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20/08/2010 13:32:48
Re: Employer's Right to Terminate Contract Employees

Dear HR Practitioners

My company has engaged several contract employees on 2-year term. Their contracts are expiring soon by next month.

2 of them are Heads of departments and the rest are senior executives/managers.

We have intention to terminate the contracts for one of the Heads and a few of the rest based on:

- restructuring : to merge 2 departments to become 1, and bring in a new Head with knowledge & experience of both departments;
- salary does not commensurate with work. Manager's salary but performing executive's work. We wish to hire junior candidate for the job.

The terms of contract provides 3 months notice (for head) and 1 month notice (for the rest) in the event we decided to terminate the contract.

May I know whether there is any other implications on the above actions?

Thanks for sharing.

Best regards
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KL Siew
20/08/2010 18:03:27
Although those employees of your company may not be covered by the Employment Act, but Section 11 as quoted below may be of some guidance to you. For those whose service you no longer required, you may let them know that their contract will end on expiry and will not be renewed.

"11. Provision as to termination of contracts.

(1) A contract of service for a specified period of time or for the performance of a specified piece of work shall, unless otherwise terminated in accordance with this Part, terminate when the period of time for which such contract was made has expired or when the piece of work specified in such contract has been completed."
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