Secondment vs. New Employment Contract in Singapore – Key Legal Considerations

As an expat considering a move to Singapore, one of the fundamental decisions you’ll face is whether to be seconded by your current employer or to sign a new employment contract directly with a Singaporean entity. While both paths lead to working in Singapore, they carry distinct legal implications that can significantly impact your rights, benefits, and long-term security.

Understanding the Two Paths: Secondment vs. New Local Employment

At its core, a secondment (or intra-company transfer) means you remain an employee of your full-time employer located elsewhere, but are temporarily assigned to work in Singapore. Your primary employment relationship, and often your benefits and long-term career path, remain tied to your original company.

Conversely, entering into a new employment contract in Singapore means you formally resign from your original employer and become a direct employee of a Singapore-based entity (which could be a subsidiary of your current company or an entirely new organisation). Your employment relationship, rights, and obligations are then primarily governed by Singapore law.

Key Legal Considerations

1. Governing Law of Employment

• • • Secondment: Your underlying employment contract will typically remain governed by the laws of your full-time employment jurisdiction. However, the secondment agreement itself will often specify that certain aspects of your work in Singapore (e.g., workplace safety, minimum working conditions) will be subject to Singapore law. This can create a “dual” legal framework, which might lead to complexities in case of disputes.
    • New Local Employment: Your entire employment relationship, including your contract, terms of service, termination, and post-employment obligations, will be governed by Singapore employment law, primarily the Employment Act, providing clear jurisdiction.

2. Employment Pass (Work Visa) Application

• • • Secondment: Your existing full-time employer will typically be the sponsoring entity, and your assignment will likely be under an Employment Pass (EP) or possibly a Personalised Employment Pass (PEP) if you meet the criteria for a high-earning individual. The application process will involve demonstrating the intra-company transfer and your qualifications.
      
      
    • New Local Employment: The Singaporean hiring entity will be your sponsoring employer for your work pass (typically E Pass or S Pass). The application focuses on your qualifications for the role and the company’s legitimacy in Singapore. The employer’s compliance with fair hiring practices would then be a factor of their ability to sponsor work passes for foreigners.

3. Terms and Conditions of Employment (T&Cs)

• • • Secondment: Your T&Cs will largely be dictated by your full-timeemployment contract and the secondment agreement. This often means retaining benefits like pension schemes in the jurisdiction of your full-time employment, social security contributions, and long-service entitlements. You may receive additional allowances (e.g., housing, cost-of-living, mobility) as part of your secondment package.
    • New Local Employment: Your T&Cs will be set out in your Singapore employment contract and must comply with Singapore’s Employment Act if you fall under its scope, including statutory leave entitlements (annual leave, sick leave), public holidays, minimum notice periods, and provisions for overtime. Your benefits will align with typical Singaporean market practices.

4. Social Security Contributions

• • • Secondment: You may continue to contribute to your existing social security or pension scheme. Singapore’s social security equivalent, Central Provident Fund (CPF) contributions, are generally not mandatory for foreign employees on an Employment Pass, unless they become Singapore Permanent Residents. This can be advantageous for retaining continuity with your existing retirement plans.
      
      
    • New Local Employment: As an EP holder, you will not be required to contribute to CPF. However, if you become a Singapore Permanent Resident (SPR) later, CPF contributions become mandatory for both employer and employee.

5. Termination of Employment

• • • Secondment: Termination provisions are typically governed by your full-time contract and the secondment agreement. This can sometimes offer greater protection or different notice periods compared to Singaporean norms. Issues like repatriation or severance may also be covered.
    • New Local Employment: Termination procedures will strictly adhere to Singapore’s Employment Act and the terms of your employment contract. This includes statutory notice periods, grounds for dismissal, and fair treatment principles. Disputes would be handled by Singapore’s industrial dispute resolution mechanisms such as the Tripartite Alliance for Dispute Management (TADM).

Conclusion

The decision between a secondment and a new employment contract is not one-size-fits-all. It hinges on your personal circumstances, career aspirations, and the specific terms offered by your employer. Whilst secondment may provide greater job stability due to continued ties with your full-time employer, a new employment contract may provide more certainty when navigating through employment terms, and basic employment rights.

Expats in Singapore must be proactive in understanding the legal implications of the decision to be seconded into Singapore or to establish a new employment contract. Legal advice can make all the difference in safeguarding your employment rights for a conducive working environment in Singapore.