![]() ![]() Zainal proposes that tripartite partners should come to an understanding or draw out some guidelines against unfair clauses in employment contracts, to discourage companies from including such clauses to intimidate the workers into compliance. ”Do workers even have the financial means to challenge such unfair employment clauses if the case is brought before the court? What is the position of our court on such unfair clauses if the employer refused to resolve it during mediation at TADM and insist on going to court?” “What is even more incredulous is the penalty is payable even if the termination was initiated by the employer! Are such clauses in the employment contract even legal? Under Contract Law, is it enforceable in court? ”This could amount to a few thousand dollars if the trainer wanted to cease working for the company and take up a better job offer,” he wrote. This was regardless of whether the termination was initiated by the employer or employee. The trainer’s employment contract contained a clause stating that if the contract was terminated within one year, he was liable to pay the company a penalty of $50 per calendar day from the date of the termination notice till the one-year term. ![]() Penalties and conditions for termination of contract: Zainal cited a real-life example of a trainer earning a basic monthly salary of $2,000. Still, Zainal wrote that some employers get away with it because vulnerable, low-wage workers are unaware of their rights or are afraid to report their employers for fear of losing their rice bowls. If reported to TADM, employers must reimburse deductions arising from liquidated damages to the employees. However, according to the Ministry of Manpower (MOM), salary deductions for liquidated damages should not be made even if consent has been obtained from the employees, as it is not to the benefit of the employee. ![]() However, some service providers may resort to passing the cost of liquidated damages to the workers, given the narrow profit margins they are getting. Liquidated damages borne by workers: Zainal said that, in outsourced service industries such as cleaning and security, it is a standard practice for service buyers to reflect the liquidated damages payable for non-performance issues in the contract. “Regardless, including unfair clauses is unethical as they abuse the vulnerable position the workers might be in.” Three types of unfair clauses “Some employers have included in employment contracts certain clauses that may not be fair to the workers, perhaps to address staff attrition, recoup losses they incurred due to liquidated damages, or protect their business interest. “Due to the challenging business environment, there are employers who may resort to underhand practices or tactics to address the problems they are facing, but to the possible detriment of the workers,” Zainal wrote. ![]()
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