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What is a contract of service?

A contract of service is a formal, legally binding agreement between an employer and an employee. It is also known as an employment contract. It defines the employer-employee relationship, and must include certain terms and essential clauses.

All permanent employees must have a contract of service with their employer. It sets out an employee's terms of contract, including their employment conditions, rights, responsibilities and duties.

A contract of service must include:

  • Full name of employer
  • Full name of employee
  • Job title, main duties and responsibilities
  • Job title, main duties and responsibilities
  • Start date of employment
  • Duration of employment
  • Working arrangements, such as: daily working hours, number of working days per week, rest days
  • Salary period
  • Basic salary
  • Fixed allowances
  • Fixed deductions
  • Overtime payment period
  • Overtime rate of pay
  • Other salary-related components, like bonuses and incentives
  • Type of leave, like annual leave, outpatient sick leave, hospitalisation leave, maternity leave, childcare leave
  • Other medical benefits, like insurance, medical benefits, dental benefits
  • Probation period
  • Notice period
  • Place of work
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