For any business entity subject to the Labour Standards Act (LSA), an employment relationship is established with workers based on the employment contract. Employment contracts may be executed in writing or orally. In practice, employment contracts are in a written form to clearly describe the important employment terms. For the purpose of obtaining a work permit, a written employment contract is required.
a. Fixed-term Contract:
Only when the work is of a non-continuous nature can the employer enter into a fixed-term contract with the employee as required by the Labour Standards Act (LSA). In this regard, only a contract for temporary work (completed within 6 months), short-term work (completed within 6 months), seasonal work (completed within 9 months) or specified work (the local labour authority’s approval is required if the period is longer than one year) of a non-continuous nature can be regarded as a fixed-term contract.
b. Open-ended Contract:
A non-fixed term contract shall be entered into with an employee whose work is of a continuing nature relating to the employer’s regular business operation. Any fixed-term contract for continuous work should be considered as a non-fixed term contract by operation of law.
The Labour Standards Act (LSA) is silent on the issue of trial period. However, it is legally acceptable for both employer and employee to agree to a probationary period. In local practice, a reasonable trial period is up to 6 months.
Termination notice:
The notice period for an employer or an employee to terminate an employment contract shall depend on the employee’s service period.
| Service years | Notice period |
| three months or more but less than one year | 10 days |
| one year or more but less than three years | 20 days |
| three years or longer | 30 days |
