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