HRSINGAPORE Community Discussions

Frustration of Contract


Dear HR Professionals,

We have an employee who did not pass a licence required to work in his role and we have no other positions to deploy him. In this case where it is impossible to exercise the offer as accepted, can this be considered as frustration of contract? In this case, do we need to pay his notice period given that he is unable to work in the first place?




Reply 1

This staff is under probation or on a new posting that requires a new skills licence? Whatever the case, follow your terms & conditions in his contract or appointment letter. Hope a clause is clearly stated that in the event staff failed to secure required licence what is the company stands. Let’s practice fair employment.




Reply 2

Strictly speaking, the Letter of Offer differs from the Employment Contract. The former usually lists the conditions of the offer while the latter is issued to the candidate who has accepted the offer after meeting all the conditions listed in the offer. However, many employers in Singapore do not differentiate the practices between these two, and have often issued one document, using these two interchangeably, unlike our counterparts in the Western worlds.

As such, from both the employer and candidate's perspective, the practice of having a document, called it employment contract or letter of offer, the endorsement is taken as acceptance.

Putting this aside, a candidate cannot be considered an employee as long as he/she has not started work. In this sense, the endorsed employment contract / letter of offer would not be valid under the Singapore's employment law. In this case, the notice of termination and related compensation do not apply. Nevertheless, the notice of termination shall apply for both parties should the employee have commenced work regardless the duration,

Having said this, however, the candidate would not have a case to pursue under the Singapore's employment law even if he/she have signed the employment contract but subsequently the offer is retracted. The candidate can only seek recourse under the civil law for the 'loss'.