Overlooked employment contract
Dear HR Community Subscribers,
We have a situation that requires your kind advice.
Our company was founded by our present managing director (MD) in 1988 and we are in the offshore oil industry.
We have recently discovered that our founder and MD does not have an employment contract.
Do you think we should provide one for him since he is the MD?
And if we do, should we backdate the contract to company incorporation?
Appreciate your replies.
HR Poll: Does the MD require an employment contract?
Not sure: 7.07%
REPLIES & COMMENTS
Every position in the company should have an employment contract - Sazana
As this is part of the audit process the question is why till now is being found out. There should be a separate explanation letter to support this - Maggie
Yes, MD is also an employee of the Company, hence, should have an employment contract - Nancy
Yes of course. I suggest you get help with the drafting of the contract - Esther
Yes - all staff must have a contract. You will need to include an addendum to explain the effective date and also include all the new benefits and his latest salary - Jennie
Start a new contract that spells out all his benefits, remuneration package, notice period, and other terms and conditions - NA
MD also needs to be given an employment contract. Terms and conditions should be spelled out clearly to MD too. Would be good to backdate to the day he joined - CC
I would suggest that we do a clean-up: 1. New Contract with updated terms from 1 Jan 2021 2. You may backdate if the HR Head from 1988 is still around to sign the contract, but we usually do not advise since the Employee will also need to sign & agree on this document for validity. Hope this helps - Jane
You can’t legally backdate but still need to have a contract detailing leave, entitlements, and exit details - Charlotte
Yes, whoever is employed under the company should have official documentation to state what is their position, salary, commencement date, etc. Regardless of what is the position. even if it's family - Jenny
Hi Iris, yes. As long as he is an employee, he should also have a copy of the employment contract. In the event, that he sold the company, or M&A happens, there will be implications if he does not have any employment contract. I will recommend that you do not backdate the contract and you can seek help from your legal team or external legal services to review/draft the employment contract if required - YW
If he is being paid a monthly salary and CPF, he would need an employment contract signed by either a Board member if there is a Board, a co-founder, or someone among the C-Suites - Eng
Suggest that the past be treated as grandfather’s terms & conditions. And to have an employment contract with immediate effect - Cath
Yes... And don't need to backdate. Date the contract as of today - YY
Hi, Iris Can understand the dilemma you have as an HR Professional. On the one hand, you need to have a contract for all employees and on the other hand, this issue was overlooked. My suggestion is to issue a letter of employment now, say dated 4 January 2021, and start with a sentence somewhat like this “This employment terms and conditions supersede all others dated before 4 January 2021.” “We are pleased to appoint you as MD…..” and hereon you may state the current terms/conditions/benefits etc. This may help you to cover the past oversight and start anew. Best to have a lawyer vet this new contract. Hope this helps - WH
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