Some employers include unfair clauses in employment contracts, abusing the vulnerable position workers might be in, said labour MP Zainal Sapari in a blog post yesterday.
He called for more education on such contracts for both employers and employees, and suggested the Ministry of Manpower (MOM) or Tripartite Alliance for Dispute Management consider starting a watch-list of companies found to have unfair clauses in these contracts.
Administrative penalties should be imposed on them, he said, adding that MOM could consider a cooling-off period of, say, up to five working days to allow workers to rescind an employment contract they have signed, without penalty.
"Due to the challenging business environment, there are employers who may resort to underhand practices or tactics to address the problems they are facing, but to the possible detriment of the workers," Mr Zainal, a National Trades Union Congress (NTUC) assistant secretary-general, said in his post on NTUC blog LabourBeat.
Workers are likely to bend to the unreasonable demands of an employer.
"As such, there is an urgent need for the tripartite partners to provide greater clarity and guidance on fair and proper contracting practices," he said.
Mr Zainal said he had come across three main types of unethical clauses: requiring workers to pay liquidated damages incurred by the company, requiring compensation when the contract is terminated, and excessive non-competitive or restraint of trade clauses.
Although the MOM website states that salary deductions for liquidated damages are forbidden, some low-wage workers are unaware of their rights or are afraid to report their employers, added Mr Zainal.
For non-competitive clauses, he said he had seen a fresh graduate's contract with a clause stating that she must pay $100,000 in liquidated damages if she moved to another firm in the same industry.
The MOM said in response that since last September, the Tripartite Alliance for Fair and Progressive Employment Practices (Tafep) has received about 50 cases of unreasonable contractual clauses.
It urged employees who feel subject to an unreasonable employment clause in their contracts to approach the union, Tafep or MOM.
"Other than intervening in such cases to help the employees, MOM will also not hesitate to take other actions, such as suspension of work pass privileges, against recalcitrant employers," said the ministry.