Unfair Contractual Terms in Career Conversion Programmes that Require Trainees to Pay Compensation for Termination
Ministry of ManpowerSpeakers
Summary
This question concerns regulatory safeguards against unfair contractual terms in Career Conversion Programmes (CCPs), specifically regarding liquidated damages (LD) required from trainees during employer-initiated terminations. Miss Rachel Ong inquired about measures to prevent employers from recovering costs exceeding actual expenditures and requested guidelines on prohibited terms. Minister for Manpower Dr Tan See Leng stated that companies with egregious practices are suspended and that LD must not exceed actual costs net of government subsidies. He clarified that subsidies must be excluded from LD calculations to ensure employers do not over-recover funds from trainees. Trainees facing unreasonable clauses may seek assistance from unions, the Tripartite Alliance for Fair and Progressive Employment Practices, or the Ministry of Manpower.
Transcript
48 Miss Rachel Ong asked the Minister for Manpower (a) what regulatory safeguards, if any, are in place in Career Conversion Programmes to prevent the inclusion of unfair contractual terms requiring trainees to pay liquidated damages when termination is initiated by the employer; and (b) how will the Government ensure that employers do not recover from trainees more than the actual training costs incurred by them under the programmes.
49 Miss Rachel Ong asked the Minister for Manpower whether the Government will consider (i) establishing clear guidelines on prohibited contractual terms in Career Conversion Programmes to safeguard trainees in employer-initiated terminations, (ii) ensuring that trainees are informed of these guidelines and (iii) providing trainees with access to advice on the fairness of employer-set terms, especially where contractually liquidated damages exceed programme fees or appear disproportionate to training costs.
Dr Tan See Leng: We are committed to safeguarding the interests of Career Conversion Programme (CCP) trainees. Companies that are successfully onboarded to CCPs typically have progressive workplace practices and demonstrate a genuine commitment to supporting individuals in their career transitions. Companies that are found to be engaging in egregious practices will be suspended from participating in CCPs.
While companies may have legitimate reasons to terminate a contract and seek liquidated damages (LD) in certain cases such as those involving misconduct, they should not seek refunds from trainees for costs in excess of what the companies have incurred. Government subsidies should be explicitly excluded from the calculation of LD to ensure that the total amount recovered by the employer will not exceed their actual expenditure, net of Government subsidies.
Trainees who believe that they have been subject to unreasonable employment clauses may seek assistance from their unions, the Tripartite Alliance for Fair and Progressive Employment Practices, or the Ministry of Manpower.