A contract template from another jurisdiction does not survive contact with the Employment Act 2025. The Act sets a floor under notice, dismissal, salary timing, deductions, hours and rest days, and any term that falls below it is simply void. Basnet Law drafts contracts of service, offer letters and HR policies that comply with the Employment Act 2025 and the Employment of Foreign Workforce Act 2025, and every term is checked against the statutory floor, because any term less favourable than the Act is void. This page sets out what that floor is and how we build a contract suite and policy pack on it.
Our legal advisory
- Draft executive, professional and workman contracts of service with notice, probation, termination and confidentiality terms that satisfy the Act's termination rules.
- Fix the salary period and payment dates in line with the Act, and set out its incomplete-month formula.
- Draft a deductions clause confined to what the Act permits.
- Draft a disciplinary and dismissal procedure built on the "due inquiry" requirement, including suspension on at least half pay.
- Where staff fall within the rest day and hours-of-work rules, draft working hours, rest day and overtime provisions that comply with them.
- Advise on the termination checklist covering final pay, the income tax clearance step and, for foreign employees, cancellation and return of the work pass.
- Advise on the register of foreign employees required by the Employment of Foreign Workforce Act 2025 and the onboarding passport check that Act demands.
How GMC employment law works, in plain terms
The Employment Act 2025 governs every "employee" under a contract of service other than domestic workers and any classes excluded by Gazette notification. Any contractual condition "less favourable to an employee than any of the conditions of service prescribed by this Act" is illegal and void to that extent. All "$" amounts are US dollars.
Termination works in the following way. Notice must be the same for both parties and, if the contract is silent, at least one day for service under 26 weeks, one week for 26 weeks to 2 years, 2 weeks for 2 to 5 years and 4 weeks for 5 years or more. Notice must be given in writing. Either party may pay salary in lieu, or terminate without notice for wilful breach. Dismissal for misconduct is permitted only "after due inquiry", and the employer may instead downgrade the employee or suspend without pay for up to one week. The party in breach is liable for the sum that would have been payable in lieu of notice.
Salary has its own rules. A salary period may not exceed one month, salary must be paid within 7 days after the period ends, and overtime within 14 days. On dismissal, all sums are due on the day or within 3 days. No deduction may be made unless authorised by the Act, a court order or a tax direction, and total deductions in a period are capped at 50% of salary, subject to exceptions. Termination sums may not be paid until the tax officer's permission is given, and the employer must give that officer immediate notice of the termination. The Act requires payment of at least the national minimum wage; the amount is prescribed separately, not stated in the Act.
The rest day and hours-of-work rules apply to workmen and to other employees earning up to $500 a month, or such other amount as the designated officer prescribes. For those employees a weekly rest day is required, rest day work attracts the Act's prescribed rates, and hours are capped at 8 a day and 44 a week with variations by agreement. Retrenchment benefit is not owed for under 2 years' service, and retirement benefit is not owed for under 5 years. Salary may be paid into an account at a bank licensed in GMC.
Who this is for
- New GMC subsidiaries issuing their first contracts to relocated and local hires.
- GFSO licence applicants documenting Approved Person and staff terms.
- Construction, hospitality and services employers with workman and foreign employee populations.
- HR teams that need a policy set matching the statute rather than a template from another jurisdiction.
How a legal advisory engagement runs
- Workforce map: we classify each role as employee, workman or hours-protected employee, and as citizen or foreign employee, so the right rules attach to each contract.
- Contract suite: we draft the templates and a variables schedule so HR can issue contracts consistently.
- Policy pack: we prepare disciplinary, leave, deductions, working time and whistleblowing policies, aligned with the General Rulebook for Licensed Firms.
- Registers and onboarding: we advise on the foreign employee register and the passport verification step.
- Training and review: we train managers on due inquiry and termination, and review the pack annually.
Frequently asked questions
Can we agree a longer notice period than the Act?
Yes. The Act allows the contract to fix the period, provided it is the same for both parties. The statutory minima apply only where the contract is silent, and we draft the clause so they never have to.
Can we dismiss for misconduct without notice?
Dismissal is permitted only "after due inquiry". During the inquiry you may suspend for up to one week on at least half salary, and you must restore full salary if no misconduct is found. Our disciplinary procedure builds that sequence in.
When must final salary be paid?
On dismissal, on the day or within 3 days. On resignation with notice, on the termination day. The tax clearance rule overrides both where clearance is outstanding, and our termination checklist covers it.
Do the hours-of-work limits apply to all staff?
No. The rest day and hours rules apply to workmen and to other employees earning up to $500 a month, or such other amount as is prescribed. Contracts for higher earners set hours by agreement, and we draft both versions.
Can we deduct the cost of a foreign employee's work pass from salary?
No. The Employment of Foreign Workforce Act 2025 prohibits it, and the Employment Act 2025 prohibits any deduction not authorised by law. Our deductions clause is confined to what the law allows.
Is there a statutory minimum wage?
Yes. The Employment Act 2025 requires payment of at least the national minimum wage. The amount is prescribed separately, and we confirm the current figure at engagement.
Contact
Basnet Law Pte. Ltd. is the first law firm incorporated in the Gelephu Mindfulness City.
You may contact Basnet Law at basnet@basnetgmc.com or office@basnetgmc.com for any legal queries related to GMC.
