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Brunei Darussalam

Employment Agreement Essentials

Understand the key elements of employment contracts in Brunei Darussalam

Types of employment agreements

In Brunei Darussalam, the employment landscape heavily relies on written contracts as outlined in the Employment Order, 2009. These contracts establish the rights and obligations between employers and employees. While there isn't a single standardized format, several prevalent types of employment agreements cater to different employment scenarios.

Contract of Service (COS)

The most common type of employment agreement in Brunei is the Contract of Service (COS). This agreement applies to traditional employer-employee relationships and must be provided in writing, signed by both parties. A COS typically includes details such as basic employee information, commencement date and term, remuneration, working hours and leave entitlements, and termination clauses. The Employment Order, 2009 serves as the minimum benchmark for these agreements, ensuring employees receive benefits and protections outlined within the legislation.

Fixed-Term Contract

A Fixed-Term Contract (FTC) specifies a pre-determined duration for employment, after which the contract automatically expires unless renewed by mutual agreement. These contracts are suitable for temporary positions, project-based work, or probationary periods.

Part-Time Contract

Part-Time Contracts cater to employees working less than 30 hours per week. They generally reflect the pro-rated benefits and entitlements compared to a full-time employee.

Specialised Contracts

Besides these common agreements, Brunei allows for specific contracts for certain employment categories:

  • Contract for Service for Managerial, Executive or Confidential Positions: These contracts may deviate from some provisions of the Employment Order if deemed necessary for the specific role.
  • Collective Bargaining Agreements: Trade unions can negotiate collective agreements with employers outlining terms and conditions applicable to a group of employees.

Essential clauses

Employment agreements in Brunei Darussalam, while not standardized, should encompass essential elements outlined in the Employment Order, 2009 (EO 2009) to ensure clarity and protect the rights of both employers and employees.

Basic Information

The agreement should clearly identify the employer and the employee. It should also specify the start date of employment and whether it's a fixed-term contract or a contract of service with an open-ended term.

Job Details and Responsibilities

The employee's job title and key duties and responsibilities associated with the position should be clearly defined.

Remuneration and Benefits

The agreement should state the employee's base salary, payment frequency, and currency. It should specify any allowances offered, such as housing or transportation allowances. Any benefits offered, such as health insurance, paid time off, and any social security contributions the employer will make on the employee's behalf should be enumerated.

Working Hours and Leave

The agreement should specify the number of working hours per week and the daily schedule. It should outline the employee's entitlement to annual leave and sick leave as mandated by the EO 2009. Details on any other types of leave offered, such as maternity leave or compassionate leave, should be included.


The agreement should define the required notice period for termination by either party. It should list the grounds for which the employer may terminate the contract with or without notice.

Dispute Resolution

The agreement should specify Brunei Darussalam law as the governing law for interpreting the agreement. It should outline the steps for resolving any disputes arising from the employment relationship.

Additional Considerations

The agreement may include a clause outlining the employee's obligation to maintain confidentiality regarding the employer's sensitive information. It may also incorporate a clause regarding ownership of intellectual property rights created by the employee during employment.

Probationary period

In Brunei Darussalam, many employment agreements incorporate a probationary period. This initial phase allows both employers and employees to assess suitability for the role, ensuring a good fit before transitioning to a permanent position.

Purpose of a Probationary Period

During this period, employers can evaluate the employee's skills, performance, and cultural fit within the organization. Simultaneously, employees can assess if the role and company meet their expectations and career goals.

Legality and Regulations

There's no specific legislation in Brunei mandating a probationary period. However, the Employment Order, 2009 (EO 2009) doesn't restrict its inclusion in employment agreements.

Key Considerations:

  • The probationary period should be fair and reasonable in its duration. The agreement should clearly outline the probationary period length.
  • Termination during probation should adhere to the notice period requirements outlined in the EO 2009, which vary based on the employee's length of service.

Typical Probationary Period Length

While there's no legal maximum, a typical probationary period in Brunei can range from 3 months, which is common for many roles, to 6 months, which may be appropriate for more senior or complex positions. It's important to note that excessively long probationary periods (exceeding 6 months) could be viewed as a tactic to avoid providing full employment benefits to the employee.

Probationary Period Clauses in the Agreement

A well-defined probationary period clause should incorporate the following elements:

  • The agreement should explicitly state the existence of a probationary period and its duration.
  • Outline the criteria used to assess the employee's performance during probation. This could include job-specific skills, work ethic, and adherence to company policies.
  • Specify how the employer will provide feedback to the employee on their progress during probation. Regular feedback allows for course correction and improvement.
  • Outline the process for termination during probation, including the notice period required by either party (which may be shorter than the post-probation notice period as per the EO 2009).

Confidentiality and non compete clauses

Employment agreements in Brunei Darussalam often include confidentiality and non-compete clauses. These are designed to protect the employer's sensitive information and mitigate competition after an employee leaves. However, due to Brunei's unique legal framework, these clauses require careful consideration.

Confidentiality Clauses

Confidentiality clauses are designed to safeguard an employer's confidential information. This can include trade secrets, client lists, or marketing strategies. While there's no specific legislation governing them, these clauses can be enforced under Brunei's general contractual principles.

Key considerations for confidentiality clauses include:

  • Reasonable Scope: The information restricted should be clearly defined and limited to legitimate business interests. Clauses that are overly broad and restrict an employee's ability to use general knowledge and skills gained during employment are unlikely to be enforceable.
  • Clarity and Specificity: The confidentiality clause should clearly define the duration of the confidentiality obligations. Ideally, it shouldn't extend indefinitely after employment ends.

Non-Compete Clauses

Non-compete clauses restrict an employee's ability to work for a competitor or start a competing business after leaving the company. Brunei's courts have traditionally been reluctant to enforce non-compete clauses due to concerns about limiting an employee's ability to earn a living.

Key considerations for non-compete clauses include:

  • Strict Scrutiny: Non-compete clauses face stricter scrutiny compared to common law jurisdictions. Brunei courts are more likely to uphold these clauses if they meet specific criteria:
    • Reasonable Geographical Scope: The restriction should be limited to a specific territory relevant to the employer's business interests.
    • Reasonable Time Period: The duration of the restriction should be reasonable and not excessively long.

Alternative Approaches

Given the challenges of enforcing non-compete clauses, employers in Brunei may consider alternative approaches to protect their interests:

  • Confidentiality Clauses: Well-drafted confidentiality clauses can safeguard sensitive information.
  • Non-Solicitation Clauses: These clauses restrict employees from soliciting the employer's clients or colleagues after leaving the company. These are generally more enforceable than non-compete clauses.
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