# Converting a contract hire to permanent changes less than most HR teams assume

URL: https://skillsforce.com.sg/insights/contract-to-permanent-conversion-singapore
Title: Converting a contract hire to permanent in Singapore | Skillsforce
Description: What actually changes when a fixed-term contractor becomes permanent: continuity of service, notice, sick leave and the KETS.
Updated 27 August 2026. First published 27 August 2026. Author: Skillsforce (People-operations team)
Category: hr-operations

The contractor has done the job well for a year and the business wants them on permanently. Someone in HR then has to decide what, precisely, has to happen at that moment: what carries across from the fixed-term contract, what a second probation would actually buy you, and what has to be reissued in writing. Here is the conversion itself, not the broader case for hiring contract versus permanent.

## Does continuous service carry over when a contract worker becomes permanent?

Yes. Where a fixed-term contract converts to permanent with no break in service, the prior period counts as continuous service. That matters because notice periods, annual leave accrual and sick leave entitlements under the Employment Act all scale with length of service, so a contractor's time is not reset to zero when their status changes.

## Key points

- A fixed-term contract that converts to permanent with no break in service keeps its continuous service. The clock does not restart on the conversion date.
- Continuity is what drives the entitlements that scale with tenure: notice periods, annual leave accrual, and the sick leave bands. All of it is inherited from the contract period, not started fresh.
- Probation is not required by the Employment Act. Where a probation period does exist, it must be stated in the Key Employment Terms. Running a second probation on someone already proven in the role is a choice, and often not a good one.
- Sick leave phases in by month of service: 5 outpatient and 15 hospitalisation days at 3 months, rising to 8 and 30, then 11 and 45, reaching the full 14 and 60 from 6 months. The 14 outpatient days sit inside the 60, they are not added on top.
- Changes to employment terms must be put in writing. No primary source sets a deadline for reissuing the Key Employment Terms themselves when they change, so treat a fresh, updated KETS as good practice rather than a fixed statutory step.
- The conversion is mostly a paperwork and judgment exercise, not a fresh start. Get the KETS right, decide honestly on probation, and the continuity looks after itself.

A contractor finishes their fixed term well, the manager wants them kept, and HR is asked to "just convert the contract." What that instruction actually requires is smaller than it sounds. Continuous service carries across automatically as long as there is no gap between the fixed-term contract ending and the permanent one starting. A fresh probation is allowed but not required, and rarely worth running on someone already proven. The one thing that genuinely needs doing is putting the changed terms in writing. Everything else is a decision, not a legal reset.

## Does continuous service actually carry over at conversion?

Yes, and this is the fact the rest of the article hangs off. Where an employee moves from a fixed-term contract to permanent employment with no break in service, MOM treats the employment as continuous. The contractor's start date, for the purposes of the Employment Act's service-linked entitlements, stays their original start date. Nothing about the conversion itself interrupts that, and there is no separate application or notification needed to preserve it: continuity follows automatically from the absence of a gap.

That single fact does the real work in a conversion. Continuous service is what the notice bands, the annual leave accrual, and the sick leave bands are all calculated against, so a contractor bringing 14 months of tenure into their permanent contract is not starting any of those clocks over. The practical HR task is simply to record the original start date correctly in the new contract and in whatever HR system tracks entitlements, so payroll and leave administration calculate from the right anniversary rather than from the conversion date.

## What does continuity change for notice, leave and sick pay?

Three entitlements move directly off continuous service, and all three should be recalculated from the original start date rather than the conversion date.

**Notice periods.** Where notice is not otherwise agreed, the Employment Act's bands run on length of service: under 26 weeks is 1 day, 26 weeks up to 2 years is 1 week, 2 years up to 5 years is 2 weeks, and 5 years or more is 4 weeks. A contractor who converts after 10 months has already cleared the 26-week threshold before the permanent contract exists; their notice period reflects that, not a fresh 1-day minimum.

**Annual leave.** Entitlement starts at 7 days in the first year and rises by one day per completed year, capping at 14 days from the eighth year onward, and it requires 3 months of service to qualify at all. Someone converting mid-way through their first year keeps accruing on the same schedule they were already on as a contractor. There is no separate, lower "new permanent employee" starting point.

**Sick leave.** This one phases in by month of service on two tracks at once, outpatient and hospitalisation, and the hospitalisation figure includes the outpatient days rather than sitting on top of them.

| Months of service | Outpatient sick leave | Hospitalisation leave |
|---|---|---|
| 3 | 5 days | 15 days |
| 4 | 8 days | 30 days |
| 5 | 11 days | 45 days |
| 6 and thereafter | 14 days | 60 days |

The 60-day figure at 6 months and beyond includes the 14 outpatient days, it is not 14 plus 60. An employee who has already used all 14 outpatient days in a year has 46 hospitalisation days left, not 60. This is the single most commonly misread part of the sick leave rules, and it applies exactly the same way to a converted contractor as it does to anyone hired permanently from day one, calculated from their original start date.

## Should a proven contractor go through a second probation?

Generally, no, though nothing stops an employer from choosing to. Probation is not a requirement under the Employment Act at all; it exists purely because an employment contract says it does. Where a probation period is used, it has to appear as an item in the Key Employment Terms, since probation is one of the 18 items KETS covers. There is no separate statutory rule governing how long it can run or what happens at the end of it beyond what the contract itself sets out. For the general mechanics of probation and confirmation, our companion piece on [probation and confirmation for employers](/insights/probation-and-confirmation-singapore-employers) covers that ground; this article is only about the conversion moment itself.

The practical question for a conversion is different from the legal one: what would a second probation actually test? A contractor who has already spent months doing the job has already supplied the evidence probation exists to generate, performance under real conditions, over real time. Restarting the clock on someone you have already decided to keep mostly signals that their track record did not count, which sits oddly next to the decision to keep them. Where it can make sense is a genuine change in scope, for instance a contractor converting into a materially different, more senior role than the one they were contracted for, where the new responsibilities are untested even if the person is not. Absent that kind of change, skip it.

## What has to change in the paperwork, and what doesn't?

The Key Employment Terms cover 18 items and must be issued in writing within 14 days of the start of employment for anyone on a contract of service of 14 days or more. That 14-day clock is for a new employee's first KETS. A conversion is not a new hire in the continuity sense described above, so the relevant question is not "does the 14-day clock restart" but "what needs to be reissued because it changed." At minimum that includes the employment status itself and anything that moves with it, typically the notice clause, the removal of an end date, and any benefits that differ between the contract and permanent arrangements.

Any changes to the terms of the original contract have to be communicated in writing; that much is settled. What is not settled by any government source is a specific deadline for reissuing the KETS document itself once terms change. We are not going to invent one. The sensible practice, absent a stated rule, is to issue an updated KETS alongside the new permanent contract rather than leaving the original, now-superseded document as the only written record on file. If a dispute ever arose about what terms applied and when, a clean, dated, updated KETS is a much better position to be in than relying on an email thread. Our piece on [itemised payslips and KETS](/insights/itemised-payslips-kets-singapore-employers) covers what belongs on the KETS document more broadly.

## What if there was a gap between the contract ending and the permanent start?

This is where the continuity assumption in the earlier sections stops holding, and it is worth stating plainly because it is easy to miss in the rush of paperwork around a conversion. Continuity depends on there being no break in service between the fixed-term contract ending and the permanent contract starting. If the contractor's engagement lapsed for even a short period before the permanent offer was signed, whether because of a gap in renewing the contract, a period between the last invoice and the new start date, or simply because the paperwork trailed the actual work, that gap is what resets the clock, not the change in employment status itself.

Practically, this means the safest sequencing for a conversion is to have the permanent contract take effect either on the same day the fixed-term contract ends, or with the fixed-term contract extended right up to the permanent start date. Leaving a week or two open "to sort out the paperwork" is exactly the kind of gap that later raises the question of whether the person's notice period, leave accrual and sick leave bands should be calculated from the original engagement or from a fresh, later date. If a gap is unavoidable for a genuine business reason, note it and the reason clearly at the time, since that record is what any later question about continuity would turn on.

## Second probation: what it actually buys, and what it costs

It is worth returning to probation for a moment, because the temptation to restart it is understandable even where it is not required. A hiring manager who has only worked with the person as a contractor, rather than having managed them directly, sometimes wants the reassurance a formal probation period seems to offer. That reassurance is largely an illusion when the underlying evidence, months of actual output in the role, already exists. What a second probation genuinely buys is a defined, documented exit path if the conversion turns out to be a mistake; what it costs is a signal to the employee that their prior performance does not count, and a period during which their own commitment to the role may reasonably be lower given the uncertainty. Where the business case for probation is really "we want an easier exit route," it is worth being honest about that rather than dressing it up as a standard step, and weighing it against the cost of introducing doubt into a working relationship that was, by definition, good enough to convert.

## A short checklist for the conversion itself

- Confirm there is genuinely no break in service between the fixed-term contract ending and the permanent contract starting; that gap, if there is one, is what would actually reset continuity.
- Record the original start date in the new contract and in payroll or HR systems, so notice, leave and sick leave calculate from it.
- Decide deliberately on probation rather than defaulting into it. If used, state it as a KETS item with a clear end date and criteria.
- Issue an updated Key Employment Terms document reflecting the changed status, even though no deadline is fixed in law for doing so.
- Put every changed term in writing and have both sides sign or acknowledge it before the fixed-term contract's end date passes.

## Where this fits against the other decisions

Deciding whether to hire on a permanent, contract, or temporary basis in the first place is a separate, earlier question, covered in [permanent, contract or temporary staffing](/insights/contract-temporary-permanent-staffing-singapore). This article picks up after that decision has already gone the contract route once, and the business now wants to change it. If your team is weighing that earlier decision, or working out how to convert a role without inheriting problems in the contract you are converting out of, our [recruitment](/services/recruitment) team can talk through both the hiring structure and the paperwork that follows it.

## Frequently asked questions

### Does a contractor's time on a fixed-term contract count towards their notice period once they go permanent?

Yes, provided there was no break in service between the fixed-term contract ending and permanent employment starting. The Employment Act's notice bands run on continuous service: under 26 weeks is 1 day, 26 weeks to under 2 years is 1 week, 2 to under 5 years is 2 weeks, and 5 years or more is 4 weeks. A contractor who has already put in 14 months has already cleared the 26-week band before their permanent contract is even signed.

### Do we need to put a new contract worker through probation again once we make them permanent?

No, and usually you should not. Probation is not a requirement of the Employment Act at all; it exists only if the employer chooses to include it, and where it does apply it must be recorded as an item in the Key Employment Terms. A contractor who has already delivered against the role for months has already answered the question probation exists to ask. A second probation mainly signals to that person that their track record did not count for anything, which is a strange message to send someone you are about to keep.

### Does annual leave reset to 7 days when a contract employee becomes permanent?

No, not if service is continuous. Annual leave starts at 7 days in the first year and rises by one day per completed year of service, capping at 14 days from the eighth year onward, and it requires 3 months of service to qualify at all. A contractor converting after 10 months of continuous service carries that 10 months into the calculation; the entitlement does not drop back to a first-year rate because the label on their contract changed.

### How does paid sick leave work for someone converting from contract to permanent partway through their first year?

It phases in by month of service and does not restart at conversion. At 3 months it is 5 days outpatient and 15 days hospitalisation, at 4 months 8 and 30, at 5 months 11 and 45, and from 6 months onward the full 14 days outpatient and 60 days hospitalisation. The 60 days includes the 14 outpatient days rather than adding to them, so someone who has already used all 14 outpatient days has 46 hospitalisation days left, not 60.

### Do we have to issue a new set of Key Employment Terms when a contractor becomes a permanent employee?

The terms that changed, at minimum the employment status and anything that moves with it such as notice period or benefits, must be communicated in writing. No government source specifies a fixed deadline for reissuing the Key Employment Terms document itself when terms change, so there is no statutory countdown to point to. Good practice is to issue an updated KETS alongside the new contract rather than leaving the original, superseded document as the only written record.

### What actually changes on the day a fixed-term contract becomes a permanent one, versus what stays the same?

The employment status changes, and with it usually the notice clause, the end date (removed), and sometimes the benefits package. What stays the same is the person's continuous service, which keeps accruing the entitlements already built up rather than resetting, and the underlying employment relationship, which the Employment Act does not treat as a new hire simply because the contract type changed.

### Is there a minimum length of contract service before we can convert someone to permanent?

No minimum is set in law for the conversion decision itself; that is a business judgment. What does have a minimum is qualifying for statutory leave, which requires 3 months of service, contract or permanent. If a conversion happens before that point, the entitlements simply phase in on the same service-based schedule they would have followed if the person had been permanent from day one.

## Sources

- [MOM: Annual Leave, Eligibility and Entitlement](https://www.mom.gov.sg/employment-practices/leave/annual-leave/eligibility-and-entitlement) (Accessed 27 August 2026)
- [MOM: Termination of Employment, Termination with Notice](https://www.mom.gov.sg/employment-practices/termination-of-employment/termination-with-notice) (Accessed 27 August 2026)
- [MOM: Sick Leave, Eligibility and Entitlement](https://www.mom.gov.sg/employment-practices/leave/sick-leave/eligibility-and-entitlement) (Accessed 27 August 2026)
- [MOM: Key Employment Terms](https://www.mom.gov.sg/employment-practices/contract-of-service/key-employment-terms) (Accessed 27 August 2026)
- [MOM FAQ: If my employee converts from full-time to part-time, do I issue a new contract and would it be considered continuous?](https://www.mom.gov.sg/faq/part-time-employment/if-my-ee-converts-from-ft-to-pt-do-i-issue-him-a-new-contract-would-it-considered-continuous) (Accessed 27 August 2026)
- [MOM: Does the Employment Act cover temporary and contract employees?](https://www.mom.gov.sg/faq/employment-act/does-the-employment-act-cover-temporary-and-contract-employees) (Accessed 27 August 2026)

## Related

- [Recruitment & Executive Search](https://skillsforce.com.sg/services/recruitment)
- [Permanent, contract or temporary staffing](https://skillsforce.com.sg/insights/contract-temporary-permanent-staffing-singapore)
- [Probation and confirmation for employers](https://skillsforce.com.sg/insights/probation-and-confirmation-singapore-employers)
- [Itemised payslips and KETS](https://skillsforce.com.sg/insights/itemised-payslips-kets-singapore-employers)