Does breaking job contract affect one's reputation and subsequently, more difficult to find job elsewhere?

As a recruiter - not really. What people look for is genuine reason for leaving a job. If the company is ill treating you, leave by all means. However, if for the past 7 jobs all your tenure is less than a year and it's always the company's fault, more often than not, the problem is you.

If the employment contract is unreasonable but you signed it under emotional pressure (e.g. young, impressionable, and it's your first job...some employers like to take advantage of this) and if breaking it, the employee needs to pay a penalty, you can report company to MOM.

Real case: A friend of mine whose cousin signed this ridiculous contract. Her salary is $2,000 but if she breaks the contract (can't remember how long she's supposed to stay), she has to pay a penalty of more than $2,000 to this local employer. She managed to leave the company without repercussion.

Because this type of contract holds no water. And two, a lawyer letter already costs $3,000. I don't think the company will send. Not worth it isn't it?

Three, it's not like the company upfront pays the salary first and the employee didn't deliver, but it's free service until the person gets the salary. LOL. What right has the company to stop the employee from leaving?

Seriously, if every person hires only stays for a short time, then the company should look at a positive way to retain employees and reduce churn meaningfully...not this kind of using contract as a force to scare people into abiding it.

However, do note if a person is paid by employer for his/her studies and then after graduation to work for them, it's only right they get the returns back through contributions at work, or otherwise, he/she pays them back the money what he/she owes.