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26 January 2018
This publication is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to. Readers should take legal advice before applying the information contained in this publication to specific issues or transactions.
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On 18 January 2018, Singapore's Ministry of Manpower (MOM) announced the commencement of a public consultation period regarding potential amendments to the Employment Act (Cap 91.) (Employment Act). The Employment Act is Singapore's main employment legislation. The last consultation period in 2012 resulted in significant changes to the coverage of the Employment Act, particularly with respect to professional, managerial and executive employees (PMEs).
In 2012, coverage of the Employment Act was extended to PMEs earning up to SGD4,500 per month from SGD2,500. In 2013, some consideration was given to raising the salary threshold for PMEs. At that time, the Acting Minister for Manpower stated in Parliament that the tripartite partners had agreed it was "too soon" to revise this threshold. In 2015, the Employment Act was amended to require employers to provide "key employment terms" and itemised payslips to all employees for the first time so as to protect the interests of workers.
It seems likely that this consultation period may result in much more significant amendments than those introduced in 2015. Specifically, MOM is now calling for feedback on proposals to:
extend the core provisions of the Employment Act (which deal with matters such as public holidays and sick leave) to all employees. The provisions currently do not cover PMEs earning more than SGD4,500 per month;
extend the application of Part IV of the Employment Act (which deals with more substantive entitlements such as annual leave, rest days, hours of work and overtime pay etc) which currently applies only to employees who are non-workmen earning up to SGD2,500 per month, and workmen earning up to SGD4,500 per month. No specific threshold for the application of these provisions has been proposed by MOM; and
streamline the manner in which employees can make employment related claims. Disputes regarding salary are now made to the Employment Claims Tribunal, while claims regarding dismissals are lodged with MOM.
The union movement has made its position on the changes clear. In a blog post published on 19 January 2018, NTUC Assistant Secretary-General Patrick Tay outlined what has been termed the union movement's position on the proposed changes. In summary, the position was that:
the provisions excluding from coverage under the Employment Act of PMEs earning above SGD4,500 be removed (this would result in the exclusion of only a limited group of employees from the Employment Act, such as domestic workers and seafarers);
the SGD2,500 and SGD4,500 per month salary threshold as applicable to non-workmen and workmen be reviewed to account for rising wages. Further, at a later date consideration may need to be given to the relevance of the "workman" and "non-workman" dichotomy, and the possible application of Part IV of the Employment Act to PMEs given the blurring of the lines between "rank and file" employees and PMEs;
the jurisdiction of the Employment Claims Tribunal be expanded to include unfair/wrongful dismissal cases; and
section 18A of the Employment Act (which gives an employer a unilateral right to transfer an employee to another employer if the company is being restructured) be amended for clarity, or for the tripartite bodies to issue a tripartite guideline governing such transfers or transactions which fall within the scope of the section.
Some other issues that may arise under the review include:
clarification or harmonisation of paid parental leave benefits. Currently, employees have different entitlements to paid parental leave benefits under the Employment Act and the Child Development Co-Savings Act (Cap. 38A); and
clarification of who may be considered a PME. The Employment Act does not define the term "manager or executive". MOM currently adopts a fairly expansive definition of who may be considered a PME.
This new consultation period, relatively soon after the implementation of the 2015 changes demonstrates that employment and industrial relations, particularly the protection of PMEs, remain a key focus of the Singapore government. It is also consistent with increased lobbying by the tripartite bodies in recent years. This follows the introduction of a number of specific employment related guidelines and standards by the Tripartite Alliance for Fair Employment Practices (TAFEP) and recent changes to the Industrial Relations Act to allow "rank and file" unions to represent PMEs. In November 2017, NTUC had also amended its constitution to permit representation of PMEs.
While it remains to be seen when a further round of amendments are introduced, employers should bear in mind the importance of compliance with Singapore's employment legislation and engagement with the tripartite bodies.
The consultation period closes on 15 February 2018.
1* Under the Employment Act, "workmen" are defined generally to include employees (skilled and unskilled) who are engaged to perform manual labour.
2* The blog post is available at http://www.labourbeat.org/2018/01/19/patrick-tay-time-review-employment-act
If you would like to have more information or know how this may affect you, please contact the following individuals: