06 March 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.
On 5 March 2018, Singapore's Minister for Manpower Mr Lim Swee Say (Minister) announced sweeping changes to the Employment Act (Cap. 91) (EA) in Parliament, to be implemented by 1 April 2019.
The main changes announced by the Minister are:
All professionals, managers, executives and technicians (PMETs) will be covered by the core provisions of the EA. These core provisions address various matters including an employee's statutory right to paid public holidays and medical leave, payment of salary and the right to make complaints of unfair dismissal. Currently, only PMETs earning a basic monthly salary of up to S$4,500 benefit from these statutory entitlements. This change will mean that coverage will be extended to the wider private sector workforce in Singapore, without any upper salary limit.
Non-workmen earning a basic monthly salary of up to S$2,600 will be covered by Part IV of the EA, which provides for various entitlements including with respect to hours of work, overtime and annual leave. This is an increase of S$100 from the current threshold of S$2,500.
All unfair dismissal and salary related claims will be heard by the Employment Claims Tribunal (ECT). Currently, a claimant has to lodge a salary claim in the ECT and separately, an unfair dismissal complaint with the Ministry of Manpower (MOM). It remains to be seen whether the monetary caps that currently apply to ECT salary claims will also apply to unfair dismissal complaints.
Further tightening of work pass requirements. These include raising the minimum qualifying monthly salary for S Pass applicants from the current S$2,200 to S$2,300 and S$2,400 from 1 January 2019 and 1 January 2020 respectively.
Extension of the Fair Consideration Framework (FCF) to a larger number of employers. Employers with at least ten employees will be required to advertise jobs paying a fixed monthly salary of less than S$15,000 on the national careers portal, Jobs Bank (Advertising Requirement). Currently, the Advertising Requirement only extends to employers with more than 25 employees and in respect of jobs paying a fixed monthly salary of less than S$12,000.
The removal of the current salary limit of S$4,500 will benefit an additional 430,000 PMETs representing slightly more than half of the 730,000 PMETs in Singapore. PMETs comprise approximately a third of Singapore's resident workforce today. The Minister also noted that 500 companies have been placed on the FCF watchlist since 2016 for unfairly favouring foreigners in their hiring practices. Companies on the FCF watchlist have their work pass applications subject to closer scrutiny by the MOM.
These changes are consistent with increased lobbying by the labour movement in recent times and demonstrate the Singapore Government's focus on PMETs in light of the changing composition of the resident workforce. The changes follow several notable developments in the employment landscape in Singapore including the recent conclusion of a public consultation on proposed amendments to the Act, changes to the Industrial Relations Act, NTUC's amendment of its constitution to permit representation of PMETs and the introduction of specific employment related guidelines and standards by the Tripartite Alliance for Fair Employment Practices (TAFEP).
If you would like more information or to know how the changes may affect you and your business, please contact the following individuals:
T +65 6416 3348
M +65 8139 1521
T +65 6416 3358
M +65 8139 1527
T +65 6416 9518
M +65 9088 3810