Amendments to the Employment Act

December 16, 2013

Source: Ministry of Manpower, Singapore

The Employment Act (EA), enacted in 1968, is Singapore's main labour law that seeks to ensure reasonable employment standards while balancing businesses' need to stay competitive.

The Ministry of Manpower (MOM) has recently made changes to the EA to extend better protection for more workers and improve employment standards, while allowing flexibility for employers where there are practical business concerns. These changes are the outcome of Phase One of the Employment Act Review. Feedback was obtained through several platforms, including an eight-week public consultation exercise from 19 November 2012 to 11 January 2013. The proposals were also carefully evaluated by employers, unions and the Government.

Most of the changes, unless otherwise stated, will take effect on 1 April 2014.

Summary of Key Amendments to the EA

Better Protection for More Workers

Extend Part IV protection of EA to more non-workmen


i.	The salary threshold for non-workmen, such as clerical staff and frontline service staff, to be covered under the working hours-related provisions (Part IV) of the EA will be raised from a basic monthly salary of $2,000 to $2,500, in line with increases in salary levels. This will benefit about 150,000 workers.

Extend more protection to Professionals, Managers and Executives (PMEs)


ii.	In addition to the salary protection currently accorded to them, PMEs earning a basic monthly salary of up to $4,500 will be covered under the general provisions of the EA, including sick leave benefits and protection against unfair dismissal. This will benefit about 300,000 PMEs.

Improve Employment Standards and Benefits


iii.	A 25% sub-cap will be imposed for deductions to employees' salaries for accommodation, amenities and services, to prevent excessive deductions to their salaries. This is within the existing 50% total cap for authorised deductions. For example, if an employee earns a monthly salary of $2,000 and receives accommodation, amenities and services provided by his employer, the employer’s deduction for these should not be more than $500 (25% of $2,000). You can refer to the section on allowable salary deduction for more information.
iv.	The non-eligibility period for retrenchment benefits will be reduced to two years from three years, in line with shorter employment tenures. This will take effect on 1 April 2015.

v.	Today, in the event of a company restructuring, unions can only represent employees transferred to another company if the pre-existing collective agreement with the original employer remains valid. To provide greater reassurance for affected employees, the validity of the collective agreement will be extended for 18 months after the date of transfer, or until the expiry of the collective agreement, whichever is later.

Flexibility for Employers


i.	Presently, non-workmen earning up to $2,000 and workmen earning up to $4,500 can claim overtime pay. Though the salary threshold of non-workmen will be increased to $2,500, the overtime rate payable for non-workmen will be capped at the salary level of $2,250 to help employers manage costs. For more information about how OT would be calculated, please refer to the infographic on the EA Amendments.

ii.	PMEs earning up to $4,500 will need to have served with the same employer for at least 12 months to be eligible to seek redress against unfair dismissal, where notice is given. This will provide employers time to assess suitability of the PMEs for their jobs.

iii.	Employers will be allowed the additional option to grant time-off in-lieu for PMEs who are required to work on public holidays, subject to mutual agreement. In the absence of mutual agreement, at least half a day off in-lieu has to be granted.

iv.	Employers will not be obliged to grant paid sick leave and bear medical examination expenses of employees for cosmetic consultations and procedures, such as mole removal or nose jobs. The assessment of whether a treatment is cosmetic or not would be based on the opinion of the medical practitioner performing the examination and providing the medical certificate.

Enhancing Enforcement of and Compliance with Employment Standards

i.	The penalty for failure to pay salary in accordance with the EA will be raised. A first-time offence will be liable to a fine of between $3,000 and $15,000 and/or 6 months' jail. A subsequent offence will be liable to a fine of between $6,000 and $30,000 and/or 12 months' jail.

ii.	The maximum composition fine will be increased from $1,000 to $5,000.

iii.	Employment inspectors will be granted the power to arrest any person whom he reasonably believes is guilty of the failure to pay salary. They will also be allowed to enter any workplace to conduct checks.

iv.	Individuals such as directors or partners of companies will be made more accountable for EA offences committed by the company. Such individuals, who are primarily responsible for the offence and have failed to exercise reasonable supervision or oversight, will be presumed to be negligent and be held liable. He/she will be able to rebut the presumption by proving that he/she has exercised reasonable supervision or oversight to avoid commission of the EA offence.

Tripartite Guidelines on Payslips and Employment Records

As a first step to encourage more employers to provide payslips to all employees and keep employment records for them, we will be issuing a set of Tripartite Guidelines about these by the first half of 2014. We will closely monitor the adoption of the guidelines, before phasing in the requirements over time.

We will also provide the necessary tools to help employers implement these requirements. These include simple payslip booklets and downloadable payslip / employment record templates. These tools will be available on MOM's website by 1 April 2014.

Marriage & Parenthood Related Amendments

Some technical amendments will be made to clarify the application of some of the existing Marriage and Parenthood measures:

a.	The Child Development Co-Savings Act (CDCA) will be updated such that it accurately reflects the policy that parents’ total child care and extended child care leave is based on their youngest qualifying Singapore Citizen (SC) child under the CDCA. This is to avoid situations where parents who have both an older SC child and a younger non-citizen child double-claim leave under both the EA and the CDCA.

b.	The EA and the CDCA will prescribe new formulae to compute the minimum number of days of maternity, paternity, shared parental or adoption leave an employee is entitled to, if there is mutual agreement between the employer and employee for the leave to be taken flexibly by days instead of by block week. This will provide greater certainty for both employers and employees.