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07 Feb 2019

Extensive amendments to the Singapore Employment Act

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On 20 November 2018, the Employment (Amendment) Bill 2018 (the "Bill") was passed in Parliament, thereby introducing several noteworthy amendments to the Employment Act (Cap. 91) of Singapore (the "Act") and the Employment Claims Act 2016.

The changes to the Act will take effect from 1 April 2019.

What are the main amendments that an employer should be aware of?

The Act will, post-amendment, apply to more employees

The Employment Act pre-amendment does not cover an employee who is:

(a) a seafarer;

(b) a domestic worker;

(c) employed in a managerial or an executive position and in receipt of a salary exceeding S$4,500 a month; or

(d) employed by the Singapore Government or a statutory board.

Further, Part IV of the Employment Act which deals with conditions of service such as annual leave, rest days and hours of work only applies to:

(a) a workman1 (for example, a person who has entered into a contract of service in which he is engaged in manual labour or who is a person specified in the First Schedule of the Employment Act such as a cleaner, machine operator, construction worker, labourer etc.) earning a monthly salary of not more than S$4,500; or

(b) an employee who is not a workman but who is covered under the Employment Act and earns a monthly salary of not more than S$2,500.

Following the passing of the Bill, a person who is employed in a managerial or an executive position and who receives a salary exceeding S$4,500 per month will now be covered by the Act.

The Bill also extends the application of the benefits under Part IV of the Act to non-workmen employees earning up to S$2,600.2

Annual leave benefits

Annual leave provisions will post-amendment now apply to all employees in Singapore. This is achieved by moving these provisions from Part IV of the Act to another part of the Act.

Another notable amendment is that employers will be prevented from simply forfeiting their employee's unused leave in the event of an employee's termination. Instead, there will be a new statutory requirement under the Act which provides that if an employee is dismissed, the employee has rights to encash accrued unused annual leave (except on dismissal on grounds of misconduct).3

Dismissal and disputes

Currently, the Act defines "dismiss" as the termination of the contract of service of an employee by his employer, with or without notice and whether on grounds of misconduct or otherwise. The Bill proposes to extend the definition of "dismiss" to cover instances of involuntary resignation of an employee.4

This redefinition means that the employers can no longer disguise their terminating of employees by getting the employees to resign.

In genuine cases of mutual agreement to part ways, extra care should be taken to document the employee's consent.

There are also changes in the forum for resolving wrongful dismissal cases. Pre-amendment, salary-related disputes are dealt with by the Employment Claims Tribunal while wrongful dismissal claims are dealt with by the Ministry of Manpower. Employees covered by the Act who believe they have been wrongfully dismissed can make representations in writing to the Ministry of Manpower. The amendments to the Bill now provides for any disputes relating to an employee's dismissal without just cause or excuse to be dealt with by the Employment Claims Tribunal instead of the Ministry of Manpower.5

This will mean that the Employment Claims Tribunal will now settle almost all employment-related disputes and employees will no longer be required to go through two different avenues to settle their employment disputes.

Parties are prohibited from being represented by lawyers in the Employment Claims Tribunal. Employers will have to be prepared to attend before the Employment Claims Tribunal, without the benefit of legal representation, in respect of such wrongful dismissal claims.

Salary deductions

The Act currently limits the type of salary deductions that employers can make. The Bill amends the Act to redefine when deductions to an employee's salary may be made.

The Bill allows for salary to be deducted for reasons such as (i) absence from work, (ii) damages or loss of goods or money, (iii) accommodation (with the employee's consent), (iv) amenities and services provided by the employer (with the employee's consent) and (v) recovering advances, loans or overpaid salary.

Salary deductions will also be allowed if the employee consents to the deduction in writing and the employer allows the employee to withdraw his consent at any time without penalty to the employee.

How we can help you

The Stephenson Harwood (Singapore) Alliance's employment team can assist clients in better understanding the changes introduced by the Bill so that clients will know what benefits employees are entitled to and what obligations the Act imposes on both the employer and employee.

Employers can then make informed decisions about whether their employment documentation should be reviewed and revised so as to ensure compliance with the provisions of the Act.

The enhanced scope of the Employment Claims Tribunal will also mean that it may hear more employment-related disputes. While lawyers are not allowed to represent either the employer or the employee if a claim has been brought before the Employment Claims Tribunal, we can be engaged to guide parties in the background.

This article was written by Partner Terence Seah and senior associate Christine Ong at Virtus Law LLP (a member of the Stephenson Harwood (Singapore) Alliance). For more information, please do not hesitate to contact any of the team at Stephenson Harwood (Singapore) Alliance.

 

1 Section 2(1) of the Act defines "workman" as:

"(a) any person, skilled or unskilled, who has entered into a contract of service with an employer in pursuance of which he is engaged in manual labour, including any artisan or apprentice, but excluding any seafarer or domestic worker;

(b) any person, other than clerical staff, employed in the operation or maintenance of mechanically propelled vehicles used for the transport of passengers for hire or for commercial purposes;

(c) any person employed partly for manual labour and partly for the purpose of supervising in person any workman in and throughout the performance of his work: provided that when any person is employed by any one employer partly as a workman unless it can be established that the time during which that workman has been required to work as a workman in any one salary period as defined in Part III has on no occasion amounted to or exceeded one-half of the total time during which that person has been required to work in such salary period;

(d) any person specified in the First Schedule;

(e) any person whom the Minister may, by notification in the Gazette, declare to be a workman for the purposes of this Act."

2 Clause 7 of the Bill

3 Clause 14 of the Bill

4 Clause 2(a) of the Bill

5 Clause 3 of the Bill

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KEY CONTACT

Terence Seah

Terence Seah
Partner

T:  +65 6602 6605 M:  Email Terence | Vcard Office:  Singapore

Christine Ong

Christine Ong
Senior associate

T:  +65 6602 6602 M:  +65 9686 3336 Email Christine | Vcard Office:  Singapore