Amendments to the Employment Act

On 5 March 2018, the Minister for Manpower announced that the Ministry of Manpower (“MOM”) would seek Parliament’s approval of the following amendments to the Employment Act (the “EA”) later this year for implementation by 1 April 2019:

  • Broadening the coverage of the EA

The EA will be broadened to cover more employees with effect from 1 April 2019. MOM has decided to remove the salary cap of S$4,500 so that the core EA provisions will cover all employees, including all Professionals, Managers, Executives and Technicians (“PMET”) regardless of salary thresholds. Such change means that all PMETs will enjoy the employee benefits under the core provisions of the EA, including (i) paid public holidays; (ii) paid sick and hospitalisation leave; (iii) maternity benefits and childcare leave; (iv) statutory protections relating to timely payment of salary, maternity protection and dismissal without just cause or excuse and (v) preservation of existing terms and conditions, length of service and automatic transfer rights to buyers on the employment sale of businesses.

  • Extension of Protection on Working Hours and Overtime Payment to more workers

Additional protection for more vulnerable employees is set out in Part IV of the EA and relate to time-based provisions such as annual leave, hours of work, overtime pay and rest day. These cover workmen earning a monthly salary of up to S$4,500, and non-workmen earning a monthly salary of up to S$2,500. Under the amended EA, the current salary cap of S$2,500 for non-workmen will be increased to S$2,600 to cover more employees. In terms of overtime pay, the salary cap for non-workmen will also be raised from S$2,250 to S$2,600.

  • Clarification on Scope of Automatic Transfer Rights in transfers of undertaking

The amendments to EA are expected to provide further clarification around the types of transfers/transactions that will constitute a “transfer of undertaking” for the purposes of Section 18A of the EA, pursuant to which EA employees have the right to automatically transfer to the buyer of that undertaking by law with continuity of service and on their existing terms and conditions of employment.

  • Dispute Resolution for Unfair Dismissal

Under the current regime, salary-related disputes are heard by the Employment Claims Tribunal while unfair dismissal claims are adjudicated by MOM. The proposed amendments to the EA will streamline the process by allowing the Employment Claims Tribunal to hear both salary-related disputes and unfair dismissal claims.

Introduction of Tripartite Standards

Between July 2017 and March 2018, the tripartite partners (MOM, National Trade Union Congress and the Singapore National Employers Federation) jointly launched various sets of Tripartite Standards for the first time. These cover (i) the employment of term contract employees; (ii) flexible work arrangements; (iii) grievance handling; (iv) recruitment practices; (v) procurement of services from media freelancers; (vi) unpaid leave for unexpected care needs and (vii) contracting with self-employed persons. Each Tripartite Standard specifies a set of verifiable and actionable employment practices that employers can adopt by registering online at the website of the Tripartite Alliance for Fair & Progressive Employment Practices (“TAFEP”). After the registration, the employers will be listed on the website of TAFEP. While the adoption of the Tripartite Standards is not mandatory, employers which adopt these Tripartite Standards will be able to distinguish themselves from their counterparts, thereby enhancing their ability to attract and retain talent. Future Tripartite Standards will cover areas such as the conduct of retrenchment exercises and age-friendly workplace practices.

Tightening of rules on the employment of foreign employees

MOM introduced new measures to moderate the intake of foreign manpower and ensure that Singaporeans have fair access to better job opportunities:

  • Changes to the qualifying salary requirement for work pass holders to sponsor their dependants in Singapore

With effect from 1 January 2018, the salary criteria for work pass holders to qualify for dependant privileges increased from S$5,000 to S$6,000 (for spouses and children) and S$10,000 to S$12,000 (for parents).

  • Increased scrutiny over recruitment practices in employment pass applications

In November 2017, MOM added several new questions in the Employment Pass (“EP”) online application form requiring employers to disclose information about their efforts to hire Singaporean candidates for the job. For example, employers have to provide information on how many Singapore citizens, permanent residents and foreign nationals applied for the job, what recruitment channels the employer has used, how far each candidate reached in the hiring process (distinguishing between Singapore citizens, permanent residents and foreigners), and up to three reasons why the company decided not to hire a local candidate from a prescribed list of reasons.

  • Jobs Bank advertisement

Under the Fair Consideration Framework, companies must advertise job vacancies on the Jobs Bank for at least 14 days before they can submit EP applications for their foreign hires. Currently, companies with 25 or fewer employees and jobs that pay fixed monthly salary of S$12,000 and above are exempted from the Jobs Bank advertising requirement. From 1 July 2018, the Jobs Bank advertising requirement will be expanded to cover companies with at least 10 employees and jobs that pay up to S$15,000 a month.

  • Updates to S-Pass Eligibility

The minimum qualifying salary to apply for a S-Pass for foreign mid-level skilled staff will be raised from S$2,200 to S$2,400. To allow companies more time to adjust, the hike will take place over two phases: (i) the S$2,300 qualification will kick in on 1 January 2019 and (ii) the S$2,400 qualification will take effect on 1 January 2020.

Expansion of the Employment Claims Tribunal Scope

The Tripartite Partners are in discussions to expand the scope of The Tripartite Alliance for Dispute Management and the Employment Claims Tribunal to include mandatory mediation and resolution of non-salary-related disputes, including disputes relating to wrongful dismissals of employees not covered under the EA. The aim is to reach agreement by 2018.

Tripartite Workgroup on Self-Employed Persons

After conducting a public consultation exercise last year, the tripartite workgroup on self-employed persons (“SEPs”) released its report on the recommendations to address the challenges faced by SEPs on 22 February 2018. The tripartite workgroup’s recommendations include, amongst others, the development of a Tripartite Standard for engaging SEP’s services, the provision of a SEP insurance product, the adoption of a contribute-as-you-earn Medisave model and the establishment of occupation specific competency frameworks.