News: Singapore's Employment Act may undergo changes

Employee Relations

Singapore's Employment Act may undergo changes

One of the key proposals of the Employment (Amendment) Bill is to expand the scope of the act and cover all professionals, managers and executives (PMEs) regardless of their salary levels. Read here to know some of the key suggestions proposed in the Employment (Amendment) Bill.
Singapore's Employment Act may undergo changes

On 2nd October, Tuesday, Manpower Minister Josephine Teo tabled the first reading of the Employment (Amendment) Act in Parliament and laid out the proposed suggestion to the existing act. 

The Act that currently applies only to the 2,90,000 PMEs who earn up to S$4,500 a month and non-PMEs will benefit 4,30,000 more PMEs once it gets approved as one of the key proposals is the removal of the salary cap. 

This would mean that more Singaporean workers will be entitled to employment terms such as minimum days of annual leave, paid sick leave, hospitalization leave, and compensation for wrongful dismissal.

The proposed bill includes three main updates to the Act, which stipulates core benefits for workers covered under it, such as the minimum days of leave for workers. It covers aspects like protection for the timely payment of salaries, maternity protection and childcare leave, and statutory protection against wrongful dismissal.

Here are some of the key suggestions proposed in the Employment (Amendment) Bill:

Removal of the salary cap of S$4,500 a month

As per the proposed changes, the salary cap will be removed and cover all professionals, managers, executives and technicians, who make up 56 percent of the local workforce, adding 4,30,000 PMEs more under the protection of the Act.

The proposed salary cap for white-collar workers is up to S$2,600, which will extend protection to half of Singapore's workforce. However, it wouldn’t apply to public servants, domestic workers and seafarers who don’t come under the scope of this Act due to the nature of their work.

Further, the Ministry of Manpower (MOM) has also proposed to raise the salary cap on the protection for hours of work and overtime pay to more workers. On overtime pay, the salary cap for white-collar workers will be revised upwards from S$2,250 to S$2,600, benefitting about 1,00,000 of the office workers.

Dispute Redressal

Currently, workers have to go to different parties to work out their employment disputes.

While salary-related disputes are mediated at the Tripartite Alliance for Dispute Management (TADM, wrongful dismissal claims are heard by MOM.

The proposed amendment makes the Employment Claims Tribunal the "one-stop service" to hear all employment-related disputes.

The term ‘dismissal of employees’ will get redefined 

According to the new definition, dismissals will also include the involuntary resignation of an employee, besides the employer terminating the contract of service of an employee.

Further, employers would be required to obtain the written consent of their employees if they would want to make any deductions from their salary for certain services such as accommodation or amenities. Written consent may also be withdrawn, without penalty in some scenarios, by the employee in the written notice before the deduction is made.

On the topic of retrenchment, employers have to furnish information on the retrenchment of any employee to the Commissioner for Labour when asked to. 

Expansion of the scope of medical leaves 

Under the proposed changes, any medical practitioner can certify an employee's entitlement to paid sick leave, as opposed to the current rule where only the medical practitioners appointed by the employer can approve any such leave. 

Further, the bill says that any hospital or medical institution, such as community hospitals, will be considered an approved hospital and be accepted for paid hospitalization leave. While, currently, employees can only qualify for paid hospitalization leave if they are admitted to an acute hospital or national center. But with the changes to the Act, employees can be entitled to hospitalization leave when they are directly admitted to a community hospital.

Labour MP Patrick Tay supported the Bill and said, "At a personal level, I have been lobbying for this expansion of the Employment Act since entering Parliament in 2011 and am glad that it has come to fruition with the salary cap removed. This, together with the other proposed amendments, is a positive step towards greater protection of fellow workers, including PMEs.”

Mr Kurt Wee, president of the Association of Small and Medium Enterprises also cheered the Bill and shared that the proposed measures will help to "clean up malpractice in companies", a move which he said "is not a bad thing".

The Employment Act was last reviewed in 2012. It was the Former Manpower Minister Lim Swee Say who had announced the proposed changes to the law in March, following a review and consultations that began in 2012.

The prospective legislation presented on the 2nd October 2018 will be debated in November, with a target to implement the changes by next April.

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Topics: Employee Relations

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