28 March 2018

On 6 March 2018, Minister for Manpower Mr Lim Swee Say announced that the Ministry of Manpower (“MOM”) will seek Parliament’s approval of amendments to the Employment Act (“EA”) to give better protection for workers. These amendments are targeted to be implemented by 1 April 2019. The Minister also announced that the minimum qualifying salary for S Pass holders will be increased incrementally in 2019 and 2020.

Amendments to the Employment Act

Extension of scope of EA for core employee benefits

The scope of the EA with respect to core employee benefits will be extended to cover all employees, including all professionals, managers, executives and technicians, with the exception of public servants, domestic workers and seafarers, who are covered under separate regulations.

Such core employee benefits include minimum days of annual leave, paid public holidays, sick leave and hospitalisation leave and other protection (such as timely payment of salary, maternity protection and childcare leave, and statutory protection against wrongful dismissal). Employees will also have the right to preserve existing terms and conditions for employment transfer resulting from a sale of business and business restructuring.

The Minister also announced that MOM will work together with the other tripartite partners to update their guidelines to clarify the types of transfers which are regulated by section 18A of the EA.

Additional protection on hours of work and overtime pay for more workers

Part IV of the EA currently provides for additional protection in relation to hours of work and overtime pay for workmen who receive a salary not exceeding S$4,500 per month and non-workmen who receive a salary not exceeding S$2,500 per month. The salary cap for non-workmen to whom the additional protection under Part IV of the EA will apply will be raised from S$2,500 per month to S$2,600 per month.

The salary cap used for the purposes of calculating overtime pay for non-workmen will be revised from S$2,250 to S$2,600.

Resolution of disputes relating to salary or wrongful dismissal

Currently, all unresolved statutory and contractual salary-related disputes are heard by the Employment Claims Tribunals (“ECT”), while wrongful dismissal claims are adjudicated by MOM. Changes will be made such that both unresolved salary-related disputes and wrongful dismissal claims are to be heard by the ECT so as to provide both employers and employees with a “one-stop service”.

Implementation timeframe

MOM will seek Parliament’s approval of these amendments to the EA later this year for implementation by 1 April 2019.

 At the moment, it remains to be seen whether any other amendments will be introduced, and how the proposed amendments to the EA will affect employment contracts which have and will come into existence prior to the implementation date. However, once the proposed amendments are made publicly available, employers should conduct a review of their template terms of employment (including employment policies and employee incentive plans) to ensure compliance with the EA going forward.

Changes to S Pass criteria

S Pass holders are mid-level skilled foreigners. The minimum qualifying salary for S Pass holders will increase to S$2,400, from S$2,200 currently.

Those with more years of experience will need to meet higher salary thresholds, in line with current practice.

The increase will be implemented in two stages to give companies more time to adjust. The salary threshold will be raised by S$100 from January 2019, with the next increase of S$100 to take effect from January 2020. A transition period will also be given to existing S Pass holders.

Reference materials

The speech by the Minister can be found on the MOM website www.mom.gov.sg, or by clicking here.

 

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