29 November 2018
On 20 November 2018, the Employment (Amendment) Bill (“Bill”) was passed in Parliament. The Bill seeks to amend the Employment Act and other employment-related legislation to expand and enhance employee protection.
The key changes expected to take effect on 1 April 2019 are:
- Extension of core benefits under the Employment Act to all employees;
- Revised salary thresholds for additional protection on hours of work and overtime pay; and
- Improvements to the resolution of wrongful dismissal disputes.
Extension of core benefits under the Employment Act to all employees
A key set of amendments extends the core employee benefits prescribed under the Employment Act to all employees, except seafarers, domestic workers and public servants, who will continue to be covered separately. Core employee benefits include annual leave, paid public holidays, sick leave and hospitalisation leave, as well as other protection (such as timely payment of salary, maternity protection and childcare leave, and statutory protection against wrongful dismissal). One notable change is that annual leave is now a statutory right of all employees; previously, only workmen earning up to S$4,500 a month and non-managerial/non-executive employees (other than workmen) earning up to S$2,500 a month had such a right.
Currently, persons employed in managerial or executive positions whose monthly salaries exceed S$4,500 are excluded from the definition of “employee”. Under the Bill, such persons will also be regarded as employees for the purposes of the Employment Act.
In addition, all employees will now be automatically transferred pursuant to a sale of business and their existing terms and conditions of employment would be preserved on transfer. Although this eases the transfer of employees in the context of a business sale as the consent of managerial and executive employees who earn in excess of S$4,500 a month no longer needs to be obtained, this may not necessarily be attractive to every acquiror of a business as it would not have the flexibility of deciding which of such managerial or executive employees it wishes to hire.
Revised salary thresholds for additional protection on hours of work and overtime pay
The salary thresholds for workers who qualify for additional protection on hours of work and overtime pay, provided for under Part IV of the Employment Act, will be raised to cover more workers. Currently, Part IV of the Employment Act applies to workmen whose monthly salaries do not exceed S$4,500 and employees (other than workmen) whose monthly salaries do not exceed S$2,500, and does not apply to persons employed in managerial or executive positions.
Under the Bill, the salary cap for non-workmen to whom the additional protection under Part IV of the Employment Act applies will be raised from S$2,500 per month to S$2,600 per month. Persons employed in managerial or executive positions will continue to be excluded from Part IV of the Employment Act.
Further, the salary cap used for the purposes of calculating overtime pay for non-workmen will be revised from S$2,250 per month to S$2,600 per month.
Improvements to the resolution of wrongful dismissal disputes
The Bill also seeks to enhance the employment dispute resolution framework. Currently, unresolved statutory and contractual salary-related disputes are heard by the Employment Claims Tribunals (“ECT”), while wrongful dismissal claims are heard by the Ministry of Manpower (“MOM”). As both types of disputes are often related, under the Bill, both salary-related disputes and wrongful dismissal claims will be heard by the ECT.
The Bill also amends the definition of “dismiss” to restate what constitutes a dismissal of an employee. Under the Bill, a dismissal will not be restricted to the termination of a contract of service at the initiative of an employer, with or without notice and for cause or otherwise, but will also include the resignation of an employee if the employee can show, on the balance of probabilities, that the employee did not resign voluntarily but was forced to do so because of any conduct or omission, or course of conduct or omissions, engaged in by the employer.
The Bill also provides that when an ECT is deciding a claim involving a wrongful dismissal dispute, it must take into account the tripartite guidelines on wrongful dismissal.
In addition, managers and executives will be eligible to claim for wrongful dismissal if they have served at least six months, instead of 12 months as is currently the case.
Other amendments set out in the Bill include the following:
- Deductions: Adopting a less prescriptive approach for authorised deductions. Essentially, the new amendments will now allow a deduction if it fulfils two conditions, namely, the employee must consent to the deduction and the employee must have the ability to withdraw its consent at any time without penalty.
- Sick leave and hospitalisation: Recognising medical certificates from all doctors for paid sick leave (and not just government doctors and company-appointed doctors) and clarifying what hospitalisation entails under the Employment Act (for example, an employee will be deemed to be hospitalised if he or she is discharged after being warded if the employee is certified to be ill enough to need rest in order to recover).
- Retrenchment: Providing that the Commissioner for Labour may require an employer to furnish information on the retrenchment of any employee.
From 18 January 2018 to 15 February 2018, MOM held a public consultation seeking feedback on three broad areas: the extension of core provisions in the Employment Act to all employees (including managers and executives, regardless of level of salary), the appropriate salary thresholds for workers who qualify for additional protection, and enhancements to the dispute resolution process for employment-related disputes. On 6 March 2018, the then Minister for Manpower, Mr Lim Swee Say, announced at the Committee of Supply 2018 that MOM would proceed with its plans to enhance the Employment Act to provide better protection for workers, and was aiming to have the changes implemented by 1 April 2019. The resulting Bill was introduced in Parliament on 2 October 2018.