Core employee benefits extended in Singapore by April 2019

Date published

13-11-2018

Services

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The Employment (Amendment) Bill (the “Bill”) which was tabled in Parliament on 2 October 2018 contains one of the most significant amendments to the Employment Act (the “Act”) since its inception in 1968. A second reading of the Bill has been scheduled to take place sometime this month and the amendments contained therein will take effect on 1 April 2019 once the Bill is passed by Parliament and assented to by the President of Singapore.

The key amendments to the Act are:

  • Extension of core benefits under the Act to all professionals, managers and executives

The core provisions under Part X of the Act relating to public holidays, annual leave and sick leave entitlement will apply to all professionals, managers and executives with the broadening of the definition of employees under the Act. Currently, only professionals, managers and executives drawing a maximum of S$4,500.00 a month fall within the statutory definition of an employee under the Act and those drawing a salary exceeding S$4,500 a month are not covered under Part X of the Act and their rights and entitlements are governed solely by way of their contracts of employment.

Seafarers, public servants and domestic workers who continue to be covered separately by other legislation are not affected by the amendments.

In particular, a new section 88A has been proposed to extend the statutory entitlement to minimum paid annual leave to every employee to whom the Act applies.

  • Increase in salary-cap for non-workmen to S$2,600.00/month

Non-workmen drawing a monthly salary of not more than S$2,600.00 a month will also be covered under Part IV of the Act (which covers hours of work, overtime, rest days and other conditions of work) once the amendments come into force, up S$100.00 from the current monthly salary cap of S$2,500.00.

Part IV of the Act will nevertheless not apply to professionals, managers and executives.

  • Employment disputes to be heard by Employment Claims Tribunal

Currently, wrongful dismissal claims are heard by the Ministry of Manpower whereas salary-related disputes are heard by the Employment Claims Tribunal. The proposed amendments will see both types of employment-related disputes to be adjudicated before the Employment Claims Tribunal as it is a common occurrence that when a dispute arises over the dismissal of an employee, there are usually salary-related issues to be considered at the same time. The proposed amendments will therefore streamline the existing dispute resolution process for such disputes.

  • Re-definition of dismissal of employees to cover involuntary resignations

Once the amendments come into force, dismissals will include the involuntary resignation of an employee, and not just an employer terminating the contract of service of an employee. Under the amended Act, the affected employee would need to show that he employee did not resign voluntarily but was forced to do so because of any conduct or omission on the part of the employer.

In addition, employers will be required to furnish information on the retrenchment of any employee to the Commissioner for Labour upon request under the proposed amendments. 

In light of the amendments to the Act, we would strongly recommend a review of existing employment contracts for employees who are professionals, managers and executives drawing a monthly salary of more than S$4,500.00 to ensure compliance with the amended Act once it comes into force next year.

We would be happy to discuss and answer any queries that you may have in relation to the developments in the law described in this article. The writer’s contact details are set out below for ease of reference.