Major changes to the Singapore Employment Act

The Amendment bill seeks to introduce major amendments to the Employment Act (EA) and is expected to come into force in April 2019.

The changes are clearly geared towards creating a more pro-employee regime in Singapore and will have a very significant impact in the way companies operating in Singapore hire and manage their employees.

We set out below a summary of the key proposed changes to the EA.

Some of the key amendments include:

• Removal of the monthly salary cap – From 1 April 2019, the EA will include all employees (except public servants, domestic workers and seafarers). This means that statutory protections and benefits set out in the EA (outside Part IV) must also be offered to professionals, managers and executives (PMEs) earning more than SGD 4,500 a month (who were previously excluded under the EA). Examples include minimum days of annual leave, paid sick leave, paid public holidays, employment records, hospitalisation leave and compensation against wrongful dismissal.

• Part IV Benefits – The monthly salary threshold under Part IV of the EA for non-workmen will be increased from SGD 2,500 to SGD 2,600. This means that more rank-file employees will be protected under Part IV of the EA.

• Wrongful dismissal – The qualifying employment period for protection under the wrongful dismissal provision will be shortened from 12 months to 6 months. The Ministry of Manpower also intends to publish guidelines in due course which provide more insight on the process of adjudicating wrongful dismissal claims.

• Changes to the Dispute Resolution Process Relating to Wrongful Dismissals – Wrongful dismissal claims will be mediated by the Employment Claims Tribunal instead of the Ministry of Manpower. This would mean that the Employment Claims Tribunal will be the “one-stop service” that hears both wrongful dismissal claims and salary related claims.

• Salary deductions – An employer will need written consent from its employee if it is to make deductions from the employee’s salary for the purposes of accommodation, amenities and services supplied by the employer.

• Information on Retrenchment – The Commissioner of Labour would gain additional statutory powers by compelling an employer to furnish information on the retrenchment of an employee.

In light of these significant amendments to the EA, Singapore Companies should take the opportunity to review the employment agreements and employee handbooks which are applicable to PMEs earning more SGD 4,500 a month to ensure that their terms and conditions are compliant with these changes from 1 April 2019.

If you wish to discuss the changes to the EA and how we may help you to comply with the new regime, please contact Elisabeth Lebard at e.lebard@rosemont-bizserv.asia