6 February, 2019
On 20 November 2018, the Employment (Amendment) Bill 2018 (the "Bill") was passed in Parliament, thereby introducing several noteworthy amendments to the Employment Act (Cap. 91) of Singapore (the "Act") and the Employment Claims Act 2016.
The changes to the Act will take effect from 1 April 2019.
What are the main amendments that an employer should be aware of?
The Act will, post-amendment, apply to more employees
The Employment Act pre-amendment does not cover an employee who is:
(a) a seafarer;
(b) a domestic worker;
(c) employed in a managerial or an executive position and in receipt of a salary exceeding S$4,500 a month; or
(d) employed by the Singapore Government or a statutory board.
Further, Part IV of the Employment Act which deals with conditions of service such as annual leave, rest days and hours of work only applies to:
(a) a workman1 (for example, a person who has entered into a contract of service in which he is engaged in manual labour or who is a person specified in the First Schedule of the Employment Act such as a cleaner, machine operator, construction worker, labourer etc.) earning a monthly salary of not more than S$4,500; or
(b) an employee who is not a workman but who is covered under the Employment Act and earns a monthly salary of not more than S$2,500.
Following the passing of the Bill, a person who is employed in a managerial or an executive position and who receives a salary exceeding S$4,500 per month will now be covered by the Act.
The Bill also extends the application of the benefits under Part IV of the Act to non-workmen employees earning up to S$2,600.2
Annual leave benefits
Annual leave provisions will post-amendment now apply to all employees in Singapore. This is achieved by moving these provisions from Part IV of the Act to another part of the Act.
Another notable amendment is that employers will be prevented from simply forfeiting their employee's unused leave in the event of an employee's termination. Instead, there will be a new statutory requirement under the Act which provides that if an employee is dismissed, the employee has rights to encash accrued unused annual leave (except on dismissal on grounds of misconduct).3
Dismissal and disputes
Currently, the Act defines "dismiss" as the termination of the contract of service of an employee by his employer, with or without notice and whether on grounds of misconduct or otherwise. The Bill proposes to extend the definition of "dismiss" to cover instances of involuntary resignation of an employee.4
This redefinition means that the employers can no longer disguise their terminating of employees by getting the employees to resign.
In genuine cases of mutual agreement to part ways, extra care should be taken to document the employee's consent.
There are also changes in the forum for resolving wrongful dismissal cases. Pre-amendment, salary-related disputes are dealt with by the Employment Claims Tribunal while wrongful dismissal claims are dealt with by the Ministry of Manpower. Employees covered by the Act who believe they have been wrongfully dismissed can make representations in writing to the Ministry of Manpower. The amendments to the Bill now provides for any disputes relating to an employee's dismissal without just cause or excuse to be dealt with by the Employment Claims Tribunal instead of the Ministry of Manpower.5
This will mean that the Employment Claims Tribunal will now settle almost all employment-related disputes and employees will no longer be required to go through two different avenues to settle their employment disputes.
Parties are prohibited from being represented by lawyers in the Employment Claims Tribunal. Employers will have to be prepared to attend before the Employment Claims Tribunal, without the benefit of legal representation, in respect of such wrongful dismissal claims.
Salary deductions
The Act currently limits the type of salary deductions that employers can make. The Bill amends the Act to redefine when deductions to an employee's salary may be made.6
The Bill allows for salary to be deducted for reasons such as (i) absence from work, (ii) damages or loss of goods or money, (iii) accommodation (with the employee's consent), (iv) amenities and services provided by the employer (with the employee's consent) and (v) recovering advances, loans or overpaid salary.
Salary deductions will also be allowed if the employee consents to the deduction in writing and the employer allows the employee to withdraw his consent at any time without penalty to the employee.
For further information, please contact:
Terence Seah Partner, Stephenson Harwood (Singapore) Alliance
terence.seah@shlegalworld.com
