Singapore -Tougher Work Pass Controls For Foreign PMES And Proposed Amendments To The Employment Act.

24 July, 2015

 

INTRODUCTION

 

On 8 July 2015, the Ministry of Manpower (“MOM”) announced a suite of measures to enhance employment and career opportunities for Singaporean Professionals, Managers and Executives (“PMEs”). MOM stated that these measures are part of the Government’s ongoing efforts to strengthen the Singaporean core, as Singaporean PMEs continue to form a critical and growing core of the workforce.

 

Broadly, these measures cover the following areas:

 

(a)  additional requirements and scrutiny for employment pass applications;

(b)  tightened work pass controls for hiring foreign PMEs;

(c)  wage support and reskilling for Singaporean PMEs; and

(d)  increased access to dispute resolution mechanisms for PMEs.

 

Separately, the Employment (Amendment) Bill (“Bill”) was introduced in Parliament on 13 July 2015. Importantly, the proposed amendments seek to make it compulsory for employers to:

 

(a)  make and keep records of employees and former employees;

(b)  give to employees a written record of their key employment terms (“KETs”); and

(c)  give complete and accurate pay slips to employees.

 

The Bill also seeks to amend the requirements for statutory maternity benefits and childcare leave.

 

These developments are discussed in greater detail below.

 

ENHANCED SUPPORT FOR SINGAPOREAN PMES

 

Additional requirements and scrutiny for employment pass applications

 

From 1 October 2015, employers who advertise job vacancies on the national Jobs Bank before submitting Employment Pass (“EP”) applications will be required to publish the salary ranges of these jobs. EP applications accompanied by advertisements which do not state a salary range will be rejected. The move is to prevent Singaporeans from being short-changed, MOM said.

 

MOM has also stated that it will increase scrutiny of EP applications for selected firms which may have a disproportionately low concentration of Singaporean PMEs relative to others in their industry, or have had repeated complaints of nationality-based hiring practices. To this end, MOM will require the company to submit more information when applying for an EP, to assess whether Singaporeans were considered fairly. Such information will include:

 

(a) the number of applications submitted by Singaporeans;

(b) whether Singaporeans were interviewed for the vacancy; and 
(c) the firm’s current share of Singaporeans in PME positions.

 

Where MOM finds, further to such additional scrutiny, that the human resource (“HR”) practices of any firm is unfair, it will ask the firm to submit and comply with a plan to make improvements to their HR practices. Uncooperative firms may have their work pass privileges curtailed.

 

Manpower Minister, Mr Lim Swee Say, later clarified in Parliament that only a small group will have their hiring processes scrutinised more closely by MOM, either because they have a lower proportion of Singaporeans compared with their industry peers or are deemed by MOM not to be fully committed to hiring Singaporeans. Mr Lim added that MOM is also looking at companies whose HR director is a foreigner and which have a "high concentration" of foreign professionals from the same country as that HR director.

 

MOM also confirmed on 20 July 2015 that it is investigating a complaint over discrimination against local pilots at the Boeing Singapore Flight Services campus. It was also reported that MOM has already put the hiring process of some 150 firms under greater scrutiny.

 

Tightened work pass controls for hiring foreign PMEs

 

MOM will implement tighter quality controls in its assessment of foreign PMEs applying for work passes. Presently, MOM’s assessment of foreign PMEs is based on a combination of qualifications, experience, and salary. Applicants who submit forged qualifications will be barred from working in Singapore for life, and may potentially be fined up to S$20,000 and/or imprisoned for up to two years.

Moving forward, MOM will reject work pass applications which contain doubtful qualifications, such as those obtained from unaccredited institutions that do not ensure that its students are properly qualified (commonly known as “degree mills”).

 

MOM also stated that it will also pay closer attention to the relevant experience of EP and S Pass applicants, especially those applying for professional occupations.Mr Lim also stated in Parliament that the Government aims to maintain the foreign share of Singapore’s workforce at the current one-third level.

 

MOM will also be raising the requirements for EP and S Pass holders to bring their families over. From 1 September 2015, foreigners will have to earn at least S$5,000 monthly to obtain Dependant’s Passes (DPs) for their spouses and children to stay in Singapore. This is up from the current S$4,000. Foreigners will have to earn at least S$10,000 monthly to obtain Long Term Visit Passes (LTVPs) for their parents to stay in Singapore, up from the current S$8,000.

Wage support and reskilling for mature Singaporean PMEs

 

On 1 October 2015, the Singapore Workforce Development Agency (“WDA”) will launch a new Career Support Programme (“CSP”), which aims to assist mature Singaporean PMEs who may face greater difficulties in securing jobs. This pilot initiative will run for two years and will be open to eligible PMEs who register with WDA Career Centres and the Employment and Employability Institute (e2i).

 

Under the CSP, employers will be given wage support (in accordance with the table below) if they hire mature Singaporean PMEs, who have been looking for jobs for at least six months, in mid-level jobs that pay at least S$4,000. These employers will be required to provide the newly-hired mature PMEs with structured on-the-job training, or send them for external training. 

 

 

WDA

 

A will also collaborate with and provide incentives to private search and placement firms to support mature Singaporean PMEs in accessing more job opportunities.

 

Increased access to dispute resolution mechanisms

 

MOM will establish the Employment Claims Tribunal (“ECT”) in the first quarter of 2016. The ECT aims to provide PMEs earning more than S$4,500 a month (and therefore not covered by the Employment Act) with a more affordable and expeditious dispute resolution mechanism for their statutory and contractual salary-related disputes. Currently, such PMEs can only pursue breaches of employment contracts through civil suits.

 

In addition, the coverage under the Tripartite Mediation Framework (“TMF”) will be enhanced, as follows:

 

(a)  cover re-employment and other employment statutory issues;

(b)  remove the current salary cap of S$4,500 to cover all PME union members in non- unionised companies; and

(c)  include rank-and-file union members in non-unionised companies.

 

The TMF was set up in 2011 by MOM and its tripartite partners – the Singapore National Employers Federation (SNEF) and the National Trade Unions Congress (NTUC), to provide mediation services to resolve employment disputes between eligible PMEs and their employers. Currently, PMEs who are eligible for tripartite mediation are those who earn less than S$4,500 a month; are employed in a non- unionised company; and have joined any registered trade union as individual members without collective representation rights. The issues covered under the TMF are presently limited to:

 

(a)  salary arrears;

(b)  payment of retrenchment benefits; and

(c)  breaches of individual employment contracts.

 

For reference, MOM’s press release on the Enhanced Support for Singaporean PMEs may be accessed here.

 

PROPOSED AMENDMENTS TO THE EMPLOYMENT ACT

 

The new Bill was read for the first time on 13 July 2015. A key feature of the new Bill is its proposed amendments to the Employment Act (“EA”) which will require employers to make and keep records of employees, and to give written records of KETs and pay slips to employees.

 

Failure to comply with these requirements will be considered “civil contraventions” under the EA, and offending employers will be liable to a fine of up to S$1,000 on the first occasion and up to S$2,000 on subsequent occasions.

 

Furthermore, an employer who makes or keeps incomplete or inaccurate employee records, or gives incomplete or inaccurate written records of KETs or pay slips, will be deemed to have failed to comply with this requirement, regardless of whether the employer knew of such incompleteness or inaccuracy.

These proposed amendments are expected to minimise and facilitate resolution of employment disputes once they take effect.

 

The proposed amendments come in the wake of MOM’s previous announcements in 2014 that the issuance of written KETs will be mandated by the first half of 2016, in tandem with the mandating of itemised pay slips. As a first step to encouraging employers to adopt these workplace practices, MOM and its tripartite partners have also published the Tripartite Guidelines on Issuance of Itemised Pay Slips and the Tripartite Guidelines on Issuance of Written Key

Employment Terms in 2014.

 

Maintenance of employee records

 

The Bill will impose a requirement on employers to make and keep (for the prescribed retention period) employee records containing information about the employment of current and former employees. This will replace the existing requirement for employers to prepare and keep a register of employees and a record of workmen. 

 

In addition, employers will have to ensure that such employee records are readily accessible to
that current or former employee during the prescribed retention period.

 

Issuance of written key employment terms

 

The Bill will introduce a new requirement on employers to give employees a complete and (c) accurate written record of their KETs, no later than14 days after the start of employment, or within such other period as prescribed by regulations in substitution. 

 

Employers may give the written record of the KETs to employees in any manner, including in an (e) electronic form, or via the publication of such KETs on an Internet website authorised by the employer and readily accessible to the employee.

 

This requirement will only apply to contracts of service entered on or after the commencement date of this proposed amendment.

 

Issuance of itemised pay slips

 

The Bill will also impose a new requirement on employers to give employees complete and accurate pay slips for all salary paid, for the salary period(s) to which such pay slips relate.

 

The pay slips may be given an in electronic form, but must be given within the prescribed time for issuing pay slips, be in the prescribed form (if any), and contain all the information prescribed.

 

Other proposed amendments

 

Apart from the above, the Bill also seeks to:

 

(a) introduce a new EA regime on administrative penalties, which will

empower authorised officers to issue to an employer who commits a civil contravention under the EA: (i) a contravention notice requiring the payment of administrative penalties; and/or (ii) directions requiring the employer to bring the civil contravention to an end, and where necessary, require the employer to take specified actions to remedy, mitigate or eliminate any effects

of the civil contravention and to prevent the recurrence of the civil contravention;

 

(b) expand the Commissioner for Labour and inspecting officer’s powers of entry, search, and seizure, and allow for the disposal of exhibits that are seized during investigations;

 

(c) extend the Minister’s powers to prescribe penalties for contraventions of any regulations made under the EA;

 

(d) make miscellaneous changes for the administration of the EA; and

 

(e) make consequential and related amendments to the Child Development Co-Savings Act, the Employment of Foreign Manpower Act and the Employment, Parental Leave and Other Measures Act 2013. In particular, while a female employee must currently have been employed for three months immediately before her confinement in order to qualify for statutory maternity benefits, this requirement will be changed such that the female employee must still have been employed for three months before her confinement, but this period need not be immediately before the confinement. The maternity benefit period will also not include any day during that period on which the female employee takes no-pay leave.

 

CONCLUSION

 

The measures announced by MOM build upon its efforts in the past few years to increase protection for PMEs, and in particular, Singaporean and Singapore Permanent Resident PMEs. Notably, the EA was extensively amended in 2014 to grant statutory rights to PMEs earning less than S$4,500 basic monthly salary. While these EA rights were not granted to higher-income PMEs, these latest measures will likely affect higher-income PMEs and grant them another avenue to challenge breaches of employment contracts by their employers.

 

In addition, while MOM has not introduced strict bright line quotas on the ratio of EP holders to Singaporean PMEs, it has signalled its intent to “scrutinise” EP applications for selected firms which have a disproportionately low concentration of Singaporean PMEs. Taken in consideration with the potential penalties for non-compliance with the proposed new requirements under the EA, employers are strongly encouraged to evaluate their hiring and employment practices. 

 

 

For further information, please contact:

 

Kelvin Tan, Director, Dre w & Napier

kelvin.tan@drewnapier.com