Employment Act, a law that governs worker’s rights in Singapore, has undergone four major changes. Parliament approved the changes on November 20, 2018. However, will not come into effect until April of next year.
Enacted for the first time in 1968, the Employment Act has undergone several amendments, with the latest changes set to come into effect next year. The Act seeks to govern the relationship between employers and employees. The law includes terms of employment as well as the rights and obligations of each party.
The current Employment Act comes with a limited application for executives, professionals, and managers (PMEs). The new Act, on the other hand, comes with an extended scope of application targeting both employees as well as PMEs. For starters, it enshrines minimum legal protection with respect to conditions of work. A lack of a salary cap means the new law will cover more people than the current act.
One of the biggest changes included in the revamped bill pertains to the protection of employees in the private sector. In addition, the new law guarantees extra protection to regular workers as well. It also promises to improve employment disputes resolution framework. Employers will also have greater flexibility when it comes to staff compensation for work done on public holidays.
For the longest time private sector, employees have not enjoyed the same benefits as their counterparts in the public sector. However, with the new bill, there will no longer be any form of discrimination, depending on where one works.
Under the new Employment Act, Private sector employees will enjoy paid sick leave for the first time. The new bill also proposes mandatory annual leave of between 7 and 14 days in a calendar year. Private sector employees will also rest assured of protection against any form of wrongful dismissal.
The new Employment Act will apply to all employees excluding seamen, and domestic workers as there are other laws already protecting them. Paid leave entitlements is one of the biggest inclusion, as it will be extended to cover PMEs as well. The act stipulates a 7 day paid annual leave, 11 days public holiday as well as well 14 days paid sick leave.
Employees are also entitled to 60 days paid hospitalization leave as well as Maternity leave and Childcare leave. Under the new act, employers who take issue with pregnant workers and mothers will have to change their ways.
The Amended Act will also ensure timely payment of salary as well as a calculation formula for the daily wage rate.
Starting April, rank-and-file workers will enjoy more protection when it comes to working hours as well as payment for overtime work and rest days. The new law will raise the monthly salary threshold to $2,600 from $2,500, targeting workers in white-collar jobs as well as non-workmen. However, for manual and blue-collar workers, part IV will only offer protection for those earning up to $4,500.
The new bill will also give businesses greater flexibility. For starters, employers will now be able to decide whether to provide payment for time off especially on hours worked during public holidays. This will avert the risk of having to pay them for a full day off.
Salary deductions will be much flexible under the new act, while still protecting the interests of workers. Under the current Act, there are limitations on the type of deductions that employers can make, including absence from work or when an employee damages or loses goods entrusted on him or her.
The Employment Claims Tribunal is to handle all salary related disputes under the new bill. Employees and employers should enjoy one-stop service from the Tribunal as a result. The change was made in part because the Tribunal already hears salary related disputes.
The Ministry of Manpower is to handle wrongful dismissal claims under the new framework. PMEs who need help on matters pertaining to wrongful dismissal or nonpayment of salary cases will have to go to court. The Tribunal has no jurisdiction over such matters.
However, a lack of clear definition of unfair dismissals means a lot of issues could crop up. Concerned with the standoff, the Ministry of Man Power intends to publish a new set of guidelines that will guide the litigation of wrongful dismissals.
The current Employment Act does not cover, Japanese expatriates as most of them are executives earning more than $4,500 a month. The amended act will change all this, as it covers professional executives as well as managers both foreign and local. The new law does not come with an exclusion when it comes to foreign employees.
Japanese companies that intend to introduce paid statutory leave for PMEs will have to introduce appropriate internal rules and procedures. The requirement seeks to avert any abuse of such entitlements or any form of misunderstanding between employees and the management.
According to Manpower Minister, Josephine Toe, the new changes reflect the ever-changing labor force market as well as emerging employment practices. The new changes will also go a long way in covering extra 430,000 workers currently not covered under the employment act. This will especially target employees in the managerial and executive positions.
“Today, with the proportion of PMETs… expected to make up two-thirds of our local workforce by 2030; it is timely to make a more fundamental change to the coverage of the EA. Since it was last reviewed in 2012, the profile of our labor force and local employment practices have continued to evolve,” Toe in a statement.
The new changes received unanimous support in parliament an acknowledgment of the changing labor market. However, some legislators are still calling for the expansion of the law to cover vulnerable workers such as disabled workers as well as well as baby boomers and the elderly who work for minimum wage. Some legislatures are also calling for the removal of the white and blue-collar worker distinction.
Neha Gupta has been in the financial space for over six years now. Gupta earned her MBA degree from Symbiosis Centre of Distance Learning in 2009 and her passion for finance led her to pursue Chartered Financial Analyst (CFA) course. She has successfully completed Level II of her CFA. She is a veteran in article writing, which is depicted in her numerous pieces published on SeekingAlpha, Nextiphonenews, InsiderMonkey, MarketWatch, and Techinsider. Her crisp and eloquent writing finds its best place in Researchcows, where emphasis is given on developing rich content for various websites, products, business plans, trainings, and book writing.