Jurisdiction - Singapore
Reports and Analysis
Asia Pacific – Comparing Employment Laws Across The Region.

16 January, 2015

 

Legal News & Analysis – Asia Pacific 

 

We asked our lawyers to tell us three need-to-know employment law facts in Singapore, Hong Kong, PRC, Thailand, Indonesia, Australia and Japan. The results show that while there are some similarities across the region, there are also some very interesting differences.

 

Jurisdiction Top 3 Things To Know About Employment Law In Your Jurisdiction
Singapore 1. Although it is possible to terminate employment contracts with notice in Singapore, employees covered by the Employment Act may still appeal to the Minister for Manpower that the termination of their employment was “without just cause and excuse”. 

2. Employers hiring foreign employees on an EmploymentPass need to comply with the Fair Consideration Framework which promotes hiring local talent, and requires jobs to be advertised on the Work & Development Agency’s website for at least fourteen days.

 

3. Singapore does not have specific anti discrimination legislation, but there are provisions under the Constitution which protect Singaporeans, and rules which protect those on maternity leave, military service leave or who are participating in trade union activity.

Hong Kong 1. Although it is generally considered to be the case that Hong Kong employers have a broad ability to dismiss employees, the dismissal must still be “by reason” of one of the five reasons set out in the Employment Ordinance: conduct of the employee; capability or qualifications of the employee to perform his/her role; redundancy or operational reasons; potential breach of law; or any other reason of substance sufficient to warrant the dismissal of the employee. 

 

2. The payment of annual bonuses is highly regulated in Hong Kong, and the grasp of the law in this respect is broader than might be expected. The terms agreed to by an employer and employee in relation to the payment of bonuses may be overridden by the Employment Ordinance in certain circumstances.

 

3. While there are some narrow exceptions, it is generally unlawful to dismiss an employee who is pregnant; on statutory maternity leave; on statutory paid sick leave; or suffering from a work-related injury, including for reasons of redundancy.

PRC 1. An employer is required to enter into a written employment contract with an employee within one month of the employment commencing. Otherwise the employer is required to pay double wages for up to one year, and the employment may be deemed to be permanent. 

 

2. An employer may only terminate an employee based on the narrow grounds set out in the PRC Employment Contract Law.

 

3. If an employer wishes to enact, revise or decide on its rules and policies for major issues that directly involve the “vital interests” of employees, the company must present the policies to an assembly of employee representatives, or to all of its employees, for consultation.

Indonesia 1. Indonesian employment laws regarding termination and severance payments are complex and require careful consideration in the circumstances of each particular transaction. In general, the law imposes an obligation on the employer to prevent termination of employment. If termination cannot be avoided, and the terms cannot be agreed with the employee, then the company must apply for and obtain permission to terminate an employee from the Industrial Relations Court 

 

2. The wording of the legislation on the requirement to obtain a work permit is broad. The provisions do not specify whether they apply to “non-resident directors/employees” and it is unsettled whether foreigners who hold office/are employed by an Indonesian company, but who do not reside within the country, also require work permits.

 

3. Fixed term employment contracts are limited to circumstances where the work to be performed is a “one-off” task or the nature of the work is temporary; the work is expected to be completed within a short time frame and must take no longer than 3 (three) years; the work is seasonal; or the work relates to a new product or activity or to an existing product that is still in the experimental stage or phase. Fixed term contracts must be made in Bahasa, or will be deemed to be a permanent contract.

Japan 1. A company’s work rules will form part of an employee’s terms of employment; in practice many Japanese companies that have work rules in place do not enter into written employment contracts with their employees. 

 

2. Given the lifetime employment system in Japan, it is extremely difficult to legally dismiss an employee. It is common to pay a severance package to an employee in return for the employee’s agreement to voluntarily resign.

 

3. In general, an employer cannot require an employee to work more than 8 hours a day (even with pay) unless the employer has entered into a written labour management agreement with a labour union that has more than half the employees in the workplace as union members or, if there is no such labour union, with an employee representative who represents the majority of the employees in the workplace.

Thailand 1. If an employer unilaterally terminates an employee who is not on a fixed term contract, the employer must pay to the employee severance pay within three days of the termination taking effect. The amount of severance pay is calculated according to a sliding scale based on the employee’s duration of employment. 

 

2. It is not possible to prevent an employee from bringing a claim against an employer for unfair dismissal; an employee retains the right to bring a claim in all employment termination circumstances, including if the employee voluntarily resigns or enters into a mutual agreement to cease employment.

 

3. Unless an employee consents, an employer is prohibited from amending employee benefits if the result of the amendment is less favourable to the employee.

Australia 1. Statutory employment laws in Australia exist at both the Federal and State levels. This means that depending on the State or Territory in which your employees are based, different rules may apply in relation to matters regulated by State/Territory legislation, such as long service leave, workers compensation and prohibited grounds of discrimination. 

 

2. The minimum terms and conditions of employment set out in legislation do not necessarily paint a full picture of an Australian employee’s minimum statutory entitlements. Federal legislation imposes asystem of “awards”, which are documents setting out particular minimum conditions that apply to employers in particular industries and employees performing particular types of jobs. There are 122 “modern” awards and approximately 1 in 5 employees in Australia are covered by an award.

 

3. Employees in Australia are entitled to “long service leave” which rewards long service with an employer by providing a period of paid leave, and an employer may be required to pay out accruals if employment ends before the leave is taken. The length of time required to become eligible to take long service leave or to be paid out on termination differs depending on the source of the entitlement (State/Territory legislation or an industrial instrument) but typically ranges from 5-10 years service. In many cases prior service with an overseas related entity may be required to be taken into account for long service leave accrual purposes.

 

herbert smith Freehills

 

For further information, please contact:

 

Fatim Jumabhoy, Herbert Smith Freehills

fatim.jumabhoy@hsf.com

 

Jasmine Chen, Herbert Smith Freehills
jasmine.chen@hsf.com
Celia Yuen, Herbert Smith Freehills
celia.yuen@hsf.com
Helen Beech, Herbert Smith Freehills
helen.beech@hsf.com
Florence Cheung, Herbert Smith Freehills
florence.cheung@hsf.com
Janaki Tampi, Herbert Smith Freehills
janaki.tampi@hsf.com
Narendra Adiyasa, Hiswara Bunjamin & Tandjung
narendra.adiyasa@hbtlaw.com

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