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Singapore – Employment Quarterly Review: 2014

5 June, 2014

 

Legal News & Analysis – Asia Pacific – Singapore – Labour & Employment

 

Looking Back:

 

11 November 2013: Representations To Employee By Employer On Additional Payments May Be Enforceable As A Free- Standing Contract (Daniel John Brader v Commerzbank AG [2013] SGHC 284)

 
This case involves the then Chief Executive Officer of the bank announcing a retention plan to bank employees at a town hall meeting on 18 August 2008. As part of the retention plan, a discretionary bonus would be provisionally awarded to employees for 2008. However, on 18 February 2009, the management of the bank sent an email to all employees, noting the difficulties faced by the bank over the past year and announced that no bonuses would be paid for 2008 and all provisional bonus awards previously announced would be reduced by 90% pro rata. The employees then commenced an action to claim for either the balance 90% of their provisional bonus awards or alternatively, damages.

 
The High Court held that the 18 August 2008 announcement satisfied all the elements with regard to the formation of a valid contract: offer, acceptance, consideration and intention to create legal obligations. Therefore, the 18 August 2008 announcement constituted a free- standing contract, separate from the employees’ employment contracts, despite the fact that the existing employment contracts stated that the bank retains the discretion to pay variable bonuses to the employees.

 

12 November: Parliament Passes Employment, Parental Leave And Other Measures Bill 2013

 
The Ministry of Manpower (‘MOM’) has made changes to the Employment Act (‘EA’) to extend better protection for more workers and improve employment standards, while allowing flexibility for employers where there are practical business concerns. As part of Phase One of the Employment Act Review, feedback was obtained through several platforms including an eight- week public consultation exercise from 19 November 2012 to 11 January 2013. In particular, under the enhanced EA, protection against unfair dismissal and sick leave benefits are extended to professionals, managers and executives (‘PMEs’) earning up to SGD 4, 500 a month. Also, non- workmen such as clerical staff and front- line service staff, earning up to SGD 2, 500 are now protected in terms of working hours, rest days and overtime payments. Previously, PMEs are excluded from the general protection accorded by the EA and the salary threshold for non- workmen covered by the EA was SGD 2k. The new EA will also shield workers from excessive pay cuts by employers, with a 25 per cent sub- cap on deductions for accommodation, amenities and services. According to Acting Manpower Minister Tan Chuan- Jin, these changes will benefit some 450, 000 workers. Most of the changes will take effect on 1 April 2014.

 

28 November: MoM Takes Action Against 15 More Companies For Discriminatory Job Advertisements

 
The Ministry of Manpower (‘MOM’) has taken action against 15 more companies after investigations found the job advertisements of these companies were discriminatory and unaligned with the Tripartite Guidelines on Fair Employment Practices (‘TAFEP’). This investigation was similar to an earlier investigation by the MOM in September 2013 regarding discriminatory job advertisements posted by 10 companies. As was required of the 10 companies, these employers will also have to put up online public apologies for 30 days and are barred from hiring new foreign workers during this 30- day period and 6 months following the publication of their apologies. This brings the total number of companies MOM has taken action against for discriminatory hiring practices since March 2013 to 27. MOM expects all employers doing business in Singapore to comply with the TAFEP and put in place fair employment practices. Non compliance will be viewed seriously and all companies and employment agencies ought to familiarize themselves with the TAFEP.

 

Reference: Ministry of Manpower

 

18 December: Implications On Overtime Work (Monteverde Darvin Cynthia v VGO Corp Ltd [2013] SGHC 280)

 
This case involves the employee claiming against the employer for overtime pay for hours worked in excess of the statutory limit of 44 normal working hours a week. The main issue was whether the employee’s basic monthly wages of SGD 1, 900 covered the additional 16 hours of work per week done by the employee. The Labour Commissioner had previously held that as the employee had agreed in her employment contract to work for a maximum of 60 hours a week, the employer will only have to pay the 0.5 hourly basic rate premium on overtime hours worked, instead of the full overtime rate of 1.5 times hourly basic rate per overtime hour worked in addition to her basic monthly wages.

 
The High Court overruled the Commissioner’s decision and held that the contractual obligation obliging the employee to work a maximum of 60 hours for a monthly salary of SGD 1, 900 should not be taken to mean that any possible overtime payment for work done beyond the statutory limit of 44 normal working hours is included in the monthly salary. The employer was therefore ordered to pay the employee 1.5 times the hourly basic rate per overtime hour worked in addition to her basic monthly wages.

 
The High Court also remarked that even if the 60 hours was phrased as a ‘minimum’ and not a ‘maximum’ figure, conditions in the contract of service will only be read to the extent that they are consistent with the provisions of the Employment Act (‘EA’).

 
Therefore, this case makes clear that employers cannot artificially raise the amount of working hours covered by the monthly basic pay and only pay the employee 0.5 times the hourly basic rate of pay for every overtime hour worked. This case also clarified that any condition of service less favourable to an employee than those prescribed in the EA, for example, requiring workers to work for a minimum amount of time above the statutory limit of 44 hours a week, will be treated as illegal, null and void, to the extent that it is no less favourable. This would mean that employers will not be allowed to contract beyond the limits set in the EA.

 

6 January 2014: Changes To Workplace Safety And Health Incident Reporting Requirements

 
Pursuant to amendments to the Workplace Safety and Health (Incident Reporting) Regulations, employers will have to report to the Ministry of Manpower (‘MOM’) all accidents which render their employees unfit for work for more than three days cumulatively. Previously, only accidents which render employees unfit for work for more than three consecutive days need to be reported. These changes came in light of industry feedback received regarding employers’ practice of breaking up medical leave of injured employees to circumvent the reporting requirement. MOM hopes that these changes would discourage such practices and also ensure that employees’ recovery process is unaffected.

 
The Work Injury Compensation Regulations was also amended to require employers to report to the Commissioner for Workforce Safety and Health any traffic- related incidents that happen to any employees in his/her course of work. This means that employers will have to update their reporting standards to better track work- related traffic accidents. This amendment was made to emphasize the employer’s duty to manage employee traffic safety in the course of work.

 
Both amendments came into effect on 6 January 2014.

 

Reference: Ministry of Manpower

 

13 January: Tripartite Guidelines On Issuance Of Itemised Payslips

 
To prepare businesses for mandatory itemised payslips, MOM, along with the National Trades Union Congress (‘NTUC’) and Singapore National Employers Federation (‘SNEF’) have developed a set of Tripartite Guidelines on the issuance of itemised payslips. The Guidelines set out how companies can put in place the system of administering payslips, and provide payslip templates that companies may use and customise based on their own needs. As an overview, the payslip should include items such as basic salary, total allowances and total deductions for each salary period. MOM further highlighted that providing itemised payslips is a good employment practice as it raises employees’awareness of their salary components and facilitates the resolution of salary disputes. For information, mandatory payslips were initially intended to be included as part of the changes to the Employment Act last November but this was not so due to complaints from small and medium enterprises (‘SMEs’) that such a move would raise administrative costs. Notwithstanding this, it is likely that itemized payslips will become mandatory in the future, and the Guidelines serve as a first step towards it.

 

Reference: REACH

 

18 January: The Ministry Of Manpower (‘MOM’) Acts Against Unsafe Practices Involving Formwork Structures

 
On 18 January 2014, the MOM issued an advisory to Professional Engineers to remind them of their obligations in the design, construction and inspection of formwork structures. This advisory is in light of two accidents that had occurred over the past week involving formwork structures at separate construction worksites. While it was fortunate that there were no serious injuries arising from these accidents, the MOM noted that such dangerous occurrences can have catastrophic consequences and result in significant loss of lives. MOM has also decided to step up worksite inspections to check on unsafe practices involving formwork structures from 20 January 2014. Such inspections will target formwork practices at construction worksites such as unsafe design of formwork structures, improper erection of formwork structures, incompatible formwork components, and improper supervision and inspection of formwork structures. These inspections will be in addition to MOM’s regular checks on formwork structures as part of its construction safety inspections.

 

Reference: Ministry of Manpower

 

24 January: Progressive Wage Model For Cleaners 

 

On 20 January 2014, Parliament introduced the Environment Public Health (Amendment) Bill which seeks to amend the Environmental Public Health Act. Under the provisions of the Bill, cleaning businesses in Singapore will have to be licensed within 5 months of the provisions coming into force. Significantly, one of the requirements of the cleaning business licence is that the licensee must submit a progressive wage plan for employees. This wage plan must relate to employees who are Singapore Citizens or Permanent Residents, specify the basic wage payable to employees, be on an increasing scale depending on seniority, responsibilities, work experience and training received and specify the amount of basic wage which should be no lower than the basic wage amount prescribed by the Commissioner of Labour in subsidiary legislation. The amendments are expected to come into force in April 2014 if passed by Parliament.

 

Reference: National Environment Agency

 

27 January: Call For Standard Employment Contracts For All Migrant Workers

 
The Migrant Workers’ Centre (‘MWC’) is seeking to impose standard employment contracts that outline specific service agreements and employment terms so as to discourage malpractices by errant employment agents. The advocacy group is also calling for the granting of Change of Employer status for deserving migrant workers who have been unfairly treated in their jobs so that these workers can continue working while their disputes are being resolved. MWC also wants a greater say, as equal with the authorities, during the resolution process starting from the point of investigation till closure. Chairman Yeo Guat Kwang pointed that model employment contracts are already available for foreign domestic workers and extending this to all migrant workers would offer better protection and fairer terms of employment.

 

Rajah & Tann

 

For further information, please contact:

 

Kala Anandarajah, Partner, Rajah & Tann 

kala.anandarajah@rajahtann.com

 

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