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Singapore – Key Issues For Your Business In 2015: Employment.

10 March, 2015

 

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

 

Employment Pass Holders – Jobs Bank Requirement

 
Businesses which have a substantial number of Employment Pass holders, or tend to second or post employees from foreign headquarters to their Singapore operations must be mindful of the Jobs Bank requirement that came into effect on 1 August 2014.

 
To ensure that employers consider Singaporeans fairly before hiring Employment Pass holders, prior to applying for new Employment Passes, subject to limited exemptions, employers must first advertise their job vacancies in the Jobs Bank. The advertisement must be open to Singaporeans, comply with the Tripartite Guidelines on Fair Employment Practices, and run for at least 14 calendar days. This has lengthened employers’ HR hire periods, which could result in a strain if not planned well. Employers who fail to comply with the requirement will have their work pass privileges curtailed.

 
Representation Of Professionals, Managers And Executives By Trade Unions

 
Employers must review their current employment arrangements and policy on unions given the amendments to the Industrial Relations Act (“IRA”) which will take effect from 1 April 2015. Under the amended IRA, rank-and-file trade unions will be able to represent a limited class of executive employees in negotiations for collective bargaining, and on an individual basis for disputes relating to retrenchment benefits, dismissal, breaches of employment contracts, victimisation and reemployment. This may result in heightened union activity.

 
Executive employees who hold roles and responsibilities likely to give rise to conflicts of interest or undermine the effective operations of the business are excluded from this wider scope of representation and employers will be able to prohibit such executive employees, as a condition of their appointment or promotion, from being an officer or a member of any rank-and-file trade unions.

 
MediShield Life Scheme

 
The MediShield Life Scheme (the “ML Scheme”) introduced as a Bill in January 2015, and expected to be implemented by end- 2015 brings significant changes. First, employers may find themselves potentially liable for the outstanding premiums of their employees who defaulted on the payments. Second, as the ML Scheme applies to all Singaporeans, employers should note the potential for an overlap between the medical benefits that they provide to employees and that under the ML Scheme. Third, corporations outside Singapore hiring Singaporeans based out of Singapore must note that the requirements apply to such employees as well. In this regard, employers are encouraged to review and restructure (if necessary) their employee benefits schemes to allow employees to enjoy portable medical benefits that are in addition to the ML Scheme or provide additional Medisave contributions to help employees pay for premiums under the ML Scheme.

 
CPF, PDPA And Retirement Issues

 
The CPF Board has in recent times, ramped up its enforcement activities to initiate and conduct audits and investigations into the CPF practices of companies. Companies should relook their CPF practices to ensure that the employer portion of CPF contributions are not included in their employees’ salaries (whether expressly stated or not, with or without the employees’ consent) and ascertain if any employment benefits paid or made to employees incur CPF contributions.

 
On the Personal Data Protection Act (“PDPA”) front, companies should already have in place PDPA policies and procedures for its employees. Nevertheless, where companies obtain personal data of its employees’ dependents from the employees (e.g. through insurance benefits or reimbursement of medical claims), for certainty, consent should be obtained.

 
For employers who have older employees in the company, do note that the Tripartite Committee on Employability of Older Workers has recommended for the re-employment age to be increased from the current 65 to 67 years old.

 
Entitlement To Discretionary Bonuses

 
The recent High Court decision of Brader Daniel John v. Commerzbank AG [2013] SGHC 284 held that communications between employers and employees (even through an update broadcasted over the company intranet) may give rise to an enforceable contract – for instance entitling the employees to discretionary bonus payments where the employers expressly represented or communicated to their employees that such bonus payments will be made. In light of this, employers are advised to be mindful of what they communicate in their letters or notifications to their employees to avoid inadvertently forming an enforceable contract with them.

 

Rajah & Tann

 

For further information, please contact:

 

Kala Anandarajah, Partner, Rajah & Tann 

kala.anandarajah@rajahtann.com

 

Desmond Wee, Partner, Rajah & Tann

desmond.wee@rajahtann.com

 

Rajah & Tann Labour & Employment Practice Profile in Singapore

 

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