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Singapore – More Legal Protection For PMEs.

19 November, 2013

Introduction


Parliament has passed amendments to the Employment Act to afford better protection to employees, including professionals, managers and executives (“PMEs”), and to raise standards of employment.


The Ministry of Manpower (“MOM”) has also issued a public consultation on the proposed amendments to the Industrial Relations Act, to allow rank-and-file unions to represent PMEs collectively.


MOM states that these changes are intended to reflect the changing workforce profile and workplace norms, in particular the growing proportion of PMEs in the workforce.


Background To The Employment Act


The Employment Act is Singapore’s main labour law and sets out minimum standards for basic terms of employment.


In general, the Employment Act protects rank-and-file employees in Singapore, that is non-executive and non-managerial employees. The Employment Act currently also offers limited protection, in respect of salary payments, to managers and executives who earn up to $4,500 a month.


Amendments To The Employment Act


The Employment Act will be extended to cover more employees. For example:


(a) PMEs earning a basic monthly salary of up to $4,500 will be covered under the general provisions of the Employment Act, including sick leave benefits and protection against unfair dismissal; and
(b) the salary threshold for non-workmen, such as clerical staff and frontline service staff, to be covered under the working hours-related provisions (Part IV) of the Employment Act, will be raised from a basic monthly salary of $2,000 to $2,500, in line with increases in salary levels.


The Employment Act will also be amended to allow more flexibility for employers. For example, from 1 April 2015, PMEs earning up to $4,500 will need to have served an employer for at least a year before being eligible to seek redress against unfair dismissal, where notice is given.


MOM’s enforcement powers and the penalties under the Employment Act have also been enhanced.


Most of these changes will take effect on 1 April 2014.


Background To The Industrial Relations Act


The Industrial Relations Act enables parties to a trade dispute to participate in collective bargaining processes with the assistance of conciliation officers, with a view to arriving at a collective agreement to settle the trade dispute. If the parties are unable to settle, the Industrial Arbitration Court will arbitrate the unresolved trade dispute.


However, to date, PMEs have had limited access to these collective bargaining processes.


Proposed Amendments To The Industrial Relations Act


MOM, together with its tripartite partners, the Singapore National Employers Federation and the National Trades Union Congress, has proposed the following amendments:


(a) allowing rank-and-file unions to represent PMEs collectively in all industrial matters, except that the following shall be excluded:

i. senior management and certain categories of executives with substantial managerial responsibilities;
ii. certain areas such as promotion, transfer, employment, termination, dismissal and assignment of duties; and

(b) allowing rank-and-file unions to represent PMEs individually in re-employment disputes.


At present, rank-and-file unions may represent certain managers and executives individually in disputes concerning dismissal, victimisation, retrenchment benefits and breach of individual contracts. Managers and executives in non-unionised sectors may also participate in a tripartite mediation process for disputes arising from salary arrears, breach of individual employment contracts and payment of retrenchment benefits.


Closing date for feedback is 21 November 2013.


Comments On Employment Law And Policy Trends


These amendments to the Employment Act are significant because they extend protection to the growing PME population, moving further away from the position that the terms of employment of PMEs are a matter to be decided by contract with their employers. This move is expected to affect about 450,000 employees and we would suggest that employers consider their human resource management processes and documents in light of these changes.


In principle, the proposed amendments to the Industrial Relations Act are significant as they would allow the growing PME population to participate in collective bargaining through trade unions. However, in practice, the scope and reach of the proposed amendments remain to be seen, as the exclusions to this right to collective bargaining are potentially wide.


These developments follow a series of changes this quarter to employment legislation and policies.


These include:


(a) amending the Central Provident Fund (“CPF”) Act to introduce minimum fines and jail terms for employers who delay or default on making CPF contributions;

(b) amending the Child Development Co-Savings Act to clarify the computation of child care, maternity, paternity, shared parental and adoption leave;

(c) proposing new Tripartite Guidelines to encourage more employers to provide payslips to all employees and keep employment records for them;

(d) issuing and enforcing the Tripartite Guidelines on Fair Employment Practices to prevent discrimination in the workplace and discriminatory advertisements;

(e) issuing the Fair Consideration Framework that requires employers to consider Singaporeans before hiring Employment Pass holders; and

(f) proposing amendments to the Work Safety & Health (Incident Reporting) Regulations and the Work Injury Compensation Regulations.

 

Drew & Napier

 

For further information, please contact:

 

Lim Chong Kin, Director, Drew & Napier
chongkin.lim@drewnapier.com


Benjamin Gaw, Director, Drew & Napier
benjamin.gaw@drewnapier.com


Elizabeth Tong, Drew & Napier
elizabeth.tong@drewnapier.com


Kelvin Tan, Director, Drew & Napier
kelvin.tan@drewnapier.com


Charmian Aw, Drew & Napier
charmian.aw@drewnapier.com

 

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