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Singapore – Employment Review 2013.

15 January, 2014

 

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

 

2013: Predictions For The Year As Of February 2013…

 

Employment Act 2013: Public Consultation

 

The Ministry of Manpower announced that it would review the Employment Act (‘EA’) to ensure that the EA remains relevant to the changing workforce profile. For example, the increasing proportion of professionals, managers and executives (‘PME’s) in the workforce; rising salary levels, and evolving employment norms and practices. A public consultation was held from 19 November 2012 through 11 January 2013 to seek feedback on the issues for review.

 

Maritime Labour Convention Ratified


Singapore ratified the 30th ratification of the Maritime Labour Convention, 2006 (‘MLC 2006’) on August 2012 which will come into force 20 August 2013. The MLC 2006 establishes minimum requirements for almost all aspects of working conditions for seafarers including, but not limited to, conditions of employment, minimum wages, hours of work and rest, accommodation, recreational facilities, food and catering, health protection, medical care, welfare and social security protection.

 

Work Pass: Administrative Fee Changes


From 1 April 2013, administrative fees will rise sharply for applications of all work passes, as the Ministry of Manpower seeks to address rising costs and to bring the fees closer to the actual costs of providing work pass services. Key changes include increasing application fees from a flat S$20 for all passes, to S$70, S$60 and S$30 for Employment Pass, S Pass and Work Permit applications respectively

 

Weekly Rest Days For Foreign Domestic Workers (FDW)


Following an amendment to the Fourth Schedule to the Employment of Foreign Manpower (Work Passes) Regulations 2012, all FDWs who are issued with a Work Permit on or after 1 January 2013 will be entitled to one rest day every week. Employers may compensate their FDWs in lieu of the weekly rest day if there is a mutual written agreement between both parties. The amendment also requires that any such compensation should amount to at least one day’s salary or a replacement rest day taken within the same calendar month.

 

Proposed Workplace Safety And Health (Work-At-Heights) Regulations


In 2012, a review conducted by the Ministry of Manpower revealed that, in comparison to other countries, current legislation in Singapore on safety for employees who work at heights was inadequate in many areas. This includes organization and planning requirements , authorization to carry out activities at heights and the use of an industrial rope access system. The proposed “Workplace Safety and Health (Work-at-Heights) Regulations 2013”will come into effect in April 2013 and will impose additional duties on employers on this front.

 

…Updated As Of End Of December 2013

 

January: 

 

Non-Compete Clause Unenforceable For Too Wide A Scope

 

In Centre for Creative Leadership (CCL ) Pte Ltd v Byrne Roger Peter and others [2013] SGHC 4, the Plaintiff sued two ex-employees for, among others, breach of a non-compete clause. In analysing the enforceability of the non-compete clause, the court discussed the reasonableness of each element of the clause in terms of the duration, geographic scope, activity and parties or persons covered. After analysing each factor, the court found that looking at the totality of the circumstance the clause was unenforceable. First, the court found that the duration of 12 months had no rational or reasonable basis and appeared to have been ‘plucked out of thin air’. Second, the court found that the geographic scope of the clause was too wide, as it prevented a former employee from soliciting business from a client in any city even where the Plaintiff had no office of its own in that city. Last, the court found that scope of persons or clients covered under the clause was too wide. This was because the clause would extend to clients to whom the employee may have generated, designed, delivered or provided programmes or other services, but who would otherwise have no actual interaction with such a client.

 

February:

 

High Court Finds CEO Was Constructively Dismissed


In Cheah Peng Hock v Luzhou Bio-Chem Technology Limited [2013] SGHC 32, the Plaintiff was employed by the Defendant as a CEO. In August 2009, the Plaintiff left the Defendant’s employment claiming that he had been constructively dismissed and sought contractual damages. The Plaintiff argued that there had been a repudiatory breach of an implied term of mutual trust and confidence to provide the Plaintiff with general authority in the daily management and revamping the organisational structure of the Defendant company, which caused the Plaintiff to leave the Defendant’s employment.


In finding for the Plaintiff, the court found that the Defendant had committed a repudiatory breach of an implied term of trust and confidence  through the Defendant’s deliberate and systematic undermining of the Plaintiff’s position in the company through the appointment of a co-CEO, the exclusion of the Plaintiff from meetings, and the removal of the Plaintiff’s access to the company car. Based on these factors, the court found that the Plaintiff had been constructively dismissed by the Defendant and awarded the Plaintiff damages.

 

Enhancements To Foreign Manpower Policy For Quality Growth And Higher Wages


In line with the 2013 Budget Statement, the Ministry of Manpower will be tightening the requirements for eligibility for S Pass holders in all sectors. The key changes include raising the qualifying salary criteria for S Pass from S$2,000 to S$2,200, which will take effect from 1 July 2013 for new applications, and progressive increases in Foreign Worker Levies for both S Pass and Work Permit holders, which will take place from 1 July 2014 to 1 July 2015. There will also be a reduction in the Dependency Ratio Ceilings (‘DRC’) from 45% to 40% and a reduction in the S Pass sub-DRC from 20% to 15%. The DRC refers to the maximum permitted ratio of foreign workers to the total workforce that a company in the stipulated sector is allowed to hire.

 

March:

 

Changes To The Employment Act


On 17 April 2012, the Ministry of Manpower announced that it would be reviewing the Employment Act (Cap 91, 2009 Rev Ed) (‘EA’), the first major review of the EA since 2008. Given the scope of the review and the complexity of issues, it was announced that the review would be conducted in two phases. Phase 1 would cover issues which include extending the coverage of the EA, improving employment standards and benefits for employees, and reducing rigidity and augmenting flexibility for employers. Phase 2 would cover issues relating to employer-employee dispute resolution mechanisms, as well as non-traditional work arrangements such as contract workers, freelancers and self-employed persons.

 

More Flexibility For Service Sector Businesses In Deploying And Upgrading The Skills Of Foreign Manpower


From 1 July 2013, businesses in the Service sector can offer their Work Permit Holders the flexibility to work across different job functions within the same firm. This will help businesses reduce their need for additional manpower as well as optimize and adjust their deployment of employees in accordance with changes in demand. Separately, more Work Permit Holders will be able to upgrade from the ‘Unskilled’ (R2) status to ‘Skilled’ (R1) status if they earn a fixed monthly salary (including fixed allowances) of at least S$1,600 and have at least 4 years of working experience in Singapore. This inclusion of an additional route to upgrading the skills of foreign manpower will result in lower worker levy rates for employers, as well as allowing employees to upgrade their capabilities and earn better wages.

 

Ministry Of Manpower Releases Guide For Employers On Weekly Rest Days For Foreign Domestic Workers


All foreign domestic workers who have their work permits issued or renewed from 1 January 2013 onwards are entitled to a weekly rest day or compensation in-lieu. The Ministry of Manpower has released a guide for employers.

 

National Wages Council Invites Views On Annual Wage Guidelines


The National Wages Council (‘NWC’) announced that it would meet in April and May this year to discuss and consider the wage and wage-related guidelines for 2013/2014. Members of the public and stakeholders are encouraged to send in their views to the Secretary of the NWC. Such feedback will be taken into consideration in the NWC’s deliberations, along with other relevant factors such as Singapore’s economic performance, the global, regional and local economic outlook, as well as Singapore’s competitiveness, labour market conditions, inflation and productivity

 

April:

 

Work Pass Administrative Fee Changes (Effective 1 April 2013)


From 1 April 2013, administrative fees will rise sharply for applications of all work passes, as the Ministry of Manpower seeks to address rising costs. Such fees are paid for by employers but were priced substantially below cost recovery when they were first introduced in 2005. Key changes include increasing application fees from a flat S$20 for all passes, to S$70, S$60 and S$30 for Employment Pass, S Pass and Work Permit applications respectively. There are also increases between S$10 to S$30 for renewal and issuance fees. In addition, card replacement fees will go up from a flat rate of S$60 to S$100 for first-time losses, and S$300 for second-time losses.

 

New Programs To Help Singapore Nationals Re-Join The Workforce And For Employers To Improve Workplace Practices (Effective 1 April 2013)


From 1 April 2013, a program entitled ‘WorkPro’ will be introduced to provide support to encourage economically inactive locals, which includes women and mature residents, to return to active employment. This will come about mainly through a variety of funding support, such as an incentive for employers to implement flexible work arrangements, as well as a Retention Bonus for individuals who have not been working for 3 months or more. Separately, to help employers improve workplace practices, ‘Enterprise Training Support’ (‘ETS’) will be introduced to offer a wide range of assistance to enhance the training and human resource capabilities of employers, by giving employers incentives to assist and plan their employees’ career development. Through the ETS, employers can receive funding for their employees’ training, developing training plans customised to employees, as well as for enhancing the company’s human resource and management functions.

 

May:

 

Marriage And Parenthood Package (Effective 1 May 2013)


In support of a pro-family environment in Singapore, the Ministry of Manpower announced the enhanced Marriage and Parenthood Package, which will take effect from 1 May 2013. However, employers are encouraged to implement such new benefits for any Singapore citizen births from 1 January 2013. The key enhancements include extending maternity protection to cover the full pregnancy period, instead of the current 3 months (for retrenchment) and 6 months (for dismissal) before delivery; introduction of shared parental leave to enable fathers to share up to 1 week of the mother’s maternity leave; introduction of a 1 week Government-paid paternity leave; extension of 2 days childcare leave for parents of children between the ages of 7 and 12, and the provision of Government-paid adoption leave for 4 weeks.

 

31 May:

 

Government Accepts National Wages Council’s Recommendations For 2013/2014

The Government announced that it has accepted the National Wages Council’s (“NWC”) recommendations for 2013/2014 to raise real wages for workers by improving productivity, and to achieve higher wages for low-wage workers. Most notably, the Government supported the NWC’s proposition to build on its recommendation in 2012 to give low-wage workers larger built-in wage increases. Further to this, the Government stated that it will lead by example, not only as an employer but also as a service buyer and will continue to take reference from the NWC guidelines in its annual wage adjustment. Service suppliers to the public sector are also strongly encouraged by the Government to adopt the NWC recommendations on wage increments for workers.

 

24th June – July

 

Public Consultation Held On The Proposed WSH (Asbestos) Regulations


The Ministry Of Manpower (“MOM”) conducted a public consultation on the proposed Workplace Safety And Health (Asbestos) Regulations (“WSH Asbestos Regulations”). The Regulations are intended to replace the existing Factories (Asbestos) Regulations, which were enacted in 1980 to protect workers from exposure to asbestos in factories which use or manufacture asbestos products. In reviewing the Factories (Asbestos) Regulations, the MOM found that as the bulk of asbestos-related work now involves the removal of in-place asbestos-containing material (“ACM”) rather than the actual manufacture of ACM, it was necessary to amend the existing legislation to protect those carrying out demolition, alterations and maintenance work involving ACM. Some of the key changes include: licensing of asbestos removal contractors, having a plan of work for asbestos removal and updating technical requirements for asbestos removal work. The date on which the regulations will come into effect has yet to be confirmed.

 

24 June:

 

Ministry Issues Tripartite Guidelines On Job Flexibility Scheme For Service Sector Employers


The Ministry Of Manpower (“MOM”) announced that the Job Flexibility Scheme in the Services sector will be implemented on 1 July 2013. This scheme allows Work Permit holders in the services sector to be deployed across occupations within the same business, over and above the occupation specified on the Work Permit. The Guidelines set out the principles on how employers may exercise this new capability and also reminds employers of their legal and contractual obligations. Such obligations include seeking notice and consent from the foreign employees before assigning additional or new roles; mandatory rest days, hours of work and other conditions of service under the Employment Act, and ensuring that the foreign employee remains employed under the same company and sector as specified on the Work Permit card.

 

22 July:

 

Second Phase Review and Public Consultation On Employment Legislation: Deadline October 30, 2013


The Ministry of Manpower (“MOM”) announced that it has embarked on the second phase of reviews of the Employment Act (“EA”) and the Employment of Foreign Manpower Act (“EFMA”). The public may send their views by mail or email by 30 October 2013. The second phase of review of the EA will focus on issues relating to further protection for the well-being of vulnerable workers, particularly those in non-traditional work arrangements. Such arrangements include workers who engage in contract work, outsourcing work and freelancing work. Some issues that were highlighted include the requirement for a minimum service period qualification for leave entitlements with respect to contract workers; additional protection for salary defaults for outsourced workers, and freelancers who exhibit employee-like characteristics but do not benefit from the protection under the EA. As for the EFMA, the MOM has only stated so far that it will be reviewing existing rules relating to the employment of foreign workers, such as circumstances under which foreign workers could be allowed to change employers. Presently, no further information is available as to when the MOM will respond after it has consolidated the public’s views.

 

1 August:

 

Changes To Entrepass Framework


On 1 August 2013, the Ministry of Manpower (‘MOM’) had introduced changes to the EntrePass framework to attract more innovative types of foreign entrepreneurs to Singapore. These changes came into effect on 1 September 2013. The EntrePass is a type of work pass that was first introduced in 2003 to attract foreign entrepreneurs who wish to start a business in Singapore. The new revisions will make it more difficult to qualify for the EntrePass scheme. In addition to the existing criteria, applicants must now fulfil a new condition to show that their business is innovative. There are several ways applicants can satisfy this condition, including holding a licensed intellectual property (‘IP’) recognised by an approved national IP institution, or receiving funding from a recognised third-party venture capitalist accredited by a Singapore Government Agency, among other means set out by the ministry. Further, there will also be a mid-year audit check on the progress of the business, and applicants will have to demonstrate efforts that they have scaled up their business. For example, applicants may show documents such as tenancy agreements, staff employment contracts/CPF statements or research collaboration milestones. Last, the renewal framework will also be changed to more progressive criteria which will be commensurate with the number of years that the business has been operating in Singapore.

 

23 September:

 

Firms To Consider Singaporeans Fairly For Jobs


The Ministry of Manpower (‘MOM’) announced new rules, known as the Fair Consideration Framework (‘FCF’) that requires employers to consider Singaporeans fairly before hiring Employment Pass (‘EP’) holders. Firms with discriminatory hiring practices will be subject to additional scrutiny and may have their work pass privileges curtailed. These changes are intended to reinforce expectations for employers to consider Singaporeans fairly for job opportunities and to enhance job market transparency.


Key features of the FCF include (1) from 1 August 2014, all firms making new EP applications must first advertise the job vacancy for at least 14 calendar days on a new jobs bank administered by the Singapore Workforce Development Agency (‘WDA’) before submitting an EP application to the MOM; (2) MOM and other government agencies will also actively identify and assess firms that may have scope to improve their hiring and career development practices and direct these firms to take certain actions; (3) from January 2014, the qualifying salary for new EP applications will be raised from S$3,000 to S$3,300, in line with rising salaries. The MOM has also indicated that the changes are part of a broader effort to ensure that good jobs continue to be created for Singaporeans but clarified that it was not about ‘Hire Singaporeans First, or Hire Singaporeans Only’. The FCF was intended only to create a fair opportunity for Singaporeans.

 

25 September:

 

Ministry Of Manpower (‘MOM’) Takes Action Against 10 Companies For Discriminatory Job Advertisements


The MOM took action against 10 companies after investigations found their job advertisements to be discriminatory and not aligned with the Tripartite Guidelines on Fair Employment Practices issued by the Tripartite Alliance for Fair Employment Practices (‘TAFEP’).


Under the Tripartite Guidelines, employers who advertise a position requiring a specific attribute which may be viewed as discriminatory should ensure that the attribute is indeed a requirement of the job, and state the reason for the requirement in the advertisement. For example, words or phrases that exclude Singaporeans or indicate preference for non-Singaporeans and those that exclude or indicate a preference for a certain age group or gender should not be used in job advertisements. The 10 companies were not able to provide valid justifications for restricting their recruitment to exclusive groups.


This investigation was similar to an earlier investigation by MOM in March 2013 regarding discriminatory job advertisements posted by 2 companies, who had to put up public apologies. Similarly, the 10 companies were also required to put up online public apologies for 30 days and were barred from hiring new foreign workers for the 30-day period as well as for 6 months following the publication of these apologies. The MOM emphasized that it expected all employers doing business in Singapore to comply with the TAFEP and took non-compliance with the TAFEP seriously.

 

17 October:

 

Employment Agent On Suspension Order Fined $30,000 For Non-Compliance With Employment Agencies Act


Sunway Employment Pte Ltd (‘Sunway’), an employment agency (‘EA’), was convicted of entering into new placement agreements with new clients while under a suspension order. The order had been imposed by the Ministry of Manpower (‘MOM’) while Sunway was under investigation for a separate illegal employment offence. A suspension order forbids an EA from entering into new recruitment or placement agreements with new clients and may only carry on its existing business. Despite being fully aware of the restrictions under the suspension order, Sunway had continued to enter into new placement agreements with new clients. Sunway was able to circumvent MOM’s Work Pass On-Line (‘WPOL’) system by using the SingPass password of two of its new clients to submit online work pass applications and had received a total of S$5,522 as placement fees from the new clients. In addition to the new placement agreements, Sunway had also continued to actively recruit new Foreign Domestic Workers (‘FDW’) to meet the demands of its clients while it was under the suspension order.


Sunway is the first EA to be convicted of such an offence since the revised Employment Agencies Act (‘EAA’) came into effect in April 2011, which saw the penalties for this offence increased to S$80,000. Sunway pleaded guilty in the Subordinate Courts to the charge under section 12(1) of the EAA, and was fined $30,000.

 

25 October:

 

Victims Of Workplace Attacks Qualify For Compensation (Kee Yao Chong v S H Interdeco Pte Ltd [2013] SGHC 218)


The Singapore High Court has ruled that workers who were attacked by their colleagues at their workplace stand to qualify for compensation from their employer for their injuries. The judge ruled that such deliberate attacks, especially where the victim did not expect the assault, count as workplace ‘accidents’ under the Work Injury Compensation Act (‘WICA’).
The case involved an apprentice carpenter, who was set alight by a coworker. Previously, the Assistant Commissioner of Labour had ruled that the victim could not claim compensation from his company, because no ‘accident’ had taken place within the context of the WICA. This was overturned in the High Court by Judicial Commissioner George Wei on the basis that the WICA is a piece of ‘social legislation’ and that the term ‘accident’ should be defined broadly enough ‘such that it encompasses an event which is unexpected or unforeseen even though [it] was deliberately caused by another individual, rather than only events which happen without deliberate cause’.


Further, the judge also disagreed with the Assistant Commissioner of Labour that the victim’s injuries were not work-related. On the facts, the apprentice had had brushed an acrylic strip he was holding against his co-worker. The incident escalated when the co-worker’s demand for an apology was ignored and the co-worker then flung thinner on the apprentice and set him on fire. The judge explained that the altercation was work-related because the two employees were not ‘on frolics of their own’ when the incident happened. On the contrary, the ‘argument had taken place between co-workers in a shared workspace as a result of an incident when both were carrying out their work assignments’. The judge took the view that interaction between fellow employees/workers was an ordinary incident of employment even if the workers are not engaged in the same task, and especially when they are working on assigned tasks in a shared workspace. The sum of compensation would be determined at a later date.

 

29 October:

 

Ministry Of Manpower (‘MoM’) Takes Action Against 61 Companies For Crane Safety Lapses


The MOM took action against 61 companies for crane safety lapses following inspections of 90 workplaces between July 2013 and September 2013. The inspections were part of an enforcement operation focusing on the safety of crane operations in the construction and manufacturing sectors, and were part of MOM’s ongoing enforcement efforts to correct poor Workplace Safety and Health (‘WSH’) practices at various workplaces. The MOM officers had uncovered 189 contraventions of the WSH Act at the workplaces inspected, and issued 107 Composition Fines to the 61 companies, as well as Notices of Non-Compliance and Stop-Work Orders. Common contraventions uncovered included the failure to maintain cranes in good working condition, failure to implement safe lifting plans and using either defective lifting gears or lifting gears not examined by an Authorised Examiner. The MOM emphasised that crane safety remained a high priority for MOM because of the sheer size of cranes and the nature of lifting operations. Occupiers and employers were reminded to take their obligations to ensure the safety and health of their workers seriously. Companies and individuals alike may be liable for safety lapses and consequently, prosecution under the WSH.

 

1 November:

 

Public consultation on review of the industrial relations act On 1 November 2013, the Ministry of Manpower (‘MOM’) invited members of the public to provide feedback on a review of the Industrial Relations Act (‘IRA’). The IRA is a framework for the prevention and settlement of trade disputes through collective bargaining, conciliation and arbitration. In 2002, the IRA was amended to introduce limited representation to allow rank-and file (‘R&F’) unions to also represent certain managers and executives on an individual basis in certain types of disputes. In 2011, it was amended again to establish a tripartite mediation process for managers and executives in the non-unionised sector for certain disputes. The consultation will end on 21 November 2013.


In the latest review, the focus will be on building on the 2002 amendments to also allow R&T unions to represent professionals, managers and executives (‘PMEs’) collectively. For example, to have collective representation for PMEs in all industrial matters except for areas such as promotion, transfer, employment, termination, dismissal and assignment of duties which are the prerogative of employers. Another proposed change would be extending the areas for limited representation to include re-employment disputes. This was because re-employment had become a common employment issue that was suitable for individual representation due to the need to consider factors such as individual performance and medical fitness.

 

Rajah & Tann

 

For further information, please contact:

 

Kala Anandarajah, Partner, Rajah & Tann 

[email protected]


Rajah & Tann Labour & Employment Practice Profile in Singapore

 

Homegrown Labour & Employment Law Firms in Singapore

 

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International Labour & Employment Law Firms in Singapore

 

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