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Singapore – Key Changes In Employment Law In 2014.

7 April, 2014

 

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

 

There have been many recent changes in Singapore employment law to extend better protection for more workers and improve employment standards. The key changes which take effect on 1 April 2014 (unless stated otherwise) are as follows:

 

  1. More Protection For Professionals, Managers And Executives (“PMEs”): PMEs in receipt of a salary not exceeding SGD 4,500 a month will be covered by all parts of the Employment Act save for Part IV which relates to rest days and hours of work. Previously, such PMEs were only covered by the provisions relating to payment of salary, documentary requirements and procedures and regulations.
  2. Higher Salary Threshold For Non-Workmen: The salary threshold for non-workmen, such as clerical staff and frontline service staff, covered under the “Rest Days, Hours of Work” provisions (Part IV) of the Employment Act will be raised from a basic monthly salary of SGD 2,000 to SGD 2,500, in line with increases in salary levels, such that Part IV will cover more non-workmen.
  3. Cap On Salary Threshold For Overtime Pay: Under the Employment Act, overtime allowance payable to an employee covered by Part IV of the Act, if the employee is required by the employer to work more than eight hours in a day or 44 hours in a week, will be capped at the basic monthly salary of SGD 2,250.
  4. Sub-Cap On Deductions: Under the Employment Act, employers may deduct up to a maximum of 50% of the salary of an employee for authorised deductions (i.e.for CPF contributions and/or accommodation). With effect from 1 April 2014, a 25% sub-cap for deductions for accommodation, amenities and services for all authorised deductions will be introduced. For example, if an employee earns a monthly salary of SGD 2,000 and receives accommodation, amenities and services provided by his employer, the employer’s deduction for these should not be more than SGD 500 (25% of SGD 2,000).
  5. Shorter Non-Eligibility Period For Retrenchment: With effect from 1 April 2015, the minimum service period for an employee to be eligible for retrenchment benefits will be reduced from three to two years in line with shorter employment tenures.
  6. PME Eligibility For Redress Against Wrongful Dismissal: Protection for unfair dismissal will be extended to PMEs earning up to SGD 4,500 per month. For dismissals without notice, PMEs will be afforded the same protection as rank-and-file employees. For dismissals where notice is given and contractual terms of termination are complied with, only PMEs who have served with the same employer for at least 12 months will be eligible to seek redress against unfair dismissal.
  7. Time-Off In-Lieu For PMEs: Employers will be allowed the additional option to grant time-off in-lieu (of paying an extra day’s salary) for PMEs who are required to work on public holidays. The duration of time-off in lieu will be subject to mutual agreement. In the absence of mutual agreement, the duration of time-off in lieu should be four hours if the PME works on a public holiday for less than half a day; or a full day if the PME works for more than half a day.
  8. Enhancing Enforcement And Compliance
 
  • A penalty for the failure to pay salary will be introduced. A first-time offence will be liable to a fine of between SGD 3,000 and SGD 15,000 and/or six months’ jail. A subsequent offence will be liable to a fine of between SGD 6,000 and SGD 30,000 and/or 12 months’ jail.
  • The maximum composition fine will be increased from SGD 1,000 to SGD 5,000.
  • Employment inspectors will be granted the power to arrest any person whom he reasonably believes is guilty of the failure to pay salary. They will also be allowed to enter any workplace to conduct checks.
  • Individuals such as directors or partners of companies will be made more accountable for Employment Act offences committed by the company but will be able to rebut the presumption by proving that he/she has exercised reasonable supervision or oversight to avoid commission of the offence.
 

Other changes relate to:

 

  1. Child Development And Co-Savings Act (Cap. 38A): Some technical amendments have also been made to the Child Development and Co-Savings Act to clarify the application of some of the existing Marriage and Parenthood measures.
 
  • Childcare Leave: The Child Development Co-Savings Act will be updated to accurately reflect the policy that parents’ total child care and extended child care leave is based on their youngest qualifying Singapore Citizen child under the CDCA to avoid situations where parents who have both an older Singapore Citizen child and a younger non-citizen child double-claim leave under both the Employment Act and the Child Development Co-Savings Act.
  • New Formulae For Maternity, Paternity, Share Paternity Or Adoption Leave: New formulae will be prescribed to compute the minimum number of days of maternity, paternity, shared parental or adoption leave an employee is entitled to, if there is mutual agreement between the employer and employee for the leave to be taken flexibly by days instead of by block week.
 
  1. Employment Of Foreign Employees: Effective 1 January 2014, the qualifying salary for new Employment Pass applications has increased from SGD 3,000 to SGD 3,300. With effect from 1 August 2014, employers submitting new Employment Pass applications for employees who will earn less than SGD 12,000 will have to advertise job vacancies on the new jobs bank launched by the Singapore Workforce Development Agency 14 days before submission. These changes reinforce expectations on employers to consider Singaporeans fairly for job opportunities and enhance job market transparency.

 

Clyde & Co

 

For further information, please contact:

 

Julia Yeo, Clyde & Co

[email protected]

 

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