Review of the Employment Act- Singapore

Introduction:

On 18 January 2018, the Ministry of Manpower (“MOM”) issued a month –long public consultation on its latest review of the Employment Act (“EA”). In view of the changes in the labour force profile and employment landscape in Singapore.

The EA was last reviewed in 2012 and the latest amendments were tabled in 2015.

On March 5th 2018, Manpower Minister Lim Swee Say announced the proposed changes to the Employment Act and noted that the changes to the Act will be implemented by April 1 2019.

Please see below the summary of the proposed changes to EA.

 Proposed Key Changes:

1)   Extension of the core provisions under the EA to cover all employees, except for public servants, foreign   domestic workers and seafarers who are protected under industry-specific legislation.

  • By April 1 2018, the EA will cover more professional, manager, executives and techinicians, as thee previous salary cap of $4,500 is to be removed.
  • About 430,000 more professionals, managers and executives (PMEs) will be covered under the Employment Act when it is amended to remove the S$4,500 salary cap.
  • With the revisions, these PMEs will enjoy core employee benefits under the Act which include redress for wrongful dismissal, public holiday and sick leave entitlements, timely payment of salary and allowable deductions.
  • Currently, only Singaporeans earning under S$4,500 come under the Act’s core provisions.

2)  Enhanced dispute resolution services

  • Under the current legislative framework, statutory and contractual salary related disputes are heard by the Employment Claims tribunal (“ECT”), while wrongful dismissals claims are heard by the MOM.
  • To ease the dispute resolution process, the ECT will become a “one-stop avenue” taking on claims for wrongful dismissals and statutory and contractual salary related disputes, as it was noted that these typically are in tandem;

3)   Additional protection for more vulnerable employees

  • Under the proposed changes more rank and file workers, such as clerks and retail assistants, classified as “non-workmen” under the Act, will receive additional protection. As the MOM plans to increase the coverage for employees earning up to $2,600 from the previous cap of $2,500.
  • The additional protection will also seek to cover workmen, or those engaged in manual work such as cleaners, construction workers and transport drivers, earning up to $4,500 a month.

Conclusion

The review of the EA is timely in light of the rapidly changing employment ladscape in Singapore, given that managers and executives who currently fall outside the coverage of the EA, increasingly make up the majority of Singapore’s workforce and according to the latest report by MOM , PMET are estimated to make up 59% of Singapore’s labour force. Therefore, the review of the EA comes at an important juncture in Singapore and the forwing need to offer an  extension of staturary protections to the labour force of Singapore.

Should you have any queries or wish to speak to us on the above please feel free to contact us.

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