BACKGROUND
The Employment Act (EA) is the main legislation governing employment terms and conditions in Singapore. Since the last major amendment to the EA in 1995, the labour market has changed significantly, with shifts in the workforce profile, and the emergence of new trends such as outsourcing and the shortening of employment tenures. A review is necessary to bring the EA up-to-date, and ensure that it continues to protect workers, while maintaining Singapore’s labour market flexibility and competitiveness. The proposed amendments were developed in close consultation with the National Trades Union Congress, the Singapore National Employers Federation, and the Singapore Business Federation. The public was also consulted
The amendments, which will take effect from 1 Jan 2009, are in the following areas
a. Revising the coverage of the EA to keep pace with changes in the workforce profile;
b. Reviewing employment standards and benefits;
c. Enhancing penalties and enforcement powers, and streamlining administrative processes.
a) Revising Coverage
Currently, the EA covers all employees except seamen, domestic workers, public servants, confidential staff, and employees in managerial and executive positions. The changes relating to the EA coverage are as follows:
i. Confidential staff (e.g. accounts assistants, HR clerks and secretaries) will be included in the EA as most are rank-and-file employees2 who are seldom directly involved in sensitive matters; and
ii. Junior managers and executives earning a basic monthly salary of $2,500 and below will be granted access to Labour Court for salary claims, as pursuing such disputes under civil action might be costly for these lower-paid managers and executives.
Part IV of the EA, which prescribes additional employment protection and benefits (e.g. working hours, overtime pay, rest days etc) currently covers (i) all workmen regardless of salary, and (ii) all other employees earning a basic monthly salary $1,600 and less. The coverage under Part IV will be amended as follows:
i. The salary ceiling for non-workmen employees will be increased from $1,600 to $2,000 in line with the significant wage increase since 1995; and
ii. A basic monthly salary threshold of $4,500 will be introduced for workmen, 3 as such highly paid and skilled workmen would be able to negotiate for favourable employment terms even without Part IV protection.
b) Reviewing Employment Standards and Benefits
The following employment standards and benefits will be enhanced:
i. Paid public holidays and paid sick leave will be extended to all employees4 covered under the EA, as these are well-established industry norms;
ii. The qualifying period for paid sick leave will be reduced from 6 to 3 months in view of shorter employment tenures; the sick leave entitlement for new employees will be phased-in from the 4th to 6th months of employment to alleviate employers’ cost burden;
iii. Medical certificates from both company-appointed doctors and public medical institutions will be recognised for the granting paid sick leave and the reimbursement of medical examination fees;
iv. The Minister or the Commissioner of Labour will be empowered to deem an employer as having fulfilled his obligation to bear medical examination fees if he has complied with certain requirements (e.g. the provision of specified healthcare plans); and
v. Part-time employees will be re-defined as those who work less than 35 hours per week (instead of the current 30 hours), to encourage employers to offer more part-time employment opportunities.
c) Enhancing Penalties & Enforcement Powers
Enhancing Penalties
The penalties in the EA will be enhanced to deter infringements and align them with the penalties for similar offences in other legislations,5 i.e.:
i. The maximum financial penalty for first-time and subsequent offenders will be increased from $1,000 to $5,000, and from $2,000 to $10,000 respectively;
ii. The maximum composition amount will be increased from $200 to $1,000.
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