Employment Act Singapore – 2019 Changes and Updates

The relationship between the employer and employee is not just regulated by the contract of employment between them. The Employment Act (“Act”) could also apply to this relationship. On 20 November 2018, the Minister for Manpower, Mrs Josephine Teo proposed several changes to the Act, which would take effect on 1 April 2019, to ensure that the Act remains relevant in regulating the everchanging employment practices. This article seeks to summarise and highlight the proposed changes to the Act. If you need clarification about any matters related to the Employment Act, we strongly advise you to contact a specialized Employment Lawyer In Singapore.

Core provisions extended to managers and executives

While the Employment Act is Singapore’s primary source of labour law, it does not apply to everyone. Section 2 of the Act applies only to “employees” which is currently defined to exclude:

• Domestic Workers;
• Seamen;
• Statutory board employees or civil servants; or
• A manager or executive with a monthly basic salary of more than S$4,500.

However, from 1 April 2019, all managers and executives would be protected under the Act. This essentially means that everyone (except for domestic works, seamen, and statutory board employees or civil servants) will be entitled to enjoy core provisions such as:

• a minimum of 7 to 14 days of paid annual leave;
• 11 paid public holidays;
• 14 days of paid sick leave (up to 60 days of hospitalisation leave);
• maternity protection;
• childcare leave; and
• other statutory benefits and protection.

Managers and executives

Employees with executive and supervisory functions such as:

• Ability to make decisions with respect to recruitment, discipline, termination of employment, performance appraisal, and employee incentives/reward;
• Formulating company policies and strategies; and
• Managing and running a business.

This includes professionals with tertiary education and specialised knowledge or skills whose employment terms are like those of managers or executives, such as advocates and solicitors, chartered accountants, and practicing doctors and dentists.

Employees

Part IV of the Act applies to workmen earning up to S$4,500 a month and non-workmen earning up to $2,500 a month (collectively, “Part IV Employees”). Overtime rate payable for non-workmen is capped at $2,250 a month.

Managers and executives are not Part IV Employees and therefore protection provisions under Part IV will not apply to them.

Workmen = A rank and file employee engaged in manual labour.

Non-workmen = A rank and file white-collar employee.

The following are some pertinent Part VI provisions:

Hours of work

• Up to 8 hours a day to a maximum of 44 hours a week (if Part IV Employees are to work for more than 5 days a week)

• Up to 9 hours a day to a maximum of 44 hours a week (if Part IV Employees are to work for 5 days a week or less)

• Not more than 6 consecutive hours without a period of leisure.

Overtime Pay

At least 1.5 times the hourly basic rate of pay

Rest Days

At least one day per week

Annual Leave

(If served an employer for a period of not less than 3 months) The Part IV employee will be entitled to annual leave of 7 days in respect of the first 12 months of continuous service with the same employer and an additional 1 day’s annual leave for every subsequent 12 months of continuous service with the same employer subject to a maximum of 14 days.

(If served for a period of not less than 3 months but who has not completed 12 months of service) He will be entitled to annual leave in proportion to the number of completed months of service in that year.

2019 changes

The 1 April 2019 changes to the Act will see Part IV Employees include non-workmen earning up to $2,600 (an increase of $100 a month). Additionally, overtime rate payable for non-workmen is capped at $2,600 a month (also an increase of $100 a month).

Time off for non-part VI employees

Currently, all workmen and non-workmen who are required to work on public holidays, employers can only choose to compensate them with an extra day’s pay or provide a full day off-in-lieu.

A 3^rd option will be introduced to allow employers to grant workmen and non-workmen who are not Part IV employees (i.e. workmen earning more than $4,500/month, and non-workmen earning more than $2,600/month) time off for the hours worked on a public holiday, rather than a full day off.

Workmen and non-workmen who are Part VI employees remain unaffected and will continue to get an extra day’s pay or a full day off-in-lieu.

Wrongful dismissal claims

Currently, salary-related disputes are adjudicated by the Employment Claims Tribunals (or ECT), while wrongful dismissal claims are adjudicated by the Ministry of Manpower (“MOM”). However, with the changes to the Act, MOM will no longer hear wrongful dismissal claims under the Act and Child Development Co-savings Act. Instead, all claims will be now heard by the ECT, following mediation by the Tripartite Alliance for Dispute Management (“TADM”).

The MOM will also publish a set of Tripartite Guidelines on Wrongful Dismissal which will set out guidelines on what could constitute as wrongful dismissal.

Further, managers and executives were only allowed to claim for wrongful dismissal if they have served at least 12 months with the employer. This minimum service period has been reduced to six months from 1 April 2019 onwards. There is no such minimum service period for non-managers and executives.

Finally, given that the changes will only take effect from 1 April 2019, managers and executives earning above $4,500 will not be able to raise a wrongful dismissal claim if they are terminated before 1 April 2019.

Medical certificates

Currently, only medical certificates issued by government doctors or company approved doctors are recognised for granting paid sick leave under the EA. This rule was first enacted in 1968 and was implemented to prevent employees from submitting fictious medical certificates.

From 1 April 2019 onwards, all employers are required under the EA to recognise medical certificates issued by all doctors registered under the Medical Registration Act when granting paid sick leave. However, there will be no change with respect to the reimbursement of medical consultation fees. Employers will still only be required to reimburse medical consultation fees if the employee consults with government doctors or company approved doctors.

It is also noteworthy that this change does not affect medical certificates from Traditional Chinese Medicine practitioners. The company retains the discretion of whether it wishes to recognise such certificates.

Authorised deductions

Under the current Act, employers could only make salary deductions for authorised reasons such as:

• The employee’s absence from work without a valid reason;
• Damage or loss of goods or money that is expressly entrusted to the employee;
• recovery of advances or loans or for adjustment of overpayment of salary; and
• contributions payable by employers on behalf of their employees and in accordance with the provisions of the Central Provision Fund Act.

From 1 April 2019, apart from authorised deductions, employers will be able to make other deductions (such as for the co-payment of premium for insurance provided by the company for the benefit of the employee) IF:

• the employee willing consents in writing; and
• is able to withdraw from such deductions without penalty.

Regulations relating to protection of employee’s entitlement and wellbeing

Finally, the proposed changes to the Act would also empower the MOM to make regulations that would make it a civil contravention for employers to ask an employee to indicate that they have received their salary when they had not. Additionally, it would also be a civil contravention if the employee is asked to sign a receipt of salary that is blank or inaccurate.