How to Handle The 2019 Changes to the Singapore Labour Law

14/03/2019

On 1 April 2019, amendments to the current Singapore Employment Act (“EA”) will come into effect. Until now the EA  has only applied to a subset of the workforce and has excluded individuals employed in managerial or executive roles if their salary exceeds SGD $4,500 per month. However, in the future all employees will be subject to the the core provisions of the EA. Furthermore, the pool of Part IV Employees benefiting from additional statutory rights will be larger due to the salary threshold increase to SGD $2,600 per month (instead of SGD $2,500).

 

While managers or executives probably already benefit from equivalent rights today, it is still worth verifying that your business complies with all statutory rights set forth in the EA (e.g. maternity benefit and childcare leave, payment in lieu of notice, etc.) as it is automatically affected by the amendments.

Core Statutory Rights of the Employment Act

The following statutory rights may not be suppressed or diminished through contrary or inconsistent contractual employment terms or employee handbooks/policies:

Category of Rights

Minimum Standard/Right

Usually dealt with in:

Annual Leave

7-14 paid days, depending on length of service

Employment contract and/or employee handbooks/policies

Right to encash accrued unused annual leave on

termination (except on the grounds of misconduct)

Employee handbooks/policies

Paid Holiday

11 paid public holidays

Employment contract and/or employee handbooks/policies

Statutory right to paid public holidays and be paid for work done on public holidays

Employment contract and/or employee handbooks/policies

Sick Leave

After an employment of more than 6 months, employees are entitled to:

– up to 14 days of paid sick leave (without hospitalisation) or

–  maximum of 60 days if hospitalisation is necessary in each year.

Employment contract and/or employee handbooks/policies

Under the amended EA, employees are entitled to paid sick leave after examination by any medical practitioner (even if such medical practitioner was not appointed by the company). Furthermore, community hospitals can now certify for paid hospitalisation leave.

Employee handbooks/policies

Maternity and Childcare Leave

Maternity benefit period of 12 weeks and childcare leave of 2 days per year and a maximum of 14 days per child in total. More extensive periods apply to employees whose child/children are Singapore citizens (as provided in independent Ordinance).

Employee contract and/or employee handbooks/policies

Salary

Employers need to pay employees on time. Furthermore, under the amended EA, employers need to provide payslips to all employees.

Employment contract (key employment term)

Under amended EA, with employee’s written consent, all kinds of deductions generally allowed. However, consent can be withdrawn at any time without penalty.

Employee handbooks/policies

Overtime

Under amended EA, monthly basic salary used to calculate the hourly rate for overtime work will be SGD$2,600/month.

Formula for calculating overtime pay under the EA: Hourly rate* x 1.5 x number of hours worked overtime.

Employment contract and/or employee handbooks/policies

Employment Records

Under amended EA, employers will have to provide key employment terms and itemised pay slips in writing to all employees.

Employment records

Following amendments, employers will have the obligation to make and keep employee records for a prescribed retention period.

Employee handbooks/policies

Payment in Lieu of Notice

Under amended EA, any employee has the right to terminate employment by making a payment of salary in lieu of notice to the employer.

Employee handbooks/policies

Due Inquiry

Under amended EA, employer is required to conduct “due inquiry” before taking any disciplinary action, including dismissing an employee on the grounds of misconduct.

Employee handbooks/policies

Dismissal

Notice or dismissal during maternity benefit period is prohibited.

Employee handbooks/policies

If an employee considers that they have been dismissed without just cause or excuse by their employer, under the amended EA, the employee can complain to the Employment Claims Tribunal.

Employee handbooks/policies

Under the amended EA, constructive dismissal is recognised as a statutory basis for unfair/wrongful dismissal claim.

Employee handbooks/policies

Unfair dismissal could lead to reinstatement and/or compensation.

Employee handbooks/policies

Automatic Transfer

Where the business is sold / in restructuring, under amended EA, all employees of the transferor will automatically transfer to the transferee, with recognition of their length of service with the transferor and on the same terms and conditions of employment.

Employee handbooks/policies

Retrenchment

Under amended EA, an information and consultation process will have to be conducted with respect to the affected employees (and if applicable, any trade union recognised by the transferor) as soon as is reasonable before the transfer. Furthermore, Commissioner of Labour needs to be informed about the intended retrenchment measures.

Employee handbooks/policies

Employment Tribunal

Under the amended EA, in addition to salary-related claims, dismissal claims will be heard at the Tripartite Alliance for Dispute Management/Employment Claims Tribunal.

Employee handbooks/policies

* There are other statutory rights in the Employment Act and this article does not attempt to provide an exhaustive summary of all such rights and introduced changes.

In the case that contractual terms and employee handbooks/policies are in line with the statutory rights, no specific action is required.

In the case that the employment agreement and/or the employee handbooks/policies do not contain specific provisions related to the statutory rights as set out in the EA, statutory rights will automatically apply. As long as statutory rights are respected in practice, no specific further action is required.

In the event that the contractual terms and/or the employee handbooks/policies are inconsistent with statutory rights, the latter will prevail. As inconsistent terms are illegal, contractual terms and/or employee handbooks/policies should be amended to be in line with statutory rights (e.g. through a supplement to the employment agreement to be signed off by the employee). Serious consequences under the EA exist in case of failure to provide statutory rights to Part IV Employees.

Please see also following compliant documents available on our platform:

 

Practical Tips – What To Do Before April 2019?

  • Verify that that existing contractual employment terms as well as employee handbooks/policies do not contain provisions that are inconsistent with statutory rights set forth in the EA;
  • Check if any of your employees will be classified as Part IV Employees, as those benefit from further statutory rights;
  • In case of anticipated M&A processes to be completed after 1 April 2019, seek legal advice on how to handle potential employee retrenchment;
  • Make sure that internal systems and operations are updated to administer the upcoming changes to EA as of 1 April 2019 (e.g. payroll system, HR management, draft employment documents).

Start managing your legal needs with Zegal today

 

Read More: Are You Aware of These Employment Laws In Singapore? 

 

 

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