Key changes to the Employment Act (EA) to enhance employment protection for workers were announced during the Ministry of Manpower’s Committee of Supply debate in March 2013. This current Bill – the Employment, Parental Leave and Other Measures Bill – puts those changes into law.
- The Bill was introduced for first reading at the Parliament Sitting on 21 October 2013. (Please refer to the Annex for the Bill).Summary of Proposed Key Amendments to the EA
- The EA, enacted in 1968, is Singapore’s main labour law that seeks to ensure reasonable employment standards while balancing businesses’ need to stay competitive.
- The proposed key amendments to the EA are:a. Better Protection for More Workers and PMEs• The salary threshold for non-workmen1 to be covered under the working hours-related provisions (Part IV of the EA) will be raised from a basic monthly salary of $2,000 to $2,500, in line with increases in salary levels.
• PMEs earning a basic monthly salary of up to $4,500 will also be protected under the general provisions of the EA, including protection against unfair dismissal and sick leave benefits, beyond the salary protection currently already accorded to them.
• A 25% sub-cap will be imposed for deductions for accommodation, amenity and services (within the existing 50% total cap) to prevent excessive deductions to employee salaries2.
• The non-eligibility period for retrenchment benefits will be reduced to two years from three years, in line with shorter employment tenures.
b. Flexibility for Employers
• Presently, non-workmen earning up to $2,000 and workmen earning up to $4,500 can claim overtime pay. Though the salary threshold of non-workmen will be increased to $2,500, the overtime rate payable for non-workmen will be capped at the salary level of $2,250 to help employers manage costs.
• PMEs will need to have served with the same employer for at least one year to be eligible to seek redress against unfair dismissal. This will provide employers time to assess suitability of the PMEs to their jobs.
• Employers will be allowed to grant time-off in-lieu for PMEs who are required to work on public holidays, subject to mutual agreement. In the absence of mutual agreement, at least half a day off in-lieu has to be granted.
• Employers will not be obliged to grant paid sick leave and bear medical examination expenses of employees for cosmetic consultations and procedures3. This is to maintain the balance of responsibilities between employers and employees.
c. Enhancing Enforcement and Compliance with Employment Standards
• The penalty for failure to pay salary in accordance with the EA will be raised. A first-time offence will be liable to a fine of between $3,000 and $15,000 and/or six months’ jail. A subsequent offence will be liable to a fine of between $6,000 and $30,000 and/or 12 months’ jail.
• The maximum composition fine will be increased from $1,000 to $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 place of employment to conduct audits.
Marriage & Parenthood Related Amendments
- Some technical amendments are proposed to clarify the application of some of the existing Marriage and Parenthood measures:• The Child Development Co-Savings Act (CDCA) will be updated such that it accurately reflects the policy that parents’ total child care and extended child care leave is based on their youngest qualifying Singapore Citizen (SC) child under the CDCA. This is to avoid situations where parents who have both an older SC child and a younger non-citizen child double claim leave under both the EA and the CDCA.• The EA and the CDCA will prescribe new formulae 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 for the leave to be taken flexibly by days instead of by block week. This will provide greater certainty for both employers and employees.
- The proposed amendments will help to ensure better protection for more workers and improve employment standards, while allowing flexibility for employers. Measures are also proposed to enhance enforcement and ensure compliance with the EA to protect the interests of employees.
1 Non-workmen include clerical staff and frontline service staff.
2 For instance, the deduction for an employee earning a monthly salary of $2,000 who receives accommodation, amenity and service provided by his employer, should not be more than $500 (25%) for these. For more information on other allowable deductions, please refer to: http://www.mom.gov.sg/employment-practices/employment-rights-conditions/salary/Pages/default.aspx
3 This amendment is proposed in relation to feedback raised by employers and agreed upon by the unions. Examples of cosmetic procedures include nose jobs and mole removal.