Singapore: A Snapshot Of Employment Changes In 2014

The Singapore Parliament has rolled out a number of employment-related legislative changes, which have either recently come into force, or are due to come into force this year. This new legislation and the implications for employers are summarised below.

Employment Act Amendments

Most changes to the Employment Act, the principal employment legislation in Singapore, came into effect on 1 April 2014, with others coming into force from 1 April 2015.

Part IV protection extended to more employees

• The salary threshold for non-workmen (such as clerical and service staff) has been raised from SGD 2,000 to SGD 2,500 per month
• Overtime pay is however capped at a salary level of SGD 2,250 to help employers manage their business costs

Greater protection for Professionals, Managers and Executives (PMEs)

• Except for Part IV benefits, PMEs with a basic salary up to SGD 4,500 per month will now enjoy protection under all the other general provisions of the Act, such as sick leave benefits, salary protection and protection against unfair dismissal
• Importantly, PMEs earning up to SGD 4,500 per month who have at least 12 months' service with their employer can now seek redress for unfair dismissal through the Ministry (in addition to the usual civil claims route)

Ensured union representation for transferred employees

• In a company restructuring, the collective agreement will be extended for 18 months after the date of transfer, or until the expiry of the collective agreement, for unions to represent the transferred employees in the new company.

Protection against excessive deductions to workers' salaries

• Allowable salary deductions are limited to 50% of the monthly salary. Within the 50% cap, no more than 25% can be deducted for
• housing accommodation, amenities and services provided by the employer as part of the agreed employment terms, or
• damages or loss caused by the employee's neglect or default

Shorter eligibility period for retrenchment benefits

• In recognition of the current trend of shorter employment tenures, from 1 April 2015, employees who have worked for two years (previously three years) will be eligible for retrenchment benefits

Flexibility for employers

• In addition to overtime pay, employers may now give time off in lieu (of at least half a day) for PMEs who have to work on public holidays
• Employers are not required to give paid sick leave or pay the employee's medical examination expenses for cosmetic consultations and procedures

Stricter enforcements

• First-time offenders who fail to pay employees' salaries will be liable to a fine between SGD 3,000 and SGD 15,000 and/or a six months' prison term. For repeat offenders, the penalty will be a fine between SGD 6,000 and SGD 30,000 and/or a 12 months' prison term
• Individuals, such as directors and partners of the company, will also be held accountable for non-compliance, unless they can prove that they have exercised reasonable supervision or there was genuine oversight
• Employment inspectors may enter any workplace to conduct checks, and to arrest people they reasonably believe are guilty of failure to pay salaries

Industrial Relations Act Amendments

Greater union representation for PMEs:

• With effect from 1 April 2015, rank-and-file unions which have been granted recognition by an employer may now represent that employer's PMEs collectively on specific industrial matters, on bargaining for collective salary agreements and they can also represent PMEs in any re-employment issues
• Senior management and specific categories of executives (such as in-house counsel, those with access to highly confidential information and those whose work has important strategic impact on the company) are however not entitled to collective representation

Personal Data Protection Act

Though not employment-specific legislation, this Act has a significant impact on employers in relation to the processing of their employees' personal data.

Employers must notify employees of the purpose behind the collection, use, or disclosure of their personal data and obtain valid consent for this. The Act imposes obligations on the transfer of such data out of Singapore and a limit to the retention and storage of that data. However, there are exceptions to the requirement for consent, such as the use of personal data for the management and termination of employment, evaluative purposes, investigative purposes and in the context of a business asset transaction.

One notable obligation is the mandatory requirement to appoint Data Protection Officer(s), responsible for compliance with the Act.

Protection from Harassment Act

This Act, which came into effect on 15 November 2014, establishes statutory protection from harassment and anti-social behaviour, which includes cyber-bullying and stalking.

Its net is cast wide by:

• open-ended definitions – non-exhaustive illustrations of offending behaviours rather than restrictive definitions of harassment
• no restriction on physical space – cyberbullying and harassment is also an offence
• no restriction on location – acts committed outside Singapore can be caught if the acts are committed against victims in Singapore
• medium-neutral – harassment can take the form of words, behaviour, pictures or any means of communication

Offenders face a wide range of potential penalties, such as fines, imprisonment and community orders. Repeat offenders will face enhanced penalties. Victims may also seek a number of sanctions, such as:

• protection orders, expedited protection orders for victims and affected family members
• orders to cease and desist
• orders to remove offensive materials
• notifications to alert readers of the false facts alleged against the victim
• damages (separate from a fine, which is a criminal sanction)

Although it is not employment-specific legislation, the Act uses a number of workplace scenarios to illustrate what constitutes harassment. It is important that employers review their existing anti-harassment/violence policies, and internet and social media policies, and that they educate employees on what conduct is unacceptable within the workplace.

Stricter enforcement of Tripartite Guidelines on Fair Employment Practices

According to these Guidelines, job advertisements should not stipulate criteria (i.e. age requirements) unless specific attributes are necessary for the job, in which case the reason for the requirement should be stated.

There has been greater emphasis recently on the vigilant enforcement of the Guidelines. The Ministry of Manpower has imposed various penalties for non-compliance, such as the immediate removal of offending job advertisements, making a public apology and the curtailment of work privileges, such as a bar on work pass applications.

Introduction of the Fair Consideration Framework

The Fair Consideration Framework (reported on in the September 2014 edition of our International Newsletter), introduced on 1 August 2014, is a Singapore-first policy. It seeks to promote the hiring of Singaporeans and ensure staff development practices are transparent, based on merit and do not discriminate against Singaporeans.

Employers submitting Employment Pass applications for foreign employees must first advertise their job vacancies on the national Job Bank at least 14 calendar days before they can proceed with their application. The advertisement must be open to Singaporeans and must comply with the Tripartite Guidelines on Fair Employment Practices, for instance, being non-discriminatory.

Certain jobs are exempted from the advertising requirements, such as:

• in companies with fewer than 25 employees
• vacancies with a fixed monthly salary of SGD 12,000 and above
• jobs filled by Intra-Corporate Transferees (a manager, executive or specialist who has worked for the firm outside Singapore for at least one year before the proposed hiring)
• short-term assignments of not more than one month

Requirement under the Tripartite Guidelines for employers to issue payslips

The Guidelines require all employers, as part of good HR practice, to issue itemised payslips to all employees at least once a month and within seven days of the last day of the month. They can either be issued in hard copy or in electronic form.

Increase in Central Provident Fund contributions

The Central Provident Fund is a compulsory savings plan for working Singapore citizens and Singapore permanent residents. All eligible employees and their employers must make monthly contributions.

From 1 January 2015, employers' contributions increased by:

• 1% for employees aged 50 years or less, or for employees over 65
• 2% for employees aged 51-55 years
• 1.5% for employees aged 56-65 years

What this means for employers

The myriad of changes signifies a shift in the official attitude towards employee rights and employee protection. We can expect to see more employee-friendly legislation in the future, as well as employers being held to task if they fail to follow fair employment practices.

It behoves employers to review their existing hiring and administrative processes, and their internal policies dealing with employee data and employee relations. Non-compliance does not just expose employers to tangible financial penalties but may result in damages which are difficult to quantify, such as reputational loss and the curtailment of privileges.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.