Recent years have seen an increase in employee protections in Singapore, as evidenced by measures to (1) help employees cope with structural economic changes arising from globalization and Singapore’s transition to a knowledge-based economy, (2) encourage the re-employment of older employees and (3) prevent discriminatory practices. Below is a summary of the employment-related changes introduced as well as the changes expected.
- Retrenchment Exercises: Mandatory Notification of Retrenchment: Since January 2017, employers with at least 10 employees are legally required under the Workforce Singapore and Agency Act to notify the Ministry of Manpower (MOM) if five or more employees are retrenched within five working days after the affected employees are notified of their retrenchment. This notification obligation was introduced to enable the Singapore authorities to assist retrenched local employees find alternative employment and training. Failure to provide the requisite notification is punishable with a fine.
- Anti-Discrimination: Fair Consideration Framework: One area of concern to Singapore authorities has been unfair discrimination by employers against hiring Singaporean professionals, managers and executives (PMEs). Thus, the Fair Consideration Framework (FCF) was put in place in 2014 to require employers with 25 or more employees to advertise job vacancies for jobs that pay up to S$12,000 per month, to Singaporeans via a job bank, before they submit employment pass applications to hire non-Singaporeans for the same role. Employers that fail to comply with the FCF may see their work pass privileges curtailed.
- Proposed Changes to the Employment Act: Currently, certain important protections in the Employment Act (EA) (e.g., 14 days of paid sick leave, 60 days of paid hospitalization leave, timely payment of salary) are not provided to managers and executives who earn more than S$4,500 per month. This has left a significant number of PMEs outside of the statutory protections provided by the EA. On March 5, 2018, the Minister of Manpower announced the government’s plans to amend the EA to extend these protections to all employees, recognizing that the Singapore workforce now has more PMEs and fewer rank-and-file workers. It is estimated that an additional 430,000 PMEs will benefit from these changes, which are expected to take effect by April 1, 2019. In addition, the Minister announced that the EA will be amended to (1) extend the protections on work hours and overtime pay to more rank-and-file workers (earning S$2,600 or less) and (2) have wrongful dismissal claims adjudicated by the Employment Claims Tribunal instead of MOM.
- Proposed Changes to the Fair Consideration Framework: With effect from July 1, 2018, the FCF will be amended to cover more employers. Employers with at least 10 employees (down from the current 25) will be obliged to advertise job vacancies that pay up to S$15,000 per month (up from the current S$12,000) to Singaporeans on a job bank. Once the above-mentioned changes to the EA and FCF are implemented, companies will need to review their employment contracts and employment practices to ensure compliance with the above-mentioned requirements under the EA and FCF.
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