The amendments to the Employment Act ("EA") announced in 2013 will come into effect in April 2014. These changes seek to extend the coverage of the EA to more employees, improve employment standards and refine benefits for employees and self-employed persons and include:
Extended coverage of the EA
Prior to the amendments, only rank and file employees were covered by the Employment Act ("EA Employees"). Those earning up to S$2,000 per month being entitled to additional protections on working hours, annual leave and overtime benefits ("Part IV"). For rank and file employees, the salary threshold for EA Part IV benefits will be raised to S$2,500 (although overtime computation will be computed on a maximum salary of S$2,250 per month).
With the amendments, Junior executives ("Junior PME") earning up to S$4,500 per month will now be entitled to greater cover under the Employment Act, including provisions relating to public holidays, sick leave, and the right to complain of unfair dismissal. However, Junior PMEs remain excluded from the EA Part IV benefits.
Unfair Dismissal Claims
Currently, EA Employees who are dismissed (with or without notice) have a right to complain to the Ministry of Manpower within 1 month from the date of dismissal, on the grounds that the dismissal was without just cause or excuse. This statutory right will be extended to Junior PMEs who have served the employer for at least 12 months.
Under the EA, Part IV employees who have been in continuous service with an employer for less than 3 years are not entitled to any retrenchment benefits. This qualifying period is now reduced to 2 years. However, this amendment will only take effect in April 2015 to allow employers time to update employment agreements and collective agreements.
Paid Public Holidays
Currently, only EA Employees are statutorily entitled to paid public holidays in a year. EA Employees who work on a public holiday are paid an extra day's salary at the basic rate of pay for working on the public holiday and the gross rate of pay for that holiday; or can mutually agree with the employer to substitute a public holiday for any other day.
The amended EA extends this entitlement to Junior PMEs who work on a public holiday. Alternatively, Junior PMEs who work on any gazetted public holiday can be given (in addition to the gross rate of pay for work done on that holiday) part of a day off on a working day a day's off on a working day, if the employee has worked up to 4 hours on that holiday or an entire day off, if the employee has worked more than 4 hours on that holiday.
This year will also see the introduction of a Fair Consideration Framework (FCF) and the establishment of a National Jobs Bank (NJB). The FCF aims to ensure Singaporeans are considered fairly for job opportunities and to enhance job market transparency and prevent discriminatory hiring practices.
The NJB acts as an accessible database for prospective job seekers (Singaporeans and Permanent Residents) granted added functionality by being able to upload their CVs and to apply for jobs on the NJB directly through the system.
Any employer looking to hire a foreign employee on an Employment Pass (EP) will now have to first advertise the position on the NJB for a mandatory minimum period of 14 days before any employment pass application for the hired foreign employee will be considered. This aims to allow local jobseekers access to these jobs and to be fairly considered for the position before a foreigner is hired.
Employers should review and update their policies to ensure compliance in anticipation of the new laws in April this year.