Employment Act to be widened to cover all workers, regardless of salary levels

SINGAPORE — The Republic’s main labour law — which provides for basic terms and working conditions — will be extended to cover all employees, except for public servants, foreign domestic workers and seafarers who are protected under industry-specific legislation.

The Employment Act, which currently covers workers earning S$4,500 or below, will be amended later this year to cover about 430,000 more white-collar workers who are not protected under the law, Manpower Minister Lim Swee Say announced on Monday (March 5).

This means that by April 1 next year, about 720,000 professionals, managers and executives (PMEs) in total will be covered under the core provisions of the Act, based on figures from the Ministry of Manpower (MOM).

The law’s core provisions include redress for wrongful dismissal, public-holiday and sick-leave entitlements, as well as timely salary payment, and maternity protection and childcare leave.

Monday’s announcement comes less than three months after the MOM launched a public consultation on the matter, and on streamlining services for employees and employers to settle disputes.

The Act, which came into force in 1968, was last reviewed in 2012, with the most recent amendments taking effect in 2016. Some of these included making it mandatory for employers to give their workers payslips, and making known key employment terms to workers within 14 days of employment.

Mr Lim said the changes to the coverage of the law was “timely”, given that professionals, managers, executives and technicians form 56 per cent of the Singapore workforce. This will rise to 65 per cent by about 2030.

Apart from broadening the core provisions of the Act, more vulnerable employees will be better protected under the law. Presently, rank-and-file employees in white-collar jobs such as clerks and retail sales assistants — prescribed as “non-workmen” under the Act — earning up to S$2,500 monthly are protected in terms of time-based provisions, such as annual leave, hours of work, overtime pay and rest day. The threshold will be raised by S$100.

Currently, workmen — or those engaged in manual work such as cleaners, construction workers and transport drivers — earning up to S$4,500 a month are also accorded extra protection.

The proposed changes to the Act will see half the workforce, or about 1.6 million workers, receive added protection.

To ease the dispute resolution process, the Employment Claims Tribunals will become a “one-stop avenue”, taking on claims of wrongful dismissals.

Presently, the MOM looks into such claims, while the tribunals hear statutory and contractual salary-related disputes. As a result, affected employees have to approach two parties to have their issues resolved, which is cumbersome given that dismissal-related claims typically go in tandem with salary issues.

Speaking to TODAY, a white-collar worker who had sought the MOM’s help for wrongful dismissal last year welcomed the move to broaden the Act’s coverage. In December, the 42-year-old former store manager, who wanted to be known only as Mr Koh, was handed a letter of dismissal by his employer, an international luxury retail brand.

While the company did not have to give a reason for the sacking, Mr Koh learnt from his Hong Kong-based area manager that it was because he had failed to meet the sales target. He felt the dismissal unfair because the brand’s sales had already been on a downward trend, and barring the exceptional contributions of a certain client before he joined in end-2016, his performance was similar to his predecessor’s.

There was also a lack of support or plans from the company in growing the brand in Singapore, and proposals to bump up sales were dismissed, he said.

Mr Koh approached the MOM in the same month that he was handed his letter of dismissal. As he was not covered under the Act, Mr Koh, who had earned more than S$6,000 a month, was referred to the Tripartite Alliance for Dispute Management (TADM).

Through a free legal service, he was told by a lawyer that his employment contract stated that the company could terminate his employment without having to state a reason, as long as he was given one month’s notice. There was thus little he could do other than to have TADM set up a meeting to negotiate with his employer. However, his employer could choose not to turn up, and the chances of redress were also slim.

In the end, he decided to let the matter rest. If he had been covered under the law, his employer would have had to “prove their grounds that the dismissal was of valid reason”, pointed out Mr Koh, who is still unemployed.

OTHER MANPOWER MINISTRY INITIATIVES

- The new Career Trial programme — where jobseekers do a short stint with a company — will offer higher training allowances from April 1.

Jobseekers actively seeking work and who are at least 16 years old, among other criteria, will earn S$7.50 to S$15 hourly for up to three months, capped at S$2,400 a month. The maximum payout is double that of the previous Work Trial scheme. Those actively seeking work for half a year or more, and who are retained by their company for six months or longer, will get a one-off S$1,000 incentive. Under Work Trial, this applied only to those actively seeking work for a year or more. Employers will also get better wage support.

More than 500 jobseekers were placed in over 350 companies after they took part in Work Trial last year, Workforce Singapore said.

- The Place-and-Train programme, where rank-and-file workers are reskilled to take on new jobs, will be improved. Employers will receive higher support of up to 90 per cent of the monthly wage for rank-and-file workers who were jobless for six months or more, capped at S$3,000 per month. Currently, the Government funds up to 70 per cent of monthly wages for this group, capped at S$2,000 monthly.