November 27, 2018

Significant changes to the Singapore Employment Act from 1 April 2019

The Singapore Government has recently passed major amendments to the Employment Act (Cap 91) of Singapore (the Employment Act) which will take effect from 1 April 2019.

Some of the key amendments include:

  • Scope and coverage under the Employment Act - The Employment Act will include all employees (except public servants, domestic workers and seafarers). This means that statutory protections and benefits set out in the Employment Act (outside Part IV) must also be offered to professionals, managers and executives (PMEs) earning more than SGD 4,500 a month (who were previously excluded under the Employment Act). Examples include minimum days of annual leave, paid sick leave, hospitalisation leave and compensation against wrongful dismissal.
  • Part IV Benefits – The monthly salary threshold under Part IV of the Employment Act for non-workmen will be increased from SGD 2,500 to SGD 2,600. This means that more rank-and-file employees will be protected under Part IV of the Employment Act.
  • Wrongful dismissal – The qualifying employment period for protection under the wrongful dismissal provision will be shortened from 12 months to 6 months. The Ministry of Manpower also intends to publish guidelines in due course which provide more insight on the process of adjudicating wrongful dismissal claims.
  • Changes to the Dispute Resolution Process Relating to Wrongful Dismissals – Wrongful dismissal claims will be mediated by the Employment Claims Tribunal instead of the Ministry of Manpower. This would mean that the Employment Claims Tribunal will be the "one-stop service" that hears both wrongful dismissal claims and salary-related claims.
  • Salary Deductions – An employer will need written consent from its employee if it is to make deductions from the employee's salary for the purposes of accommodation, amenities and services supplied by the employer.
  • Information on Retrenchment – The Commissioner of Labour would gain additional statutory powers by compelling an employer to furnish information on the retrenchment of an employee.

In light of these significant amendments to the Employment Act, Singapore employers should take the opportunity to review the employment agreements and employee handbooks which are applicable to PMEs earning more than SGD 4,500 a month to ensure that their terms and conditions are compliant with that of these changes from 1 April 2019.