Singapore: Changes proposed to Employment Act

The Ministry of Manpower (MOM) has announced proposed changes to the Singapore Employment Act (EA), following a public consultation. Of significance, MOM has proposed to extend employment protections to a broader category of employees. Additional changes to the EA will be considered later this year.

The proposed changes include:

• extending the application of Part IV of the EA (which is concerned with annual leave, working hours, rest periods and overtime), through an increase in the salary threshold for non-manual labourers;
• extending certain existing EA minimum entitlements and protections to junior managers/executives (including unfair dismissal protection, but with a one year service qualification period);
• removing liability to pay for sick leave and medical expenses for employees’ cosmetic consultations and procedures;
• introducing sub-caps in relation to existing salary deduction caps;
• requiring employers to maintain detailed employment records and provide payslips; and
• reducing the current three year qualifying period for entitlement to retrenchment benefits to two years (although this change is largely cosmetic as there are currently no statutory entitlements to retrenchment benefits in Singapore).

Later this year the MOM will review dispute resolution mechanisms and protection for people in non-traditional work arrangements such as contract work and self-employment.

The changes proposed to the EA are significant and, if passed, will alter the employment landscape in Singapore.

Action for employers

Employers should identify employees that may be affected by the changes, in particular junior managers/executives earning up to $4,500 a month, and consider the impact for their business.

Article written by Celia Yuen, Executive Counsel and Georgia Leonhardt, Associate.