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Amendments to the Employment Act: Singapore Ensure Better Protection for PMEs

Last modified: June 2, 2016
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Singapore Ensure Better Protection for PMEsParliament passes a new bill which will bring few new and remarkable changes to the Singapore Employment Act (Cap 91). These changes have been made to ensure better protection for more workers, especially for Professionals, Managers and Executives (PMEs).

The Ministry of Manpower (MOM) has introduced some new changes to Employment Act Singapore and the parliament has passed it on 12 November 2013. Most of these changes, unless otherwise stated, will take effect on 1 April 2014. These amendments have been made to provide better protection for more workers and enhance the employment standard, while allowing flexibility for employers.

Key amendments (changes) are highlighted below:

Better Protection for More Workers:

  • PMEs (Professionals, Managers, Executives) earning a basic monthly salary of up to S$4,500 will now be covered under general provision of the Employment Act through which employees will enjoy more  salary protection with sick leave benefits just like rank and file workers.
  • The salary threshold for non-workmen (such as clerical staff and frontline service staff) will be raised from a basic monthly salary of S$2,000 to S$2,500 and will be covered under the working hours-related provisions of the Employment Act.

Improved Employment Standards:

  • To prevent excessive deductions to the employee’s salaries, a 25% sub cap will be imposed for deduction of salaries of employees for accommodation, amenities and services.  This is within the existing 50% total cap for authorized deduction.
  • The non-eligibility period for retrenchment benefits will be reduced to two years from three years, in line with shorter employment tenures. This will take effect on 1 April 2015.
  • In the event of a company restructuring, unions can only represent employees transferred to another company if the pre-existing collective agreement remain valid. The validity of the said agreement will be extended for 18 months after the date of transfer, or until the expiry of the agreement, whichever is later.

Increase in Flexibility for Employers:

  • Despite the increase of the salary threshold of non-workmen to S$2,500, the overtime rate payable for non-workmen will be capped at the salary level of S$2,250 to help employers manage costs.
  • PMEs earning up to S$4,500 is eligible to seek recourse against unfair dismissal (dismissal without just cause) if he has been employed by the same employer for at least 12 months.
  • With a mutual agreement, employers will be allowed the additional option to grant time-off in-lieu for PMEs who are required to work on public holidays. In the absence of mutual agreement, at least half a day off in-lieu has to be granted.
  • Employers are not obliged to grant paid sick leave and bear medical expenses of the employees for cosmetic treatments such as more removal, nose job, etc.

Other Changes Include:

  • Stiffer penalties will be imposed for failure to pay salaries. There will be a mandatory minimum penalty/ fine of S$3,000 for first-time offenders and S$6,000 for repeat offenders.
  • The Child Development Co-Savings Act (CDCA) will also be updated to accurately reflect the policy that parents’ total childcare and extended childcare leave are based on their youngest qualifying Singapore citizen child under CDCA.
  • The Employment Act (EA) and Child Development Co-Savings Act (CDCA) will prescribe new formula to compute the minimum number of days of maternity, paternity, shared parental and adoption leave an employee is entitled to.

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