Singapore: Singapore – Latest Developments In Employment Law

Thomas Choo, Senior Associate and employment law expert based in Clasis LLC’s office summarises the review currently underway in relation to Singapore employment law and outlines some changes which have made it more difficult for foreign workers to work in Singapore.

Future reforms for better protection of workers

Singapore’s main labour law, the Employment Act, is currently up for review. The last review was in 2008.

The Employment Act generally covers every employee (regardless of nationality) who is under a contract of service with an employer, except:

  • Any person employed in a managerial or executive position

  • Any seaman

  • Any domestic worker

  • Any person employed by a Statutory Board or the Government of Singapore

Part IV of the Employment Act, which provides for rest days, hours of work and other conditions of service, also applies only to:

  • Workmen earning not more than S$4,500 basic monthly salary

  • Employees earning not more than S$2,000 basic monthly salary

Given the complexity of some of the issues, the Ministry of Manpower of Singapore (being the ministry of the Government of Singapore that directs the formulation and implementation of policies related to manpower in Singapore) (the “MOM”) has announced that the review of the Employment Act will be conducted in two phases.

The first phase, which is envisaged to end in the first quarter of 2013, will look at extending coverage of the Employment Act (to include better protection and working conditions for professionals, managers and executives (“PMEs”), short-term contract workers and low-wage workers), improving employment standards and benefits for employees, and reducing rigidity and augmenting flexibility for employers (such as giving employers the flexibility to provide time-off-in-lieu for work done on public holidays by PMEs). The MOM has also invited members of the public to provide their feedback on these areas.

The second phase, which will commence in the fourth quarter of 2013, will examine more complicated issues that require further study – these “complicated issues” may include enhancing protection for employees in non-traditional work arrangements – such as contract work – and creating better dispute resolution mechanisms for employers and employees.

The National Trades Union Congress (being Singapore’s sole national trade union centre) (“NTUC”) has put forth its wish list for the upcoming review of the Employment Act. Among other things, NTUC wants at least half of Singapore’s resident PME’s to be covered by the Employment Act. Currently, PME’s are only covered in that they can go to the Labour Court of Singapore for salary claims, and only if they earn S$4,500 or less per month. NTUC also wishes to raise the salary cap for workers in Part IV of the Employment Act. Other suggestions, aimed at protecting vulnerable workers, include making written contracts and payslips mandatory and ensuring a minimum rest period between shifts for shift workers.

Law strengthened to prevent illegal hiring of foreign workers

The Employment of Foreign Manpower (Amendment) Bill (the “EFMA”) took effect from 9 November 2012. From 9 November 2012, employers who illegally hire foreign workers will be punished with higher fines and longer jail terms. The amendments strengthen its enforcement capabilities and ensure compliance with work pass rules. The law had been passed in September 2012 to deal with various ways some employers have devised to get around tighter quotas and higher levies introduced in recent years to slow down the inflow of foreign workers. The EFMA has been amended in three ways:

  • Establish a new administrative penalty regime. This will allow for more expeditious and effective punishment for those who bend the rules. New Commissioners for Foreign Manpower appointed by the MOM will be authorised to impose administrative financial penalties of up to S$20,000 per infringement and/or any directions to comply

  • Create new offences and infringements with higher penalties. This is to achieve greater deterrence, and to ensure that penalties are commensurate with potential profits by errant employers

  • Include new presumption clauses and enhance investigatory powers to step up enforcement against syndicates and errant employers

Foreign workers to find work passes tougher to obtain

Non-residents in Singapore must hold a valid work pass before they can work in Singapore. There are generally three types of employment passes for professionals, being the Employment Pass, the Personalised Employment Pass and the EntrePass.

  • The Employment Pass (“EP”) allows foreign professionals to work in Singapore, and applies to foreigners who earn a fixed monthly salary of at least S$3,000, and have acceptable qualifications

  • The Personalised Employment Pass (“PEP”) is for certain groups of existing Employment Pass holders and overseas foreign professionals. Unlike an Employment Pass, which must be cancelled when the pass holder leaves the employer, the PEP is not tied to the employer and is granted on the strength of the applicant’s merit. A PEP holder can remain in Singapore for up to six months between jobs to evaluate new employment opportunities

  • The EntrePass is meant specifically for foreign entrepreneurs who would like to start a business in Singapore

The MOM has recently announced certain work-pass criteria changes, which follows earlier government curbs on foreign manpower. Top-tier foreign talent hoping to get a PEP for better job security when they work here, will soon find it tougher to qualify. From 1 December 2012, the qualifying criteria for the PEP has been raised and some of its features will be refined. This ensures that the PEP remains a premium pass for top-tier foreign talent and is in line with recent moves to raise the quality of EP holders. The changes are:

  • The availability of PEP to EP holders who earn a fixed monthly salary of at least S$12,000 and overseas-based foreign professionals whose last drawn fixed monthly salary was at least S$18,000. This is up significantly from at least S$3,000 to S$8,000 or more, depending on the previous EP tier

  • An increase of minimum annual fixed salary requirement from S$34,000 to S$144,000

  • A change in the validity of the PEP from five years to three years

  • New PEP holders being able to bring in their parents, spouses and children

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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