The landscape of Singapore’s employment law is set to see a number of changes in 2017. Several parliamentary bills were set in motion in the course of 2016, resulting in a number of amendments made to key employment legislation, some of which took effect as early as 1 January 2017.
2017 will also see the setting up of the Employment Claims Tribunal which will be the new institution handling salary-related disputes for all levels of employees regardless of their salary levels (with a few exceptions). The Employment Claims Tribunal will reside within the Singapore court system and will be the successor to the existing Labour Court. These key changes are outlined below.
Statutory Leave Entitlements
- Paternity Leave
From 1 January 2017, fathers will enjoy an increase from one to two week’s paid paternity leave under the Child Development Co-Savings Act (“CDCA”). To qualify for this leave, the male employee must be married to the baby’s mother and the baby must be a citizen of Singapore. Paternity pay is capped at SGD2,500 per week.
Paid paternity leave was first introduced in May 2013 as part of the Singapore Government’s efforts to help working couples balance work and family commitments.
- Maternity Leave
From 1 January 2017, single mothers will join the ranks of married mothers and benefit from the 16-week paid maternity leave under the CDCA (and assuming they meet the other conditions prescribed by the CDCA). Legislative amendments were made to the CDCA to remove the requirement that a female employee must be married in order to benefit from the CDCA’s maternity leave provisions.
These changes reflect a recognition of the plight of single mothers and the difficult challenges they often face in having to single-handedly raise children.
- Adoption Leave
From 1 July 2017, adoptive mothers will enjoy 12 weeks of adoption leave. The quantum of Government reimbursement for such adoption leave depends on the number of children adopted by the mother. Currently, adoption leave is for 4 weeks and is fully paid for by the Government.
- Shared Parental Leave
From 1 July 2017, working fathers will be able to share up to 4 weeks of leave from their wives’ 16 weeks of maternity leave (provided for under the CDCA), as long as the latter agree. This will apply to working parents of Singapore citizen children born on or after 1 July 2017. Currently, wives may only share up to 1 week of their maternity leave with their husbands. The husband is entitled to be paid up to a maximum of SGD2,500 per week during this leave.
Increase to Qualifying Salaries for Foreign Workers
From 1 January 2017, the minimum qualifying monthly salary for Employment Pass applications for foreign workers to work in Singapore will be raised from SGD3,300 to SGD3,600, though more experienced candidates need higher salaries to qualify.
This change is part of the Ministry of Manpower’s regular updating of the Employment Pass qualifying salary to keep pace with rising local wages, maintain the quality of our foreign workforce and enhance their complementarity to the local workforce.
Retirement and Re-Employment Issues
Three important legislative amendments were made to the Retirement and Re-Employment Act in early January 2017 to allow elder employees opportunities for continued employment, whilst at the same time affording businesses some measure of flexibility to accommodate their continued employment.
Under the current scheme, employers must offer re-employment to eligible employees who turn 62, up to age 65, to continue their employment in the business. An employee will be eligible for re-employment if he or she: (a) is either a Singapore citizen or a Singapore Permanent Resident; (b) has served the current employer for at least 3 years before turning 62; (c) has satisfactory work performance (as assessed by the employer); and (d) is medically fit to continue working. The re-employment contract should be for a minimum period of 1 year, renewable every year up to the age of 65.
If an employer is unable to offer the employee a position in the business notwithstanding that that employee has met the eligibility criteria, the employer must offer that employee a one-off Employment Assistance Payment which is effectively a one-off payment equivalent to 3 months’ salary (subject to a minimum sum of SGD 4,500 and a maximum sum of SGD 10,000).
The legislative amendments to the Retirement and Re-Employment Act will bring about the following changes with effect from 1 July 2017:
First, employers will be required to offer re-employment to eligible Singaporean workers up to the age of 67 (which is two years higher than the present age ceiling). This change will apply to employees who turn 65 on or after 1 July 2017.
Second, as an added measure of flexibility, if an employer is unable to re-employ an eligible worker, the employer now has the option (apart from making an Employment Assistance Payment as a last resort) of transferring the re-employment obligation to another employer (which may or may not be an affiliate). The second employer must agree to take over all applicable re-employment obligations and the employee’s consent to this arrangement must be sought. Should either of these two conditions not be met, the employer will then have to make the Employment Assistance Payment to the employee.
Third, the requirement that employers cut up to 10 per cent of an employee’s wages at age 60 will be removed. This provision was first introduced in the 1990s to help employers with seniority-based wage systems manage labour costs.
These legislative amendments – most of which were the product of extensive tripartite efforts – are a calibrated response to bolster the competitiveness of Singapore’s economy, especially in the face of her aging population where the proportion of residents aged 60 and over in the labour force has more than doubled from 5.5 per cent in 2006 to 12 per cent in 2015. They are also consonant with the growing societal recognition that the experience of elder employees may be invaluable and that they should, where possible, be given avenues to contribute meaningfully to the business and the economy at large.
Mandatory Retrenchment Notification
From 1 January 2017, Singapore employers that employ at least 10 employees and retrench 5 or more employees within a six-month period are obliged to notify the Ministry of Manpower of the retrenchments within. For the first four retrenched employees, employers must submit the notification within five working days after the fifth employee is notified of retrenchment. For subsequent retrenched employees, employers must submit notification to the Ministry within five working days after each employee is notified. A failure to notify within the required timeline constituted an offence and employers may face penalties that include a fine of up to SGD5,000 if convicted.
Retrenchments would include dismissals on the ground of redundancy or by reason of any reorganisation of the employer’s profession, business, trade or work, and would apply to permanent employees, as well as contract workers with full contract terms of at least 6 months.
This mandatory notification requirement will provide timely retrenchment information to Workforce Singapore (a statutory board administered under the auspices of the Ministry of Manpower), which be better equipped to assist retrenched local employees find alternative employment and provide them with relevant training to enhance their employability.
New Employment Claims Tribunal (ECT)
The establishment of the new ECT is arguably the most anticipated and prominent addition to Singapore’s employment landscape.
From 1 April 2017, the ECT will be set up to provide employees and employers with an accessible and expeditious platform to resolve employment disputes. No longer administered under the auspices of the Ministry of Manpower, the ECT will be a division of the State Courts and will replace the role of the Commissioner for Labour in adjudicating statutory salary-related claims under the Employment Act, Retirement and Re-employment Act, and Child Development Co-Savings Act. Employment claims will be heard by legally qualified Tribunal Magistrates and in accordance with the Singapore court processes.
The ECT will hear salary-related claims (including claims for contractual bonus payments) for all employees, including professionals, managers and executives (PMEs), regardless of their salary levels. There will be a claims limit of SGD 20,000, though a higher “claims cap” of $30,000 will apply to cases that have undergone a formal mediation process. Designed to keep the dispute resolution process swift and affordable, no legal representation will be allowed and there will be compulsory mediation conducted by a new centre, the Tripartite Alliance for Dispute Management (TADM), before claims can be heard before the ECT. Should mediation be successful, a settlement agreement will be entered into by the parties and upon registration with the courts will have the same legal effect as an ordinary court order.
The ECT will not have jurisdiction to hear non-salary related claims (e.g. an employer seeking to enforce confidentiality or non-competition clauses) and these claims will have to resolved before the Singapore courts.
Broadly, these changes to Singapore’s employment laws attempt to fine-tune the existing measures of promoting a better work-life balance amongst employees, and to give business a larger bandwidth to re-employ elder employees. The setting up of the Employment Claims Tribunal is likely to see more salary-related disputes get adjudicated on a streamlined and cost-efficient basis.