Following the Budget 2017 speech that was delivered on 20 February 2017, the Ministry of Manpower ("MOM") has been sharing with the public about efforts to increase the protection of employees and allay the population's fears about the tight job market. We summarise the key updates that are likely to affect employers below.
The MOM has expressed that it will continue to focus on encouraging employers to employ more local employees.
The MOM will be increasing the salary threshold for a local worker to be considered a full-time equivalent - from S$1,000 to S$1,100 from 1 July 2017 and subsequently to S$1,200 from 1 July 2018. This will affect a company's Dependency Ratio Ceiling, i.e., the maximum permitted ratio of foreign workers to the total workforce that a company in the stipulated sector is allowed to hire.
The Manpower Minister (Lim Swee Say) also expressly warned that the MOM will take action against employers who discriminate against local employees in hiring practices. Such actions include but are not limited to placing companies on the Fair Consideration Framework watch-list. Companies that are placed on the Fair Consideration Framework watch-list may have their Employment Pass applications rejected by the MOM.
Financial Incentives Provided to Employers to Boost Employment
Another significant area of focus for the MOM was to use financial incentives to encourage employers to hire more employees who have been made redundant or to provide employees with adequate training. For instance, to encourage employers to offer more mid-level jobs to local employees, especially local employees who have been made redundant for a prolonged period of time or who are slightly older, the Government will increase the sums offered to employers through the Professional Conversion Programme and the Career Support Programme. Details of both schemes can be found here and here, respectively.
To encourage employers to play a more active role in sending employees for training, SkillsFuture Singapore may also provide employers with funding support for such initiatives.
Government Support for Freelancers and Outsourced Employees
As discussed in a previous client alert, the Singapore government appears to be heading in the direction of regulating the treatment of individuals who are engaged to work under short-term or project-based arrangements, either as term contract employees or independent contractors. With the increasing relevance of the "gig economy", it is no surprise that this year's Budget discusses the issue of independent contractors (or also known as freelancers), particularly within the media industry.
We can expect the following developments within this year:
(a) A tripartite workgroup will be formed to examine the issue of freelancers in the economy and address the concerns that surface.
(b) Various initiatives specific to the media industry, e.g., subsidized mediation services provided to freelancers in the media industry on disputes that involve contractual issues such as late payment or nonpayment, and action being taken by the Infocomm Media Development Authority against media companies that wrongfully delay or withhold payment to their freelancers or employees.
The Government also recognizes that companies are increasingly interested in outsourcing as part of cost-cutting measures. They have therefore released an updated "Tripartite Advisory on Best Sourcing Practices" to set out best practices with regards to compensation and benefits for outsourced workers. MOM has also indicated that they will be working with various other ministries and governmental agencies to develop measures against contractors that fail to protect the basic rights of outsourced workers working under Government contracts.
Improving Workplace Safety and Health Standards
The Government announced plans to enhance the Workplace Safety and Health Regulations to deal with the following issues:
(a) Vehicle-related accidents within worksites
(b) Accidents involving formwork
(c) Lack of proper supervision, communication and coordination of work activities
The role of corporate officers in maintaining the safety and health standards of a workplace
The MOM also plans to roll out a Return to Work Programme to assist injured workers in being able to return to their workplace. More details will likely be released at a later date.
Other Issues To Note
The Employment Claims Tribunal and the Tripartite Alliance for Dispute Management, which have already been discussed in our previous client alert, will commence operations as scheduled on 1 April. We expect that more details regarding this will be released closer to the date.
A key focus in this year's Budget is to assist employees and jobseekers to deal with the challenging economic climate. The Government is therefore encouraging companies to partner with them in such efforts, and to be responsible employers. Accordingly, it is likely that there will be further legislative changes or changes to guidelines issued by MOM over the course of this year. Employers should take note of the above changes to ensure that they will be able to deftly navigate the constantly changing labour landscape in Singapore.