In 2015, we continued to see the shift towards a more pro-employee and pro-Singaporean approach in Singapore’s employment landscape, and 2016 promises to be no different. As a brief overview, 2015 saw the passing of the Employment Act (Amendment) Bill 2015, the coming into force of the Industrial Relations (Amendment) Act 2015 (see update here), the introduction of additional requirements for the Fair Consideration Framework (“FCF”) (see update here), as well as increased scrutiny by the Central Provident Fund Board (“CPF Board”) on the payment of contributions to the Central Provident Fund (“CPF”) by companies of all backgrounds.
We provide a summary of some of these key developments in 2015 and an overview of some of the key changes to Singapore’s employment legislation in 2016. Employers must be cognisant of the changing face of employment practices in Singapore to avoid unforeseen negative consequences. HR managers will have to take on an even more proactive approach to managing employees.
Employment (Amendment) Act 2015 To Come Into Force On 1 April 2016
From 1 April 2016, all employers in Singapore will be required to issue written Key Employment Terms (“KETs”) and Itemised Payslips to their employees who fall within the ambit of Singapore’s Employment Act (Chapter 91) (“EA”). This follows from the first round of amendments to the EA, which came into effect on 1 April 2014, and is part of the continuing effort by the Ministry of Manpower (“MOM”) to ensure that employees are better protected, while also balancing this against the business considerations of employers. More details on these new requirements can be found in our update here.
The introduction of a legislative requirement to issue written KETs and Itemised Payslips marks the conclusion of Phase 1 of the review of the EA, which started in November 2012. In 2016, as part of Phase 2 of the review, one can expect the introduction of amendments relating to the protection of employees in non-traditional work arrangements, such as contract workers, freelancers and self-employed personnel. Companies operating in Singapore are well advised to monitor the developments in this area to ensure that their employment practices remain relevant and in accordance with the law.
Continued Support For Singaporean Professionals, Managers and Executives
In 2016, the Singapore Government’s focus on enhancing the Singaporean core of professionals, managers and executives in the work place is expected to continue. On this, while further changes to the FCF are unlikely to occur, the scrutiny on firms who have a significantly greater proportion of foreign employees in managerial and executive positions, as well as on Employment Pass applications, will continue for some time to come. This is in light of the Singapore Government’s goal to achieve a 2/3 Singaporean core in the economy.
On this, it is worth noting that on 12 November 2015, the MOM charged a director of a local company with 20 counts of making false declarations of salary in various applications for an Employment Pass. According to the MOM, the director had instructed her foreign employees to falsely declare their fixed monthly salary as S$3,100 in order to meet the salary threshold for an Employment Pass. The MOM also took the opportunity to remind employers that that it takes a serious view of such false declarations and will not hesitate to permanently curtail the work pass privileges of a company found to have provided false declarations to the MOM.
Changes To Compensation Limits for Work Injury Compensation
From 1 January 2016, the minimum and maximum limits for death and permanent incapacity, as well as the limit for medical expenses, under the Singapore Work Injury Compensation Act (Chapter 354) (“WICA”) were increased by approximately 20%. To recap, the WICA is a no-faults compensation scheme which allows employees to claim compensation from their employers for any personal injury arising out of and in the course of employment.
Interestingly, in 2015, in the first case of its kind, the State Courts convicted a company for failing to pay compensation under the WICA. This indicates an increased willingness on the part of the MOM to proceed against companies who fail to comply with their statutory obligations relating to work injuries. To reduce such risks, businesses are well advised to be aware of their statutory obligations under the WICA and the Workplace Safety and Health Act (Chapter 354A).
Increased Scrutiny On Employment Agencies?
2015 also saw the conviction of 2 unlicensed employment agents in the State Courts. In addition, a fine was imposed on an employment agency for collecting excessive agency fees from 2 foreign employees. This indicates the readiness of the MOM to proceed against any party suspected of contravening the provisions of Singapore’s Employment Agencies Act (Chapter 92). With foreigners finding it increasingly difficult to find a job in Singapore, this is an area that the MOM will likely pay additional attention to in 2016.
Employment Litigation – Increased Termination Risks
As employees become more aware of their rights, there have been a number of instances in the past year where ex-employees have commenced action against their former employers for unpaid incentive compensation and other termination benefits.
One interesting case that was decided by the High Court in 2015 was Piattchannine, Iouri v Phosagro Asia Pte Ltd  SGHC 259. This case makes clear that where an employee is terminated pursuant to a contractual term, the employer cannot subsequently raise new grounds of termination to avoid paying to the ex-employee his contractual entitlement. Notwithstanding this, the High Court clarified that such new grounds of termination can be raised in circumstances where (i) the ex-employee is terminated under the common law and the ex-employee claims against the employer for wrongful termination, or (ii) the ex- employee is terminated pursuant to a contractual term and the ex-employee subsequently brings an action arguing that the employer was not entitled to rely on the said contractual term. In the latter scenario, the new grounds of termination can only be used to justify the reliance by the employer on the contractual term. You can read more about this case from our update here.
The above case highlights that termination of employees in Singapore is no longer simply a matter of hiring and firing. Rather, companies should review their termination practices and be clear as to whether it wants to state in their letters of termination the grounds on which it seeks to terminate its employees. This is particularly so where there is a risk of the employee subsequently challenging his termination as being a case of wrongful termination.
Workplace Harassment – A New Focus?
On 23 December 2015, the MOM, National Trades Union Congress (“NTUC”) and Singapore National Employers Federation (“SNEF”) issued a new set of guidelines – The Tripartite Advisory On Managing Workplace Harassment (“Harassment Guidelines”). The Harassment Guidelines make clear that employers are responsible for putting in place policies and procedures to manage harassment in the workplace, including implementing a harassment hotline whereby complaints can be made on an anonymous basis as well as remedial measures that the employer can take.
The issuance of the Harassment Guidelines is an indication that moving forward, harassment in the work place will be a key area of concern for the MOM and it is recommended that companies start looking at their anti-harassment policies to avoid any sanctions that may arise in time to come.
MOM Makes Clear That Statutory Leave Is An Entitlement
In a comic strip released on its social media platform, the MOM makes clear that upon the completion of 3 months of employment, an employee falling within the ambit of the EA is entitled to paid annual leave, outpatient sick leave and hospitalisation leave. This reinforces the view of the MOM that for EA employees, the above statutory leaves are entitlements and employers should be slow to take into account such leaves when deciding on an employee’s overall performance.
As with 2014 and 2015, 2016 promises to be another interesting and hectic year for both employers and employees as the employment landscape in Singapore continues to evolve. In addition to the new statutory obligations imposed on employers, there will likely be increased regulatory action on various fronts, including workplace discrimination, workplace harassment and payment of CPF contributions. Companies are therefore advised to keep themselves updated on new developments on this front to avoid any adverse outcomes in the new year.