An extract from The International Hotel Law Review, 1st Edition

Employment law

i Labour trends in the hospitality sector

Being a manpower-intensive sector, there is heavy reliance on foreign manpower for hospitality staff – particularly frontline staff – in Singapore. Foreign employees in the hospitality sector generally require an 'S-pass'. There is a quota on the number of S-Pass holders a company can hire – S-Pass holders cannot exceed 15 per cent of the company's total workforce. This quota was due to be reduced to 13 per cent with effect from 1 January 2020 and further reduced to 10 per cent with effect from 1 January 2021. With tighter immigration policies, hospitality companies will need to manage with more careful manpower planning.

A commonly used approach towards managing manpower needs in the hospitality sector is to rely on labour hire companies and professional employer organisations to supply manpower. The use of such providers remains an unregulated area in Singapore. However, the common law risks of employee misclassification are inherent in such an approach; if the individuals supplied by such providers are deemed to be de facto employees of the hotel, the hotel faces liabilities under the Central Provident Fund Act, the Employment Act and Work Injury Compensation Act. In determining whether an individual is an employee of the hotel, the courts generally consider the parties' actual intentions, whether some framework of control exists, whether the services performed by the individual form an integral part of the hotel's business and method of payment.

ii Shift workers

Hospitality frontline staff are likely to be working shifts. Shift workers are not allowed to work more than 12 hours daily under any circumstances and the average number of hours worked by shift workers over any continuous period of three weeks cannot exceed 44 hours per week. Employers may substitute any continuous period of 30 hours as a rest day for staff working shifts.

Shift allowances are not mandatory under Singapore law. Singapore laws do not require standby time to be paid (but it is best practice to provide payment for standby time).

iii Overtime

Manual workers earning up to S$4,500 pm and non-managerial or non-executive employees earning up to S$2,600 pm are statutorily entitled to overtime pay. Overtime pay is calculated as follows:

Hourly basic rate of pay x 1.5 x number of hours worked overtime.

iv Work injury compensation insurance

Work injury compensation insurance is mandatory for all employees doing manual work, regardless of salary level and for employees doing non-manual work, earning S$1,600 or less a month.

v Unfair dismissal

In April 2019, Singapore tightened its unfair dismissal regime by affording all employees (regardless of rank or salary grade) the statutory right to complain of unfair dismissal. Unfair dismissal claims are now brought before the Employment Claims Tribunal instead of the Ministry of Manpower. The definition of 'dismissal' has also been widened to include constructive dismissal by resignation. If the Employment Claims Tribunal finds that the dismissal was wrongful, the employer may be ordered to either reinstate the employee and pay the employee for loss of income due to the wrongful dismissal or pay the employee a sum of money as compensation.