Singapore’s Employment Act underwent substantial amendments after more than 13 years, driven by changes in the employment landscape such as the growth of the services sector, the increase in PMETs (professionals, managers, executives and technicians) and contract workers, outsourcing and rising median wages. The Act previously applied to all workmen, and to employees who were not employed in managerial, executive or confidential positions. Also, Part IV of the Act, which provides additional employment protection and benefits with regard to rest days, working hours, overtime and other conditions of service only applied to employees earning up to S$1,600 per month. Part-time employees who would receive prorated benefits under the Act were defined as those working for 30 hours or less a week.

New legislation

The amendments which took effect on 1 January 2009 focused on 4 major areas:

1. Revising the coverage of the Act

Confidential staff will now be covered by the Act. Junior managers and executives earning a basic monthly salary of up to S$2,500 can now seek redress in the Labour Court for salary claims. For eligibility under Part IV of the Act including for overtime pay, the salary threshold for employees has been raised to S$2,000, but a salary ceiling of S$4,500 has been introduced for workmen.

The working hours’ ceiling for part-time employees entitled to prorated benefits has been raised to 35 hours per week, compared with up to 30 hours per week previously.

2. Reviewing employment standards and benefits

Paid public holidays and sick leave will now apply to all employees who are covered by the Act regardless of their salary level. The qualifying period for paid sick leave was reduced from 6 months to 3 months of completed service. Medical certificates issued by public medical institutions as well as company appointed doctors will now be recognised.

Employers who were previously required to fund employees’ outpatient and inpatient medical consultation will now be able to adopt alternative medical schemes, including the Portable Medical Benefits Scheme, which involves co-payment by employees. The statutory working hours for shift workers can now be exceeded in certain circumstances.

3. Enhancing penalties and streamlining administrative procedures

Penalties were increased to deter infringements. Employment Inspectors now enjoy additional powers to search and examine premises for employment records, take photographic and video graphic evidence, and issue warrants of arrest to secure attendance of witnesses in court. Labour Court proceedings have been made more flexible to improve efficiency.

4. Rationalising outdated provisions

The term “dismiss” is now expressly defined in the Act as “termination of the contract of service of an employee by his employer, with or without notice and whether on the grounds of misconduct or otherwise”. Outdated provisions in the Act have been rationalised or repealed.

Effect on employers

In general, more employees will now be covered by the minimum statutory protections in the Act. In particular, more employees will qualify for overtime payments. Increasing the working hours ceiling in the definition of “part-time” employees will encourage more employers to offer part-time working arrangements. Employers should review and revise their employee handbooks and employment contracts to reflect the changes in the Employment Act.