The employment landscape in Singapore used to be pretty static. However, the last two years have seen an enhancement of employee protection in Singapore. The Employment Act (Cap. 91) of Singapore generally covers employees (regardless of nationality) who are under a contract of service with an employer, other than seamen, domestic workers, government employees or any person employed in a managerial or an executive position earning more than SGD 4,500 per month (EA Employees). Those employees who do not fall within the scope of the Act (Non-EA Employees) enjoy certain limited protections under other legislation. However, their employment terms and conditions are principally governed by their employment contracts.
Issues arising on hiring individuals
All non-residents have to possess a valid work pass before they can work in Singapore. Ordinarily, the holder of the work pass is only permitted to work for a specified employer and in a specified occupation. There are various types of work passes such as Work Permit, Employment Pass, S Pass and Personalised Employment Pass, Miscellaneous Work Pass, Training Work Permit and Training Employment Pass.
Considering Singaporeans first
Employers submitting Employment Pass applications are required to advertise their job vacancies on the Job Bank (a public platform to facilitate job matching between local individuals and employers) for at least 14 calendar days before being allowed to proceed with their application. The advertisement must be open to Singaporeans and must comply with the Tripartite Guidelines on Fair Employment Practices, such as being non-discriminatory.
Certain jobs are exempted from the advertising requirement, such as, jobs in firms with fewer than 25 employees, jobs that pay a fixed salary of SGD 12,000 and above, jobs filled by Intra-Corporate Transferees (a manager, executive or specialist who has worked for the firm outside Singapore for one year or more before being posted to the branch, affiliate or subsidiary in Singapore) and short-term jobs for not more than one month.
Employment structuring and documentation
The standard type of employment contract in Singapore is an “open-ended” contract terminable on notice (subject to the protection which the law provides on unfair dismissal). A contract of employment need not be in writing and may be partly written and partly oral.
An employment contract should as a minimum include the following: (1) commencement of employment; (2) appointment (job title and job scope); (3) hours of work; (4) probation period, if any; (5) remuneration; (6) employee benefits (e.g. sick leave, annual leave, maternity leave); (7) termination of contract (notice period); and (8) code of conduct (e.g. punctuality, no fighting at work).
Workers may be contracted to work for a fixed period only or to perform a particular task with the contract terminating at the end of such period or on the completion of the task. There is no requirement for fixed-term contracts to specify the reason why it is a fixed-term.
Issues arising during the employment relationship
Wages, annual leave and working time
The Act provides that minimum rates of salaries for children or young persons engaged in particular industries or work may be prescribed. However, to date no minimum rate is in force.
Part IV of the Act (which provides for rest days, hours of work and other conditions of service), applies only to the following workers (Part IV EA Employees):
- Employees to whom the Act applies (except managers and executives) who are earning a basic monthly salary of SGD 2,500 or less
- Workmen (i.e. manual labourers) earning a basic monthly salary of SGD 4,500 or less
Part IV of the Act provides that no Part IV EA Employee is required to work for more than eight hours in a day or for more than 44 hours in one week. Further, Part IV EA Employees are allowed one rest day per week, although in the case of a shift worker a continuous period of 30 hours may be substituted for a rest day. For employees who are not Part IV EA Employees, matters such as rest days and hours of work will depend on contractual provisions found in their contracts of employment.
Part IV of the Act provides that a Part IV EA Employee who has served his employer for not less than three months will be entitled to paid annual leave of seven days in respect of the first year of continuous service with the same employer, and one additional day for every subsequent year with the same employer subject to a maximum of 14 days. For other employees, matters such as rest days, hours of work and annual leave will depend on contractual provisions found in their contracts of employment.
In Singapore, there is provision for maternity, paternity, childcare, infant-care, and adoption leave for qualifying employees. There are two relevant statutes: the Act itself and the Child Development Co-Savings Act (Cap. 38A 2002 Rev Ed).
There is no statutory entitlement for marriage and compassionate leave under the Act. The entitlement to such leave depends on what is in the employment contract or agreed mutually between employer and employee.
The Trade Unions Act (Cap. 333) defines a trade union as an association of workers or employers that aims to regulate relations between workers and employers. The objectives of a trade union are stated as being to promote good industrial relations; to improve workers’ working conditions; to enhance the economic and social status of workers; and to raise productivity for the benefit of workers, employers, and the economy. Any employee who is over the age of 16 may join a trade union, and nothing in any contract of service may restrict the right of any employee to join and/or participate in the activities of a registered trade union. While industrial action is permitted, the majority of members affected must have agreed to it by means of a secret ballot. Strike action is prohibited for the three essential services of water, gas and electricity. For other essential services, striking is prohibited unless 14 days prior notice is given of any strike. As the national confederation of trade unions in the industrial, service and public sectors in Singapore, the National Trades Union Congress has always enjoyed a close working relationship with the Government and employers. Labour disputes between trade unions and employers are relatively rare.
From 1 April 2015, professionals, managers and executives (PMEs) will be able to enjoy greater union protection and representation due to amendments to the Industrial Relations Act. Prior to the amendments, PMEs could only be represented by rank-and-file unions as individuals without collective bargaining rights, but now these unions can collectively represent PMEs. Effectively, this will mean that unions will be able to bargain for collective salary agreements and to represent PMEs in any reemployment issues.
The Central Provident Fund (CPF) is a compulsory comprehensive savings plan for working Singapore citizens and Singapore permanent residents to fund their retirement, healthcare and housing needs. All eligible employees and their employers must make monthly contributions to the CPF. Contribution rates change periodically and are tiered based on the employee’s age. As of 1 January 2015, the rates are 17% for the employer and 20% for the employee (of the employee’s monthly salary capped at SGD 5,000). Employees aged over 50 will have both their contribution rates revised downwards.
Employee personal data
The Personal Data Protection Act (No. 26 of 2012) imposes obligations on employers in relation to collection, use and disclosure of employees’ personal data. Under the Act, the employer will have to notify its employees of the purposes for the collection, use or disclosure of personal data and to obtain their consent.
Employers’ obligations include limitations on the collection, use or disclosure to purposes that a reasonable person would consider appropriate, providing the right for individuals to access and correct their data, taking reasonable efforts to ensure that the data is accurate and complete, protecting the data in its possession, and not keeping the data for longer than is necessary to fulfil the purpose for which it was collected, or for a legal or business purpose.
However, employers may collect, use and disclose employee personal data without first obtaining consent, if it is for the purposes of evaluating the suitability or eligibility of an employee for employment, the continuance of their employment or promotion. Employers are also permitted to collect, use or disclose the personal data of their employees without their consent if the collection is reasonable for the purpose of managing or terminating the employment relationship, nonetheless, employees must still be notified of this.
Harassment in the workplace
The Protection from Harassment Act (No. 17 of 2014) came into effect on 15 November 2014. It provides protection from harassment and anti-social behaviour, including cyber-bullying and stalking. Offenders face a wide range of potential penalties, such as fines, imprisonment and community orders. Even though there is not a specific offence of workplace harassment, employers should be mindful that the Act does apply to acts of harassment in the workplace.
Issues arising on termination of the employment relationship
Under the Act, where a business or part thereof is transferred from the transferor to the transferee, Section 18A automatically operates to novate the contracts of employment of all of the EA Employees to the transferee. Section 18A does not apply in a sale of assets. The Act specifically provides that there will be an automatic transfer with no break in the continuity of employment and the terms and conditions of service of the EA Employees transferred will be the same as those enjoyed by them immediately prior to the transfer.
EA Employees and employers may approach the Ministry of Manpower for mediation or conciliation services in respect of employment disputes or be referred to the Commissioner of Labour. Non-EA Employees can still refer a matter to the Commissioner of Labour for disputes relating to matters such as salary payments. Employees who are union members may seek assistance from their unions in resolving disputes. Finally, disputes between unions and the employer may seek conciliation with the Ministry of Manpower or bring the matter to the Industrial Arbitration Court (very rare).
Under the Act, only Part IV EA Employees, who are employed in the continuous service of an employer for at least two years will be entitled to retrenchment/redundancy benefits. In relation to Non-EA Employees, retrenchment/redundancy benefits will depend on contractual provisions found in their contracts of employment.
The statutory minimum retirement age is 62 years and employers are required to offer re-employment to eligible employees who turn 62, up to the age of 65, or if no suitable job is available, a one-off Employment Assistance Payment to the employee (recommended to be at least three months’ basic salary capped at SGD 10,000). Where a retirement age is not specified in an employment contract, the employer should give the employee advance notice of retirement as stipulated in the contract. An employer is not required to pay retirement benefits to an employee, unless it is stated in the employment contract.
Under the Constitution of Singapore, discrimination against Singapore citizens on grounds of inter alia religion, race, or place of birth is prohibited.
There is specific legislation prohibiting discrimination based on pregnancy and age. However, discrimination on the basis of sex, disability or sexual orientation is not statutorily provided for. There is a tripartite alliance for fair employment practices which promotes non-discrimination in the workplace but these are just guidelines and are not legally enforceable.
Whilst the rights of foreign citizens/expatriates are not protected by statute, discrimination against such individuals can be argued as being contrary to public policy. However, these types of cases are not commonly reported in Singapore.