Guidelines issued to cover: (1) managing excess manpower, (2) employment of fixed term contract employees, and (3) re-employment of older employees

Guidelines have been issued which cover the following:

  • Managing Excess Manpower and Responsible Retrenchment: These revised Guidelines emphasise the need for employers to maintain a “strong Singaporean Core” and encourage employers to actively assist employees who have been displaced. Employers facing structural changes are encouraged to consider alternative ways of managing their local manpower, e.g., by upgrading employees’ skills and redesigning jobs. Employers are also encouraged to consider implementing certain cost-saving measures to manage excess manpower.
  • Employment of Fixed Term Contract Employees: These Guidelines encourage employers to grant certain fixed term contract employees benefits which are (under current legislation) only to employees in permanent positions.
  • Re-employment of Older Employees: They also seek to prepare employers for the impending rise in the re-employment age from 65 to 67, effective from 1 July 2017. The key changes relate to wages, medical benefits and the employment assistance payment payable to eligible employees who are not offered re-employment in suitable jobs.

Bill to establish Employment Claims Tribunal

A Bill for the establishment of the Employment Claims Tribunal (“ECT”) has been passed. The Bill is not yet in force. The ECT, which is expected to be established by April 2017, will provide an additional avenue for more workers to pursue salary-related employment claims. A new centre called the Tripartite Alliance for Dispute Management (“TADM”) is expected to be set up in tandem with the ECT. The TADM will conduct the pre-ECT mediation and serve as the approved mediation centre for all employees, both unionised and non-unionised.

Increase in salary threshold for ‘employment pass’

From 1 January 2017, the qualifying salary for ‘employment pass’ (“EP”) applications by foreign employees will be raised from S$3,300 to S$3,600. Only new EP applicants with a monthly salary of S$3,600 or more will be considered for an EP (subject to meeting other criteria). The increase in the EP qualifying salary is intended to keep pace with rising local wages, and to help maintain the quality of the foreign workforce in Singapore.


Work Injury Compensation Act amended to increase compensation limits

With effect from 1 January 2016, the maximum and minimum compensation limits under the Work Injury Compensation Act for death and total permanent incapacity caused by accidents arising out of and in the course of employment were increased. The cap on compensation for medical expenses for accidents arising out of and in the course of employment also increased.

Changes to Central Provident Fund salary ceiling and contribution rates for older workers

With effect from 1 January 2016, the Central Provident Fund Act has been amended to raise the CPF salary ceiling to S$6,000. This means that there is no CPF contribution payable in respect of an employee’s monthly wages that is in excess of S$6,000 (previously S$5,000).

With effect from 1 January 2016, the contribution rate for older employees was also raised.

Requirements for employers to provide a written record of key employment terms and pay slips

With effect from 1 April 2016, employers have been required to make and retain certain records relating to employees (in place of a register of employees and record of workmen) and to provide employees with a written record of key employment terms and pay slips under the Employment Act.

With thanks to Melissa Anne Teo of Allen & Gledhill for her invaluable collaboration on this update.