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The employment relationship

Country specific laws

What laws and regulations govern the employment relationship?

Employment law in Singapore is predominantly governed by the Employment Act, which prescribes certain minimum employment conditions. Other legislation specific to particular aspects of employment in Singapore include:

  • the Child Development Co-savings Act;
  • the Central Provident Fund Act;
  • the Employment of Foreign Manpower Act;
  • the Employment Claims Tribunal Act;
  • the Industrial Relations Act;
  • the Trade Unions Act;
  • the Retirement and Re-employment Act;
  • the Workplace Safety and Health Act; and
  • the Work Injury Compensation Act.

In addition, the Tripartite Alliance – comprising the Ministry of Manpower, the Singapore National Employers Federation and the National Trade Union Congress – issues different types of guidance to encourage employers to follow progressive employment practices. These include guidelines, standards and advisories, with varying expectations for compliance. There are at least 18 such guidance documents at present, including the upcoming Tripartite Guidelines on Unfair Dismissal.

Who do these cover, including categories of worker?

Different pieces of legislation have different applicability requirements. For example, the Employment Act covers all employees, regardless of nationality, except:

  • seafarers;
  • domestic workers;
  • government and statutory board employees; and
  • persons employed in managerial or executive positions who earn more than S$4,500 a month (this salary threshold will be removed when the amendments to the act take effect in April 2019).

Further, Part IV of the act – which sets rest days, working hours, overtime, shift work and annual leave – applies only to:

  • ‘workmen’ (ie, employees who engage in manual labour or operate machines or vehicles) who earn a maximum basic salary of S$4,500 a month; and
  • non-workmen, non-managerial and non-executive employees who earn a maximum basic salary of S$2,500 a month (this threshold will increase to S$2,600 a month from April 2019).

The applicability of other legislation varies depending on:

  • an employee’s nationality;
  • their age;
  • the citizenship status of their children; and
  • their trade union membership.

Misclassification

Are there specific rules regarding employee/contractor classification?

There are no specific rules. However, based on case law, the courts will look at the substantive arrangement between the parties and consider all of the relevant factors to determine whether workers are employees or independent contractors.

Common factors examined are:

  • the extent to which a company exercises control over the work process;
  • the company’s payments to workers;
  • workers’ compliance with the company’s rules and regulations;
  • the extent to which workers follow instructions of company employees;
  • the ability of workers to work for other companies; and
  • whether the services provided are integral to the business.

Contracts

Must an employment contract be in writing?

Employment contracts need not be in writing; they can also be entered into verbally or by conduct.

That said, if an employee is covered by the Employment Act and the duration of their contract is more than 14 days, employers must provide them with their key employment terms in writing. The list of terms includes:

  • the parties’ identities;
  • the employee’s job title and their main duties and responsibilities;
  • details of the employment period;
  • details of the employee’s working hours and rest days;
  • details of the employee’s salary and salary-related components;
  • details of any overtime and pay;
  • details of any medical benefits;
  • the termination notice periods; and
  • the employee’s leave entitlement.

Are any terms implied into employment contracts?

Case law has established that an implied duty of mutual trust and confidence exists between an employer and an employee, defined as “a portmanteau, general obligation not to engage in conduct likely to undermine the trust and confidence required if the employment relationship is to continue”.

Employees also have a duty of good faith and fidelity towards their employers and to use reasonable care and skill in the performance of their duties.

If certain labour legislation applies to an employee, certain minimum terms are implied into their employment contract.

Are mandatory arbitration/dispute resolution agreements enforceable?

Arbitration and dispute resolution agreements are generally enforceable in Singapore and the courts usually defer to them. However, it remains to be seen whether mandatory arbitration agreements contravene public policy in an employment context.

How can employers make changes to existing employment agreements?

Any change to the fundamental terms and conditions of an employment contract should be made with the consent of both parties and be documented in writing. Some employment contracts may allow the employer to change the terms of the agreement unilaterally, but this is generally limited to administrative (ie, non-fundamental) terms or internal policies and procedures. However, such discretion is subject (unless expressly stated otherwise) to the decision-making process being exercised lawfully, in good faith and rationally in the public law sense (ie, not arbitrarily or capriciously). Where consent is required, the employer will be unable to proceed with the proposed changes without the employee’s consent.

Foreign workers

Is a distinction drawn between local and foreign workers?

This depends on the labour legislation in question. For example, the Employment Act makes no distinction between local and foreign workers and provides protection to all employees within its scope.

However, the Retirement and Re-employment Act and the Central Provident Fund Act apply only to Singapore citizens and permanent residents.

Further, the additional parental leave benefits provided for by the Child Development Co-savings Act apply only to employees whose children are or become Singapore citizens within 12 months of their birth or adoption, subject to other qualifying criteria.

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