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Employment (Amendment) Bill 2015, Second Reading Speech

Mr Lim Swee Say, Minister for Manpower, Parliament

  1. Madam Speaker, I beg to move, “That the Bill be now read a Second time.”

    Background
  2. Madam, the Employment Act is Singapore’s main employment law. It provides for the basic terms and working conditions for employees, while balancing employers’ need to stay competitive. It is complemented by the Industrial Relations Act. Together with our tripartite partners, we regularly review our laws to keep pace with the changing labour force profile and employment landscape. We last amended the Employment Act in 2013 to extend protection to more workers. We also amended the Industrial Relations Act in 2014 to better meet the needs of our PMEs.
  3. The Bill that I am presenting today is another instance of how the tripartite partners have worked together to enhance labour standards. It proposes amendments to the Employment Act in two key areas. First, we will be requiring employers to provide itemised payslips and key employment terms in writing to their employees. Second, MOM will be setting up an administrative penalty framework to make less severe breaches of the Employment Act non-criminal. Let me elaborate:

    Itemised Payslips and Key Employment Terms
  4. The first set of amendments proposes to give itemised payslips and key employment terms (KETs) in writing to employees covered under the Employment Act.
  5. On the one hand, providing such documents will allow employees to better understand their regular salary components, as well as employment terms and benefits.
  6. On the other hand, this will help the employers to prevent misunderstandings and minimise disputes with their employees. Overall, this is better for employers and employees.
  7. We plan to make the new requirements for itemised payslips and KETs effective from 1 April 2016.

    Implementation Flexibility
  8. Madam, in coming up with these requirements, MOM actively consulted and took feedback from our tripartite partners. In particular, the Association of Small and Medium Enterprises (or ASME) gave us practical feedback about the difficulties faced by small businesses in implementing these changes. We have therefore made adjustments to include flexibility for employers, but without compromising protection for workers. So for example:
  9. Employers will have flexibility to issue the payslips and KETs in either soft or hard copy, including handwritten copies.
  10. For payslips, even if workers are paid weekly or fortnightly, employers will be allowed to consolidate payments into one monthly payslip.
  11. For KETs, common terms can be provided in the company’s employee handbook or website, so long as the information is easily accessible to workers.
  12. In addition, KETs apply only to employees who work for at least 14 days continuously. This means that employers need not give KETs to casual workers who work only for a few days now and then.

    Ongoing Assistance for Smaller Companies
  13. These new requirements were made known publicly since 2014. We had deliberately given a two-year window till 2016 for employers to prepare for these changes. In the interim, we released two sets of tripartite guidelines on itemised payslips and KETs to help employers understand and implement the requirements.
  14. We are also aware that small businesses need extra help. For example, some do not have the practice of issuing payslips and/or KETs. Or if they do, they may not include all the items required.
  15. MOM has therefore been working with IDA, SPRING, as well as the tripartite partners, to help give smaller employers the tools to meet these new requirements. Over the past two years, we have provided an assistance package. This includes blank payslips that can be filled in by hand, free software, one-to-one hands-on assistance for SMEs, and funding support. We have received positive feedback from users on the assistance package.
  16. Over the next few months, my Ministry will also be issuing more detailed guides, with sample payslips and KETs, to better help employers understand how to comply with these requirements. We will continue to work with our tripartite partners, industry and grassroots associations to conduct briefings and workshops to communicate these changes.

    Grace Period for Companies
  17. In view of the feedback from small businesses, we will give a one-year grace period in our enforcement. This means that from April 2016 to end-March 2017, MOM will take a light touch enforcement approach. Our focus will be on educating smaller employers on how to comply with the KET and payslip requirements, rather than on punishing those who do not comply.

    Administrative Penalties
  18. Madam, let me now move to the proposed administrative penalty framework, which will also come into effect from April 2016.
  19. Today, all Employment Act breaches are considered criminal offences. These range from the failure to maintain employment records, which is mostly administrative, all the way to the more serious offences like non-payment of salaries which directly harm our workers. This is not proportionate.
  20. The proposed framework will allow MOM to treat less severe breaches as non-criminal infringements which attract an administrative penalty instead. For a start, four breaches will be covered under this administrative penalty framework:
    a. Failure to issue itemised payslips;
    b. Failure to issue KETs in writing;
    c. Failure to maintain detailed employment records; and
    d. Provision of inaccurate information to the Commissioner for Labour or inspecting officers without the intent to defraud and mislead.
  21. What this means is that employers who do not issue payslips or KETs may face a financial penalty, but there will be no criminal record. This process is more appropriate for these types of administrative breaches, and prevents companies from being penalised too heavily, especially SMEs.
  22. To do this, ‘authorised officers’ with legal and investigative experience will be appointed. For a start, the administrative penalties they can impose will range from $100 to $200 per employee or occurrence, depending on the type of breach. The officers can also direct employers to rectify the breaches. Non-compliance with these directions will then become a criminal offence.

    Clarifications
  23. Madam, we are also taking the opportunity to make other operational amendments to the Employment Act.
  24. For example, MOM’s practice is to return to the owner evidence that is no longer needed for investigations. However, this is not possible sometimes because we cannot locate the owner; or the evidence is an illegal item (for example, a forged document). We are amending the law to allow MOM to report such evidence to the Courts so that it can be disposed of properly.
  25. The law also currently allows inspecting officers to take photos or video recordings if needed during investigations. We will amend the law to explicitly say that they can also take audio recordings. This is in line with the powers our enforcement officers have under other laws, such as the Employment of Foreign Manpower Act.
  26. We will also make other technical amendments to clarify our longstanding policy intent and existing practice with respect to public holidays and all family-related leave during no-pay leave. Employers are required to pay their employees holiday rates of pay or give them a day off if they have to work on public holidays. We will make it clear that this includes all non-scheduled public holidays declared by the Government such as the SG50 Public Holiday and polling days.
  27. In addition, we will also make it clear that employers are not required to provide paid family-related leave to employees who are granted voluntary no-pay leave. This has been the practice in order to encourage employers to grant no pay leave to employees to cater to their family or personal needs. The Child Development Co-Savings Act will also be clarified accordingly.
  28. We propose that these amendments take effect as soon as possible after the passing of the Bill, as these are technical clarifications and nothing has changed for employers or employees.

    Conclusion
  29. Madam Speaker, I would like to thank the public, the national and sectoral tripartite partners for their views and feedback that have made this review of the Employment Act more meaningful and robust. In particular, I would like to express my appreciation to NTUC, SNEF, SBF, and ASME.
  30. The proposed amendments will raise employment standards and facilitate dispute resolution at the workplace. They will also provide employers the flexibility to manage these changes in a practical manner. Taken as a whole, they will strengthen our efforts to institute good employment norms and develop progressive workplaces for our people.
  31. Madam, I beg to move.
Last Updated: 17 August 2015