Better Protection for More Workers with Changes to the Employment Act
14 March 2013
- The Ministry of Manpower (MOM) has announced changes to the Employment Act (EA) which will ensure better protection for more workers - including Professionals, Managers and Executives (PMEs) - and raise employment standards, while allowing flexibility for employers.
- These changes are the outcome of Phase 1 of the Employment Act Review consultation [see “Background”]. Feedback was obtained through several platforms, including an eight-week public consultation exercise [See Annex A]. The proposals were also carefully evaluated by employers, unions and the Government.
- Acting Manpower Minister Tan Chuan-Jin said, “I would like to thank all stakeholders and members of the public who had taken the time and effort to share your valuable views with us. The varied perspectives have made the review process more robust and comprehensive. More importantly, they have also helped us hone policy changes which ultimately strike a balance between protecting workers and addressing employer’s concerns, even as we achieve better outcomes for Singaporeans”. A full list of the proposed changes to the EA are summarised in Annex B.
- The key changes are:
i) The salary threshold of non-workmen will be raised from $2,000 to $2,500 for them to enjoy working hours-related protection, including overtime payment. About 150,000 more workers stand to benefit from working hours-related protection. However, to help employers manage costs, we will cap the amount of overtime rate payable to non-workmen at the salary level of $2,250. [See Appendix 2]
ii) Beyond the salary protection already accorded to PMEs earning up to $4,500, they will also be protected under the general provisions of the EA (e.g. sick leave benefits and protection against unfair dismissal). About 300,000 PMEs will benefit from this change. In order to provide a reasonable time for employers to assess the suitability of their employees, we will set a qualifying service period of one year for these PMEs before they are eligible to seek redress against unfair dismissal.
Taken together, about 450,000 workers would receive better protection with the above EA amendments.
- We will also introduce other measures to raise employment standards without imposing too much rigidity in the labour market. These include mandating payslips and detailed employment records, and introducing sub-caps to prevent excessive salary deductions and shorter qualifying periods for retrenchment benefits.
- The MOM will be introducing the Employment Act Amendment Bill in Parliament in the second half of 2013. When passed in Parliament, the changes would come into force in the first half of 2014.
- Since 1968, the EA is Singapore's main labour law that sets out the basic employment terms and shapes the responsibilities and relationships between employers and employees [See Annex C].
- As Singaporeans become more educated, the proportion of PMEs in our workforce is also increasing and nominal income levels have been on the rise. Employment norms and practices have also been evolving to adapt to changes in Singapore’s globalised economy. To ensure the Act remains relevant and responsive to these changing labour market conditions and trends, MOM had announced in April 2012 that we would be reviewing the EA.
- Given the complexity of some of the issues, MOM is conducting the review in two phases. We will embark on Phase 2 later this year, where we will be looking into areas pertaining to: (i) protection for employees in non-traditional work arrangements such as contract workers and self-employed persons; and (ii) mechanisms to facilitate employer-employee dispute resolution.
Annex A - Summary of Responses to Key Feedback from Public Consultation on Proposed Amendments to Employment Act
Annex B - Changes to the Employment Act
Appendix 2 - Illustration of Calculation of Overtime Pay (Current and New)
Annex C - The Employment Act