Speech at Second Reading of the Employment (Amendment) Bill

Mrs Josephine Teo, Minister for Manpower, Parliament

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

Introduction

2. Sir, the Employment Act (or EA) is Singapore’s main employment law. It provides for the basic terms and working conditions for employees, while meeting employers’ needs to stay competitive.
3. Since it was last reviewed in 2012, the profile of our labour force and local employment practices have continued to evolve. A review is therefore timely to ensure that the EA remains relevant.
4. My Ministry, together with our tripartite partners the National Trades Union Congress (or NTUC) and the Singapore National Employers Federation (or SNEF), carried out extensive consultations. The result is a set of substantive amendments that meet the interests of both employees and employers.
5. Members may be aware that the EA was first enacted in 1968 by then-Minister for Foreign Affairs and Labour S. Rajaratnam. It has come a long way.
6. Back then, managers and executives (M&Es) were a very small part of our workforce. There was little need to cover them under the EA. It was more than 40 years later that we started covering some M&Es in 2009.
7. We have also enhanced employment protection and benefits over the years. For example, we introduced childcare leave and enhanced maternity leave in 2004. In 2009, we extended the provisions on compensation for work on public holidays and paid sick leave to all employees under the EA. Recently in 2016, we also introduced itemised pay slips and written key employment terms.
8. Each amendment of the EA is a result of careful consideration by the tripartite partners to meet the interests of both employers and employees. As we mark the 50th anniversary of the EA this year, we should acknowledge the tripartite collaboration that has kept our EA relevant and well-calibrated.

Overview

9. Let me provide an overview of the amendments in this Bill, which is intended to take effect on 1st April 2019.
10. It covers changes in three key areas.
    • First, we will extend core provisions of the EA to cover all M&Es. This will mean that other than domestic workers, public officers and seafarers who will continue to be covered by other Acts and regulations due to their nature of work, all employees will enjoy the protection of EA.
    • Second, we will extend additional protection under Part IV of the Act to cover more employees.
    • Third, we will enhance our employment dispute resolution framework.
11. Let me elaborate on the key amendments.

(I) Extend core provisions to all employees

12. The first set of amendments extends the core provisions under the EA to all employees. These include the minimum days of annual leave, paid public holiday and sick leave entitlements, as well as other protections, such as timely payment of salary and protection against wrongful dismissal.
13. Today, three groups of employees already enjoy core provisions.
    • First, all workmen – these are our manual workers or blue-collar workers.
    • Second, all non-workmen – these are our rank-and-file white-collar workers.
    • Third, M&Es with basic monthly salaries up to $4,500.
14. With the proportion of PMETs (Professionals, Managers, Executives and Technicians) rising and expected to make up two-thirds of our local workforce by 2030, it is timely to make a more fundamental change to the coverage of the EA.
15. In consultation with the tripartite partners, we will remove the $4,500 salary threshold for M&Es. In doing so, all employees whether M&Es, workmen or non-workmen, will be covered by core provisions under the EA. This will benefit an additional 430,000 M&Es.

(II) Extend additional protections to more employees

16. In addition to the core provisions, the EA provides a set of additional protections in Part IV, such as on hours of work, rest day and overtime pay. Today, Part IV covers workmen earning up to $4,500, and non-workmen earning up to $2,500. They are collectively known as Part IV employees.
17. In consultation with the tripartite partners, we will increase the salary threshold for non-workmen from $2,500 to $2,600, bringing Part IV employees to half of our total workforce.
18. In addition, we will align the salary cap of $2,250 for calculating overtime pay with the new salary threshold of $2,600.
19. Taken together, an additional 100,000 employees will benefit from these enhancements.

Enhanced flexibility for employers

20. As we amend the EA to benefit more employees, we have also introduced changes to better meet business requirements.

Extend option of time off for working on public holiday to more employees

21. For example, currently, when workmen and non-workmen are required to work on public holidays, employers have only two options. They can compensate with an extra day’s pay or provide a full day off-in-lieu.
22. We will introduce a third option for workmen and non-workmen who are not Part IV employees. Employers will be able to grant them time off for the hours worked on a public holiday, rather than a full day off. With this change, the options for non-Part IV workmen and non-workmen would be the same as that for M&Es.
23. With these changes, all employees will continue to be compensated for working on public holidays. Employers will be able to grant time off to all non-Part IV employees. Part IV employees, who have lower bargaining power, will continue to receive either an extra day’s pay or a full day off if they are required to work on a public holiday.

Adopt less prescriptive approach for authorised deductions

24. Another improvement for businesses has to do with authorised deductions.
25. Today, the EA limits the type of salary deductions that employers can make, such as absence from work or damaging or losing goods entrusted to the employee.
26. Such controls protect the employee’s interests, but can also inconvenience them. For example, some companies provide voluntary group hospital and surgical insurance for their employees if the employees agree to co-pay the premiums.
27. The EA does not allow such deductions even when the employee agrees. So employees have to separately reimburse the employer.
28. The EA will be amended to allow a deduction if it fulfils two conditions. Firstly, the employee must willingly consent to the deduction in writing. Secondly, the employee must be able to withdraw his consent at any time, without any penalty.
29. This less prescriptive approach would allow employers and employees greater flexibility to arrange for mutually agreed deductions. At the same time, employees’ interests continue to be protected.
30. In addition, deductions still cannot constitute more than 50% of the employee’s total salary for any one salary period. Deductions for amenities and services supplied by the employer will continue to require the Commissioner’s approval.

(III) Enhance employment dispute resolution framework

Shift adjudication of wrongful dismissal claims to ECT

31. The third set of amendments enhances our employment dispute resolution framework.
32. Currently, salary-related disputes are adjudicated by the Employment Claims Tribunals (or ECT), while wrongful dismissal claims are adjudicated by MOM. In fact, both types of disputes are often related.
33. To provide both employees and employers with a more convenient “one-stop service”, we will shift the adjudication of wrongful dismissal claims from MOM to the ECT. In line with this “one-stop service” approach, we will also expand the coverage of the Tripartite Mediation Framework to include wrongful dismissal claims.
34. Over the years, a considerable body of cases involving wrongful dismissal claims have been accumulated. They put into practice the broad principles used by MOM that also reflect the consensus reached between employers and unions.
35. The type of dismissal cases that MOM hears include not only those when the employee was terminated by the employer, but also cases when the employee resigned involuntarily. Involuntary resignation can be considered wrongful dismissal if the employee was forced to do so for wrongful reasons. For example, an employer may make work conditions unreasonably difficult, to force the employee to resign so as to deprive him of his employment benefits, and to mask the employer’s wrongful behaviour.
36. The wrongful dismissal cases heard by MOM have not been published thus far as there was little need to do so. With the transfer of the adjudication function to the ECT, MOM will publish a set of Tripartite Guidelines on Wrongful Dismissal. These Tripartite Guidelines will contain illustrations of what constitutes wrongful dismissal and what does not.
37. Under the Employment Claims Act (ECA), when the ECT adjudicates a case, it must take into account the principles and parameters contained in the Tripartite Guidelines. In cases where a dismissal is found to be wrongful, the ECT will order compensation or reinstatement. There is no change to the scope of remedies. Per the current practice, the ECT will take into account factors beyond just the wages or maternity benefits owed to the employee, in determining the amount of compensation.

Reduce service qualifying period for dismissal with notice

38. When the EA was first expanded in 2009 to cover M&Es, the tripartite partners agreed that M&Es would only be eligible to claim for wrongful dismissal if they have served at least 12 months.
39. Following further tripartite discussion, employers have agreed to reduce this qualifying period to 6 months, on the basis that it would be sufficient for them to assess an M&E’s suitability for the job. This is in recognition that performance in an M&E role is not so immediately clear, compared to workmen or non-workmen, where there is no qualifying period.
40. This is a win-win approach, as forcing employers to accept an even shorter period would make them more hesitant in offering employment to candidates they are not entirely sure of.

(IV) Other Amendments

41. Finally, we will also make other amendments to the EA to enhance its flexibility and ensure it remains responsive.

Recognise medical certificates (MCs) from all doctors for paid sick leave and clarify hospitalisation

42. Today, employers are required under the EA to accord paid sick leave only if the medical certificate (MC) is issued by Government and company-appointed doctors. This provision has been in place since the EA was first enacted in 1968.
43. As the Minister back then made clear, there were frequent absences using fictitious MCs; Government stepped in then to specify which doctors’ MCs would be recognised by law.
44. Today, doctors are registered under the Medical Registration Act and are subject to the Singapore Medical Council Ethical Code and Ethical Guidelines. Therefore, there is no longer a need to distinguish between MCs issued by different groups of doctors where paid sick leave is concerned.
45. Moving ahead, we will require employers to recognise MCs from all registered doctors for the purpose of granting paid sick leave.
46. Given this widening in the recognition of MCs, it is timely to also clarify what hospitalisation entails under the EA.
47. The clauses on hospitalisation have been in place since 1968, and the intent has been for hospitalisation leave to cover the period requiring hospital care.
48. However, certain ground practices have deviated from the policy intent over the years. Today, some non-hospital doctors may issue medical certificates for hospitalisation leave for conditions that do not require any hospitalisation, such as sprains.
49. To clarify the intent, we will specify in the EA that when it comes to hospitalisation leave, employers are required to recognise medical certificates only if they are issued by hospital doctors. Employers who wish to recognise MCs from their own panel-doctors for granting hospitalisation leave are free to continue doing so.
50. Hospitalisation leave will continue to cover inpatient stays in hospitals and day surgeries. In addition, the post-discharge period of rest or further medical treatment for the condition that the employee was hospitalised for will also be covered.
51. There are also certain circumstances where we will continue to require employers to recognise MCs for purposes of hospitalisation leave. Occasionally, the hospital doctor assesses that inpatient stay or day surgery is required, but for some reason that does not happen. For example, a hospital doctor may assess that a pregnant woman requires hospitalisation for bed rest due to complications in pregnancy, but she may prefer to rest at home.
52. There may also be other specific circumstances such as Quarantine Orders as required by law which would qualify employees for hospitalisation leave.
53. We will provide for these situations in the Act and regulations.

Make regulations relating to protection of employees’ entitlements and their wellbeing

54. There is also a need to enhance MOM’s regulatory framework to ensure that it remains responsive to the emergence of undesirable employment practices.
55. For example, some employers have out of convenience, or even with an intention to cover up for late or non-payment of salaries, asked their employees to sign salary vouchers before receiving their salaries, or to sign on blank salary vouchers. Such errant practices should be curbed. The worker may not realise that salary vouchers can be used as proof of receipt of payment in cases of dispute.
56. We will therefore provide in the EA that the Minister for Manpower can make regulations to protect employees from any employment practice that may adversely affect their wellbeing, including where the enforcement of their entitlements might be at risk. For a start, we intend to make it a civil contravention for employers to ask an employee to indicate receipt of salary before he is paid, or sign a receipt that is blank or inaccurate.

Conclusion

57. We have covered many changes in this Bill. With your permission, Mr Deputy Speaker, may I ask the Clerk to distribute a handout on the key changes to the Employment Act, for ease of members’ reference.
58. Sir, please also allow me to summarise the Bill in Mandarin.
59. 雇佣法令是我国的主要雇佣法律。它确保雇员享有基本的雇佣保障，以及公平的待遇。同时，法令也考虑到雇主的需求，促进蓬勃的劳动力市场。
60. 我们每一次修改法令，目的是要与时俱进，同时展望未来，为国人的需求奠定良好基础。这一次的修正案同以往一样，也是通过劳资政三方磋商达成的。主要检讨的范围包括为更多经理和执行人员（M&Es）提供保障，让更多雇员享有额外的保护，以及加强解决雇佣纠纷的框架。
61. 目前，专业人士、经理、执行人员与技师，简称PMETs，占本地劳动队伍的56%。到了2030年，这个比率预料会增加到65%。雇佣法目前主要的对象是工资低于4500元的经理和执行人员，让他们在病假、公休假方面，以及遭受不合法解雇时，可以受到法律的保障。
62. 劳资政三方磋商后，认为月入超过4500元的经理和执行人员其实也应该享有这些基本的保障。大约43万名经理和执行人员，将能因此受惠。
63. 我们也将调整非劳力工人的薪金顶限，以让更多员工在工作时间、加班费和休息日等方面， 获得更全面的法律保障。大约10万名工人能因此受益。
64. 此外，为了让雇员和雇主更方便地解决劳资纠纷，我们也会简化解决劳资纠纷的程序。
65. 总得来说，这次的修正案是积极和全面的。 如果获得通过，雇佣法令的涵盖范围将扩大，除了保护收入较高的经理和执行人员，还能为更多雇员带来额外的保障，总受益人数超过50万人。与此同时，雇主在人力资源管理上，也能享有一些灵活度，有助于打造更开明的职场。
66. In conclusion, this Bill will better protect our workers, enhance our dispute resolution framework and provide employers enhanced flexibility. It will bolster our efforts to institute good employment norms and develop progressive workplaces for our people.
67. Sir, I beg to move.