In our CNPupdate of 9 May 2018, we highlighted that the proposed changes to the Employment Act (“EA”) likely to be implemented by 1 April 2019 would include the following areas:

• Extending the core provisions of the EA to all workers (including all professionals, managers and executives (“PMEs”) regardless of salary thresholds) except for public servants, domestic workers and seafarers;
• Affording additional protection to vulnerable employees by extending Part IV of the EA (which relates to Rest Days, Hours of Work and Other Conditions of Service) to more non-workmen and increasing the salary cap on overtime rate payable for non-workmen; and
• Streamlining the dispute resolution services provided by the Employment Claims Tribunals (“ECT”) by empowering it to hear both salary-related disputes and wrongful dismissal claims. The ECT is a branch of the State Courts that provides employees and employers with an expeditious and low-cost forum to resolve specific types of employment-related disputes. Appeals against the ECT’s order in a wrongful dismissal claim would be to the High Court and an appeal may only be made on any ground involving a question of law or that the claim was outside the jurisdiction of the ECT.

The above amendments to the EA have been confirmed when the Employment (Amendment) Bill was passed in Parliament on 20 November 2018[1]. In addition to the above amendments, the EA will also be amended to:

• Expand the definition of “dismiss” to cover inter alia, a situation where an employee did not resign voluntarily but was forced to do so because of conduct or omissions by the employer;
• Enhance the flexibility of employers in relation to management of employees, e.g. allowing for deduction of salary by mutual consent; and
• Extend the provisions in the EA relating to paid annual leave to all employees.

Some of the key amendments to the EA, which will take effect from 1 April 2019, are summarised below.

Scope of the EA

Statutory benefits for employees

Salary deductions

Wrongful dismissal claims

¹ Note: The ECT can only hear claims up to S$20,000. However, for eligible executives who go through the Tripartite Mediation Framework (for mediation assisted by their union recognised under the Industrial Relations Act to collectively represent rank-and-file employees), the claim limit is S$30,000. If a party’s claim exceeds the monetary limit, but the party still wishes the ECT to hear the claim, the excess amount of the claim can be abandoned.  Alternatively, an employee may still bring their claim to Court. For a wrongful dismissal dispute under section 14(2) of the EA, the claim must be filed not later than 1 month after the date of dismissal of the employee. For any wrongful dismissal dispute under section 84(2) of the EA (under the section on maternity protection and benefits), the claim must be filed within 2 months after the date of the employee’s confinement.

Suspension during inquiry prior to dismissal

Information on retrenchment

Power for Minister to regulate the conduct of an employer towards an employee

Conclusion

In view of the above upcoming amendments to the EA, it is useful for employers to note the following:

• The expanded coverage of the EA and ensure that the terms of employment of all employees (especially those affected by the wider coverage) comply with the amended EA;
• All employees will have recourse to the ECT if they consider themselves to have been wrongfully dismissed. In this regard, a set of tripartite guidelines on wrongful dismissal will be published to provide further clarity and to illustrate what would amount to wrongful dismissal; and
• If not already the current practice, proper records of retrenchment exercises should be maintained, as any failure to furnish information on the retrenchment of any employee would be a breach of the EA for which an administrative penalty may be imposed.

We will be updating our CNP Employment Law guide to reflect the amendments to the EA and the updated guide will be made available on our website in due course.

[1] “Changes to the Employment Act from 1 April 2019 to cover all employees and enhance dispute resolution and provide business flexibility” (20 November 2018).

Disclaimer: This update is provided to you for general information and should not be relied upon as legal advice.