Employment Law in Singapore

Law | 24 July 2017

Employment in Singapore

The Employment Act (Cap. 91) of Singapore (the  “Employment Act”) is the principal employment legislation in Singapore. Subject to certain carve-out sections, it covers employees (regardless of nationality) who are under a contract of service with an employer (“EA Employees”), but it does not cover seamen, domestic workers, government employees or any person employed in a managerial or an executive position earning more than SGD 4500 per month. For employees who do not fall within the scope of the Act (“Non-EA Employees”), they are generally subject to the terms and conditions of their employment contracts. 

What to watch out for during hiring

All non-residents will have to apply for a valid work pass before they can work in Singapore. Ordinarily, the holder of the work pass is only permitted to work for a specified employer and in a specified occupation. There are various types of work passes such as Work Permit, Employment Pass, S Pass, Personalised Employment Pass, Miscellaneous Work Pass, Training Work Permit and Training Employment Pass.

Considering Singaporeans first
Employers submitting Employment Pass applications are required to advertise their job vacancies on the Jobs Bank (a public platform to facilitate job matching between local individuals and employers) for at least 14 calendar days before being allowed to proceed with their application. The advertisement must be open to Singaporeans and must comply with the Tripartite Guidelines on Fair Employment Practices, such as being non-discriminatory.

Certain jobs are exempted from the advertising requirement, such as:
- jobs in firms with fewer than 25 employees
-jobs that pay a fixed monthly salary of SGD 12,000 and above
-jobs filled by Intra-Corporate Transferees (a manager, executive or specialist who has worked for the firm outside Singapore for one year or more before being posted to the branch, affiliate or subsidiary in Singapore) and short-term jobs for not more than one month.

Employment structuring and documentation
The standard type of employment contract in Singapore is an "open-ended" contract terminable on notice (subject to the protection which the law provides on unfair dismissal).

While a contract of employment may be partly written and partly verbal, with effect from 1 April 2016, the key employment terms must be issued to the employee in writing (whether in soft or hard copy) no later than 14 days from the commencement of employment.

Key employment terms will include the following:
1. Names of employer and employees respectively;
2. Commencement of employment;
3. Appointment (job title and job scope);
4. Hours of work;
5. Probation period, if any;
6. Duration of employment (if fixed-term);
7. Remuneration (basic salary, allowances and bonus if any);
8. Employee benefits (e.g. sick leave, annual leave, maternity leave); and
9. Termination of contract (notice period).

Workers may be contracted to work for a fixed period only or to perform a particular task with the contract terminating at the end of such period or on the completion of the task. There is no requirement for fixed-term contracts to specify the reason why they are fixed-term.

Apart from issuing written key employment terms, employers must issue itemised payslips and maintain updated employment records for each employee.

Things that Employers should know

Wages, annual leave and working time
The Act provides that minimum rates of salaries for children or young persons engaged in particular industries or work may be prescribed. Singapore has no minimum wage system although there may be prescribed minimum rates of salaries for children or young persons engaged in particular industries or work. Singapore has also introduced a Progressive Wage Model system intended to be part of business licensing conditions. It basically comprises of specific wage points to encourage workers to upgrade and progress to their next respective wage points. To date, the Progressive Wage Model has been implemented in the cleaning, security and landscape sectors.

Part IV of the Act (which provides for rest days, hours of work and other conditions of service), applies only to the following workers (Part IV EA Employees):
- Employees to whom the Act applies (except managers and executives (but not workmen)) who are earning a basic monthly salary of SGD 2,500 or less
- Workmen (i.e. manual labourers) earning a basic monthly salary of SGD 4,500 or less
Part IV of the Act provides that no Part IV EA Employee is required to work for more than eight hours in a day or for more than 44 hours in one week. Further, Part IV EA Employees are allowed one rest day per week, although in the case of a shift worker a continuous period of 30 hours may be substituted for a rest day. For employees who are not covered by Part IV of the Act, their working hours will be contractually agreed.

For employees who are not Part IV EA Employees, matters such as rest days and hours of work will depend on contractual provisions found in their contracts of employment.

Part IV of the Act provides that a Part IV EA Employee who has served his employer for not less than three months will be entitled to paid annual leave of seven days in respect of the first year of continuous service with the same employer, and one additional day for every subsequent year with the same employer subject to a maximum of 14 days. For other employees, matters such as rest days, hours of work and annual leave will depend on contractual provisions found in their contracts of employment.

Family rights
In Singapore, there are provisions for maternity, paternity, childcare, infant-care, and adoption leave for qualifying employees. There are two relevant statutes: the Act itself and the Child Development Co-Savings Act (Cap. 38A 2002 Rev Ed).

There is no statutory entitlement for marriage or compassionate leave under the Act. The entitlement to such leave depends on what is in the employment contract or agreed mutually between employer and employee.

Trade unions
The Trade Unions Act (Cap. 333) defines a trade union as an association of workers or employers that aims to regulate relations between workers and employers. The objectives of a trade union are stated as being to promote good industrial relations; to improve workers' working conditions; to enhance the economic and social status of workers; and to raise productivity for the benefit of workers, employers, and the economy. Any employee who is over the age of 16 may join a trade union, and nothing in any contract of service may restrict the right of any employee to join and/or participate in the activities of a registered trade union. Professionals, managers and executives (PMEs) now enjoy greater union protection and representation due to amendments to the Industrial Relations Act (Cap 136). Prior to the amendments, PMEs could only be represented by rank-and-file unions as individuals without collective bargaining rights, but now these unions can collectively represent PMEs. Effectively, this will mean that unions will be able to bargain for collective salary agreements and to represent PMEs in any re-employment issues.

Employment Claims Tribunal
From 1 April 2017, the Employment Claims Tribunal (ECT) and Tripartite Alliance for Dispute Management (TADM) will be established:

The ECT will handle salary-related disputes (e.g. for overtime pay, public holiday and rest day pay, maternity leave, re-employment, salary arrears, payment of retrenchment benefits) for most employees, regardless of salary level.
Parties must first undergo mediation through TADM will be mandatory before the ECT hears their dispute.
The ECT will hear claims up to SGD20,000 or SGD3,000 for those who go through the Tripartite Mediation Framework (being a mediation forum for certain employees who are union members working in nonunionised companies) or mediation assisted by unions who are recognised under the Industrial Relations Act (Cap 136).
The new system should provide a more accessible, expeditious and cost-effective way of resolving salary related claims than bringing claims in the Singapore Courts.

Central Provident Fund (CPF) 
The Central Provident Fund (CPF) is akin to a form of social insurance. It is a compulsory comprehensive savings plan for working Singapore citizens and permanent residents to fund their retirement, healthcare and housing needs. All eligible employees and their employers must make monthly contributions to the CPF. Contribution rates change periodically and are tiered, based on the employee's age. As of 1 January 2016, the rates are 17% for the employer and 20% for the employee (of the employee's monthly salary capped at SGD 6,000). The contribution rates differ for employees in age brackets above 50.

Employee personal data
The Personal Data Protection Act (No. 26 of 2012) ("PDPA") imposes obligations on employers in relation to collection, use and disclosure of employees' personal data. Under the PDPA, the employer will have to notify its employees of the purposes for the collection, use or disclosure of personal data and to obtain their consent.
Employers' obligations include limitations on the collection, use or disclosure to purposes that a reasonable person would consider appropriate, providing the right for individuals to access and correct their data, taking reasonable efforts to ensure that the data is accurate and complete, protecting the data in its possession, and not keeping the data for longer than is necessary to fulfill the purpose for which it was collected, or for a legal or business purpose.

However, employers may collect, use and disclose employee personal data without first obtaining consent, if it is for the purposes of:
    - evaluating the suitability or eligibility of an employee for employment;
    - the continuance of their employment; or promotion. Employers are also permitted to collect, use or disclose the personal data of their employees without their consent if the collection is reasonable for the purpose of managing or terminating the employment relationship;
    - nonetheless, employees must still be notified of this.

Harassment in the workplace
The Protection from Harassment Act (Cap 265A) ("PHA") came into effect in 2014. It provides protection from harassment and anti-social behaviour; including cyberbullying and stalking. Offenders face a wide range of potential penalties such as fines, imprisonment and community orders. Even though there is not a specific offence of workplace harassment, employers should be mindful that the PHA does apply to acts of harassment in the workplace.

The Ministry of Manpower, National Trades Union Congress and the Singapore National Employers Federation has jointly released a Tripartite Advisory on Managing Workplace Harassment which sets out guidance on steps employers should implement to prevent and manage workplace harassment. This would include developing a harassment prevention policy, providing information and training on workplace harassment and implementing reporting and response procedures.

Things to note when terminating an employer

Terminating employment
Am employer who wishes to terminate a Non-EA Employee may do so in accordance with the terms of the employment contract signed with the Non-EA Employee. The terms may provide for the employer to terminate the Non-EA Employee by way of a written notice or by paying a salary in lieu of serving a written notice. 

Under the Act, only Part IV EA Employees, who are employed in the continuous service of an employer for at least two years will be entitled to retrenchment/redundancy benefits. In relation to Non-EA Employees, retrenchment/redundancy benefits will depend on contractual provisions found in their contracts of employment.
Employers wishing to retire employees must take into account the requirements of the Retirement and Re-employment Act. A contractual retirement age earlier than 62 will not be enforceable.

Mandatory Retrenchment Notice
Under the Tripartite Advisory on Mandatory Retrenchment Notifications, retrenchments are defined as dismissals on the ground of redundancy or by reason of any reorganisation of the employer's profession, business, trade or work. This applies to permanent employees, as well as contract workers with full contract terms of at least 6 months.

Employers who employ at least 10 employees are required to notify the Ministry of Manpower (MOM), if five or more employees are retrenched within any 6 month period beginning 1 January 2017.

Such notification must be submitted within five working days of the employee being notified of their retrenchment. A failure to notify MOM within the required timeline is considered an offence, and offenders may be liable on conviction to penalties including a fine not exceeding SGD 5,000.

Under the Constitution of Singapore, discrimination against Singapore citizens on grounds of inter alia religion, race, or place of birth is prohibited.

There is specific legislation prohibiting discrimination based on pregnancy and age. However, discrimination on the basis of sex, disability or sexual orientation is not statutorily provided for. There is a tripartite alliance for fair employment practices which promotes non-discrimination in the workplace but these are just guidelines and are not legally enforceable.

Whilst the rights of foreign citizens/expatriates are not protected by statute, discrimination against such individuals can be argued as being contrary to public policy. However, these types of cases are not commonly reported in Singapore.

Created on 30 May, 2017.

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