Singapore’s Employment Act is about to be amended again! This time the amendments may include the following key points: increasing the number of annual leave days, raising the salary threshold, and strengthening the protection of employees during corporate restructuring. However, some legislators have suggested that employers must explain the reasons when firing employees, which may not be adopted.
The amendment was announced by the Minister of Manpower during the Finance Committee debate on March 6. He said that the government hopes to maintain flexible operating space for businesses while protecting the rights of employees through a review of the Employment Act.
The Ministry of Manpower (MOM) will conduct a review with its tripartite partners, including the National Trades Union Congress (NTUC) and the Singapore National Employers Federation (SNEF), and the detailed plan will be announced later this year.
Key Point 1: Annual leave is expected to increase.
Currently, the minimum annual leave for employees who have worked in Singapore for more than three months is seven days. But Yishun GRC MP, Louis Ng, proposed to increase this minimum statutory annual leave, especially to help low-paid employees. He pointed out that this annual leave standard has not been changed for 57 years.
Experts believe that increasing the minimum number of annual leave days is the most likely suggestion to be adopted. Kelvin Seah, an economist at the national University of Singapore, pointed out that in recent years, more and more surveys have shown that employees face work pressure and overwork, and increasing annual leave can alleviate this problem.
However, the Singapore national Employers Federation (SNEF) said increasing annual leave could increase costs for businesses and was not necessarily practical or sustainable. They prefer to promote flexible working arrangements.
Key Point 2: Does the employer need to explain the reason for firing an employee?
National Trades Union Congress Assistant Secretary-General, Patrick Tay, suggested that employers should provide reasonable explanations when dismissing employees, but this suggestion is not so easy to pass.
Currently, employers do not need to explain why they are firing employees even if they do not give notice. Patrick believes this makes it difficult for employees to complain about unfair dismissal.
However, experts pointed out that this proposal is unlikely to be adopted because it will put a lot of pressure on employers. Lawyer, Jonathan Yuen said that such a system is too biased towards employees and is unfair to employers.
SNEF also pointed out that this rule may make employers more conservative in hiring full-time employees. In addition, data shows that 75% of “wrongful dismissal” complaints in 2022 will eventually be unsuccessful.
But Walter Theseira, a professor at the Faculty of Social Sciences, believes that it is time to review Singapore’s “dismissal procedures” because some employers circumvent the law by forcing employees to resign.
Key Point 3: It is also necessary to explain clearly how employees are “transferred” during company restructuring.
When a company is merged or restructured, employees may be “transferred” to another company. However, Section 18A of the Employment Act does not clearly explain how to deal with such situations.
Legal experts pointed out that disputes may arise if employees do not want to be transferred, if the new employer cannot obtain a work permit, or if the new employer changes the contract terms. The definition and enforcement mechanism of this part of the law are not clear enough and need to be strengthened.
Key Point 4: Raising the salary threshold for protected employees
Currently, Part IV of the Employment Act (covering rest days, hours of work and other conditions of service) protects workers earning up to $4,500, and non-supervisory employees up to $2,600.
Zheng Deyuan suggested that these thresholds need to be adjusted in line with the median wage in Singapore to protect more employees. He also proposed that the threshold of Section 33 should be raised so that employees can get their wages first when the company goes bankrupt.
In addition, the definition of “worker” should also be reviewed. Currently, “worker” refers to employees who do physical labor, such as cleaners, construction workers, drivers, etc. However, the job content of many positions is vague and not necessarily the traditional “physical labor”.
This amendment to the Employment Act may have a huge impact.
Overall, this amendment may make employee rights clearer, increase annual leave, and provide more protection for low-paid employees. However, under the premise of retaining corporate flexibility, not every suggestion will be adopted.
How will Singapore balance “employee protection” and “enterprise competitiveness” next? Let’s continue to observe!
