Pub - Changes To The EA

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Pub - Changes To The EA

  1. 1. Changes to the Employment ActMinistry of Manpower A quick guide to the changes to theLabour Relations & Workplaces Division Employment Act from 1st January 200918 Havelock Road Singapore 059764 Tel: 6438 5122Email: mom_lrd@mom.gov.sg Website: www.mom.gov.sgThis guide is also available online at the Ministry of ManpowerWebsite: www.mom.gov.sg > Employment Standards > PublicationsThe information provided in this guide is intended to provide you with a guide to the changes to the Employment Act. It is written in general termsand is not a complete or authoritative statement of the law. If in doubt, please refer to the Employment Act or contact the Ministry of Manpower.Printed in Dec 2008
  2. 2. This guide provides information on the major changes to the Employment Actwhich come into effect on 1 January 2009. If you need further assistance, pleaserefer to www.mom.gov.sg or call the Ministry of Manpower at 6438 5122. The Employment ActThe Employment Act is Singapore’s main labour legislation. It stipulatesthe basic terms and conditions of employment and the rights andobligations of employers and employees under a contract of service.A contract of service is an employment agreement between an employeeand an employer. Contracts are commonly in writing, but they can alsobe based on verbal agreements.Why amend the Employment Act?The last substantive amendment of the Employment Act was in 1995.Since then, the labour market has changed significantly with shifts inworkforce profile, increase in wages and shortening of employmenttenures.It is thus timely to update the Employment Act so that it remains relevantand responsive to the changing labour market conditions.
  3. 3. SUMMARY OF THE MAJOR CHANGESThese changes come into effect on 1 January 2009.COVERAGE OF THE EMPLOYMENT ACT • Extend coverage to confidential staff; • Protect managers and executives earning a basic monthly salary of $2,500 and below against non-payment of salary and give them access to MOM Labour Court for salary claims; • Raise Part IV salary ceiling for non-workmen at a basic monthly salary of $1,600 to $2,000; • Introduce a new Part IV salary ceiling for workmen at a basic monthly salary of $4,500; and • Re-define part-time employees from those who work less than 30 hours a week to those who work less than 35 hours a week. The following employees will continue to be excluded from the Act: • Seamen; • Domestic workers; • Statutory board and government employees; and • Persons employed in managerial and executive positions (except those earning a basic monthly salary of $2500 and below will be protected against non-payment of salary)
  4. 4. EMPLOYMENT STANDARDS AND BENEFITS • Grant paid sick leave and paid public holiday to all employees covered under the Act, and not just those covered under Part IV of the Act; • Reduce qualifying period for paid sick leave from 6 months to 3 months of completed service. Phase in sick leave entitlements between the completion of 3 months and 6 months of service; and • Allow employees to obtain medical certificates (MC) from public medical institutions for the purpose of going on paid sick leave where company doctors are not readily available or during emergency situations, and not confined to MC issued from employer appointed doctors (if there is one) for paid sick leave during such circumstances.PENALTIES FOR INFRINGEMENT OF EMPLOYMENT ACT • Increase maximum penalty fines for most offences under the Employment Act from $1,000 to $5,000; • Increase maximum penalty fines for most repeat offences under the Employment Act from $2,000 to $10,000; and • Increase composition fine for offences from $200 to $1,000.
  5. 5. I Coverage of the Employment Act Confidential Staff From 1 January 2009, employees holding confidential positions will be covered under the Employment Act. Q1 Why do you extend the coverage of the Employment Act to confidential staff?Confidential staff were traditionally excluded to avoid conflict of interest becausesome of them may be dealing with sensitive personnel matters. However, mostconfidential staff, such as secretaries and HR clerks hold rank and file positionsand are seldom directly involved in sensitive matters. As such they should alsobe covered under the Act to be entitled to basic employment benefits and haverecourse through the Ministry when there are employment disputes. Q2 Who is considered a confidential staff?A confidential staff is an employee who hasaccess to classified sensitive information ofthe company, such as personnel records,sensitive financial data and businessoperations/trade secrets.
  6. 6. Q3 How can confidential staff benefit from coverage under the Act?As confidential staff are no longer excluded from the Employment Act as a specialclass of persons, they are protected under the Act like any other employees,provided they meet other Employment Act qualifying criteria as well (such as notholding a managerial and executive position).Employment ProtectionThey can refer their salary claims to the MOM Labour Court for adjudication.They may also appeal to the Minister against unfair dismissal.Minimum Employment BenefitsIf their salaries are not higher than the basic monthly salary ceiling of $2,000and $4,500 for non-workmen and workmen respectively, they will also enjoythe minimum employment benefits stated under Part IV of the Employment Act,including the right to overtime pay and paid annual leave. Q4 Would the coverage of confidential staff affect their collective bargaining rights?No. Although confidential staff will be covered under the Employment Act, theywill continue to be excluded from the collective bargaining process under theIndustrial Relations Act if they have access to sensitive information that couldresult in conflict of interest in the collective bargaining process.Junior Managers and Executives From 1 January 2009, junior managers and executives earning a basic monthly salary of $2,500 and below will be protected against non-payment of salary and be given access to MOM Labour Court to pursue their salary claims. However, they will continue to be excluded from the rest of the Employment Act.
  7. 7. Q5 Why do you allow junior managers and executives access to MOM Labour Court for salary claims?Managers and executives are not covered under the Act because they aredeemed to be able to protect their interest through civil claims. However, civilclaims can be protracted and costly. Junior managers and executives oftenfind the cost difficult to bear. As such, managers and executives earning basicmonthly salaries of $2,500 and below are given protection for salary payment,which is the most common type of employment claims reported to MOM. Q6 How do you define managers and executives?Managers and executives are employees with executive or supervisory functions.These functions include the authority to influence or make decision on issuessuch as recruitment, discipline, termination of employment and assessmentof performance and reward. They may also be involved in the formulation ofstrategies and policies of the enterprise, or the management and running of thebusiness.They also include professionals with tertiary education and specialisedknowledge/skills and whose employment terms are comparable to those ofmanagers and executives. Professionals such as lawyers, accountants anddoctors whose nature and terms of employment are comparable to executiveswould generally be deemed as such, and hence they would not be coveredunder the Act.
  8. 8. Q7 What constitutes basic salary?Basic salary is the total amount of money (including wage adjustments andincrements) which an employee is entitled to under the contract of service butdoes not include: • additional payments by way of overtime payments; • additional payments by way of bonus payments or annual wage supplements; • any sum paid to reimburse an employee for special expenses incurred by the employee in the course of employment; • productivity incentive payments; and • any allowance however described. Q8 What type of employment claims can junior managers and executives refer to MOM?Only salary claims of junior managers and executives may be referred toMOM. Salary includes all remuneration including allowances payable to anemployee in respect of work done under his contract of service, but does notinclude — • the value of any house accommodation, supply of electricity, water, medical attendance, or other amenity, or of any service excluded by general or special order of the Minister published in the Gazette; • any contribution paid by the employer on his own account to any pension fund or provident fund; • any travelling allowance or the value of any travelling concession; • any sum paid to the employee to reimburse him for special expenses incurred by him in the course of his employment; • any gratuity payable on discharge or retirement; and • any retrenchment benefit payable on retrenchment. Q9 What are some examples of issues/claims that junior managers and executives cannot refer to MOM?They include non-salary issues such as appeals against unfair dismissal, andencashment of perks and benefits such as annual leave, sick leave, publicholidays and payment in lieu of notice of termination.
  9. 9. Q10 Can MOM help junior managers and executives to recover salary arrears for employment periods before 1 January 2009?The new law only comes into effect on 1 January 2009. As such, only salaryarrears that are accrued from 1 January 2009 onwards can be adjudicated byMOM.Part IV salary ceiling for non-workmen From 1 January 2009, the Part IV salary ceiling for non-workmen will be revised from $1,600 to $2,000 basic monthly salary.Q11 Why do you raise the Part IV salary ceiling?The ceiling was last revised from $1,500 to $1,600 in 1995, more than 13 yearsago. The rise in Part IV salary ceiling is to reflect the increase in wages.Q12 How can employees benefit from the raising of the Part IV salary ceiling?With the increase in the Part IV salary ceiling, employees earning basic monthlysalaries of $2,000 and below will enjoy the minimum employment benefitsstipulated under Part IV of the Employment Act. These include: • the right to enjoy overtime pay at 1.5 times the basic rate of salary; • the right to enjoy 2 days pay for work on rest days; • the right to enjoy paid annual leave stipulated in the law; and • regulation of contractual working hours.Q13 For those employees earning between $1,600 and $2,000 basic monthly salaries, is there a need for employers to renegotiate new employment contracts with them?From 1 January 2009, this group of employees will henceforth be entitled toPart IV benefits such as overtime pay etc as these are the minimum statutoryrequirements. Employers are advised to update the relevant clauses in theiremployment contracts.
  10. 10. Part IV salary ceiling for workmen From 1 January 2009, a new Part IV salary ceiling at $4,500 basic monthly salary will be introduced for workmen. Workmen with salaries above the new ceiling will be excluded from Part IV of the Employment Act. However, they will continue to be covered under the rest of the Employment Act.Q14 Why do you introduce a new Part IV salary ceiling for workmen?Employers have given feedback that Part IV ofthe Employment Act restricts their flexibility to setovertime and rest day payment rates for high salariedworkmen. These workmen are also able to negotiatefor favourable employment terms without having to beprotected under Part IV. After extensive consultationwith the tripartite partners, we will introduce a basicmonthly salary threshold of $4,500 for workmen underPart IV. Workmen with lower income will not be affected,and will continue to be protected under Part IV.Q15 How do you define a workman?A ‘workman’ is an employee whose work involves manual labour. This includesan employee under any of the following categories: • any person, skilled or unskilled, doing manual work, including any artisan or apprentice but excluding any seaman or domestic servant; • any person other than clerical staff, employed in the operation or maintenance of mechanically propelled vehicles used for the transport of passengers for hire or for commercial purposes; • any person employed to supervise any workman and to perform manual ork. However this is subject to the requirement that the time w he spent in doing manual work must not be less than one half of his total working time in a salary period; and • any person specified in the First Schedule of the Employment Act.
  11. 11. Q16 How should employers address the employment terms of those workmen earning above $4,500 basic monthly salary who are currently enjoying Part IV benefits?Notwithstanding the legislative amendments, employers are required to observetheir existing contractual obligations including those in the collective agreements(CAs).Employers also have the flexibility to offer employment packages to better suittheir needs. For example, for payment for work beyond contractual workinghours, employers may continue to grant the same rate of overtime paymentto this group of workmen or negotiate with them to restructure their salary/remuneration/reward package taking into consideration their job responsibility,and to align their employment benefits with those of other categories ofemployees in the company.Definition of Part-time work From 1 January 2009, part-time employees will be defined as those who work less than 35 hours a week. Encashment of annual leave into the pay of part-timers will not be allowed for those who work 5 days or more and between 30 (inclusive) to less than 35 hours a week.Q17 Why do you redefine part-time work?The intent of the redefinition is to encourage more employers to offer more part-time opportunities. Under the Employment (Part-time employees) Regulations,employers are allowed to pro-rate the employment benefits of a part-timeemployee to that of a full time employee according to the hours worked. Thebenefits that can be pro-rated include paid annual leave, paid sick leave, paidpublic holiday and paid childcare leave.The amendment will benefit employees who require flexible workingarrangements to attend to family or personal commitments and potentialentrants to the workforce seeking part-time employment. 10
  12. 12. Q18 Do employers need to re-negotiate new employment contracts with the affected employees who are currently working 30 to 35 hours?Notwithstanding the legislative amendments,employers are required to observe their existingcontractual obligations including those in thecollective agreements (CAs).Employers may continue to grant the sameemployment benefits or make adjustment to thebenefits with the consent of their employees. II EMPLOYMENT STANDARDS AND BENEFITSPaid sick leave and public holidays From 1 January 2009, the entitlement to paid sick leave and paid public holidays will be moved out of Part IV to form a new Part X in the Act, so that all employees covered under the Act will be entitled to these benefits.Q19 Why are the entitlements of paid sick leave and paid public holidays moved out of Part IV?Granting paid sick leave and paid public holidays are already well-establishedindustry norms. The entitlements are moved out of Part IV to a new Part X toreflect labour market practices. 11
  13. 13. Q20 Will this represent an increase in cost for employers since those employees who are not covered under Part IV have to be paid for working on public holidays now?Granting paid sick leave and paid publicholidays are already well-establishedindustry norms and the increase incost is likely to be minimal. For thoseemployees who may be required to workon a public holiday, the employer may,with the agreement of the employee,substitute another day for the publicholiday.Qualifying period for paid sick leave From 1 January 2009, the qualifying period for paid sick leave under the Employment Act will be reduced from 6 months to 3 months of completed service. Accordingly, the number of days of paid sick leave will be phased in between the completion of 3 months and 6 months of service as follows: Months of service Paid Outpatient Sick Paid Hospitalisation completed Leave entitlement Leave entitlement (days) (days) 3 months 5 15 4 months 8 30 5 months 11 45 6 months 14 60Q21 Why is the qualifying period for paid sick leave shortened from 6 completed months of service to 3 completed months of service?In line with shortening employment tenures, the qualifying period for paid sickleave is reduced to align it with that for paid annual leave. 12
  14. 14. Q22 Who is affected by this change?Newer employees with less than 6 months of service will be affected by thischange. Employees who have already completed 6 months of service will not beaffected because they are already entitled to the full paid sick leave provisions.Q23 Will employees’ service period before 1 January 2009 be taken into account to determine his eligibility for paid sick leave?Yes. As long as a new employee has served 3 months or more as at 1 January2009, he or she will qualify for paid sick leave according to the table above.Q24 What happens if an employee’s medical leave exceeds his paid sick leave entitlement?The employee may still go on sick leave if the doctor has assessed him to beunfit for work. However, he will have to go on unpaid sick leave for those daysof medical leave that exceeds his entitlement.Q25 What is the total number of days of outpatient and hospitalisation sick leave that an employee can take altogether?The total number of days of outpatient and hospitalisation sick leave that anemployee can take is capped at the total number of days of hospitalisation sickleave an employee is entitled to. For example, if an employee has already taken14 days of outpatient sick leave in that year, the number of days of hospitalisationsick leave that he can take is 60 minus 14 days, which is 46 days. Likewise, forthose in their 4th, 5th and 6th month of service, the total number days of sickleave is also capped at the respective hospitalisation leave entitlement. 13
  15. 15. Q26 Are paid outpatient and hospitalisation sick leave entitlements interchangeable?No. Employees who have already taken all their paid outpatient sick leavecannot use their balance paid hospitalisation sick leave entitlements for theiroutpatient sick leave.Q27 Do those days that employees go on sick leave count towards their service period?Yes, they do.Q28 Do I have to pay the medical consultation fees for my employee after he has completed 3 months of service?Yes. With the reduction in the qualifying period for paid sick leave, employersare also required to pay for employees’ medical consultation fees after theemployees have completed 3 months of service.Medical certificates for the purpose of paid sick leave From 1 January 2009, employees can obtain medical certificates (MC) from any public medical institution for the purpose of going on paid sick leave where company doctors are not readily available or during emergency situations, and not be confined to obtaining MC issued by employer-appointed doctors for such circumstances.Q29 How would this benefit the employees?Employees would benefit as they can seek medical services from any publicmedical institutions where company doctors are not readily available (suchas when company doctors are closed or the company doctors are veryinconveniently located) or during emergency situations. 14
  16. 16. Q30 Do employers have to recognise employees’ MCs obtained from their own private doctors, overseas medical institutions or institutions offering Traditional Chinese Medicine (TCM)?Although an employer should accept valid MCs from private doctors not appointedby him, overseas medical institutions or TCM institutions for the purpose ofexcusing an employee from work, the law does not require him to pay salary forthose days that the employee is absent from work. However, employers may attheir own discretion recognise these MCs for paid sick leave.Q31 Can employers still require employees to visit their panel of appointed doctors under normal circumstances?Yes, employers may do so.Q32 What would be included in the list of public medical institutions? • Alexandra Hospital • National University Hospital • Changi General Hospital • NHG Eye Institute • Institute of Mental Health / • Singapore General Hospital Woodbridge Hospital • Singapore National Eye • Jurong Medical Centre Centre • KK Women’s and Children’s • Tan Tock Seng Hospital Hospital • The Cancer Institute • National Cancer Centre • The Heart Institute • National Dental Centre • All polyclinics under the • National Heart Centre National Healthcare Group • National Neuroscience • All polyclinics under the Institute Singapore Health Services • National Skin Centre 15
  17. 17. III PENALTIES FOR INFRINGEMENT OF EMPLOYMENT ACTFrom 1 January 2009, the maximum penalty fine for most offences in theEmployment Act will be increased from $1,000 to $5,000 for first time offenders.For repeat offenders, the maximum penalty fine for most offences will beincreased from $2,000 to $10,000. The composition fine will also be increasedfrom $200 to $1,000. For more information on the new maximum penalty finefor a particular offence, please refer to the MOM website at www.mom.gov.sgfor more details.CHANGES TO THE MATERNITY PROVISIONSWith effect from 31 October 2008, the maternity provisions in the EmploymentAct and Children Development Co-savings Act (CDCA) have been amended aspart of the Marriage and Parenthood package. The changes include conferringgreater employment protection to pregnant mothers and more maternity andchildcare benefits.For more information on the changes to the maternity provisions, please referto www.mom.gov.sg Workplace Relations and Standards EmploymentStandards The Employment Act Maternity Leave 16
  18. 18. Changes to the Employment ActMinistry of Manpower A quick guide to the changes to theLabour Relations Workplaces Division Employment Act from 1st January 200918 Havelock Road Singapore 059764 Tel: 6438 5122Email: mom_lrd@mom.gov.sg Website: www.mom.gov.sgThis guide is also available online at the Ministry of ManpowerWebsite: www.mom.gov.sg Employment Standards PublicationsThe information provided in this guide is intended to provide you with a guide to the changes to the Employment Act. It is written in general termsand is not a complete or authoritative statement of the law. If in doubt, please refer to the Employment Act or contact the Ministry of Manpower.Printed in Dec 2008

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