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Singapore – New employment law passed

22 November 2013

The Ministry of Manpower (MoM) announced that professionals, managers, and executives (PMEs) earning up to SGD 4,500 (USD 3,602) each month would qualify for most employment rights for the first time from the 1 April 2014.

The changes form part of a raft of amendments being made to the Employment Act (EA) and the Child Development Co-Savings Act (CDCA), through the passing of the Employment, Parental Leave and Other Measures Bill by Singapore law makers this month, report out-law.com.

Approximately 300,000 employees who qualify will gain holiday and sick leave rights, and will also be able to launch a claim for unfair dismissal against their employers, among other rights. PMEs will have to serve at least a year with a company before becoming eligible to bring unfair dismissal claims. PMEs earning more than SGD 4,500 (USD 3,602) will not qualify.

MoM advised in a statement: "Managers and executives are those with executive and supervisory functions. These functions include the authority to influence or make decisions on issues such as recruitment, discipline, termination of employment, assessment of performance and reward, or involvement in the formulation of strategies and policies of the enterprise, or the management and running of the business. Professionals are those with specialised skills and whose employment terms are comparable to those of executives and managers."

The breadth of an individual employees' employment rights currently depends on a number of factors, including what job those individuals perform and how much they earn.

Under the reforms, Singapore law makers have increased the amount of money ‘non-workmen’ (clerks and sales staff) can earn before losing their eligibility for certain rights relating to rest days, hours of work, and other work conditions. The threshold has been increased from SGD 2,000 (USD 1,601) to SGD 2,500 (USD 2,001) per month to reflect the fact that the average salary of the non-workman has increased by +25% since the Employment Act was last reviewed in 2008.

The threshold for triggering the loss of the same employment rights by workmen will remain unaltered at SGD 4,500 (USD 3,602). The MoM advised: "Highly paid and skilled workmen are able to negotiate for favourable employment terms without having to be protected" but has said it will monitor the need to increase the threshold figure.

A new salary cap will also be set at SGD 2,250 (USD 1,801) for non-workers for the purpose of calculating over-time payments.

Further amendments have also been made to the enforcement regime. Businesses in Singapore could be fined up to SGD 15,000 (USD 12,009) for a first-time offence of failing to pay salaries, whilst staff responsible could also be served with a six month jail sentence. Repeat offenders could face a SGD 30,000 (USD 24,019) fine and a year in prison.

The MoM advised in a statement: "Individuals such as directors or partners of companies will be made more accountable for Employment Act (EA) offences committed by the company. Such individuals, who are primarily responsible for the offence and have failed to exercise reasonable supervision or oversight, will be presumed to be negligent and be held liable. He/she will be able to rebut the presumption by proving that he/she has exercised reasonable supervision or oversight to avoid commission of the EA offence."

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