Major change to Employment Act will see more PMEs covered

Key proposal is removal of monthly salary cap of $4.5k; extra 430,000 PMEs to benefit

File photo showing a lunch crowd at Singpore's central business district, on June 30, 2018. PHOTO: ST FILE

Singapore's Employment Act will undergo a major change as proposals are introduced to expand it to cover higher-paid professionals, managers and executives (PMEs), who form an increasingly significant portion of the workforce.

A key proposal is the removal of the salary cap of $4,500 a month, which means it can ensure these workers will be entitled to such employment terms as minimum days of annual leave, paid sick leave, hospitalisation leave, and compensation for wrongful dismissal.

Currently, the Act applies only to the 290,000 PMEs who earn up to $4,500 a month and non-PMEs. With the proposed changes, an additional 430,000 PMEs will benefit.

The prospective legislation, called the Employment (Amendment) Bill, was introduced in Parliament yesterday by Manpower Minister Josephine Teo and will be debated next month. The target is to implement the changes by next April.

The Bill has been long in the making. Former manpower minister Lim Swee Say had announced the proposed changes to the law in March, following a review and consultations that began in 2012.

He had said it was timely as PMETs, a group that includes technicians, form 56 per cent of the local workforce and will increase to 65 per cent by around 2030.

The proposed law, however, does not apply to public servants, domestic workers and seafarers who are covered by other legislations.

Other key proposals in the Bill included extending overtime pay to more workers.

For example, the salary cap for paying overtime to non-workmen will be revised from $2,250 to $2,600 to benefit an additional 100,000 workers.

The Bill also requires salary-related disputes to be mediated at the Tripartite Alliance for Dispute Management. If unresolved, the claims are heard at the Employment Claims Tribunal.

Wrongful dismissals will also be heard by the tribunal, to provide a one-stop service to both employers and employees. Currently, they are adjudicated by the Manpower Ministry.

Labour MP Patrick Tay, in cheering the Bill, said: "At a personal level, I have been lobbying for this expansion of the Employment Act since entering Parliament in 2011 and am glad that it has come to fruition with the salary cap removed.

"This, together with the other proposed amendments, is a positive step towards greater protection of fellow workers, including PMEs," he added.

Mr Kurt Wee, president of the Association of Small and Medium Enterprises, said the proposed measures will help to "clean up malpractice in companies", a move which he said "is not a bad thing".

He added: "If there are bad employment practices there should be an avenue for workers to get recourse, but at the same time we want to remind regulators that it may also encourage unmerited claims by rogue employees too, so the enforcement of the law should be balanced.

"The proposed changes are unlikely to have a significant impact on business costs," Mr Wee said, but will instead "sharpen business owners' awareness of good employment practices".

Join ST's Telegram channel and get the latest breaking news delivered to you.

A version of this article appeared in the print edition of The Straits Times on October 03, 2018, with the headline Major change to Employment Act will see more PMEs covered. Subscribe