Employment Act to cover PMEs earning above $4,500 as well

The removal of the salary cap will benefit an additional 430,000 professionals, managers and executives, ensuring that they are entitled to employment terms such as compensation for wrongful dismissal. The changes to the Act will be implemented by Ap
The removal of the salary cap will benefit an additional 430,000 professionals, managers and executives, ensuring that they are entitled to employment terms such as compensation for wrongful dismissal. The changes to the Act will be implemented by April 1 next year.ST FILE PHOTO

The Employment Act will widen its reach to ensure that higher-paid workers, including all professionals, managers and executives (PMEs), will be entitled to em-ployment terms such as paid sick leave and compensation for wrongful dismissals.

These rights, spelt out in the core provisions of the Employment Act, Singapore's primary labour law, currently apply only to the 290,000 PMEs who earn up to $4,500 a month and non-PMEs.

But the salary cap will be removed, in a move that would benefit an additional 430,000 PMEs.

Manpower Minister Lim Swee Say announced the move yesterday during the debate on his ministry's budget, at which labour MP Patrick Tay (West Coast GRC) and Dr Intan Azura Mokhtar (Ang Mo Kio GRC) had asked about a review of the Employment Act. The changes to the Act will be implemented by April 1 next year.

Mr Lim said this move would extend legal protection to all workers, except for public servants, domestic workers and seafarers, who are covered separately, such as by other legal provisions, due to their nature of work .

This follows a public consultation on the proposed changes, which wrapped up last month.

Mr Tay told The Straits Times that each month, he sees about five to 10 PMEs earning more than $4,500 approaching him and the National Trades Union Congress for help with workplace grievances. These were mainly for unfair dismissals. "I suspect there are more cases," he said.

As they are not covered under the Act, their only recourse is a civil suit or voluntary mediation if they cannot resolve the issue with the employer or through a union. But many of the companies they work in are not unionised, he added.

The Tripartite Alliance for Dispute Management, which conducts voluntary mediation for such PMEs, saw more than 400 PMEs earning more than $4,500 who sought its assistance for salary claims between April and December last year.

With the proposed changes, this group could appeal to the Manpower Minister to have their jobs back, or claim compensation.

Mr Lim said more rank-and-file workers, such as clerks and retail assistants, will also receive additional protection. Under the changes, employees earning up to $2,600 will be eligible for overtime pay, up from the previous cap of $2,500.

The Ministry of Manpower (MOM) will also improve how employment disputes are settled. Though dismissal claims and salary issues often go together, workers have to refer salary-related disputes to the Employment Claims Tribunals (ECT), while wrongful dismissal claims go before MOM.

But after changes to the Act have been made, workers can go to the ECT to address both issues.

Mr Ian Lim, a partner who heads the employment and labour practice at TSMP Law Corporation, welcomed the "bold and inclusive" changes announced by the MOM.

However, he said that it is im-portant to be very clear on what constitutes a wrongful or unfair dismissal.

"The last thing we want is to inadvertently go to the other extreme and become one of those places where it is virtually impossible to fire even a highly insubordinate or severely underperforming employee without paying hefty compensation," he added.

A version of this article appeared in the print edition of The Straits Times on March 06, 2018, with the headline 'Employment Act to cover PMEs earning above $4,500 as well'. Print Edition | Subscribe