Review seeks to widen Employment Act coverage

Proposed changes include removing salary limit so higher-paid PMEs will benefit too

Higher-paid professionals, managers and executives (PMEs) will be entitled to new employment terms under proposed changes to the law.
Higher-paid professionals, managers and executives (PMEs) will be entitled to new employment terms under proposed changes to the law. PHOTO: ST FILE

Higher-paid professionals, managers and executives (PMEs) will be entitled to employment terms such as paid sick leave and compensation for wrongful dismissals under proposed changes to the law.

These rights, spelt out in the core provisions of the Employment Act, are currently only for PMEs who earn up to $4,500 a month and non-PMEs.

But a review of the Act - the first in six years - by the Ministry of Manpower (MOM) could see the removal of this salary limit, a move that would extend legal protection to PMEs who earn more.

Before it takes the step, MOM wants people to give their feedback on the proposed changes. They can do so from now until Feb 15.

The review is being undertaken although employees not covered by the Act "already have access to many of these provisions", MOM said in a statement yesterday. It did not elaborate.

There are no available statistics on how many PMEs earning above $4,500 are denied these provisions.

On why the review is necessary at this point, the ministry said the Act is reviewed regularly in view of changes in the labour force profile and employment landscape.

Labour MP Patrick Tay told The Straits Times that he regularly sees a number of higher-earning PMEs seeking help for employment issues - mainly unfair dismissals.

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 with the proposed changes, this group could appeal to the Manpower Minister to have their jobs back.

The pool of PMEs has been growing, and currently, they make up about one-third of Singapore's resident workforce, which stands at about 2.3 million.

Another proposed change to the Act is to amend the income cap of specified workers who are entitled to such additional provisions as overtime pay and annual leave.

Now, these are for rank-and-file employees in white-collar jobs - such as clerks, receptionists and retail sales assistants - making up to $2,500 a month, and manual workers who earn up to $4,500 a month.

MOM wants views on what would be the appropriate salary thresholds for these workers.

Finally, the ministry is reviewing the way employment disputes are settled.

Dismissal claims and salary issues tend to go together, but workers have to go to two different parties to resolve their cases. This is because statutory and contractual salary-related disputes are heard by the Employment Claims Tribunals, while wrongful dismissal claims go before MOM.

But now, the ministry wants to make it "more streamlined for employees and employers".

Economist Randolph Tan, who is also a Nominated MP, welcomes the proposal to lift the salary cap to include all PMEs, who are in greater demand as the economy evolves.

But Association of Small and Medium Enterprises president Kurt Wee said that while there are occasional cases of errant employers, by and large, the environment in Singapore is not exploitative.

"We have to be very mindful not to load employers with additional compliance or indirect costs because that may erode their competitiveness further," he said.

Nonetheless, he said, the proposal to streamline dispute resolution services is good for businesses, which can use such services to clarify their positions in disputes.

A version of this article appeared in the print edition of The Straits Times on January 19, 2018, with the headline 'Review seeks to widen Employment Act coverage'. Subscribe