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Singapore

January 15, 2021

By Michèle Foo

Back to International Employment Law

Singapore

KEY DEVELOPMENTS FOR 2021


 

MOM tightens work pass requirements, revises rules for hiring foreigners

On 27 August 2020, the Ministry of Manpower ("MOM") announced the tightening of work pass requirements and revised certain rules for hiring foreigners:

Tightening of work pass requirements:

  • Raising the Employment Pass ("EP") minimum qualifying salary from S$3,900 to S$4,500. The revised salary criteria applies from 1 September 2020 for new EP applicants and from 1 May 2021 for EP renewals.
  • The new salary criteria of S$4,500 for EPs that took effect from 1 September 2020 applied equally to the financial services sector. However, from 1 December 2020, the minimum qualifying salary for EPs in the financial services sector was further raised to S$5,000. The revised salary criteria applies from 1 December 2020 for new EP applicants in the financial services sector and from 1 May 2021 for EP renewals.
  • Raising the S Pass minimum qualifying salary from S$2,400 to S$2,500 for new applicants. The revised salary criteria applies from 1 October 2020 for new S Pass applicants and from 1 May 2021 for S Pass renewals.

Under the Fair Consideration Framework ("FCF"), employers submitting EP applications must first advertise the position on MyCareersFuture.sg. MOM has extended the job advertising requirement to S Pass applications submitted from 1 October 2020. To give local jobseekers more time to respond to job openings and for employers to seriously evaluate their applications, the minimum FCF job advertising duration for EP and S Pass applications has been doubled from 14 days to 28 days. This change has been implemented for new EP and S Pass applications from 1 October 2020.


 

Tripartite partners update advisory on managing excess manpower and responsible retrenchment

On 17 October 2020, MOM, National Trades Union Congress ("NTUC") and Singapore National Employers Federation ("SNEF") have updated the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment (the "Advisory" to provide employers with clearer guidance on carrying out a retrenchment exercise responsibly, if retrenchment is inevitable. Companies are urged to adopt the recommendations in the Advisory.

The Advisory was last updated in March 2020 in view of the evolving COVID‑19 situation which has affected businesses. Even with the Government support schemes, retrenchments may still be inevitable for some employers. In this context, the Advisory was further updated to emphasise the key desired outcomes in any retrenchment exercise.

  • Maintain a strong Singaporean core: The key principles of the NTUC Fair Retrenchment Framework (FRF) have been included in the Advisory, in particular the need to maintain a strong Singaporean core. The Advisory reminds employers to take a long‑term view of their manpower needs even as retrenchment is carried out. The Advisory also maintains its call for employers to use objective criteria when selecting employees to be retrenched.
  • Conduct retrenchments responsibly, provide support sensitively: The Advisory sets out good practices which employers should consider in notifying and providing support to employees affected by a retrenchment exercise. These include providing a longer notice period beyond contractual or statutory requirements where possible so employees can be mentally prepared earlier, and briefing managers on notifying employees about retrenchment in a sensitive manner, such as notifying employees in person unless it is impractical to do so.
  • Training assistance: Employers should consider providing training assistance to retrenched local employees post‑retrenchment to help them maintain or build up relevant skills. Further, employers that had carried out retrenchment exercises but subsequently experienced a pick‑up in business activities should make a deliberate effort to strengthen their local workforce by hiring locals when they are able to do so.

 

Work Injury Compensation Act 2019 now in force

The Work Injury Compensation Act 2019 (the "WICA") largely came into force on 1 September 2020, repealing the previous Work Injury Compensation Act. The WICA aims to improve the existing Work Injury Compensation framework with provisions to (1) incentivise employers to be more proactive in preventing injuries from happening in the first place, (2) speed up and improve claims processing, (3) enhance protection for employees, including by expanding the scope of employees to be covered by compulsory insurance, and (4) provide greater certainty for employers when buying Work Injury Compensation insurance.

With thanks to Michèle Foo of Allen & Gledhill for her invaluable collaboration on this update.

 

KEY DEVELOPMENTS FOR 2020


 

New rules for hiring foreigners and support for employers hiring mid-career and senior employees

A series of measures have recently been introduced to give employees a fair chance to progress at work and businesses fair support to succeed. The key measures are as follows:

  • Raising the minimum qualifying salary for new Employment Passes from SGD 3,600 to SGD 3,900 per month from 1 May 2020 for new applicants and from 1 May 2021 for renewals.
  • Under the Fair Consideration Framework ("FCF"), employers submitting Employment Pass applications must first advertise the position on MyCareersFuture.sg. Previously, job positions with a monthly salary of SGD 15,000 and above were exempt from this requirement but the advertising requirement has now been expanded to include positions paying up to SGD 20,000 per month.
  • In order to ensure that firms do not hire locals on token salaries just so that they can hire more foreign workers, only workers that are paid above the Local Qualifying Salary (currently SGD 1,400 per month) can be counted towards a firm's S Pass and Work Permit dependency ratio ceilings.
  • MOM will reduce S Pass quotas for the Construction, Marine Shipyard and Process sectors in 2021 and 2023 to deter enterprises from hiring low-cost foreigners when qualified locals are available.
  • From 2021, through the new Senior Employment Credit, the Government will provide wage offsets to employers that hire senior Singaporean workers aged 55 and above.

 

Tripartite Guidelines on Wrongful Dismissal

The MOM, National Trades Union Congress (NTUC) and Singapore National Employers Federation (SNEF) jointly developed the Tripartite Guidelines on Wrongful Dismissal ("Guidelines") which provide guidance on what constitutes a wrongful dismissal under the Employment Act.

The Guidelines provide examples of wrongful dismissal, such as for reasons of discrimination, deprivation of benefits, desire to punish an employee for exercising an employment right or for providing a false reason for the dismissal. The Guidelines also include examples of dismissals that would not be considered wrongful, such as dismissals on grounds of poor performance, misconduct, and redundancy.

With the transfer of the adjudication of wrongful dismissal disputes from the MOM to the Employment Claims Tribunals on 1 April 2019, the Guidelines provide a reference for mediators and adjudicators at the Tripartite Alliance for Dispute Management and the Employment Claims Tribunal, respectively. The Guidelines also serve as a useful reference for HR practitioners, employers and employees.


 

New legislation in relation to work injury compensation

The Work Injury Compensation Act 2019 aims to improve the existing Work Injury Compensation framework with provisions to (i) incentivise employers to be more proactive in preventing injuries from happening in the first place; (ii) speed up and improve claims processing; (iii) enhance protection for employees, including by expanding the scope of employees to be covered by compulsory insurance; and (iv) provide greater certainty for employers when buying Work Injury Compensation insurance. The Work Injury Compensation Act 2019 is expected to take effect on 1 September 2020. It will repeal the existing Work Injury Compensation Act.

 

KEY DEVELOPMENTS FOR 2019


 

Employment (Amendment) Bill 2018

Changes to the Employment Act (“EA”) are in the pipeline and will expand and enhance employee protection. Key changes include:

  • extension of core benefits to all employees: core benefits prescribed under the EA will be extended to all employees, including persons employed in managerial or executive positions with monthly salaries exceeding S$4,500. Seafarers, domestic workers and public servants will continue to be excluded from the scope of the EA and covered under separate regulations;
  • terms and conditions of employment to be preserved on transfers: all employees covered by the EA will now be automatically transferred pursuant to a transfer of an undertaking, and their existing terms and conditions of employment will be preserved on transfer;
  • revised salary thresholds for additional protection under Part IV of the EA: the monthly salary threshold will be raised from S$2,500 to S$2,600 for employees (other than workmen) who qualify for additional protection under Part IV of the EA relating to rest days, hours of work, overtime pay, retrenchment and retirement benefits. Persons employed in managerial or executive positions (regardless of salary level) will continue to be excluded from the EA. Further, the salary cap used for the purposes of calculating overtime pay for non-workmen will be revised from S$2,250 per month to S$2,600 per month; and
  • improvements to the resolution of wrongful dismissal disputes: the dispute resolution process for employees and employers will be streamlined so that both salary-related disputes and wrongful dismissal claims will be heard by the Employment Claims Tribunals. Further, the definition of “dismissal” will be revised to encompass the involuntary resignation of an employee who was forced to do so because of the conduct or omission of the employer.

 

Changes to Fair Consideration Framework (“FCF”) job advertising requirements

The job advertising requirements under the FCF have been broadened with effect from 1 July 2018 to cover:

  • businesses with at least 10 employees (previously 25 employees); and
  • job positions that pay a fixed monthly salary below S$15,000 (previously S$12,000).

The FCF requires employers to consider Singaporeans fairly before hiring Employment Pass (“EP”) holders. Employers submitting EP applications must first advertise the job vacancy on the Jobs Bank administered by Workforce Singapore (a statutory board) for at least 14 days before making the EP application. Such advertisements must also comply with other requirements under the FCF.


 

Raise in qualifying salary for S Pass holders

The minimum qualifying monthly salary for S Pass holders (mid-level skilled foreigners) will be increased from S$2,200 as of 2018 to S$2,400. The increase will be implemented in two stages to give companies more time to adjust. The salary threshold was raised by S$100 from January 2019, with the next increase of S$100 in January 2020. A transition period will also be given to existing S Pass holders.

 

KEY DEVELOPMENTS FOR 2018


 

New Best Practice Workplace Guidelines

The Ministry of Manpower, the Singapore National Employers Federation and the National Trades Union Congress have issued Tripartite Standards aimed at increasing the adoption of fair and progressive workplace practices. The standards issued are on:

  • Employment of Term Contract Employees;
  • Flexible Work Arrangements;
  • Grievance Handling;
  • Recruitment Practices; and
  • Procurement of Services from Media Freelancers.

The Tripartite Standards complement existing laws, Guidelines and Advisories but they are not mandatory. If adopted, the Standards set out verifiable and actionable employment practices which employers can publicly commit to adopt and implement at their workplaces and those employers can hold themselves out as having progressive employment practices.


 

New Forum for Employment Disputes

The Employment Claims Tribunals (“ECT”) was launched on 1 April 2017 to facilitate the expeditious resolution of employment disputes. It only hears cases that have undergone mediation at the Tripartite Alliance for Dispute Management.

The ECT hears all statutory salary-related claims from employees covered under the Employment Act, Retirement and Re-employment Act, and Child Development Co-Savings Act and contractual salary-related claims from employees, including Professionals, Managers and Executives (PMEs) who earn more than S$4,500 per month.

Only claims not exceeding S$20,000 may be heard by the ECT, but this limit is increased to S$30,000 for employees who go through the Tripartite Mediation Framework or mediation assisted by their unions recognised under the Industrial Relations Act.


 

Changes to Visa Requirements

From 1 January 2018, Employment Pass and S Pass holders need to earn a minimum fixed monthly salary of:

  • S$6,000 to bring in their spouse or children on a Dependant’s Pass (“DP”), an increase from the current S$5,000; and
  • S$12,000 to bring in their parents on a Long Term Visit Pass (“LTVP”), an increase from the current S$10,000.

This is in addition to meeting other criteria on qualifications and experience. The aim is to ensure that main pass holders are able to upkeep their dependants in Singapore.

 

KEY DEVELOPMENTS FOR 2017


 

Guidelines issued to cover: (1) managing excess manpower, (2) employment of fixed term contract employees, and (3) re-employment of older employees

Guidelines have been issued which cover the following:

  • Managing Excess Manpower and Responsible Retrenchment: These revised Guidelines emphasise the need for employers to maintain a “strong Singaporean Core” and encourage employers to actively assist employees who have been displaced. Employers facing structural changes are encouraged to consider alternative ways of managing their local manpower, e.g., by upgrading employees’ skills and redesigning jobs. Employers are also encouraged to consider implementing certain cost-saving measures to manage excess manpower.
  • Employment of Fixed Term Contract Employees: These Guidelines encourage employers to grant certain fixed term contract employees benefits which are (under current legislation) only to employees in permanent positions.
  • Re-employment of Older Employees: They also seek to prepare employers for the impending rise in the re-employment age from 65 to 67, effective from 1 July 2017. The key changes relate to wages, medical benefits and the employment assistance payment payable to eligible employees who are not offered re-employment in suitable jobs.

 

Bill to establish Employment Claims Tribunal

A Bill for the establishment of the Employment Claims Tribunal (“ECT”) has been passed. The Bill is not yet in force. The ECT, which is expected to be established by April 2017, will provide an additional avenue for more workers to pursue salary-related employment claims. A new centre called the Tripartite Alliance for Dispute Management (“TADM”) is expected to be set up in tandem with the ECT. The TADM will conduct the pre-ECT mediation and serve as the approved mediation centre for all employees, both unionised and non-unionised.


 

Increase in salary threshold for ‘employment pass’

From 1 January 2017, the qualifying salary for ‘employment pass’ (“EP”) applications by foreign employees will be raised from S$3,300 to S$3,600. Only new EP applicants with a monthly salary of S$3,600 or more will be considered for an EP (subject to meeting other criteria). The increase in the EP qualifying salary is intended to keep pace with rising local wages, and to help maintain the quality of the foreign workforce in Singapore.

 

KEY DEVELOPMENTS FOR 2016


 

Work Injury Compensation Act amended to increase compensation limits

With effect from 1 January 2016, the maximum and minimum compensation limits under the Work Injury Compensation Act for death and total permanent incapacity caused by accidents arising out of and in the course of employment were increased. The cap on compensation for medical expenses for accidents arising out of and in the course of employment also increased.


 

Changes to Central Provident Fund salary ceiling and contribution rates for older workers

With effect from 1 January 2016, the Central Provident Fund Act has been amended to raise the CPF salary ceiling to S$6,000. This means that there is no CPF contribution payable in respect of an employee’s monthly wages that is in excess of S$6,000 (previously S$5,000).

With effect from 1 January 2016, the contribution rate for older employees was also raised.


 

Requirements for employers to provide a written record of key employment terms and pay slips

With effect from 1 April 2016, employers have been required to make and retain certain records relating to employees (in place of a register of employees and record of workmen) and to provide employees with a written record of key employment terms and pay slips under the Employment Act.

With thanks to Elizabeth Wong, Ramesh Selvaraj and Melissa Anne Teo of Allen & Gledhill LLP for their invaluable collaboration on this update.

Contributors

Image: Suzanne Horne
Suzanne Horne
Partner, Employment Law Department

Image: Kirsty Devine
Kirsty Devine
Associate, Employment Law Department

Image: Aashna Parekh
Aashna Parekh
Associate, Employment Law Department

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