singapore hr law update 2018-2019...2 1. brief overview on singapore employment law; 2. key...

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18 October 2018

> Vernon Voon Partner

Singapore HR Law Update 2018-2019

22

1. Brief overview on Singapore employment law;

2. Key employment terms of an employment contract (effective 1 April

2016)

3. Non-competition and non-solicitation clauses and its enforceability in

terms of the geographical area, scope of services and length

4. Amendments to the Employment Act (with effect from 1 April 2019)

5. TAFEP and Tripartite Guidelines on Fair Employment Practices

6. Tripartite Standard on Contracting with Self-Employed Persons

Discussion Topics:

33

> The Singapore employment law is primarily derived from the following

sources:-- Singapore statutes

▪ Employment Act;

▪ Industrial Relations Act;

▪ Trade Unions Act;

▪ Retirement and Re-employment Act;

▪ Central Provident Fund Act;

▪ Work Injury Compensation Act;

▪ Workplace Health and Safety Act;

▪ Employment of Foreign Manpower Act;

▪ Personal Data Protection Act 2012; and

> Note: The common law and equity principles of English and

Commonwealth case law especially those from Malaysia, Hong Kong,

Australia and New Zealand may be applicable where Singapore

legislation is in pari materia with those statutes.

- Case law

▪ Singapore;

▪ UK; and

▪ Commonwealth.

1. Brief overview on Singapore employment law

44

> Some important organisations that employers and employees should be

familiar with:

- Ministry of Manpower (“MOM”);

- National Trades Union Congress (“NTUC”);

- Singapore National Employers Federation (“SNEF”);

- Tripartite Alliance for Fair and Progressive Employment Practices

(“TAFEP”);

- Labour Court, MOM;

- Employment Claims Tribunal (“ECT”); and

- Industrial Arbitration Court (“IAC”).


55

> The Employment Act is Singapore's main labour law.

> It provides for the basic terms and conditions at work for employees

covered by the Act.

> Currently, employees under a contract of service with an employer are

covered under the Employment Act unless the employee is a:

- Manager or executive with monthly basic salary of more than $4,500;

- Seafarer;

- Domestic worker; and

- Statutory board employee or civil servant


66

> Additionally, if the employee

> It provides for the basic terms and conditions at work for employees

covered by the Act.

> Currently, employees under a contract of service with an employer are

covered under the Employment Act unless the employee is a:

- Manager or executive with monthly basic salary of more than $4,500;

- Seafarer;

- Domestic worker; and

- Statutory board employee or civil servant

> In addition, vulnerable employees will be covered

under Part IV of the Act


77

DOES EMPLOYEE FALL WITHIN THE EMPLOYMENT ACT? (current position)

Statutory

Board or

Government

Employees

PMEs

earning

more than

S$4,500

per month

Seafarers

Domestic

Workers

EMPLOYMENT ACT

Part IV applies to:-

1) Workmen earning

not more than

S$4,500 per month

2) Other employees

(other than workmen or

PMEs) earning not

more than

S$2,500 per month

*Part IV n/a to PMEs

ALL PROVISIONS

(OTHER THAN PART IV)

apply to:-

1) PMEs earning up to

S$4,500 per month

2) Workmen

3) Other employees

(other than seafarers,

domestic workers,

government and

statutory board

employees)

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Key statutory protections under core provisions of the Employment Act -

current

1. Minimum period of notice of termination (must be the same for both

parties) – section 10;

2. Unfair dismissal recourse – section 14

3. Transfer of employment protections – section 18A

4. Limitation on deductions for each salary period – section 32

5. Maternity and childcare leave – section 76 and 87A

6. 11 days paid public holiday – section 88

7. 14 days paid sick leave and 60 days paid hospitalisation leave –

section 89

8. Pay slips – section 96


99

Further statutory protections under Part IV of the Employment Act

(vulnerable employees) - current

> Applicable to workmen earning a basic salary not exceeding $4,500.00

and non-workmen earning a basic salary not exceeding $2,500.00 per

month

1. Overtime pay

2. Minimum 7 days of annual leave

3. Maximum number of hours of work a week (44)

4. Maximum number of hours or work a day (8)

5. Maximum period of hours without a break (6)


1010

> There are amendments to the Employment Act which came into effect on

1st April 2016.

> All employers will now be required to issue itemised payslips and key

employment terms (“KET”) to employees covered under the Employment

Act.

> All employees covered by the Employment Act who have a continuous

employment of at least 14 days shall be provided with KET in writing no

later than 14 days after the start of their employment.

> Since both the employer and employee have a copy of the terms, this will

help assure employees of their regular income and main employment

benefits which will prevent misunderstandings and minimise disputes

between employers and employees at the workplace.

2. Key employment terms

1111

> There will also be a new framework under the amendments to the

Employment Act to treat less severe breaches of the Employment Act as

“civil breaches” which attract administrative penalties such as:

- Failure to issue itemised payslips.

- Failure to issue KETs in writing.

- Failure to maintain detailed employment records.

- Provision of inaccurate information to the Commissioner for Labour or

inspecting officers without the intent to defraud and mislead.

- Administrative penalties include payments of small fines ($100 to $400

depending on which breach and whether first or subsequent offence)

2. Key employment terms

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1. Full name of employer

2. Full name of employee

3. Job title, and main duties and

responsibilities

4. Date of start of employment

5. Duration of employment (If employee is on

fixed-term contract)

6. Working arrangements- Daily working hours (e.g. 8.30am – 6.00pm);

- Number of working days per week (e.g. six);

and

- Rest day (e.g. Saturday)

7. Salary period (what dates the payment is

for)

8. Basic salary per salary period*- *For hourly, daily or piece-rated workers,

employers should also indicate the basic rate

of pay (e.g. $10 per hour, day or piece)

9. Fixed allowances per salary period

10. Fixed deductions per salary period

11. (If different from #7) Overtime payment

period

12. Overtime rate of pay

13. Other salary-related components, such as:- Bonuses

- Incentives

14. Leave entitlements, such as:- Annual leave

- Outpatient sick leave

- Hospitalisation leave

- Maternity leave

- Childcare leave

15. Other medical benefits, such as:- Insurance

- Medical benefits

- Dental benefits

16. Probation period

17. Notice period

Key employment terms of an employment contract

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> These are post-termination restraint of trade clauses drafted with the aim

of restraining an employee from engaging in particular activities after his

employment with his employer terminates.

> 4 main kinds:

- non-competition with the business of the ex-employer

- non-solicitation of customers of the ex-employer

- non-solicitation of employees of the ex-employer

- non-dealing with customers of the ex-employer

> The classic definition of a restraint of trade clause can be found in

Petrofina (Great Britain) Ltd v Martin [1966] Ch 146 and Esso Petroleum

Co Ltd v Harper’s Garage (Stourport) Ltd [1968] AC 269 as “one in which

a party (the covenantor) agrees with any other party (the covenantee) to

restrict his liberty in the future to carry on trade with other persons

not parties to the contract in such a manner as he chooses”.

3. Non-competition and non-solicitation clauses

1414

> A bare covenant not to compete will not be upheld (Smile Inc Dental

Surgeons v Lui Andrew Stewart [2011] SGHC 266).

> The test to see whether or not a restraint of trade clause should be upheld

as valid in Singapore is the three-fold test found in Man Financial (S) Pte

Ltd v Wong Bark Chuan David [2008] 1 SLR(R) 663 of which all three

limbs had to be satisfied, namely:

1. Is there a legitimate proprietary interest to be protected?

2. Is the restrictive covenant reasonable in reference to the interests of

the parties?

3. Is the restrictive covenant reasonable in reference to the interests of

the public?


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Legitimate proprietary interest

> In order to establish reasonableness as between the parties, the

employer must first of all show that it/he has some legitimate proprietary

interest to protect.

> Examples of legitimate proprietary interest would include maintaining a

stable workforce such as preventing a former employee from soliciting

other staff away from the company (Man Financial); and preventing the

former employee from doing business with a client even if it was the client

who approached the former employee (John Michael Design plc v Cooke

[1987] ICR 445)

> Other examples include protection of trade secrets, or existing customer

and employee connections

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Reasonable between the parties

> In order for a restraint of trade clause to be reasonable as between

parties, it must not be wider than is necessary to protect the legitimate

proprietary interest of the ex-employer.

> There are three main parameters:

- Geographical Area

- Scope of Activities Prohibited; and

- Period of Limitation.

1. Geographical Area

- World wide restraint unreasonable (Hengxin Technology Ltd v Jiang

Wei Suit No. 161 of 2008, Singapore High Court, unreported)

- Whole of Singapore could be reasonable depending on industry

(Heller Factoring (Singapore) Ltd v Ng Tong Yang [1998] 3 SLR 299)

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2. Scope of Activities Prohibited

- All of employer’s business interests unreasonable if former employee

employed in only one. (Buckman Laboratories (Asia) Pte Ltd v Lee Wei

Hoong [1999] 1 SLR (R) 205)

3. Period of Limitation

- Case-by-case.

- Longest period upheld as reasonable is 3 years (CLASS Medical

Centre Pte Ltd v Ng Boon Ching [2010] 2 SLR 386).

- Restrictive covenants with no time limits are unreasonable (Smile Inc

Dental Surgeons Pte Ltd v. Lui Andrew Stewart [2012] SGCA 39)

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3. Period of Limitation (best practices)

- rough rule of thumb:

i. rank and file – 6 to 12 months

ii. senior management – up to 24 months

All restraint of trade clauses prima facie void unless they satisfy the test of

reasonableness stated above. It is for the employer to prove that the

clauses satisfy this 2-stage test.

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Reasonable with respect to the interests of the Public

> The third requirement in order for the clause to be upheld is that it must

be reasonable from the viewpoint of public interest.

> In Thomas Cowan & Co Ltd v Orme [1961] MLJ 41, the employer was

carrying on business as pest exterminators and fumigators and the former

employee was prohibited from setting up similar business in competition

with the employer after he left employment.

> The court refused to enforce the clause because the employer was the

only fumigator in Singapore at that time and such a prohibition would give

the employer a monopoly in Singapore which was against public interest.

2020

Garden leave clauses

Advantages over standard non-compete clauses

> More likely to be enforced by the Courts as employee is being paid while

on garden leave

> Putting the employee out of work during the period of garden leave may

make him less attractive to competitors, as he will lost touch with

customers and employees, and also his skills may not be up-to-date by

the end of the garden leave period

> The Court may grant a shorter duration of garden leave (compared to

non-compete clauses which generally stand or fall in their entirety

> Employee is still in a contractual relationship with employee during

garden leave period and the implied duty of good faith applies during this

period

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4. Amendments to the Employment Act (wef 1 April 2019)

Key Amendments

> Extension of core provisions to cover all PMETS (previously those

earning a basic salary of more than $4,500.00 per month are not covered)

> Extension of Part IV of the Employment Act to cover non-workmen

earning a basic salary of not more than $2,600.00 per month (up from

$2,500.00 per month)

> Annual leave entitlement moved from Part IV to core provisions

> Employment Claims Tribunal to hear unfair dismissal claims as well as

salary-related disputes (currently MOM hears unfair dismissal claims and

ECT hears salary-related disputes)

> Minimum threshold of period of employment for PMETs dismissed with

notice or salary in lieu of notice to be entitled to claim unfair dismissal

reduced from 12 months to 6 months

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Other Amendments

> Amendment of definition of “dismissal” to include constructive dismissal

> Extension of medical professionals who can certify paid sick leave from

medical practitioners appointed by the employer to all medical

practitioners

> Extension of employer’s right to grant day off in lieu of extra pay where

employee works on a public holiday from with respect to PMETs only to

all employees

> Narrower scope for paid hospitalisation leave – employee must actually

be warded in an approved hospital to claim paid hospitalisation leave

(currently they only need to be certified to be ill enough to need to be

hospitalized without the need to actually be hospitalized to claim this

entitlement

2323


Other Amendments

> MOM may require any employer to furnish details of any retrenchment by

notification in the Gazette and the employer must comply with every

requirement contained therein

> However non-compliance is only a civil contravention attracting an

administrative penalty only

Key Consequential Amendment

> Under Employment Claims Act 2016, the Minister may issue guidelines

on what constitutes wrongful dismissal in the form of tripartite

guidelines, and the ECT will have regard to this when adjudicating

wrongful dismissal claims

2424

DOES EMPLOYEE FALL WITHIN THE EMPLOYMENT ACT? (with effect from 1 April 2019)

Statutory

Board or

Government

Employees

Seafarers

Domestic

Workers

EMPLOYMENT ACT

Part IV applies to:-

1) Workmen earning

not more than

S$4,500 per month

2) Other employees

(other than workmen or

PMEs) earning not

more than

S$2,600 per month

*Part IV n/a to PMEs

ALL PROVISIONS

(OTHER THAN PART IV)

apply to:-

1) PMEs

2) Workmen

3) Other employees

(other than seafarers,

domestic workers,

government and

statutory board

employees)

2525


Reasons for amendments

Structural changes in employment landscape in Singapore:

> PMETs now form 56% of Singapore’s workforce, up from 49% in 2007

> Given the global technological disruption of industries and Singapore’s

push towards a digital economy, more employees will be categorised

as PMETs going forward

> Distinction between blue collar (non-PMET) and white collar (PMET)

workers are gradually becoming blurred, it not becoming irrelevant

altogether

2626


What this means to you as an employer

Protection under section 14 of the Employment Act (for wrongful

dismissal) will now extend to ALL employees:

- Employers will need just cause or excuse (for example, bad

performance, misconduct, business downturn or a restructuring)

before terminating any employee, whether with or without notice

or salary in lieu of notice, and whether the employee is a PMET

or not

- All employees can make wrongful dismissal claims together with

salary-related disputes all at one stop – the ECT

2727



With effect from 1 April 2019, all employees (including part-time

employees) will be covered for the following core protections:

• 11 paid holidays (part-time employees pro-rated accordingly)

• 14 days of paid sick leave (part-time employees pro-rated

accordingly)

• 60 days of paid hospitalisation leave (part-time employees pro-

rated accordingly)

• Timely payment of salary

• Maternity protection and childcare leave (part-time employees pro-

rated accordingly)

• Statutory protection against wrongful dismissal

2828



• Right to be given payslips and in a timely manner

• Right to preservation of existing employment terms upon transfer

of employment due to sale of business or business restructuring

• Right to be informed in writing of key employment terms in

employment contract

2929


Impact on existing employment contracts

> “Every term of a contract of service which provides a condition of

service which is less favourable to an employee than any of the

conditions of service prescribed by this Act shall be illegal, null

and void to the extent that it is so less favourable.” – section 8 of

the Employment Act

> No necessity to enter into fresh employment contracts with

existing employees, but new employment contracts should

reflect the new amendments where possible

3030

> The Tripartite Alliance for Fair and Progressive Employment Practices

(“TAFEP”)

- Formed in May 2006 by 3 parties: MOM, NTUC and SNEF

- Promotes the adoption of fair, responsible and progressive employment

practices among employers, employees and the general public.

> TAFEP works in partnership with employer organisations, unions and the

government to create awareness and facilitate the adoption of fair,

responsible and progressive employment practices.

> Vision: Fair, Responsible and Progressive Workplaces.

> Mission: To promote the adoption of fair, responsible and progressive

employment practices so as to enable employees to realise their full

potential and help their employers achieve organisational excellence.

5. Tripartite Alliance for Fair and Progressive

Employment Practices

3131

> Issues 3 pronouncements:

1. GUIDELINES

The strongest recommendations where action may be taken by MOM

for non-compliance e.g. Tripartite Guidelines on Fair Employment

Practices

2. STANDARDS

Next strongest set of recommendations intended to set best practices

for employers e.g. Tripartite Standard on Contracting with Self-

Employed Persons. Can use Tripartite Standards logomark in their job

advertisement and marketing collaterals. Standards may be upgraded

to Guidelines



3232

> Issues 3 pronouncements:

3. ADVISORIES

Weakest set of recommendations. Provides a gentle nudge to

employers to improve their employee engagement in new areas e.g.

Tripartite Advisory on Flexible Work Arrangements. Advisories may be

upgraded to Tripartite Standards and Guidelines



3333

The five principles of Fair Employment Practices are:

1. Recruit and select on the basis of merit (such as skills, experience or

ability to perform the job) regardless of age, race, gender, religion,

marital status and family responsibilities, or disability

2. Treat employees fairly and with respect and put in place progressive

human resource management systems

3. Provide employees with equal opportunities to be considered for

training and development based on their strengths and needs, to help

them achieve their full potential

4. Reward employees fairly based on their ability, performance,

contribution and experience

5. Abide by labour laws and adopt the Tripartite Guidelines on Fair




3434

>Fair Employment Practices:

1. Consistent and Fair Selection Criteria, for example:

▪ Educational qualifications

▪ Type of experience e.g. marketing experience

▪ Amount of experience

▪ Specific skills e.g. IT proficiency

▪ Willingness to commit to certain job specifics, e.g. travel or shift

work

As long as they are able to perform the requirements of the job, employers

should consider disabled applicants on a consistent and fair basis

5. Tripartite Guidelines on Fair Employment Practices

3535


2. Job Advertisements

▪ Age

▪ Race

▪ Language

▪ Gender

▪ Marital Status and Family Responsibilities

▪ Religion


3636


3. Hiring and Developing a Singaporean Core

Employees should:

▪ Ensure all jobs advertised must be open to Singaporeans

▪ Work with educational institutions, career centres and recruitment

centres to attract and recruit Singaporeans

▪ Develop skills and expertise of Singaporeans for higher level jobs


3737


4. Remuneration

Employees should remunerate employees fairly, taking into

consideration:

▪ Ability

▪ Performance

▪ Contribution

▪ Experience


3838


5. Appraisal, Promotion, Posting and Training

▪ Employees should adopt appraisal systems which are fair and

objective, with measurable standards for evaluating job

performance

▪ This would help ensure employees are assessed and promoted

based on merit

▪ Where opportunities for posting and training arise, all eligible

employees should be informed of eligibility criteria which are to be

capable of objective assessment


3939


6. Dismissals

▪ Proper records of employees’ performance to be kept

▪ Decision to dismiss to be based on documented poor performance

or conduct

▪ Employee should be given notice of poor performance or conduct

and given an opportunity to improve

▪ Before a decision is made to dismiss an employee, an enquiry

should be conducted to allow the employee to present his or her

case


4040


7. Retrenchments

▪ Where retrenchment is necessary, to be carried out responsibly in

consultation with union (if company is unionised) or with employees

affected (if company is not unionised)

▪ Under section 45 of the Employment Act, no employee who has

been in continuous service with an employer for less than 2 years

shall be entitled to any retrenchment benefit on his dismissal on the

ground of redundancy or by reason of any reorganisation of the

employer’s profession, business, trade or work


4141


8. Grievance Handling

▪ There should be in place a mechanism for handling of grievances at

the workplace

▪ SOP should prescribe procedures for making a compliant, handling

the complaint and an internal appeal process which shall be final

▪ Confidentiality must be strictly observed and the grievance handling

process documented properly

▪ Employers should make known the grievance handling process to

all employees and encourage them to utilise it


4242


8. Grievance Handling

▪ Provides a safety valve to handle internal grievances before it blows

out of proportion

▪ Opportunity to clarify misunderstandings/redress actual

wrongdoings

▪ Helps maintain a healthy relationship between employer and

employee

▪ Improves the reputation of the company as an employee-centric

organisation, and may help reduce employee turnover


4343

Role of Employers

> Abide by the Tripartite Guidelines

on Fair Employment Practices;

> Communicate the Guidelines and

educate both management and

employees, so that they understand

their roles and appreciate the

sensitivities and issue involved;

> Create an environment of mutual

respect and understanding and

adopt employment practices that

will enable employees to perform at

their best.

Role of Employees

> Familiarise themselves with the

Tripartite Guidelines on Fair

Employment Practices;

> Exercise mutual-respect and

understanding at the workplace to

enhance workplace harmony;

> Seek to resolve grievances arising

from discrimination at work in a

reasonable manner through

dialogue, discussion and

established mechanisms.

5. Tripartite Alliance for Fair and Progressive Employment

Practices

4444

> Issued jointly by the Ministry of Manpower, the National Trades Union

Congress, and the Singapore National Employers Federation on 5

March 2018 pursuant to the Tripartite Workgroup’s Report on Support

for Self Employed Persons published on 15 February 2018 and

accepted by the Government on 20 February 2018

> Sets best practices for contracting with Self-Employed Persons

(SEPs)

> Who are SEPs? They are persons who operate their own trade or

business, and are their own bosses e.g. taxi drivers, real estate

agents, free-lance designers, photographers and IT consultants

6. Tripartite Standard on Contracting With Self-Employed

Persons

4545

> Recommendations: employers should contract with SEPs via a written

agreement which should set out at least the following 5 key terms:

1. Names of contracting parties

2. Parties’ obligations such as nature of services to be provided (e.g.

outcome, duration and location)

3. Payment:

a. Amount of payment due for each product or service;

b. Due date of payment (e.g. a fixed number of days after SEP

issues an invoice for delivered service or milestones, or periodic

payments for service rendered during that period

4. If terms on variation of the agreement are provided for, how either

party can vary the agreement (e.g. by mutual agreement)

5. If terms for resolving disputes are provided for, the option of mediation

should be made available, without it being a barrier to either party

bring any dispute directly to the Small Claims Tribunal

6. Tripartite Standard on Contracting With Self-Employed

Persons

4646

QUESTIONS?

4747

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4848

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singapore hr law update 2018-2019...2 1. brief overview on singapore employment law; 2. key...

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