8 things you should know about the updated Singapore Employment Act

The Employment Act is Singapore's main labour law that seeks to ensure reasonable employment standards while balancing businesses' need to stay competitive.

With a greater push for better laws to protect workers mooted by the National Trades Union Congress, public consultations and tripartite evaluated by employers, unions and the Government, the Employment Act is slated to change in favour of better workplace protection.

1.      On 1 April 2014, PMEs earning up to $4,500 will have general protection such as unfair dismissal redress, paid public holidays, paid sick leave and hospitalisation leave.

2.      PMEs earning up to $4,500 must have served the same employer for at least 12 months to be eligible for redress against unfair dismissal where notice is given.

3.      On 1 April 2014, non-workmen (e.g clerks, sales staff) earning between $2,000 to $2,500 will have working hours-related protection such as hours of work, overtime (OT) and work on rest day pay and annual leave.

4.      The OT rate payable for non-workmen will be capped at a monthly salary of $2,250.

5.      Stiffer penalties for failure to pay salaries include a first-time offender fine of between $3,000 and $15,000 and/or maximum 6 months’ jail. Subsequent offences will receive a fine of between $6,000 and $30,000 and/or maximum 12 months’ jail.

6.      Employers are not allowed to deduct more than 25% of an employee’s salary for accommodation, amenities and services.

7.      From 1 April 2015, the period for which eligible workers are not entitled to retrenchment benefits will be reduced from 3 to 2 years.

8.      MOM is currently in their second phase of review to look into increasing workplace protection for term contract workers, outsourced workers, freelancers and foreign workers.

HR practitioners should keep themselves up to date with the changes (and Employment Act Phase 2 reviews) to avoid running afoul of the law.

Businesses should also keep in mind that besides having a law-abiding workplace, creating nurturing and conducive workplace environments which employees feel safe to work at can lead to increased productivity.

Try not to commit these five management mistakes which will lead to talent attrition and reduce your business’ competitiveness.