Singapore HR Law Update 2018-2019 - Vernon Voon Partner 18 October 2018 - RHT Academy
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Singapore HR Law Update 2018-2019
> Vernon Voon Partner
18 October 2018
1
Discussion Topics:
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
21. Brief overview on Singapore employment law
> The Singapore employment law is primarily derived from the following
sources:-
- Singapore statutes - Case law
▪ Employment Act; ▪ Singapore;
▪ Industrial Relations Act; ▪ UK; and
▪ Trade Unions Act; ▪ Commonwealth.
▪ 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
3
statutes.1. Brief overview on Singapore employment law
> 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”).
41. Brief overview on Singapore employment law
> 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
51. Brief overview on Singapore employment law
> 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
6DOES EMPLOYEE FALL WITHIN THE EMPLOYMENT ACT?
(current position)
Statutory
Board or EMPLOYMENT ACT
Seafarers
Government Part IV applies to:- ALL PROVISIONS
Employees (OTHER THAN PART IV)
1) Workmen earning apply to:-
not more than
S$4,500 per month 1) PMEs earning up to
S$4,500 per month
2) Other employees
(other than workmen or 2) Workmen
PMEs) earning not
more than 3) Other employees
PMEs S$2,500 per month (other than seafarers,
domestic workers,
earning *Part IV n/a to PMEs government and
Domestic
more than statutory board
employees) Workers
S$4,500
per month
71. Brief overview on Singapore employment law
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
81. Brief overview on Singapore employment law
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)
92. Key employment terms
> 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.
102. Key employment terms
> 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)
11Key employment terms of an employment contract
1. Full name of employer 10. Fixed deductions per salary period
2. Full name of employee 11. (If different from #7) Overtime payment
3. Job title, and main duties and period
responsibilities 12. Overtime rate of pay
4. Date of start of employment 13. Other salary-related components, such as:
5. Duration of employment (If employee is on - Bonuses
- Incentives
fixed-term contract)
14. Leave entitlements, such as:
6. Working arrangements
- Annual leave
- Daily working hours (e.g. 8.30am – 6.00pm);
- Outpatient sick leave
- Number of working days per week (e.g. six);
- Hospitalisation leave
and
- Maternity leave
- Rest day (e.g. Saturday)
- Childcare leave
7. Salary period (what dates the payment is 15. Other medical benefits, such as:
for) - Insurance
8. Basic salary per salary period* - Medical benefits
- *For hourly, daily or piece-rated workers, - Dental benefits
employers should also indicate the basic rate 16. Probation period
of pay (e.g. $10 per hour, day or piece)
17. Notice period
9. Fixed allowances per salary period
123. Non-competition and non-solicitation clauses
> 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 13 a manner as he chooses”.3. Non-competition and non-solicitation clauses
> 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?
143. Non-competition and non-solicitation clauses
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
153. Non-competition and non-solicitation clauses
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)
163. Non-competition and non-solicitation clauses
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)
173. Non-competition and non-solicitation clauses
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.
183. Non-competition and non-solicitation clauses
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.
19Garden 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
204. 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
214. Amendments to the Employment Act (wef 1 April 2019)
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
224. Amendments to the Employment Act (wef 1 April 2019)
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
23DOES EMPLOYEE FALL WITHIN THE EMPLOYMENT ACT?
(with effect from 1 April 2019)
Statutory
Board or EMPLOYMENT ACT
Seafarers
Government Part IV applies to:- ALL PROVISIONS
Employees (OTHER THAN PART IV)
1) Workmen earning apply to:-
not more than
S$4,500 per month 1) PMEs
2) Other employees 2) Workmen
(other than workmen or
PMEs) earning not 3) Other employees
more than (other than seafarers,
S$2,600 per month domestic workers,
government and
*Part IV n/a to PMEs statutory board
employees)
Domestic
Workers
244. Amendments to the Employment Act (wef 1 April 2019)
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
254. Amendments to the Employment Act (wef 1 April 2019)
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
264. Amendments to the Employment Act (wef 1 April 2019)
What this means to you as an employer
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
274. Amendments to the Employment Act (wef 1 April 2019)
What this means to you as an employer
• 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
284. Amendments to the Employment Act (wef 1 April 2019)
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
295. Tripartite Alliance for Fair and Progressive
Employment Practices
> 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.
305. Tripartite Alliance for Fair and Progressive
Employment Practices
> 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
315. Tripartite Alliance for Fair and Progressive
Employment Practices
> 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
325. Tripartite Alliance for Fair and Progressive
Employment Practices
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
Employment Practices
335. Tripartite Guidelines on Fair Employment Practices
> 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
345. Tripartite Guidelines on Fair Employment Practices
> Fair Employment Practices:
2. Job Advertisements
▪ Age
▪ Race
▪ Language
▪ Gender
▪ Marital Status and Family Responsibilities
▪ Religion
355. Tripartite Guidelines on Fair Employment Practices
> Fair Employment Practices:
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
365. Tripartite Guidelines on Fair Employment Practices
> Fair Employment Practices:
4. Remuneration
Employees should remunerate employees fairly, taking into
consideration:
▪ Ability
▪ Performance
▪ Contribution
▪ Experience
375. Tripartite Guidelines on Fair Employment Practices
> Fair Employment Practices:
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
385. Tripartite Guidelines on Fair Employment Practices
> Fair Employment Practices:
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
395. Tripartite Guidelines on Fair Employment Practices
> Fair Employment Practices:
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
405. Tripartite Guidelines on Fair Employment Practices
> Fair Employment Practices:
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
415. Tripartite Guidelines on Fair Employment Practices
> Fair Employment Practices:
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
425. Tripartite Alliance for Fair and Progressive Employment
Practices
Role of Employers Role of Employees
> Abide by the Tripartite Guidelines > Familiarise themselves with the
on Fair Employment Practices; Tripartite Guidelines on Fair
> Communicate the Guidelines and Employment Practices;
educate both management and > Exercise mutual-respect and
employees, so that they understand understanding at the workplace to
their roles and appreciate the enhance workplace harmony;
sensitivities and issue involved; > Seek to resolve grievances arising
> Create an environment of mutual from discrimination at work in a
respect and understanding and reasonable manner through
adopt employment practices that dialogue, discussion and
will enable employees to perform at established mechanisms.
their best.
436. Tripartite Standard on Contracting With Self-Employed
Persons
> 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
446. Tripartite Standard on Contracting With Self-Employed
Persons
> 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
45
Claims TribunalQUESTIONS?
46THANK YOU
47We’re social! Follow us and like us on:
RHTLaw Taylor Wessing
RHTLaw Taylor Wessing
@RHTLawTW
48Office details
>
RHTLaw Taylor Wessing
Six Battery Road
#10-01
Singapore 049909
Tel +65 6381 6868
Fax +65 6381 6869
Asia > Middle East > Europe> USA
International capabilities, delivered locally www.rhtlawtaylorwessing.com
© RHTLaw Taylor Wessing LLP
This publication is intended for general public guidance and to highlight issues. It is not intended to apply to specific circumstances or to constitute legal advice.
RHTLaw Taylor Wessing LLP (UEN No. T11LL0786A) is registered in Singapore under the Limited Liability Partnerships Act (Chapter 163A) with limited liability. RHTLaw Taylor Wessing
LLP is a Singapore law practice registered as a limited liability law partnership in Singapore ("The LLP"). It is a member of Taylor Wessing, a group which comprises a number of member
firms which are separate legal entities and separately registered law practices in particular jurisdictions. The LLP is solely a Singapore law practice and is not an affiliate, branch or
subsidiary of any of the other member firms of the Taylor Wessing group.
49You can also read
