Singapore Budget 2018: Employment Act to cover all workers by April 1, 2019

Singapore

THE government is moving to drop the salary cap in the Employment Act so that it covers all workers - including professionals, managers and executives.

The move will bring 430,000 more professionals, managers, executives and technicians (PMETs) under the Employment Act, which was first introduced in 1968 to standardise and regulate the terms and conditions of employment in Singapore.

"With PMETs making up 56 per cent of the workforce now - going up to 65 per cent by around 2030 - it is timely to make a fundamental change to the coverage of the Employment Act," Manpower Minister Lim Swee Say told Parliament on Monday during the Budget debate.

Calling the move "good and sensible", the Singapore Business Federation (SBF) said: It is right that the provisions in the Employment Act cover all employees. The Employment Act is prescriptive, providing clear and unambiguous standards."

The SNF noted that "the nature of work in Singapore is changing to meet business needs, technology adoption, the demand to be family friendly and need for flexible arrangements". "We look forward to the review of the Employment Act with flexibility to support and protect workers as the nature of work transforms," it said.

The Act currently covers blue collar workers, including most technicians; non-manual workers, especially clerical staff; and PMETs earning below S$4,500 a month.

With the pay cap removed, Mr Lim said the coverage will extend to all workers, except public servants, domestic workers and seafarers who come under other Acts due to their nature of work.

Workers protected by the Employment Act will enjoy all core employee perks, including a minimum seven days' annual leave, 11 paid public holidays, 14 days of paid sick leave and 60 days of paid hospitalisation leave.

They will also enjoy maternity and childcare leave and will be protected against wrongful dimissal.

Mr Lim said his Ministry would seek Parliament's approval later this year to amend the Employment Act and put the changes into effect by April 1 next year.

The amendment will also extend more protection on hours of worker and overtime pay to more workers. Virtually all blue collar workers are already enjoying these under the current salary cap of S$4,500 for workmen. But Mr Lim said there's a need to raise the salary cap for non-workmen, clerical staff especially, from S$2,500 to S$2,600 to extend the coverage to half of the workforce.

For overtime pay in particular, the salary cap for non-workmen will be revised from S$2,250 to S$2,600. Mr Lim said about 100,000 non-workmen will benefit from the increase.

Another key change will involve shifting the hearing for wrongful dismissal claims from the Ministry of Manpower to the Employment Claims Tribunals (ECT), where salary-related disputes are adjudicated.

As dismissal-related claims are usually coupled with salary issues, Mr Lim said the move offers a "one-stop service" for employers and workers.

For more stories on Budget 2018, click here.

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