101A Upper Cross Street

#13-11, People’s Park Centre

Singapore 058358

I. Introduction

Singapore is a global business hub renowned for its business-friendly legal environment, making it an attractive destination for local and foreign corporations. It is thus imperative for corporations operating in the country to understand the employment laws and regulations.

This guide aims to highlight the key aspects of Singapore employment law to assist corporations and individuals with navigating the legal landscape.

If there are any suggestions and/or legal queries, please feel free to contact the author, Waltson Tan, at: waltson@tjylaw.com.sg

II. Key Employment Legislation, Regulations and Guidelines

Employment Act 1968

The Employment Act 1968 of Singapore (“Employment Act”) is the primary employment legislation which provides the statutory employment terms and conditions for employees in Singapore, including full-time, part-time, contract and temporary employees.

There are certain parts of the Employment Act (e.g. Part 4 of the Employment Act) which do not apply to certain employees, such as those employed in managerial or executive positions, and which only apply to workmen who are in receipt of a salary not exceeding S$4,500 a month and employees who receive a salary not exceeding S$2,600 a month.

The Employment Act stipulates that an employer must give each employee a written record of key employment terms, within 14 days after the date of commencement of employment. Some of the key employment terms include: (a) the employee’s job title; (b) a description of the main duties and responsibilities of the employee; (c) the first day of the period of employment; (d) daily working hours, number of working days per week and rest days; and (e) salary period, etc. Failure to provide the full list of key employment terms as prescribed under the Employment Act is an offence under Singapore law.

Employment of Foreign Manpower Act 1990

The Employment of Foreign Manpower Act 1990 of Singapore regulates the employment of foreign employees in Singapore and protects their well-being. It sets out the conditions for the application, granting and cancellation of work passes to foreign employees, including Employment Passes, S Passes and Work Permits.

Other key legislation

The other salient legislation which are relevant include: (a) the Retirement and Re-Employment Act 1993; (b) the Workplace Safety and Health Act 2006; (c) the Work Injury Compensation Act 2019; (d) the Child Development Co-Savings Act 2001; (e) the Central Provident Fund Act 1953; (f) the Industrial Relations Act 1960; and (g) the Personal Data Protection Act 2012.

Key guidelines and policies

The Tripartite Alliance for Fair & Progressive Employment Practices (“TAFEP”) is an organisation set up to promote the adoption of fair, responsible, and progressive employment practices in Singapore. The Ministry of Manpower of Singapore (“MOM”) (being the key employment regulator in Singapore) is a part of TAFEP, together with the National Trades Union Congress (NTUC) and the Singapore National Employers Federation (SNEF).

TAFEP issued the Tripartite Guidelines on Fair Employment Practices (“Tripartite Guidelines”) to help organisations adopt fair and merit-based employment practices. All employers in Singapore are expected to adhere to the Tripartite Guidelines.

While the Tripartite Guidelines are not legally binding per se, the MOM will take action against employers who do not adhere to the Tripartite Guidelines. Possible consequences which employers may be subject to include having their work pass privileges curtailed (e.g. such employers could be debarred from making and renewing work pass applications).

Some examples of compliant employment practices required by the Tripartite Guidelines include the following: (a) employers should consider the workforce in Singapore fairly for job opportunities (as set out in the Fair Consideration Framework (FCF) within the Tripartite Guidelines); and (b) employers should not discriminate candidates based on non-job-related characteristics, such as age, sex, nationality or race.

Dispute resolution

Employees who wish to claim against their employers for unfair employment practices or breaches of employment legislation may first approach the Tripartite Alliance for Dispute Management (“TADM”) for mediation in relation to salary-related disputes and unfair dismissal claims. If the dispute remains unresolved, they may consider filing a claim at the Employment Claims Tribunal, which is a division of the State Courts of Singapore.

III. Employees’ Statutory Rights Under Singapore Law

Minimum leave entitlement

For conciseness, the table below sets out the non-exhaustive minimum paid leave entitlement for full-time employees in Singapore. Part-time employees are entitled to these benefits on a pro-rata basis.

Save for public holidays, the other leave entitlements only accrue if the employee has been employed by the employer for at least 3 months.

If you are an employer or employee who requires further guidance on the exhaustive list of minimum paid leave entitlement for employees in Singapore, you may wish to consult a legal adviser.

Additionally, under the Employment Act, workmen (e.g. employees who perform manual labour) earning not more than S$4,500 per month and other employees earning not more than S$2,600 per month are entitled to additional benefits such as: (a) overtime pay (which shall be at least equal to the hourly basic rate of pay); (b) not being required to work more than 72 hours of overtime a month (except in limited circumstances); (c) being provided with at least 45 minutes of break in any continuous period of 8 hours; (d) not being required to work more than a maximum of 12 hours a day (except in limited circumstances); (e) having at least one day of unpaid rest day per week; and (f) having the option to carry forward any unused annual leave to the next 12 months.

IV. Central Provident Fund (CPF) Contributions

Pursuant to the Central Provident Fund Act 1953 (“CPF Act”), the CPF scheme (which is a statutory savings and pension scheme) applies to all employees who are Singapore Citizens or Singapore permanent residents. Contributions to the CPF scheme are mandatory for both employers and employees, and are based on the contribution rates prescribed by the CPF Act. In relation to most employees below the age of 55, the contribution rate is 17% and 20% for employers and employees respectively.

V. Termination of Employment and Dispute Resolution

In general, both employers and employees may terminate the employment either with: (a) notice; or (b) payment in lieu of notice (calculated based on the period in relation to which notice is not provided). The notice period required for such termination is usually stipulated in the employment agreement. If otherwise, the notice period provided in the Employment Act would apply. In these cases, employers and employees are not required to provide each other with the reason(s) for termination. The Employment Act provides that the length of the notice must be the same for both employer and employee.

If the employment agreement does not stipulate the notice period, the following table sets out the minimum prescribed notice period for the length of notice pursuant to the Employment Act:

Separately, employers may terminate an employee without notice for cause (e.g. gross misconduct). For an employer to terminate an employee without notice on grounds of misconduct inconsistent with the fulfilment of the express or implied conditions of the employee’s service, the employer may only do so after due inquiry.

On the other hand, employees may terminate their employment in the event of the employer’s repudiatory breach of the employment contract (e.g. constructive dismissal). An example of constructive dismissal would be when the employer substantially changes the employee’s job responsibilities and job scope.

VI. Retrenchment and Retrenchment Benefits

Pursuant to the Employment (Retrenchment Reporting) Notification 2019 (“ERRN”), “retrench”, in relation to an employee, means to terminate the employee’s contract of service at the initiative of the employer because of redundancy or any reorganisation of the employer’s profession, business, trade or work.

Pursuant to the ERRN, employers with businesses registered in Singapore and have at least 10 employees are required to notify MOM when any employee is notified of retrenchment. The notification must be submitted within 5 working days after the employee is notified about their retrenchment. Employers may submit their notification at: https://www.mom.gov.sg/eservices/services/notify-for-retrenchment-exercise

According to the MOM, an employer who terminates an employment contract with no plan to fill the vacancy any time soon is presumed to have retrenched the employee. The requirement to notify MOM of retrenchment applies to permanent employees, as well as contract employees with full contract terms of at least 6 months.

It is not mandatory under Singapore law for employers to pay retrenchment benefits to employees in Singapore. The Employment Act expressly provides that employees who have been in continuous service with an employer for less than 2 years are not entitled to any retrenchment benefit on his or her dismissal on the ground of redundancy.

Notwithstanding the foregoing, The Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment issued by TAFEP provides that the prevailing norm is to pay a retrenchment benefit varying between 2 weeks to 1 month of salary for each year of service, depending on the financial position of the company and taking into consideration the industry norm. However, in unionised companies where the quantum of retrenchment benefit is stipulated in the collective agreement, the prevailing norm is 1 month salary for each year of service.

VII. Conclusion

Whilst this guide strives to provide a concise overview of the key aspects of Singapore employment law, the topics discussed herein are not exhaustive.

If you would like specific legal advice, please reach out to the author or any other experienced employment lawyer, who will be well-placed to answer your legal queries.

Staying updated and compliant with the ever-evolving employment law landscape in Singapore is imperative for the operation of successful and sustainable businesses.

Our firm specialises in advising employers and employees on their employment-related legal matters. We have experience in drafting employment agreements, and handling employment contract disputes, salary disputes, and dismissal related claims.

The author, Waltson Tan, is a corporate lawyer based in Singapore. He is qualified as an advocate and solicitor in Singapore and has more than seven years of post-qualification experience, including advising clients of a top international law firm on employment law-related matters.

Our firm also assists companies in Singapore to draft employee handbooks (also known as employee manuals). Such handbooks typically set out in detail the mission, policies, protocols, procedures and expectations of such companies.

Waltson also practises in the areas of mergers and acquisitions, private equity, joint ventures, investment funds and other general corporate and commercial transactions. He has also represented numerous leading multinational organisations on a broad spectrum of corporate, regulatory, cross-border restructuring and employment matters.

Prior to joining the firm, Waltson practised at some of the top law firms in Singapore and thereafter, at a leading international law firm, which was the second largest law firm in the United States and one of the ten largest in the world.

If you require further information and/or expert guidance on the above or any other area of law, you may wish to contact the author of the article, whose details are as follows:

Waltson Tan Director   T: +65 8079 0028 E: waltson@tjylaw.com.sg

Office address:   101A Upper Cross Street #13-11, People’s Park Centre Singapore 058358

Waltson Tan Director +65 8079 0028 waltson@tjylaw.com.sg

Office address: 101A Upper Cross Street #13-11, People’s Park Centre Singapore 058358