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Singapore Employment Act

Here is an overview of the constitutional requirements that are considered as essential under the Singapore Employment Act. On this page, you will get complete information regarding employment contracts, benefits, wages, work hours, Central Provident Fund contributions, annual leaves and other related key concepts.

Singapore is a regional hub that allows the foreign nations to invest in here and is also known to have an open economy. The human resource here is diverse in nature and hence the government has well-structured and planned legislations which are present as the Employment Act, labor law, clarification of the all the terms and conditions of employment, the responsibilities and rights of the employees as per the contract of the service. The government assures that all the rights of the involved parties are protected in accordance with the Act and international legislations. The top most priority of the legislation is to develop a harmonious and proactive labor along with a good relationship with the government and industries.

BACKGROUND

The association and relationship among the employees and the employers is determined largely by the employment contract between them. In accordance to the Singapore Law, the parties are free to get into contract with their desired business parties and if any matter arises between them, they can resolve it by referring to the implied or express terms as per the contract. However, there are legislations that regulate the terms and conditions of the contracts so that they can easily prevent the unreasonable limitations and restrains between the involved parties. Specific statutes and common laws govern the terms of the employment contracts.

The Singapore Employment Act includes all the basic and principal statutes that regulate the employment. There are several other statutes that play an important role in the process. These include the Children Development Co-Savings Act (Cap 38A) (“CDCSA”), the Workplace Safety and Health Act (“WSHA”), the Retirement Age Act (Cap 274A) (“RA”), the Industrial Relations Act (Cap 136) (“IRA”) and the Trade Unions Act (Cap 333).

The Employment Act (Cap 91) (“EA”) was passed in the year 1968 and was amended lastly on January 1, 2009. The Ministry of Manpower in May 2012 declared a main review of the employment act which has lead to a considerable change in the employment landscape which is today departing from its conservative practices with respect to payment, time, type of employees, type of work etc.

ABOUT SINGAPORE EMPLOYMENT ACT

The Employment Act of Singapore is a law that manages and protects the right and duties of the employees under a Contract with a Singapore employer.

This employment Act covers almost all the employees despite the following:

  • Executive and managerial personnel
  • Seamen
  • Domestic Workers
  • Any individual employed by the government or Statutory Board

There is a part IV of the Employment Act that provides information for the rest days, conditions of services in different industries, working hours etc. and it is only applicable to:

  • People or workmen whose basic income is less than or equal to $4,500 monthly
  • The employees whose basic income is less than or equal to $2,000 monthly

As far as the executives and junior managers earning a basic monthly salary of $4,500 and below are concerned, they are only partially covered. Other provisions of the Employment Act do not apply to these employees.

ABOUT CONTRACT OF SERVICE

A Contract of Service is different from Contract for Services.

A Contract for Services is a contract between a client (company) and an independent contractor. There is no establishment of employer- employee relationship in this case.

A Contract of Service (Employment Contract) is a written or verbal agreement that expresses:

  • A person’s agreement to employ the other one as staff and
  • The approval of the other person to render services as a staff.

Hence, an internship contract or an apprenticeship can also be regarded as a Contract of Service.

HERE ARE THE SALIENT FEATURES OF AN EMPLOYMENT CONTRACT

  • Job scope and designation title
  • Employment period and commencement date of the employee
  • Working hours
  • Code of conduct
  • Probation clause
  • Employee benefits
  • Remuneration benefits
  • Termination

DESIGNATION TITLE AND JOB SCOPE

The contract must clearly reveal the designation and job scope to be rendered by the employee.

EMPLOYEE’S COMMENCEMENT DATE AND EMPLOYMENT PERIOD

If an employee does not turns up to the work place even after singing the Employment Contract, the Employment Act is no longer applicable. It is due to the fact that the employer-employee relationship did not begin.

HOURS OF WORK AND OVERTIME

The employment Contract must clearly reveal

  • The daily hours of work
  • The number of rest days in a week
  • The number of working days in a week

If you are an employee who is covered under the part IV of Employment Act, your working hours cannot exceed eight hours in a day or 44 hours in a week.

The Employers who wish their staff to work for 12 hours on daily basis, they are required to apply with the Ministry of manpower for overtime exemption in accordance to the Section 40 of Employment Act.

PROBATION CLAUSE

There are no clauses in the Singaporean Employment Act that deals with the probation period of the employees.

However, there is a standard trend of having a probation period of 3 to 6 months which is followed by most of the employers to judge the performance of the new employees.

REMUNERATION PACKAGE

There is no such law that states about the implementation of a minimum wage.

If the employer is not able to pay the salary of an employee, it is regarded as an offence with respect to the provisions and laws of the Employment Act. The employees who do not get their salary or wages can report their employers for investigation to MOM. The salary of the employee should be paid within the 7th day of working as per the contract of service after the last day of the previous paid salary. The additional payments should also be paid within the 14 days with respect to the last day of the salary period within which the overtime work was done.

EMPLOYEE BENEFITS

Among the various employee benefits in Singapore, some of the major ones include medical leave, annual leave, healthcare benefits, staff incentives, retirement fund contributions, additional bonuses and maternity as well as childcare benefits.

ANNUAL LEAVE

In order to avail the facility of annual leave, the employees should have served a period of at least 3 months as per the employment contract. The employees can get entitled to get a leave of 7 days annually in the first year of employment according to Ministry of Manpower. The standard leave period in the country is 14-25 days annually but it can vary with different companies.

MEDICAL LEAVE AND HEALTH CARE BENEFITS

An employee can get entitled to avail the medical leave facilities as per the Employment Act if the following formalities are fulfilled.

  • The service period of the employee with employer should be a minimum of three months.
  • It is essential that he should report his absence within 48 hours to the employer.
  • The medical leave application is approved by the doctor, dentist or a general practitioner via medical certificate which is commonly called as MC in the country.

However, the period of hospitalization and medical leave is greatly affected by the service duration of the employee. The employees who have completed a term of three months can get the medical leave of 5 days and hospitalization leave of 15 days. However, the maximum number of leaves for hospitalization and medical leave are 60 days and 14 days.

MATERNITY LEAVE

As per the Child Development Co-Savings Act in Singapore, a female employee can avail the facility of 16 weeks of paid maternity leave if the following conditions are fulfilled.

  • The parents of child are lawfully married
  • Child is a citizen of Singapore
  • The employee has been in service for a minimum of 90 days prior to child birth or
  • The child’s mother has been self employed continuously for a minimum period of 90 days prior to child birth and has not left her source of income during the maternity period.

If the mother is single and the child to be born is not a Singaporean or both the parents belong to another country and are employed in Singapore, the women is entitled to a maternity leave of 12 weeks according to the Employment act no matter it is on a contractual basis or full time.

CHILDCARE AND INFANT CARE LEAVE

According to Child Development Co-Savings Act, an employee can take infant care leave for 6 days and a childcare leave of 6 days on an annual basis, if all the following conditions are fulfilled.

  • the employee has been in service under the employer for a minimum for three months
  • Infant care leave: child below 2 years
  • Childcare leave: child should not be older than seven years on or after 31 Oct 2008.
  • The parents of the child are lawfully married
  • The child should be a Singaporean Citizen
  • If the source of working of the parent is self-employment, the term of engagement should be at least 3 months and should have a continuous income during the infant care or childcare period.
  • The initial three days of the child care are covered by the employer. The government covers the last three days (capped at $500 per day, including CPF).

RETIREMENT FUND CONTRIBUTIONS

According to the Employment Act, the employer is not liable to pay or provide retirement benefits to the employees until and unless it is declared in the employment contract.

The employers are however required to make CPF (Central Provident Fund) in Singapore (both the employees and employers share) for Singapore Permanent resident staff and Singaporeans (including part-time as well as temporary) within 14 days from the completion of the month at the preset rates of the CPF Act.

There are some people who are excused from making the CPF contributions:

  • Workers from foreign working on S Pass, temporary work permits and Singapore Employment Pass
  • Self-employees professionals and sole-proprietors
  • Overseas Singaporeans

STAFF INCENTIVES AND BONUSES

There are several Singapore Companies that offer incentives to their staff in terms of monetary bonuses. This is done with the sole motive to encourage the employees to deliver their best. The Employment contract carries all the information regarding the bonuses and incentives that an employee is entitles to pay.

In Singapore, there are 3 types of incentives. These include the bonus, variable payment and the AWS.

The AWS or the Annual Wage Supplement is the 13th month payment or the bonus.

The bonus can be looked upon as a payment that is rewarded to the employees for their excellent performance. It is generally paid at an annual basis at the completion of the financial year.

Variable payment is however similar to that of the bonuses and is generally rewarded to the employees for their contributions in enhanced productivity of the business.

The employees are liable to pay any of these incentives to the employees if it is stated in the Employment contract.

CODE OF CONDUCT

The employer cannot change the terms and conditions of the Employment Contract without the consideration and agreement of employee. If any of the parties does not agree with any of the terms and conditions, both the parties should try to negotiate for mutual agreement.

TERMINATION

The employee and employer both can terminate the Employment Contract. In accordance to the notice period, any of the parties must give a written notice for terminating the contract.

If either the employee or the employer wish to terminate the contract prior to the desired notice period, wither of them are required to pay a sum equal to that of the salary earned during that notice period.

The employer as well the employee can terminate the contract if any of the parties violate the terms of the employment contract.

The employer has no rights to reject the employee’s resignation. Not allowing the employee to resign from his service is considered as an offence and is punishable by a fine which cannot be more thanS$5,000. An imprisonment of 6 months can also be the punishment in this regard.

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