Changes to the MOM Employment Act from 1 April 2019

There will be changes to the employment act from 1 April 2019. The amendment to the employment act on 1 April 2019 will include the coverage of all employees, an enhanced dispute resolution and to allow business flexibility.

Today on 20th of November 2018, Minister for Manpower, Mrs Josephine Teo has announced amendments to the employment act.

As stated by the Minister, there are three key amendments

  • "First, we will extend core provisions of the employment act to cover all M&Es. This will mean that other than domestic workers, public officers and seafarers who will continue to be covered by other Acts and regulations due to their nature of work, all employees will enjoy the protection of employment act.

  • Second, we will extend additional protection under Part IV of the Act to cover more employees.

  • Third, we will enhance our employment dispute resolution framework."
Extension of Provisions of Employment Act

As per the current employment act rules, managers and executives who are earning above $4,500 a month are not covered by employment act.

Part IV employees (workmen earning up to $4,500, and non-workmen earning up to $2,500) are able to claim for the overtime pay for the additional working hours. The overtime rate payable for non-workmen is capped at the salary level of $2,250, or an hourly rate of $11.80.

Employers are to accept the medical certificate (MC) only from government doctors and company approved doctors.

According to the new amendments in the employment act after 1st of April 2019, there will be no salary cap for managers and executives to be covered by the basic employment act which means, managers and executives who are earning above $4,500 a month will now be well covered by the employment act.

managers and executives will also be entitled to a minimum of 7-14 annual paid leaves, paid sick leaves and public holidays and employment protection against wrongful dismissal.

Part IV employees, the maximum salary limit to claim overtime pay for non-workmen will also be revised and increased to $2,600 from $2,500 per month and the overtime rate payable for non-workmen will be capped at the salary level of $2,600.

There are no restrictions on the medical certificate to be given by the government or company approved doctors only. After 1st of April 2019, all the employees can produce a medical certificate (MC) given by any registered doctor or a dentist for the medical leave.

AS per ministry of manpower statistics, around 430,000 managers & executive will be benefitted by removing the salary cap to be covered by the employment act. The revision of salary caps for overtime pay will benefit around 100,000 employees.

Employment Dispute Resolution

Current employment act states that an employee cannot claim to be wrongfully dismissed from work unless the employee has been employed by a company for 12 months or more. Furthermore, any salary related dispute is handled by the ministry of manpower.

From 1st of April 2019, all employment disputes will be handled by employment claims tribunals (ECT) instead of ministry of manpower. managers and executives will be protected if they have served for at least a period of 6 months or more under wrongful dismissal protection.

Enhanced Flexibility for Employers

Another significant amendment made is to give an additional option to compensate the employees for working on a public holiday and making deductions from employees' salary.

The current rules for working on a public holiday is, workmen and non-workmen are given either one additional day of salary or one full working day off to in compensation.
For managers and executives category, for working on a public holiday, the employer can compensate the employees by giving one extra day salary, one full day off or time off of less than a full day.

After the 1st of April 2019, the workmen earning up to $4,500/month and non-workmen earning up to $2,600/month will either get an extra day salary or a full day off.
For all managers and executives, workmen earning more than $4,500/month, and non-workmen earning more than $2,600/month, they employer can compensate the employees by giving an additional day salary, a full day off or time off of less than a full day.

The employers now will no longer be able to deduct the employee's salary without a written consent. This may include breaking, damaging, losing office or employer's property and being absent from work.

In order to make deductions from an employee's salary, the employee will need to authorise the employer to do so. Also, the employer must give liberty to the employee of withdrawal of consent without ensuring any penalty.

Other Amendments

The new amendments in the employment act also address hospitalisation leaves. Time of recovery from the illness, time spent in isolation on doctors' advice during illness and hospital care after being discharged from the hospital will also be covered under hospitalisation leave.

With the new Employment Act in effect from 1st April 2019,

  • All the employees are covered from wrongful dismissal after 6 months of working with a company.
  • Salary caps will be revised to be qualified to overtime pay
  • All the employment disputes will be handled by Employment Claims Tribunals (ECT).
  • Medical Certificate (MC) from any registered doctor or dentist will be recognised by the employer
  • The employer will not be able to make deductions from the salary without employees' consent.

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