Singapore Employment Act in 2021 – Things You Need to Know

Murtuza Topiwalla
Jun 18

Though Singapore is considered one of the best countries to work in because of its excellent conditions both for companies and employees, it doesn’t mean that there are no strict business and professional relations responsibilities. Whether you are an employer or an employee, the Singapore Employment Act is your best protection. 

Keep reading to learn more about Singapore Employment Act.

What is the Singapore Employment Act?

The Singapore Employment Act is the primary labour law that governs the country's basic terms and working conditions for all types of employees, both local and foreign employees.

The Employment Act Singapore is designed to protect the rights of employees, such as setting out minimum standards for the employment contract during the hiring process. If the agreement is less favourable to the employee than the employer, the employment act shall prevail. The contract will be considered null and void.

Who is covered by the Employment Act?

The contract of employment binds the employer and employees in Singapore.  These parties are free to enter into a contract and choose subject to complying with the Act and certain limits.

Employees earning below SGD 2,600 per month are given additional protection under Part IV with regards to the following:

  • Rest Day
  • Hours of Work and Overtime
  • Public Holidays
  • Annual Leave
  • Sick Leave
  • Retrenchment Benefits
  • Retirement Benefits
  • Annual Wage Supplement
  • Other variable payment
Who is not covered under the Employment Act?

The following are not covered under the employment act:

  • Managerial & Executive Positions
  • Professionals such as lawyers, accountants, dentists, and doctors
  • Domestic Workers
  • Seamen
  • Most of the Government Staff
Key Amendments to the Act

All the amendments that took effect on April 1, 2019, are made to ensure better protection for more employees and apply to all employees, whether existing or newly hired. Thus, employers are responsible for ensuring that employment terms and conditions comply with the amendments.

Better Protection for More Employees

One of the amendments made is removing the salary cap to the managers and executives, which now covered 4,30,000 more managers and executives, including those earning above SGD 4,500 per month. Amendments include adding more protection in terms of the minimum 7 to 14 days paid annual leave, paid public holidays and sick leave, timely payment of salary, and protection against wrongful dismissal.

Recognition of medical certificates issued by any registered doctor and dentist Before, only the medical certificates issued by government doctors and company-approved doctors were recognized.  In this amendment, employers must recognize medical certificates issued by any registered doctor and dentist. 

An additional 100,000 more employees are now included in the additional protection on hours of work, overtime pay, and rest days.  The salary capped in this protection includes more employees.

Enhance Dispute Resolution

Effective on April 1, 2019, the wrongful dismissal claims and salary-related claims will now be heard by the Employment Claims Tribunal instead of MOM.  Also, Managers and Executives can seek help if they served the company for at least six months, instead of 1 year in the previous policy.

Greater business flexibility Before, employers were only allowed to deduct from salary for only specific reasons.  With the amendments, employers can now make salary deductions if there is written consent from the employees.  Likewise, employees can be allowed to withdraw their consent anytime and without any imposed penalty.  

Common FAQs about Singapore Employment Act
Do employment contracts have to be in writing?

The employment contract can be in any form, such as writing, verbal, expressed, or implied.  However, it is highly recommended to make it in writing to minimize disputes on the agreed terms and conditions.  

Are there any minimum employment terms and conditions that must be observed?

Yes, these terms and conditions in the employment contract Singapore are about the following:

  • Minimum number of rest days
  • Maximum hours of work
  • Minimum overtime pay
  • Compulsory retrenchment benefits in certain circumstances
  • Minimum number of days of paid public holidays, annual leave, and sick leave
Is notice of termination required to be given to employees?

Generally, the termination letter is mandatory, and the notice period must be included in the employment contract. If the employer has to terminate the employee before the notice of contract period ends, the employer must pay the employee compensation in place of notice.

Are there any employees who have special protection against dismissal?

Yes. Female employees must be allowed to enjoy their maternity leave and cannot be terminated. Also, employees ageing below 62 must not be terminated on the ground of age. Similarly, those employees who are at their retirement age must be given a re-employment option.  

Are employers allowed to carry out pre-employment checks?

Even without the prospective employee’s consent, employers may check the employee’s data where it is publicly available or collect data for an evaluation purpose to determine the suitability and eligibility. 

Can employers prohibit the use of social media in or outside the workplace?

Generally, employers may instil employment policies regarding the use of social media by their employees. However, there are no legal provisions prohibiting employees from using social media in or outside the workplace.

In this COVID-19 situation, do employees have a right to work from home?

The Singapore government has allocated budgets to support employees and businesses such as the Jobs Support Scheme, COVID-19 Recovery Grant, and Workfare Special Payment. 

Since October 2020, working from home conditions has continued as the default mode of working. Employers must ensure that employees whose jobs can be performed from home continue to do so. Upon returning to the workplace, employees working from home can be required to return to the workplace and render up to half of their working time.

Is there any software or application that keeps aligned with the Employment Act?

Yes. Carbonate is an HR Solution that ensures its user keeps up with its governing policies, especially the Singapore Employment Law.  It ensures that the company follows the provisions such as CPF contributions, leave compensation, and more.

Bottom Line

Being a business-friendly country, Singapore has been chosen by many business people across the globe as their business headquarters. For employees, it should be the best country to work with and build a successful career. Nevertheless, it is essential to understand the employment law in Singapore for your best protection.  

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