The Employment Act will be amended to cover all employees, including those in managerial and executive positions earning a basic monthly salary in excess of SGD4,500. Claims for wrongful dismissal will be extended to include constructive dismissal. The changes are expected to come into force next year.
The Employment (Amendment) Bill underwent its first reading in Parliament on 2 October 2018. Some of the more noteworthy changes that it will introduce are discussed below. It is expected to come into force next year.
Managers and executives to be covered
The Employment Act will cover all employees, including those in managerial and executive positions regardless of their salary level. It should be noted, however, that certain provisions of the Employment Act will continue to not apply to employees in managerial and executive positions, most notably those provisions in Part IV of the Employment Act (i.e., those that deal with rest days, hours of work and retirement benefits). The question of who is a manager or executive will therefore remain relevant. In this respect, the recent case of Hasan Shofiqul v China Civil (Singapore) Pte Ltd which had held that a site supervisor was not an executive for the purposes of the Employment Act will be of interest (for more on this case, please see our update, “Construction Site Supervisor Not an Executive under the Employment Act”).
Provisions that will apply to employees in managerial and executive positions who earn more than SGD4,500 will include the following:
• Section 14 on the wrongful dismissal of employees will therefore cover all employees, including those in managerial and executive positions. This is discussed in greater detail below.
• Section 18A on the transfer of employees in the event of a transfer of undertaking currently does not apply to such employees. This therefore means that in the event of a transfer of business undertaking, managers and executives earning above SGD4,500 are not automatically transferred under section 18A. This will no longer be the case after the Employment Act is amended.
• The provisions on annual leave have been moved out of Part IV of the Employment Act and will hence apply to employees in managerial and executive positions. The minimum amounts of leave will therefore apply to such employees.
Claims for wrongful dismissal
As noted above, the Employment Act will cover employees in managerial and executive positions regardless of their salary level. This will include claims for wrongful dismissal under section 14 of the Employment Act. Section 14 of the Employment Act allows an employee to seek redress against his employer if he considers that he has been dismissed without just cause or excuse, including in cases of termination with notice or pay in lieu of notice. Employees in managerial and executive positions earning above SGD4,500 will therefore be entitled to rely on this remedy after the Employment Act is amended. Their right to do so will arise after they have been employed for six months.
The definition of “dismiss” in the Employment Act will be amended to include constructive dismissal. Currently, the definition only covers termination of employment initiated by the employer. Where the employer creates conditions of employment that cause the employee to resign, an employee cannot seek redress for wrongful dismissal under the Employment Act (although he may have a civil claim for breach of contract). The amendment of the definition of the term “dismiss” to include such cases of constructive dismissal where an employee chooses to quit rather than wait to be terminated will mean that such cases of wrongful dismissal may be brought under the Employment Act and the Employment Claims Act, rather than the more expensive route of bringing a civil claim in court.
