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Salary cap to be removed so that all employees covered under Employment Act

Manpower Minister Lim Swee Say has announced during Parliament on Monday (5 March) that the Employment Act will be extended to cover all employees, except for public servants, foreign domestic workers and seafarers who are protected under industry-specific legislation.

The laws, which provides for basic terms and working conditions, currently covers workers earning S$4,500 or below. The minister stated that the Act will be amended to cover about 430,000 more white-collar workers who are not protected under the law.

Mr Lim also said that the exceptions are public servants, domestic workers and seafarers who are covered separately, such as by other Acts due to their nature of work in his ministry's committee of supply (COS) debate.

According to the minister, the removal of the salary cap and other amendments to Singapore’s main labour law will be introduced in Parliament later this year for implementation by April 2019, which means that about 720,000 professionals, managers and executives (PMEs) in total will be covered under the core provisions of the Act, based on figures from the Ministry of Manpower (MOM).

The law’s core provisions include redress for wrongful dismissal, public-holiday and sick-leave entitlements, as well as timely salary payment, and maternity protection and childcare leave.

The Act came into force in 1986. It was last reviewed in 2012, with the most recent amendments taking effect in 2016. Some of these included making it mandatory for employers to give their workers payslips, and making known key employment terms to workers within 14 days of employment.

To date, only Singaporeans earning under S$4,500 come under the Act’s core provisions.

Mr Lim said, "Our workforce is changing fast, we now have more PMETs  (professionals, managers, executives and technicians), and fewer rank-and-files. This trend will continue. With PMETs making up 56 per cent of the local workforce now, going up to 65 per cent by around 2030, it is timely to make a more fundamental change to the coverage of EA."

Earlier in January, the ministry held a public consultation on the matter and on streamlining services for employees and employers to settle disputes.

With changes to the salary cap, more non-workmen employees will see stronger protection of their rights.

According to the minister, apart from broadening the core provisions of the Act, more vulnerable employees will be better protected under the law.

Currently, rank-and-file employees in white-collar jobs such as clerks and retail sales assistants, prescribed as “non-workmen” under the Act, earning up to S$2,500 monthly are protected in terms of time-based provisions, such as annual leave, hours of work, overtime pay and rest day. The threshold will be raised by S$100.

While, workmen, or those engaged in manual work such as cleaners, construction workers and transport drivers, earning up to S$4,500 a month are also accorded extra protection.

The proposed changes to the Act will see half the workforce, or about 1.6 million workers, receive added protection. While, in terms of overtime pay, the salary cap for non-workmen will also be revised upwards from S$2,250 to S$2,600.

Currently, the MOM looks into such claims, while the tribunals hear statutory and contractual salary-related disputes, resulting to employees that have to approach two parties to have their issues resolved, which is cumbersome given that dismissal-related claims typically go in tandem with salary issues.

To ease the dispute resolution process, the Employment Claims Tribunals will become a “one-stop avenue”, taking on claims of wrongful dismissals by the Tripartite Alliance for Dispute Management.