$100 increase in salary threshold for non-workmen under Part IV of the Employment Act from $2,500 to $2,600 “too insignificant”: Assoc Prof Daniel Goh

$100 increase in salary threshold for non-workmen under Part IV of the Employment Act from $2,500 to $2,600 “too insignificant”: Assoc Prof Daniel Goh

The $100 increase in salary threshold for non-workmen eligible for the additional protections under Part IV of the Employment Act from $2,500 to $2,600 is too insignificant, said Non-Constituency Member of Parliament Associate Professor Daniel Goh Pei Siong.

“Non-workmen” are classified under Part IV as white-collar workers who are not professionals, managers, or executives (PMEs).

“At first glance, this struck me as a miniscule enhancement. Upon reflection and research, I still cannot put my head around the significance of a $100 increase in the threshold,” said Assoc Prof Goh.

He added that while he understands that “the Ministry said this increase would result in half of the workforce being covered”, he questioned if this is “an increase from 40% to 50%”, or “from 48% to 50%” of the workforce.

“If it is the latter, it does not appear to be a meaningful increase,” argued Assoc Prof Goh.

“Just to illustrate, annual real wage growth in recent years is around 1.9%. This means that within two to three years, this $100 increase in salary threshold would be rendered irrelevant,” he said.

Assoc Prof Goh added: “In the 2014 amendment, the salary threshold for non-workmen was increased from $2,000 to $2,500. This was a significant increase, and the $100 increase this time round pales in significance compared to the $500 increase in 2014.”

The associate professor said that while he does not deny that “this amendment Bill is a progressive piece of legislation that would extend the protection of our workers”, particularly “in the midst of economic disruptions and uncertainty”, the “meaningless” legacy distinction between workmen and non-workmen in providing for additional protections under Part IV of the Employment Act should be removed altogether.

“I understand from former Minister for Manpower Mr Lim Swee Say’s reply to a Parliamentary Question by Ms Thanaletchmi in May 2016, this distinction is a legacy issue, and the Government’s longer term plan is to remove this distinction given the changing nature of our workforce,” said Assoc Prof Goh.

He added that while it is important for legislators to “balance employers’ concern with the rise in business costs”, the $100 increase appears to be “quite imbalanced against the favour of white-collared workers”.

“I believe the increase should be more substantial to better protect white-collared workers, precisely because this segment of the workforce has become a lot more vulnerable in recent years because of technological disruptions and the rise of artificial intelligence,” said Assoc Prof Goh.

Assoc Prof Goh also raised the proposed amendment related to the status of annual leave becoming a core provision available to all workers instead of workers eligible for benefits under Part IV of the EA, stating that while it is a “good and logical move”, it is “less progressive than it seems”. Providing for annual leave is already a common practice and an irreversible norm, so the law is only catching up with reality.

A more precise definition of what constitutes wrongful dismissal ought to be included in the proposed amendments

Assoc Prof Goh said that while the inclusion of forced resignations in the definition of “dismiss” in the EA “plugs a loophole that employers could use to get around wrongful dismissal allegations,” the Bill “misses the opportunity” to define what constitutes dismissal “without just cause or excuse”.

He also posed several questions regarding the tripartite parties’ role in building a framework for the Employment Claims Tribunal to work around in the process of handling wrongful dismissal claims:

[…] how would the tripartite guidelines on wrongful dismissal and factors for determining compensation amount, when they are issued, interact with the adjudication work of the Employment Claims Tribunal? What would be the legal status of the tripartite guidelines?

“Would the Tribunal be obliged to stay within the limits of the tripartite guidelines and if so, would not this be undermining the purpose of having the Tribunal adjudicate wrongful dismissal claims? If not, how should the Tribunal take guidance from the tripartite guidelines? Can the Tribunal override the tripartite guidelines in specific cases due to peculiar circumstances?

Assoc Prof Goh also brought up the issue of workers’ mental health in justifying wrongful dismissal claims.

He questioned if the guidelines would “cover unjust causes or excuses such as discrimination on ethnic, nationality, age, gender, religion, marital status, disability and mental health grounds”.

“I would like to stress that dismissal of workers because they are suffering from mental health problems should be considered wrongful, if these mental health problems could be treated and managed and would not substantially affect work performance.

“Mental health issues are prevalent in advanced economies such as ours and are often under-reported and go untreated because of the stigmatisation and lack of understanding of mental health issues. The same stigmatisation and lack of understanding is the basis of wrongful dismissals of workers with mental health issues,” said Assoc Prof Goh.

“Another unjust cause or excuse that the tripartite guidelines should cover is related to sexual harassment, as the threat and actuality of dismissal are often used by those in power to sexually exploit their subordinates,” he added.

Assoc Prof Goh argued that “the compensation and reinstatement of the workers (who were subjected to wrongful dismissal due to discrimination or sexual harassment) are not good enough remedies,” and that not only are such wrongful dismissals “unjust,” they are also “egregious violations of workers’ rights and social norms”.

“I believe that the Tribunal should be empowered to impose punitive sanctions in terms of fines and jail time for those guilty of these violations,” he said.

The issues of disguised retrenchment and false retrenchment were also brought up by Assoc Prof Goh under the subject of wrongful dismissal.

“Disguised retrenchment refers to the serving of termination notice to employees due to job redundancy without treating it as retrenchment so that retrenchment benefits do not have to be paid. If the employment contract contains retrenchment benefit provisions, then it would be clear that such cases should be heard at the Tribunal.

“If the employment contract does not contain retrenchment benefit provisions, then I would like to ask do workers in such cases have the basis to claim fair retrenchment benefits based on prevailing industry norms? False retrenchment refers to the retrenchment of workers not due to genuine redundancy but on unjust grounds such as discrimination. I believe in such cases, it is clear too that claims should be heard by the Tribunal,” he said.

He added that “the Tribunal is limited to awarding claims up to only $20,000,” which could be disadvantageous and even unfair to “highly paid PMEs” who would “likely be seeking claims for back wages and compensation that are much more than $20,000”.

“It would seem to be unreasonable and unfair to open up this avenue for redress for these PMEs while maintaining the jurisdictional limit for the claims. Would the cap be adjusted upwards after the passing of this Amendment? If so, what would be the new cap and why?” he questioned.

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