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This is applicable only to employees employed on or after April 1, The Employment Act guarantees certain benefits to employees. These benefits include annual paid leaves, sick leaves, maternity benefits, paid public holidays etc. Employers must ensure that they fulfil all such requirements in the Act and also draft the terms of the contract accordingly. An employee must be at least 13 years of age to be eligible for employment.

For instance, an employer cannot engage persons below the age of 16 years in any workplace with hazardous conditions that can be detrimental to the health of the person. With respect to wages, the Act does not prescribe any minimum wage for employees. The wages are applicable according to the agreed terms between the employer and the employee. The normal working hours of an employee are 8 hours a day up to a maximum of 44 hours a week. Additionally, no employee should work consecutively for 6 hours a day without any break.

An employer must confirm the hours of work in the employment contract. Every employee is entitled to one rest day each week without pay. The rest day must either be Sunday or any other day of the week. If the employer cannot give an entire day for rest to a shift worker the rest day has to be a continuous period of 30 hours. Employees are entitled to a total of 11 paid public holidays annually.

If specified in the agreement, the employer can substitute the public holiday for another day. If the public holiday falls on any of the rest days, the next working day is considered a paid holiday. An employee is entitled to a paid annual leave if he or she has been working for the employer for at least 3 months. The number of days of annual leaves depend on the years of service completed by the employee in the organization.

For instance for 1 year of service, an employee is entitled to 7 days annual paid leaves. For 2 years of service, an employee is entitled to 8 days annual paid leaves. For 8 or more years of service, the employee is entitled to 14 days annual paid leaves. This does not mean that the employer cannot grant any additional leaves to an employee.

An employee can avail leaves over and above the statutory limit. An employee is entitled to paid sick leave. However, the employee must fulfil the following conditions:. Like annual leaves, the number of sick leaves an employee is entitled to depend on the years of service completed. Under the Act, a working mother can claim paid maternity leaves and working parents can claim paid child care leaves on fulfilment of certain conditions. To claim such leave, an employee must have completed at least 3 months in service. Additionally, the child for whom the employer provides such benefits must be a Singapore Citizen.

These are just a few of the conditions that an employee needs to fulfill. The number of hours worked by an employee in a day or a week in excess of the contractual work hours is considered overtime work. The Act states that:. The employer must pay the salary for overtime work within 14 days from the end of the salary period during which the employee performed the work.

The rate for overtime work should not be less than 1.

Singapore’s New Employment Act Changes

According to the Retirement and Re-employment Act, the minimum age for retirement is 62 years. An employer cannot ask any of its employees to retire before that age. Additionally, employees who reach the retirement age can be re-employed up to the age of However, only Singapore citizens and permanent residents are eligible for re-employment.

What are the areas covered by the Employment Act in Singapore?

Retrenchment means the involuntary or forced layoff of an employee. The Act states that an employee is entitled to retrenchment benefits only if the employee has been in continuous service with the employer for a period of minimum 2 years. The Act, however, does not specify any concrete retrenchment benefits.

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The employer and the employee can mutually agree on these benefits at the time of signing the contract. The employment contract must state the way in which either party can terminate the contract. A contract is terminated either by the employer or the employee. If there is no clause in the contract explaining the termination process, the termination provisions of the employment act are applicable. The parties can terminate the contract on the basis of a written notice.

However, both the employer and employee must follow the notice period in the contract. At common law, contracts of employment or of service as opposed to contracts for service, which are independent contractor relationships can be formed in writing, orally or by conduct. An employee does not necessarily need to sign a written employment contract for the terms of employment to be enforceable, though evidentiary issues may arise when there is no written contract.

However, employers in Singapore are now statutorily required to set out certain key employment terms KETs in writing, and to issue a copy of these written KETs to all employees covered by the Employment Act if the employee was hired on or after 1 April within 14 days of commencing employment. The KETs must include provisions relating to, among other things, payment of salary; allowances and other salary-related payments, such as bonuses and incentives; leave entitlement; and termination notice periods.

Employers should ensure that any onerous financial terms are set out expressly and unambiguously in the employment contacts, and specifically brought to the employees' attention where possible. This is important, as the courts have leaned in favour of the employee when construing onerous terms in employment agreements, 11 and have also endorsed the concept of an implied duty of mutual trust and confidence between the employers and employees. Fixed-term employment contracts are not uncommon and are enforceable, and may potentially be terminated prior to the expiry of the fixed term depending on their provisions.

In the absence of agreement, the notice period for termination of a fixed-term contract should be not less than the minimum notice periods prescribed by the Employment Act. The distinction between independent contractors and employees is as follows: the latter includes freelancers and gig workers, who are engaged through contracts for services and who are presently not entitled to any particular statutory rights or protection under Singapore law; and the former are hired through contracts of service and entitled to statutory employee rights and protections.

Cicada Cube Pte Ltd held, there is no single, clearly defined test that determines whether an individual is an employee or a contractor. For example, in Public Prosecutor v.

Who Does Employment Act Apply To?

Jurong Country Club, a district court found that a club was liable for Central Provident Fund CPF contributions 15 to a gym instructor because it misclassified the instructor as an independent contractor. The court observed that although the club did not control the manner in which the individual carried out his work, the club tracked his attendance, dictated his hours, required him to seek approval before taking leave and did not authorise him to publicise his training programmes without its approval.

While there is presently a pending appeal against the decision in Public Prosecutor v. Jurong Country Club, employers should nevertheless make a conscious and deliberate effort to properly classify the individuals they engage whether they are independent contractors or employees, and if the latter, what benefits they are entitled to.

While the district court in that case did not exercise its discretion to grant such an order, it remains to be seen whether such an order may be granted on appeal. Probationary periods are allowed and are generally one to three months. The contractual notice period for termination is also, in practice, shorter during probation periods e.

There are no present statutory requirements in this respect. A foreign company must be registered in Singapore in order to carry on business in Singapore. In this respect, the hiring of employees local or foreign, through an agency or another third party or agents to conduct the company's affairs and operations in Singapore would generally be considered as carrying on business in Singapore. On the other hand, registration is unlikely to be required when only an isolated transaction is contemplated.

Carrying on business in Singapore or having a permanent establishment PE in Singapore is likely to attract corporate income tax liability as long as the income is accrued in or derived from Singapore, or received in Singapore from outside Singapore in respect of gains or profits. Singapore's Income Tax Act defines a PE as having a fixed place where a business is wholly or partly carried on from.

A person is also deemed to have a PE in Singapore if that person has another person acting on that person's behalf in Singapore who has and habitually exercises authority to conclude contracts. For employees, income tax in Singapore is determined by the employee's residence status as well as the source of his or her income.

Employers are obliged to report employee earnings to the Inland Revenue Authority of Singapore IRAS , and withhold salary payments for tax purposes when the employment is terminated. For example, before a non-Singapore citizen employee ceases employment, the employer is generally required to withhold all moneys due to the employee until tax clearance with the IRAS is completed. Under Singapore law, restraints of trade are generally contrary to public policy and therefore unenforceable. Wong Bark Chua David Man Financial , 18 is where a restrictive covenant 1 seeks to protect a legitimate proprietary interest of the employer, and 2 satisfies the twin tests of reasonableness, namely, that the clause is reasonable between the parties concerned and with respect to the interests of the public as a whole see subsection i.

In Man Financial, the High Court recognised three legitimate proprietary interests in the employment context: trade secrets and confidential information; trade or business connections clients and customers ; and the maintenance of a stable, trained workforce staff. An employer's trade secrets and confidential information can be protected by an express confidentiality provision. While this interest could also be generally protected at common law, an express confidentiality clause helps to identify the precise trade secrets or confidential information that the employees are precluded from using or disclosing during and after employment, and also aids in enforcement.

However, care must be taken to distinguish between trade secrets and confidential information on the one hand, and the skill and knowledge belonging to the ex-employee on the other. As the Court held in Man Financial, the courts will not sanction a covenant seeking to prevent an employee from exercising his or her own natural skill, talent and abilities, even if these were acquired or bolstered in the course of employment. Where an employee has personal knowledge and influence over an employer's customers or clients i. This is usually done through a 'non-solicitation of customers or clients' clause, which must be reasonable in duration and geographical area of restraint.

Non-solicitation provisions may extend to non-solicitation of suppliers as well. Periods of restraint of up to one year may be enforced. Although there is no clear prohibition against longer periods and restraints of up to two years have been allowed in certain specialised industries see Tan Kok Yong Steve v. Itochu Singapore Pte Ltd, as discussed in subsection iii , the prohibition period may affect the overall enforceability of the clause. An employer can protect its workforce by a 'non-solicitation of employees' clause also known as a 'non-poaching' clause. Such clauses are again subject to the requirement of reasonableness, taking into account duration and the types of employees covered.

The restraint should not be a blanket prohibition on the prospective solicitation of all employees of the ex-employer, but should be referable to the position, training or knowledge of the target ex-employee, and should also be restricted to employees over whom the ex-employee had influence. Again, periods of restraint of up to one year may be enforced with longer periods not impossible but potentially affecting enforceability of the clause. Under Singapore law, non-compete clauses are difficult to uphold and enforce if the three recognised legitimate proprietary interests identified in subsection i are already protected by other clauses.

In its earlier decision of Stratech Systems Ltd v. Nyam Chiu Shin alias Yan Qiuxin and others Stratech , 19 the Court of Appeal found that the employer that sought to enforce a non-compete clause was unable to demonstrate any other legitimate proprietary interest that required protection, apart from the interests that were already protected by other restrictive covenants in that case, a confidentiality clause.

As such, the Court concluded that the main function of the non-compete clause was to inhibit competition, and was therefore unenforceable. The Court of Appeal in Man Financial reaffirmed the principle in Stratech and took the view that it would apply equally in the context of other legitimate proprietary interests i. The correctness of the Stratech principle has since been doubted. Byrne Roger Peter and others CCL , 20 the judge commented that it did not seem logical that an employer that had both a non-compete covenant and a confidentiality clause had a lower chance of using the non-compete covenant to protect its confidential information than an employer that had only a non-compete covenant with no confidentiality provision, as the employer would have been able to enforce the non-compete under the Stratech principle.

The Court ultimately did not grant the non-compete injunctions sought, and in any event, the position that trade connections can support both a non-compete and a non-solicitation clause is questionable on the present authority of Man Financial. The Stratech principle therefore remains law for now. Pang Chee Kuan Solomon Alliance which did not refer to Stratech at all , 22 two non-competes against an independent contractor one restraint operating during the term of the contract, and the other restraint operating both during the term and for one year after the term of the contract were upheld.

In coming to its decision, the Court found a legitimate proprietary interest 'in ensuring that an independent contractor. This decision is an unprecedented recognition by the Singapore courts of a legitimate proprietary interest in the exclusive marketing of an entity's products. It could be the Court's way of avoiding the application of Stratech, but it also could be that this decision will eventually prove itself as a reliable authority for a new legitimate proprietary interest of exclusive marketing.

After all, the Court in Man Financial did state that 'other legitimate proprietary interests may also exist and be protected by the courts. However, the Solomon Alliance decision concerned an independent contractor rather than an employee, and the courts have noted that restrictive covenants are scrutinised less strictly in non-employment contexts i. Loh Kin Yong Philip and others Powerdrive 24 see subsection iii made some reference to the decision in Stratech.

The Court recognised that Stratech remains binding, though it also reiterated that concerns have been raised over that decision in CCL and Humming Flowers. Apart from those brief remarks, in Powerdrive the Court essentially bypassed the issue of whether there was a legitimate interest capable of justifying the restraint in holding only that the non-competition restrictive covenant in question was unreasonable and therefore unenforceable.

The Court took the view that given the unreasonableness of the restraint, it was 'not necessary to decide whether to rule against the enforceability of the [non-competition restraint] based on Stratech'. Some observers note that the High Court appears to consciously avoid the application of the Stratech decision where possible, while waiting for an appropriate case to be brought before the Court of Appeal to determine whether the decision ought to remain good law.

Understanding the latest changes to the Singapore Employment Act

Powerdrive serves as an important reminder that when determining whether a restrictive covenant is reasonable, the court will also consider the types of employees sought to be restrained, over and above other common factors i. In Powerdrive, the Court noted that the non-compete clause was used against 'all its employees regardless of their seniority, nature of work or level of access to information'. Following past decisions, the Court further noted that 'such an indiscriminate application would suggest that the true purpose of the provision was to restrain competition rather than to protect a legitimate interest of an employer', which would make the non-compete unenforceable.

The Court further noted that the two-year duration of the non-competition restriction appeared to be 'arbitrarily selected'. In light of this decision, employers should be vigilant when drafting non-competition restraints. Over and above stipulating an appropriate scope of work and geographical area, the employer would also need to carefully consider the types of employees to be restrained and, as Powerdrive suggests, would need to be able to provide some explanation and basis as to why the stipulated period of restraint is appropriate although generally speaking, shorter periods of restraint would be relatively easier to justify.

That is not to say that long periods of restraint would always be unreasonable and unenforceable though. Itochu Singapore Pte Ltd, 28 the High Court upheld a non-competition restraint that lasted for two years. This case concerned an employee who was in charge of his employer's cement products business which the Court noted was a specialised industry in various Asian countries, and who had taken about four years to build up customer connections on behalf of his employer. As such, it was reasonable that the employer would expect at least two years to rebuild the same contacts without any interference from the ex-employee.

If a restrictive covenant is indeed directed at protecting a legitimate proprietary interest but it is too wide and unreasonable to be enforceable, the court may sever some portions of the relevant clause so that the remainder becomes reasonable and enforceable. This 'blue-pencil' test allows for severance by deletion but not addition or other amendment. Lui Andrew Stewart Smile Inc , 29 the Court of Appeal indicated that it was not in favour of the 'notional' severance approach where a court applies the flexible 'reading down' test by modifying or adding to the clause as appropriate, as opposed to the blue-pencil test.

The Court stated that employers should draft reasonable restrictive covenants from the outset, instead of drafting unreasonably long periods of restraint in trying to potentially obtain maximum protection, then subsequently relying on the courts to read down the provision to make it enforceable where necessary. As such, a restrictive covenant with an unreasonably long period of restraint e.

While the Court of Appeal in Smile Inc raised, without apparent disapproval, the use of 'cascading clauses', which consist of multiple overlapping periods and areas of restraint, to specifically allow the offending clauses to be blue-pencilled out, the subsequent High Court decision in Humming Flowers opined that cascading clauses offend against public policy.

The High Court reasoned that they increase rather than reduce uncertainty, particularly on the part of the employee, and should accordingly not be upheld. This is now the correct view unless and until the Court of Appeal holds otherwise. A potential way to achieve a similar result to a non-compete clause may be to expressly incentivise employees not to compete, or disincentivise employees from competing, for a specific period of time after employment.

However, the employer should take great care in doing so. Cargill TSF Asia Pte Ltd Mano , 30 the Court held that to financially disincentivise an employee from competing through a contractual clause that deprived the employee of a vested right effectively amounted to a restraint of trade, and it would then have to pass the test of reasonableness in order to be enforceable.

The employer in Mano attempted to retain a declared and vested deferred bonus payment due to his employee pursuant to the employment agreement, and the Court held that the restriction was unreasonable because, among other things, it had no geographical limit. This was notwithstanding the fact that the clause in question did not actually prohibit competition by the ex-employee, as his competition with the company was not in breach of his employment contract per se , leaving the company with no recourse to damages or an injunction. In light of this decision, while a financial disincentive to compete may still be a viable alternative means to effectively stifle competition, employers should ensure that the benefits withheld cannot be construed as having been vested, or otherwise encourage expectations that employees are entitled to such benefits, if this is not the intention.

Injunctive relief may also be granted to prevent a person who has obtained confidential information from using it as a 'springboard' for activities detrimental to the person, including an entity, to whom the confidential communication belongs, or to gain an unfair advantage over or a headstart on that person. Although similar in effect to an injunction based on express restrictive covenants, springboard injunctions originate from cases involving a breach of the duty of confidence, and do not exclusively arise in employer—employee situations.

Accordingly, a springboard injunction may even be granted in the absence of any express restrictive covenants, although the presence of these would certainly be relevant. In Goh Seng Heng v.


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The High Court found that the four requirements were satisfied as the ex-employees had, among other things, taken and misused confidential information and trade secrets. The Court found that the ex-employees' actions were intended to and did affect the company financially, and the breaches of confidentiality gave an unfair competitive advantage to the ex-employees' new company. There was a real likelihood that without a springboard injunction, the company would be ruined before the matter reached trial, and damages in lieu of an injunction would therefore be insufficient.

As such, the springboard injunction was found to be necessary. The ex-employees appealed against the High Court's decision in this regard, and the appeal was in fact allowed by the Court of Appeal, overturning the springboard injunction. However, no written grounds of decision were handed down, so it is unclear what view the Court of Appeal took of the High Court's reasoning above, and whether the injunction had been overturned on the facts, or as a result of the Court of Appeal's rejection of the legal principles applied by the High Court.

A clause prohibiting the misuse of confidential information for a stipulated period of time may be a relevant consideration for the court in deciding how long the springboard injunction should remain in place. Intrepid Offshore Construction Pte Ltd and another, 32 the High Court stated that the springboard doctrine did not apply, as the two-year period in the relevant confidentiality clause had expired and the information was no longer confidential.

On the other hand, where a period of time was not expressly stipulated in a confidentiality clause and the relevant clause did not indicate how long this obligation would last , the Court of Appeal in Tang Siew Choy and others v. Certact Pte Ltd 33 ruled that the period of time to restrain the ex-employees from using confidential information would have to be gathered mainly from the complexity of the information protected, with the injunction to continue for the period for which the unfair advantage may reasonably be expected to continue.

Generally, employees covered under Part IV of the Employment Act cannot be required to work for more than eight hours a day or nine hours a day in a working week that is five days or fewer or 44 hours a week, or work for more than six consecutive hours without a leisure period. Under exceptional circumstances e. Employees covered under Part IV of the Employment Act are also allowed one whole day, or for shift work employees, any continuous period of 30 hours, as a rest day each week without pay.

The employer can determine which day of the week the rest day shall fall on, which is usually Sunday by default. However, these employees may elect to work on, and be remunerated for, the rest day. An employee may work overtime at higher rates of pay for more than those numbers of hours or on a rest day, provided that no employee works overtime for more than 72 hours in a month. An employee covered under Part IV of the Employment Act also cannot work for more than 12 hours a day save in exceptional circumstances.

VGO Corp Ltd, 34 it was held that any contractual term requiring an employee covered by Part IV of the Employment Act to work for more than 44 hours without overtime payment was illegal, and the employee would be entitled to overtime payment for the extra hours worked. No statutory restrictions as to working hours, days or periods presently apply to employees not covered by Part IV of the Employment Act, and any such restrictions would be a matter of contract between the employees and their employers.

In late , however, the Tripartite Standards on Flexible Work Arrangements were released, encouraging employers to implement variations from usual work arrangements in exchange for public recognition as a progressive employer. Overtime payment must be made to the employee within 14 days of the last day of the employee's salary period. In addition, an employee covered by the Employment Act, regardless of whether he or she is also covered by Part IV, who is required by his or her employer to work on any public holiday is also entitled to an extra day's salary at the basic rate of pay. Alternatively, and provided that the employee is employed in a managerial, executive or professional position, he or she may be given a day off or part of a day off in lieu of an extra day's salary.

This option will, as of April , be extended to all employees under the Employment Act who are not covered by Part IV. Under the EFMA, no foreign employee may be employed or work without a valid work pass. In addition, all employers are required to keep a register of foreign employees to whom they have issued work passes.

These types of work passes are valid only for the employer, type, place or time of employment expressly specified, and each work pass is issued with mandatory conditions the foreign employee must follow. Different eligibility criteria and restrictions apply depending on the specific work pass and the foreign employee concerned. A Miscellaneous Work Pass may be granted for foreigners who are directly involved in organising or conducting seminars, conferences, workshops or gatherings that relate to religion, race, a cause or politics; giving talks related to any religion; or journalists, reporters or accompanying crew members not supported or sponsored by any Singapore government agency to cover an event or write a story in Singapore.

This Miscellaneous Work Pass allows foreigners take on assignments of up to 60 days in Singapore. There are no published quota limitations on such passes. Generally, there is no minimum qualifying salary to obtain a Work Permit, which is usually applicable to manual or unskilled workers, or domestic helpers.

A Work Permit typically lasts two years, and there are limitations on quotas and maximum employment periods, depending on the industry sectors, and the employee's skill level and nationality. In comparison, there are no maximum employment periods with respect to S Pass holders, which usually apply to skilled workers such as technicians, though employers are bound by quota restrictions that are calculated by way of various prescribed ratios on a case-by-case basis. Foreign workers are not, however, entitled to benefits that only Singaporean citizens or permanent residents qualify for, such as CPF contributions.

As for taxes, employers are not required to pay taxes for foreign employees, but are required to observe the tax reporting and tax clearance procedures as explained in Section IV. Singapore has no specific laws mandating the implementation of internal disciplinary rules and procedures by employers, though the Tripartite Guidelines on Fair Employment Practices require that employers 1 set out their disciplinary procedures and policies for breaches of conduct; 2 set up mechanisms to deal with complaints of discrimination; and 3 communicate the above clearly to their employees.

In practice, many employers in Singapore, especially multinational companies, institute internal disciplinary rules and policies with respect to issues such as discrimination, corruption and sexual harassment. These policies are commonly made accessible to the employees on the company's intranet or detailed in the company's HR policies or employee handbook, and are usually expressly incorporated into the employee's employment contracts.

Singaporean commercial contracts, including employment contracts, are generally in English, which is the language of business in Singapore. However, this does not mean that employment contracts that are not in English will not be upheld. In fact, employers are also encouraged to adopt the language that the employees can understand, especially with respect to the KETs.

There is also no legislation or guidelines requiring translation of employment-related documents if in another language into English, though this would be necessary before the documents may be received, filed or used in the Singaporean courts. The Trade Unions Act allows employees to form or join trade unions to regulate their relations with their employers through collective agreements.

Following amendments to the Industrial Relations Act in , PMEs may also be collectively represented by trade unions. That said, where the majority of a trade union's membership is made up of non-PMEs, it will not be able to collectively represent PMEs where there is a real or potential conflict of interest between the PMEs and the non-PMEs, or where management effectiveness may be undermined. Once formed and registered with the Registrar of Trade Unions, the trade union may approach an employer for statutory recognition under the Industrial Relations Recognition of a Trade Union of Employees Regulations.

Upon recognition, a trade union can invite the employer to negotiate a collective agreement for its relevant employees pursuant to the Industrial Relations Act. These collective agreements would then govern the employment relationship between the employer and the unionised employees. The unions may also assist individual unionised employees in negotiating better bonuses, salary increments and other benefits. A fair number of the larger companies and multinationals in Singapore have granted statutory recognition to, and negotiated collective agreements with, trade unions.

It is difficult for an employer to refuse to recognise a trade union at law in the long run. Where the employer continually refuses, the MOM Commissioner for Labour may then call for a secret ballot among the employees entitled to vote, and if a majority of those employees are members of that trade union, the employer must give it recognition. If the majority is not met, then the union is precluded from seeking recognition again for six months. Because secret ballots are logistically challenging, cannot guarantee success and can create hostility, trade unions typically prefer to use a memorandum of understanding MOU with employers as an interim step.

MOUs are contracts where, for example, the union agrees not to seek recognition for a certain number of years, and the employer in return agrees to sponsor or subsidise its employees' union fees and dues, therefore effectively securing the success of any future secret ballot. If the employer refuses to negotiate a collective agreement, a statutory trade dispute will exist, which will have to be determined by the Industrial Arbitration Court IAC , where legal representation is not allowed.

Prior to that, the Commissioner for Labour from the MOM may intervene to facilitate reconciliation between the parties. Technically, a registered trade union is also able to commence, promote, organise and finance a strike or industrial action, but it may only do so in very limited circumstances — the majority of affected members must consent to strike through a secret ballot, and under the Trade Disputes Act an industrial action is illegal if: it has any other object than the furtherance of a trade dispute; if it is in furtherance of a trade dispute of which the IAC has cognisance; or if it is designed or calculated to coerce the government either directly or by inflicting hardship on the community.

Union-led strikes are very rare in Singapore. The last strike, in , did not involve a union it involved non-unionised foreign bus drivers taking unilateral action , and the previous strike was in , which lasted a day. It generally protects personal data, which is broadly defined as data about an individual who can be identified from that data, or in conjunction with other likely accessible information, through governing its collection, use and disclosure.

However, it requires that an organisation designate one or more individuals to be responsible for ensuring that the organisation complies with it i.