Chapter 4: Legal Framework of HRM

HR Headline
Firm Wins Moonlighting Suit
Legal issues may arise in the course of employment, and both employers and employees
must know their rights because failing to do so may result in unwanted disputes.

Not too long ago, a well-known architectural company in Singapore was happy to have won
a legal suit in court against three of its employees over the latters moonlighting outside
their formal employment.

Belinda Ang, the presiding justice at the High Court for the case, opined that it was difficult
to determine whether the current employer has suffered losses arising from the
employees breach of duties even though she ruled in favor of the current employer. The
damage to be awarded to the company would be assessed separately in another court
hearing.

This case involved three former employees of interior design firm Six Planes & Partners
(SPP), who left their employer and joined Ong & Ong Architects. These employees were Ms.
Rachel Yee, Mr. Leslie Seow, and Mr. Ridzuan Sarbini. They signed employment letters with
Ong & Ong after they left SPP. Subsequently, they were accused by Ong & Ong of using Ong
& Ongs resources to provide services to clients outside their employment. They claimed
that the employment letters which they had signed indicated that they had merely entered
into a profit-sharing business venture and under the venture, they were not prohibited
from doing work for SPP. Ong & Ong disagreed with the interpretation and sued them in
the civil court. The court agreed with Ong & Ong and held that the three employees were
indeed employed as employees by Ong & Ong and hence they owed a duty of care as
employees to their current employer, namely, Ong & Ong.

These three employees had countersued Ong & Ong for $230,000, claiming that the sum
was their share of profits under the profit-sharing venture. The judge found no evidence to
support their claim that a joint venture had existed.

Employment contracts are different from other types of commercial contracts (such as a
joint-venture agreement). Understanding the nature of an employment contract and the
legal environment in which an employment contract is administered and enforced is a
basic requirement for all HR professionals as well as non-HR professionals with HR
responsibilities.

Inequality in the treatment of people from different backgrounds

has been a concern for years. Some countries have castes where
individuals in some groups are treated better or worse based on
race, ethnicity, religion, or other factors. In the United States,
slavery was a major concern until amendments to the U.S.
Constitution gave all citizens rights to due process (Fifth
Amendment), freedom from slavery (Thirteenth Amendment), and
equal protection under the law (Fourteenth Amendment). Despite
these protections, discrimination in employment has a long
history. Women and men working in similar jobs sometimes have
been paid differently; African Americans and Latinos/Hispanics
simply have not been considered for some jobs even if they are
qualified, or they have been treated differently or terminated
unfairly.

In Singapore, the main concerns at the workplace are the creation

of a work environment conducive for investment and the fair
treatment of both employees and employers. In general, legal
provisions and government-sanctioned regulations are established
only if both of these two sets of workplace concerns can be well
served by their existence. In many other situations, moral suasion
rather than legislation is a preferred approach. Moral suasion
refers to using a persuasion tactic on the part of an authority to
influence and pressure, but not force, its subjects to adhere to a
policy. We will see how moral suasion pans out in Singapore in
terms of how fair employment practices are implemented in the
next chapter. In this chapter, we will focus on the legal framework
that exists in Singapore.

Both employers and employees in Singapore are entitled to specific

rights and are bound by specific obligations in an employment
relation. When a contract of service is established (i.e., one party is
employed by another party as an employee), both the employer
and the employee must be aware of their contractual rights and
obligations: otherwise, unnecessary disputes may arise. In many
cases, genuine disputes may still surface and it is in the interest of
both parties to have a clear understanding of the nature of the
contractual relationship they are entering into. As shown in the
opening case, a dispute may even surface regarding whether a
contract is an employment contract (where an employee-
employer relationship exists) or a joint venture agreement
(where the three employees involved are deemed to be partners to
a venture and not employees). Whether a contract between two
parties is an employment contract or otherwise makes a big
difference in terms of the rights and obligations of both parties. In
an employment contract, the employee may owe loyalty to
his/her employer and is not free to work for other organizations.
In contrast, when a person is not deemed to be an employee, he or
she can work as an independent contractor in his or her own
personal capacity (e.g., a freelancer as it is commonly called in
Singapore); he may be able to undertake work assignments with
more than one party.
 4-1Nature of Employment Contract
Because an employment contract belongs to one of the many
types of contractual relationships in which two or more parties can
enter into, it is subject to the many common law principles that
have merged from past contractual disputes of a similar nature. In
addition, to the extent that the employee or employer is covered by
specific parts or provisions of an employment-related law (e.g., an
Act of Parliament; such as the Employment Act) or a government-
sanctioned regulation, both the employee and employer must also
abide by the legal provision or regulation. When the issue at hand
can be adjudicated under both common law and a statutory
provision or government regulation, the party concerned may have
an option to choose to have it adjudicated under common law (law
of contract) or under the legal provision or regulation. For
example, if an employee covered by the Work Injury Compensation
Act suffers injuries while at work, he or she may claim
compensation under the Act or pursue the matter in a Civil Court,
but not both.

In Singapore, there are three major ways in which the terms and
conditions of an employment contract may be established:

4-1aIndividual Contract of Service (i.e., An Employment Contract)

When an employer and an employee find each other suitable for
establishing an employment relationship, they may enter into an
employment relation in writing or orally, expressed or implied.
Once it is established, an employment contract can be enforced in a
Civil Court in Singapore based on the common law doctrine. In
addition, if the employee is covered by the Employment Act (which
calls it a contract of service), the contract can also be enforced via
the Ministry of Manpower. The terms and conditions of an
employment contract cannot contravene the Employment Act if the
employee concerned is covered by the Act. When an infringement
of the Employment Act occurs in respect of a covered employee,
the affected terms and conditions may be rendered null and void
by the Act and the contravening party may be penalized by the Act.
In this chapter, we will look at the statutory provisions of this Act
as well as other employment-related laws in detail.

The Commissioner of Labor appointed by the Minister for

Manpower under the Employment Act has specific powers to
enforce the Act, including adjudicating employment contracts that
come under the Acts purview. The hearings conducted by the
Commissioner of Labor are generally referred to as Labor Court
proceedings in Singapore. The Labor Court thus is part of
 Singapores legal court system and it is given a status equivalent to
a District Court.

Collective Agreement Specific categories of employees in

Singapore are free to join a labor union for collective bargaining
purposes, so as to bargain on employment-related matters
collectively with their employer. In general, employees whose jobs
are not designed to closely or directly represent the interest of the
employer or shareholders are eligible to form and join a labor
union for collective bargaining purposes. An individual who joins a
labor union as a social member (e.g., individuals who join the
General Branch of the National Trades Union Congress (NTUC)) is
not deemed to be a member of a labor union set up for collective
bargaining purposes. He or she does not enjoy the right to bargain
with his or her employer on employment-related matters but is
eligible to receive union-sponsored benefits that are attached to
the membership. We will take a closer look at who can and who
cannot join a labor union for collective bargaining purposes later in
this book.

When a labor union is formed for collective bargaining purposes,

the labor union members bargain as a category or categories of
employees with their employer. A collective agreement between
the organized labor union and the employer is then established
and it covers all employees (union and non-union members) who
fall into the category or categories of employees that the labor
union represents. In other words, non-union members belonging
to the category or categories of employees represented by the
labor union enjoy the same terms and conditions contained in the
collective agreement. This may give rise to free-riders who enjoy
the fruits of the unions labor without having to pay union
membership fees. To counter this, the labor union movement in
Singapore directly provides many perks to their members in the
form of purchase discounts, rebates, recreational facilities,
dividends, etc.

The Industrial Arbitration Court is the highest authority to

adjudicate matters pertaining to organized labor in Singapore
including all the collective agreements. It is set up under the
Industrial Relations Act and the Court has a status equivalent to
the High Court.

4-1bEmployment-Related Laws and Regulations

The Ministry of Manpower administers most of the employment-
related laws in Singapore. Some laws not directly administered by
the Ministry of Manpower may also impose HR-related
 requirements on employers and employees. Both employees and
employers must abide by all employment-related laws regardless
of whether they are administered or enforced by the Ministry of
Manpower. For example, the Enlistment Act requiring male
Singapore citizens and permanent residents other than first-
generation immigrants to perform national service is administered
by the Ministry of Defense and both employers and employees are
bound by the Act. Major employment-related laws in Singapore
include:

Constitution of Republic of Singapore

Employment Act and Children Development Co-Savings Act
Workplace Safety and Health Act
Work Injury Compensation Act
Central Provident Fund Act
Employment of Foreign Manpower Act and Immigration Act
Retirement and Reemployment Act
Industrial Relations Act
Trade Unions Act
Trade Disputes Act
Criminal Law (Temporary Provisions) Act
Enlistment Act
Holidays Act
Skills Development Levy Act
The coverage of all the above major employment-related laws is a
major point to note when we try to comply with the laws. The rest
of this chapter will provide a more detailed description of all these
major laws as they are relevant to HR. Note that you may soon
realize that in Singapore, there are no legal provisions or
government regulations that specify a minimum wage rate for any
employee or category of employees. Hence, in theory, an employee
may be paid as little as you can imagine for any work done. How
much an employee earns is dependent on the market demand and
supply of the skills or labor he or she possesses or renders.

4-2Constitution of the Republic of

Singapore
4-2aCoverage
The Constitution covers Singapore.

4-2bKey Provisions
Article 4 provides that any law enacted by the Legislature after the
commencement of this Constitution which is inconsistent with this
Constitution shall be void to the extent of the inconsistency.
 Article 10 provides that no person shall be held in slavery and all
forms of forced labor are prohibited except

1. compulsory service for national purposes may be allowed; and

2. work incidental to the serving of a sentence of imprisonment
imposed by a court of law is not considered as forced labor within
the meaning of this Article.
Article 14 provides that all citizens of Singapore have the right to
form associations except that

1. Parliament may impose restrictions on this right in the interest of

the security of the whole or part of Singapore, public order, or
morality; and
2. a law relating to labor or education may also impose restrictions
on the right to form associations.
-2cImplications for Employees and Employers
Subject to the various restrictions that may have been put in place
under Article 14, eligible employees who are Singaporeans are free
to join a labor union as this is their constitutional right. Non-
Singaporeans such as permanent residents and foreign employees
working in Singapore on work passes or work permits (i.e., work
visas), however, do not enjoy the same constitutional right.
However, they are not barred from doing so by the Constitution.
Thus, the government may still allow them to do so.

Article 14 has a major implication for the labor movement in

Singapore. National Trades Union Congress (NTUC) is the only
labor union confederation in Singapore, representing the vast
majority of ordinary labor union members (with collective
bargaining rights). It is supported by the ruling Peoples Action
Party (PAP) government and it also has an explicit policy of being
pro-PAP. Some scholars have characterized the relationship as
symbiotic since many of the elected PAP Members of Parliament
hold key executive positions in the labor movement. Reinforcing
this status quo, the Trade Unions Act (Section 14) provides that the
Registrar of Trade Unions may refuse to register a new trade union
if he is satisfied that there is already an existing trade union in a
particular trade, occupation, or industry that can represent the
category or categories of employees who are proposed to be
covered by the new trade union. As the NTUC covers almost all
conceivable categories of employees in Singapore for collective
bargaining purposes, it would seem very difficult for a new non-
NTUC labor union to be set up in Singapore. Thus, the stability of
the labor movement gives investors and employers a sense of
confidence and peace of mind.
 Article 10 has some implications for the maximum length of
termination notice that is enforceable in Singapore. Will the Court
allow an employment contract to provide for a termination notice
of, say: 1 year, otherwise the party leaving the contractual
relationship must make a payment in lieu of notice? How about 3,
5, 10, 20, 50 years? Clearly, providing for such a long notice period
is tantamount to setting up a slavery relationship or quasi-forced
labor scheme. Yet, interestingly, the Employment Act only provides
that for an employee covered by the Act, a notice period of
between 1 day and 4 weeks depending on the length of service
already rendered by the employee (see the next section
on Employment Act) would be the notice period if the employment
contract is silent on it. The maximum length of termination notice
that is permissible in an employment contract, however, is not
mentioned in the Employment Act or any other statutory laws or
regulations. This raises the question as to when a termination
notice period stated in an employment contract would be
enforceable. It is common for the notice period to be one month,
but some tertiary education institutions may impose a 3- or 6-
month notice on their lecturers. For some key appointments in
private companies, six months may be a reasonable period. What
if the notice period is stretched to, say, nine months, one year or
longer for chief executive officers (CEOs) in very large
organizations with, say, tens or hundreds of thousands of
employees? The answer to this question thus is an open one, both
in the statutory and common law arena in Singapore. The
Employment Act (Section 108), however, does provide that for an
employee covered by the Act, the employer cannot without
reasonable excuse refuse to allow him or her to leave his or her
service (i.e., to walk away from the employment contract) if the
employment contract has been determined in any of the ways
hereinbefore provided. What constitutes a reasonable excuse
and how long a refusal can be are likewise not apparent or defined.

4-3Employment Act and Children

Development Co-Savings Act
4-3aCoverage
In general, the Employment Act defines employees as all
employees who have entered into a contract of service with an
employer except government and statutory board employees,
seamen, domestic workers, and managers and executives who earn
more than S$4,500 per month in basic salary. Confidential staff
such as pay clerks are covered by the Act.
 Part IV of the Act, which deals with minimum working conditions
such as rest days, hours of work, overtime pay, shift workers,
annual leave, and annual wage supplement, is applicable to all
manual-work employees earning not more than S$4,500 a month
in basic pay and all non-manual-work employees earning not
more than S$2,500 a month in basic pay (except managerial and
executive employees, who are not covered by Part IV even if they
earn not more than S$4,500 in basic salary a month). A supervisor
who spends 50% or more of the work time doing manual work is
considered as a manual-work employee and not as an executive or
a manager. Other than this limitation concerning Part IV, all other
Parts of the Act are applicable to all employees covered by the Act
and these other Parts deal with issues such as maternity and
paternity leave, payment of salary, termination of contract, sick
and hospitalization leave, public holidays, and others.

A contract of service is defined under the Act (Section 2) as any

agreement, whether in writing or oral, express or implied, whereby
one person agrees to employ another as an employee and the other
agrees to serve his employer as an employee and includes an
apprenticeship contract or agreement.

Employees who are excluded from the definition of employees

under the Act or those who are excluded from or are not included
in respect of specific provisions in the Act (or government
regulations imposed via the Act), may seek recourse in a Civil
Court based on the common law doctrine should an employment-
related dispute arise. In some cases, the Ministry of Manpower may
render help to employees not covered by the Act or specific
provisions or regulations imposed under the Act, but it lacks the
statutory power to enforce the recommendations or advice.

4-3bKey Provisions
Part II: Contract of Service A contract of service can be
terminated when the work or the time specified in it has been
completed or expired. Notwithstanding these provisions, any
contract of service can be terminated by notice (i.e., no person is to
be held in slavery) and if the contract does not provide for a notice
period for termination, the length of the termination notice (which
must be the same for both the employee and the employer) shall
be:

1 day if the employee has been employed for less than 26 weeks;
1 week if the employee has been employed for 26 weeks or more but
less than 2 years;
 2 weeks if the employee has been employed for 2 years or more but
less than 5 years;
4 weeks if the employee has been employed for at least 5 years;
As discussed earlier in this chapter, it is not clear as to the
maximum length of termination notice that can be incorporated in
a contract of service for it to remain enforceable in a Civil Court or
at the Ministry of Manpowers Labor Court.

Either party to a contract of service may terminate without notice

or without waiting for the notice to expire by making a payment to
the other party in lieu of the period that must otherwise be served
out.

When a willful breach of a condition of the contract of service by

one party occurs, the other party can terminate the contract
without notice.

A contract of service entered into by a person below the age of 18

years as an employee is not enforceable unless it is for his/her
benefit.

A person who is at least 16 years old can do any industrial or non-

industrial work. A person who is 15 years old but has not attained
16 years of age can work in a non-industrial setting but when an
industrial setting is involved, he/she can work provided that the
employer has obtained medical clearance from a medical
practitioner to certify that he/she is suitable for the work and
informs the Ministry of Manpower within 30 days after the
employment has taken place.

A person who is at least 13 years old and has not attained 15 years
of age can do light works in a non-industrial setting only. When an
industrial setting is involved, he/she can work if only family
members are employed at the workplace and the work must not be
dangerous or be likely to cause him/her injuries.

A person who has not attained 13 years of age cannot be employed.

All children and young persons must not be given works that are
potentially injurious to their health, such as working underground
or in the presence of moving machines, live wires, and others.

An employer is deemed to have broken a contract if he/she does

not pay his/her employee

1. the salary (other than overtime pay) earned within 7 days after the
salary period or
2. the overtime pay earned within 14 days after the salary period.
The employer is then liable to make a payment in lieu of the notice
period should the employee refuse to continue the employment.

An employee is deemed to have broken his/her contract of service

if he/she absents from work for more than 2 days consecutively
without prior leave from his/her employer or without reasonable
excuse or without informing or attempting to inform his/her
employer of the excuse for such absence. The employee is then
liable to make a payment in lieu of the notice period should the
employer refuse to continue the employment.

An employee is deemed to have broken his contract of service if he

absents himself from work for more than 2 days consecutively
without prior leave from his employer, or without reasonable
excuse, or without informing or attempting to inform his employer
of the excuse for such an absence. The employee is then liable to
make a payment in lieu of the notice period should the employer
refuse to continue the employment.

When an employee commits a misconduct against the express or

implied conditions of his contract of service, the employer may
after due inquiry dismiss him, downgrade him (demotion), or
suspend him from work without pay for up to 1 week. A dismissed
employee, however, may appeal to the Minister of Manpower for a
reinstatement if he feels that the dismissal is unjust. The Minister
may, after an investigation by the Commissioner, uphold the
dismissal by the employer, or if he feels that the dismissal is unjust,
order

1. a reinstatement for the employee complete with the wages which

he would have otherwise earned had the dismissal not taken place;
or
2. order the employer to pay an amount of wages as compensation
without a reinstatement.
(For the purpose of conducting a due inquiry, the accused
employee may be suspended from work on half-pay for up to 1
week but the other half of the pay must be paid if he is not found to
be guilty of the misconduct subsequently.)

An employee may terminate his contract of service without notice

if he or his immediate family is threatened by danger (violence or
disease) for which the employee does not undertake in his contract
of service.
A contract of service cannot restrict an employee from joining a
registered trade union, participating in trade union activities, or
associating with any other persons to organize a trade union.

When a change in employer occurs or there is a transfer of

employment from one employer to another, the employee enjoys
continuity in his employment and the period of time served under
the former employer is deemed to be part of the employment
period served under the new employer. When a labor union exists,
the new employer will recognize the labor union if it is recognized
by the former employer and a majority of the relevant category or
categories of employees employed by the new employer are
members. Otherwise, the new employer will only be obligated to
abide by the collective agreement entered into with the former
employer until the agreement expires or for a period of 18 months
(whichever is later) and to recognize the trade union to the extent
of disputes arising from the transfer of employment.

Part III: Payment of Salary An employee must be paid at

least once a month. In the absence of a salary period in a contract
of service, the salary period is by default one month.

Salary (other than overtime pay) earned must he paid within 7

days after the end of the salary period and overtime pay, within 14
days. The salary earned on completion of a contract of service must
be paid upon the completion of the contract. An employee who is
dismissed or whose service is terminated by the employer must be
paid all the salary and any sum earned on the day of dismissal or
termination or, where this is not possible, within three days after
the dismissal or termination. If an employee terminates his
contract by serving out a termination notice, what he has earned
must be paid on the last day of the notice period. If an employee
terminates his employment without notice or after serving a
termination notice, chooses not to serve out the entire notice
period, the employer can deduct the payment in lieu of the notice
period that is not served from what he has earned and the balance
must be paid to him within 7 days after the termination takes
place.

Salary may be paid into the employees bank account. Otherwise,

salary must be paid at the workplace or any other place agreed to
between the employee and employer during working hours.

An employer may deduct from an employees salary based on these

reasons:
 Absence from work when he is required to work (including food
supplied, if any, during the absence);
Damage or loss of goods or loss of money due to the employees
neglect or default (up to of a months pay unless otherwise
permitted by the Commissioner);
Meals supplied at the request of the employee;
Housing accommodation supplied by the employer (as agreed to by
the employee);
Amenities and services supplied by the employer as agreed to by the
employee (as authorized by the Commissioner for Labor);
Recovery of advances or loans or over-payments of salary (advances
made before the commencement of a contract other than for
traveling expenses can be recovered by installments within a 12-
month period but each installment cannot be more than one-
quarter of the salary earned; loans may be recovered by
installments but each installment cannot be more than one-quarter
of the salary earned);
Income tax payable by the employee;
Central Provident Fund contributions (retirement savings) payable
by the employee;
At the request of the employee, contributions to a superannuation
scheme or provident fund or other scheme as approved by the
Commissioner for Labor;
Subscriptions, entrances, installments of loans, interest and other
dues payable to any cooperative society as requested by the
employee in writing and paid through the employer;
Maximum 25% of salary for amenities, accomodation, and services;
Any other deductions as approved by the Minister for Manpower.
Total deductions other than for absence from work,
advance/loans/over-payment of salary, income tax payable by the
employee, and fees payable to any cooperative society as agreed by
the employee, must not exceed 50% of the salary earned except for
the last salary payable upon termination or completion of the
contract of service.

Employees salary enjoys priority over other creditors claims

against the employers properties (for up to five months of salary)
when these apply:

The property concerned is where the employees do their work;

The property is produced by the employees;
The property is movable and is used by the employees in the course
of their work;
The money due to the employer is generated from the work done by
the employees.
Part IV: Conditions of Service This Part is applicable to
all manual-work employees (as defined in this Act) earning not
more than S$4,500 in basic salary a month and all non-manual-
work employees earning not more than S$2,500 in basic salary a
month. The provisions here are minimum conditions of work for
employees. This Part does not apply to managerial and executive
employees even if they earn not more than S$4,500 in basic salary
a month.

Employers must provide to employees one rest day without pay

per week or 30 hours without pay per week in the case of shift
employees.

An employee who works at the request of the employer on a rest

day is entitled to 2 times the pay; an employee who requests to
work on a rest day is entitled to the normal pay; overtime work on
a rest day is 1.5 times the normal rate regardless of who requests
for the work.

An employee shall not be required to work for more than 6

consecutive hours without a period of leisure and not more than 8
hours a day or more than 44 hours per week. If the work must be
carried out continuously for up to 8 hours, the employee is entitled
to 45 minutes of rest in aggregate during the 8 hours. By
agreement, the employee may be required to work for between 40
and 48 hours per week but the average of 2 consecutive weeks
must not be more than 44 hours per week. Similarly, within a given
week, the employee work for up to 9 hours a day as long as the
average 44 hours per week limit is not breached. For shift workers,
these restrictions may not apply as long as the employee is not
required to work for more than an average of 44 hours per week
over 3 consecutive weeks and the employee is not required to
work for more than 12 hours on any of the days. These restrictions,
however, are not applicable when the employer is exempted from
these restrictions as deemed fit by the Commissioner of Labor. (For
example, Singapore Airlines pilots and air stewards may have to
work consecutively for 14 hours on a Singapore-London flight. The
14 hours is considered as normal work hours if the Commissioner
deems it a business necessity).

When the employee agrees to work more than the normal hours of
work at the request of the employer, he/she is entitled to overtime
rate of pay, which is set at 1.5 time the normal rate of pay. In the
case of non-manual work employees who earn not more than
S$2,500 in basic salary a month, the overtime rate of 1.5 times is
applicable to only the first S$2,250 of basic salary. Otherwise, the
 overtime rate is one time the normal rate of pay. In total, an
employee cannot do more than 72 hours of overtime work in a
month.

An employee may be required to work beyond the normal hours of

work when there is an emergency, such as when an accident has
occurred or may occur; when the life of the community is at stake;
when defense or security is involved; when urgent work must be
done to machinery or plant; when an unforeseeable interruption to
work occurs; or when essential services as defined under the
Criminal Law (Temporary Provisions) Act are involved.

An employee may be paid by the day, the piece, or the task.

An employee who has served for at least 3 months is entitled to 7

days of paid annual leave per year for the first year and an
additional day for each subsequent year up to a total of 14 days per
year. No-pay leave is not considered as part of the service period of
the employee in the calculation of annual leave. Annual leave must
be consumed within 12 months after the end of every 12 months of
continuous service and an employee who absents himself
without reasonable excuse for more than 20% of the month or year
will have his leave entitlement for the month or year forfeited.
When an employee is dismissed otherwise than for misconduct,
the employer must pay him for any unconsumed leave at the gross
rate of pay.

An employee is entitled to paid sick leave after having served at

least 3 months (with effect from January 1, 2009) after he is
examined at the expense of the employer by a doctor appointed by
the employer or a government medical officer and the doctor has
so certified that he is unfit to work, according to this schedule
(each year):

If the employee has served for at least 3 months but less than 4
months: 15 days including 10 days for hospitalization
If the employee has served for at least 4 months but less than 5
months: 30 days including 22 days for hospitalization
If the employee has served for at least 5 months but less than 6
months: 45 days including 34 days for hospitalization
If the employee has served for at least 6 months: 60 days including 46
days for hospitalization
An employee who has been in continuous service for less than 2
years shall not be entitled to any retrenchment benefit.

An employee who has been in continuous service for less than five
years shall not be entitled to any retirement benefit other than the
sums payable under the Central Provident Fund Act or those due
under approved retirement savings plans.

Retirement benefits due to an individual enjoy priority over all

other unsecured debts but are ranked below all other preferred
debts under the Companies Act. Retirement benefits payable by an
individual are ranked above all other debts in the case of a
bankrupt or a person dying insolvent under the Bankruptcy Act.

Annual Wage Supplement (AWS), a form of fixed bonus, cannot be

more than 1 month of pay. Companies that have a tradition of
paying AWS before August 26, 1988 shall continue to do so until it
is renegotiated. AWS can be reduced in a bad business year.
Payment of bonus based on trading results, productivity, or other
criteria, is allowed regardless of the amount.

The Minister for Manpower can make wage recommendations (the

National Wages Council is established under this Part).

Part V: Truck System A manual-work employee (workman)

must be paid his salary in cash, by check, or via a bank account and
cannot be paid in kind (such as food or accommodation). An
employer can offer food or drink for voluntary purchase by a
workman and the employer is also allowed to offer food,
accommodation, allowances, or privileges (except noxious drugs
and intoxicating liquor) in addition to money salary as part of the
total compensation package to a workman.

Part VI: Contractor and Contracting A principal (other

than a property developer), contractor, or subcontractor, who not
being the employer has contracted with another contractor who
employs a manual-work employee for the supply of labor, shall be
jointly and severally liable to that manual-work employee as
employed by the contractor for up to 1 month of pay for the work
done by the contractor.

Part VIA: Part-Time Employees An employer can pro-

rate the benefits payable under this Act for employees who are
employed on a part-time basis, which is defined as working for less
than 35 hours per week.

Part VII: Employment of Children and Young

Persons A child is anyone below 15 years of age; a young person
is anyone who is at least 15 years but below 16 years of age.
 A child between 13 and 14 years old can be employed to do light
works in a non-industrial setting. In an industrial setting, the child
can work if only family members are employed and the work is not
potentially injurious to his health.

A child below the age of 13 cannot be employed.

A young person (15 years of age) can be employed to work in a

non-industrial setting but when an industrial setting is involved,
he/she can be employed to work provided that the employer has
obtained medical clearance from a medical practitioner to certify
that the young person is fit to do the work.

A child who is at least 13 years of age may be employed in light

work suited to his capacity in a non-industrial undertaking.

The Ministry of Manpower sets conditions or restrictions on

employing children or young persons.

The Ministry of Education, the Institute of Technical Education, and

any Government-funded technical, vocational, or industrial
training school or institute can approve and supervise children and
young persons who are enrolled in their training programs.

Part IX: Maternity Leave and Child-Care Leave for

Parent Under Part IX of the Employment Act, every female
employee (regardless of marital status or nationality) who has
served her employer for at least 90 days is entitled to 8 weeks of
paid maternity leave (paid by the employer) per confinement
(delivery) unless

1. she already has two or more living children at the time of

confinement (delivery); and
2. the living children were born during more than one confinement.
The female employee can in addition take a 4-week no-pay leave in
connection with the confinement.

The Children Development Co-Savings Act enhances the paid

maternity leave to 16 weeks per confinement (delivery) for any
legally married female employee (including managers and
executives regardless of monthly basic salary levels) who gives
birth to a Singaporean child provided she has worked for at least
90 days for the employer prior to delivery (regardless of the
number of children that she already has). The government pays for
all 16 weeks of maternity leave regardless of the number children
that the legally married female employee has at the time of
confinement except for the employer-paid portion already
provided under Part IX of the Employment Act. The legally married
working father of the female employee can take up to one week of
the mothers maternity leave as paid for by the government subject
to the mothers agreement.

Self-employed mothers are not eligible for the maternity benefits

provided for under Part IX of the Employment Act but are eligible
for the government-paid maternity benefits (all 16 weeks of paid
leave) for giving birth to a Singaporean child under the Children
Development Co-Savings Act, if they are legally married and are
self-employed for at least 90 days prior to the confinement,
regardless of the number of children that she already has.

It is illegal to dismiss a female employee during her maternity

leave.

An employer must give just cause for terminating the female

employees service after she has served the employer for 90 days,
else the female employee is entitled to the maternity leave benefit.

The female employee cannot use maternity leave as part of a

termination notice.

An employer who employs a female employee within 4 weeks

following a confinement is guilty of an offence.

A female employee who works for another employer during her

maternity leave shall forfeit her maternity leave entitlement.

A male or female employee is entitled to 2 days of paid child-care

leave per year after he or she has served the employer for at least 3
months and has at least one child under 7 years of age during the
year. The Children Development Co-Savings Act increases this
child-care leave for each married/widowed/divorced parent
(including managers, executives, confidential staff ) of a child who
is a Singaporean below 7 years of age, to 6 days per year (the first 3
days are paid by the employer and the second 3, by the
government). In addition, a parent can also take 6 days of unpaid
infant care leave per year when the Singaporean child is less than 2
years of age. These benefits are applicable to both employed and
self-employed parents who have engaged in the employment or
self-employment for at least 3 months during the relevant benefit
period.

Part X: Holiday and Sick Leave Entitlements An

employee covered by this Act is entitled to the public holidays as
declared under the Holidays Act (administered by the Ministry of
 Manpower). An employee, however, may be required to work on a
public holiday and be paid an extra day of basic pay in addition to
the gross rate of pay that the employee is receiving for that day
even without working. If the public holiday falls on a rest day, the
next working day shall be a paid holiday. If a public holiday falls on
a non-working day (e.g., in a 5-day work week, one of the 2 free
days in the week must be a rest day and the other is considered a
non-working day), the employer may pay the employee for that
day at the gross rate of pay or substitute the public holiday with
another day off. By agreement between the employer and the
employee, a public holiday can be substituted by another day off.
An employee who absents himself from work before or after the
public holiday without reasonable excuse will have his/her
entitlement to the public holiday forfeited.

An employee covered by this Act is entitled to paid sick leave after

having served for at least 3 months and after he/she is examined at
the expense of the employer by a doctor appointed by the
employer or a government medical officer and the doctor has
certified that he/she is unfit to work, according to this schedule
(each year):

If the employee has served for at least 3 months but less than 4
months: 15 days including 10 days for hospitalization
If the employee has served for at least 4 months but less than 5
months: 30 days including 22 days for hospitalization
If the employee has served for at least 5 months but less than 6
months: 45 days including 34 days for hospitalization
If the employee has served for at least 6 months: 60 days including 46
days for hospitalization
If an employee falls sick on a public holiday, rest day, non-working
day, or a day when he/she is on annual or no-pay leave, he/she is
not entitled to the paid sick leave.

4-3cImplications for Employees and Employers

The Employment Act provides a set of basic conditions for
employment. It is thus not surprising that many individual
employment contracts and collective agreements (for unionized
employees) specify that whatever minimum conditions contained
in the Act are applicable to the employees in question. The
Children Development Co-Savings Act seeks to boost the local
population growth rates by ensuring that parents of Singaporean
newborns enjoy sufficient maternity, paternity, and parenting
leave.
The Employment Act does not protect everyone. Managers and
executives earning more than S$4,500 per month in basic pay are
not protected by the Act even in terms of salary payment. In
general, they are not covered by the Act, so may not be able to seek
justice through the Ministry of Manpower unless otherwise
provided for. They would need to enforce their rights, where
necessary, in a Civil Court based on their employment contracts.

Although seamen and domestic workers are not employees as

defined under the Employment Act, they enjoy protection through
other means. Seamen are protected under the Industrial Relations
Act and the Trade Unions Act and they can form a labor union to
protect their interests. The Singapore Organization of Seamen is
the labor union that protects seamen registered in Singapore (they
can be non-Singaporean). Likewise, Part VII of the Employment Act
allows the Minister for Manpower to specify protection measures
for domestic workers. The Minister for Manpower also has power
to specify conditions that employers must fulfill in order to employ
foreign domestic maids under the Employment of Foreign
Manpower Act.

When a workplace strike takes place, labor union members may

stop work to exert pressures on the employer to accede to their
demands. If the strike takes place for more than two days
consecutively, the striking employees (if they are covered by the
Employment Act) may be terminated from their employment and
may also be liable to make a payment in lieu of the termination
notice to their employer should their employers refuse to continue
the employment relation under this Part II of the Act. (However,
the union may be able to exonerate the striking workers from the
termination notice liability by invoking its right to immunity in a
legally conducted strike under the Trade Unions Act.) It is thus
potentially costly for labor union members to be on a strike for
more than 2 days consecutively, even if it is for legitimate reasons.
Between 1978 and now, only one legal strike took place, in 1986.
In this strike, the workers went back to work on the third day,
successfully avoiding this hefty cost. In 2012, an illegal strike broke
out at SMRT Corporation over issues relating to working
conditions, resulting in five bus drivers charged and jailed, 29
deported back to their home country, and some 150 given a
warning. This was dealt with under the Criminal Law (Temporary
Provisions) Act.

4-4Workplace Safety and Health Act

 4-4aCoverage
The Workplace Safety and Health Act covers all workplaces
(see Figure 4-1for a partial list of workplaces covered by the Act)
in Singapore and it includes the government, but the government is
not liable to be prosecuted under this Act. Individuals providing
services to the government, however, may be prosecuted under
this Act.

Figure 4-1
Sample Workplaces Covered by Workplace Safety and Health Act
A Partial List of Workplaces Covered by the Workplace Safety and Health Act
1. Any premises using an assembly-line manufacturing process in connection with the
manufacturing, for the purposes of trade or gain, of any goods or products using
mechanical power, not being a restaurant or kitchen.
2. Any premises used for the manufacturing, for the purposes of trade or gain, of fabricated
metal products, machinery, or equipment.
3. Any premises used for the manufacturing, for the purposes of trade or gain, of wood
products using mechanical power.
4. Any premises used for the production of gas for commercial sale.
5. Any premises used for the manufacture of pharmaceutical products or its intermediates.
6. Any premises where the printing by letter press, offset, lithography, photogravure,
rotogravure or other similar process, or the binding of such printed materials, is carried
out.
7. Any premises where mechanical power is used in connection with the sorting, packing,
handling, or storing of articles.
8. Any premises used for the processing or manufacturing of flammable, corrosive or toxic
substances, including petroleum, petroleum products, petrochemical, or petrochemical
products.
9. Any premises where the treatment, coating, or electroplating of metal products involving
the use of flammable, corrosive, or toxic substances is carried out.
10. Any premises where the washing or filling of bottles, containers or vessels that contain or
had contained flammable, corrosive, or toxic substances is carried out, not being any
premises where the filling of fuel into vehicles for their propulsion is carried out as a
commercial undertaking.
11. Any premises used for the storage of gas (including liquefied gas) in a container having a
storage capacity of not less than 140 cubic meters, not being any premises where the gas is
stored for filling of fuel into vehicles for their propulsion as a commercial undertaking.
12. Any premises used for the bulk storage of toxic or flammable liquid (excluding liquefied
gas) in a container, not being an underground container, that has a storage capacity of not
less than 5,000 cubic meters.
13. Any yard (including any dock, wharf, jetty, quay and the precincts thereof) where the
construction, reconstruction, repair, refitting, finishing, or breaking up of ships is carried
out, including the waters adjacent to any such yard where the construction, reconstruction,
 repair, refitting, finishing, or breaking up of ships is carried out by or on behalf of the
occupier of that yard.
14. Any premises where the construction, reconstruction, or repair of locomotives, aircraft,
vehicles, or other plant for use for transport purposes is carried on as ancillary to a
transport undertaking or other industrial or commercial undertaking, not being any
premises used for the purpose of housing locomotives, aircraft, or vehicles where only
cleaning, washing, running repairs, or minor adjustments are carried out.
15. Any premises where building operations or any work of engineering construction are
carried out.
16. Any premises where articles are made or prepared incidentally to the carrying on of any
building operations or any work of engineering construction, not being premises in which
such operations or work are being carried out.
17. Any premises where work is carried out for or in connection with the generating of
electrical energy for supply by way of trade or for purposes of gain.
18. Any premises where mechanical power is used for the purposes of or in connection with a
water supply.
19. Any sewage works where mechanical power is used and any pumping station used in
connection therewith.

4-4bKey Provisions
The Ministry of Manpower administers this Act and may issue a
remedial or stop-work order if a workplace covered by the Act is
not fit for a person at work in terms of his safety, health, and
welfare. The following parties are responsible for ensuring that the
workplace is safe and without health risks to any person at the
workplace:

the occupier of the workplace;

the employer;
the self-employed person whose undertaking affects the person;
the principal who contracts directly with a contractor or indirectly
with a subcontractor to carry out his undertaking
The person at work is also required to follow the proper
procedures and processes to secure his safety, health, and welfare
and to help the above-mentioned parties and any other person to
comply with this Act.

4-4cImplications for Employees and Employers

Both the employer and the employee are responsible for ensuring
the safety, health, and welfare of anyone at the workplace. They
must work together conscientiously to ensure that the workplace
is free from safety and health hazards. The Act covers virtually
every workplace, so large and small employers must be aware of
this provision. The Ministry of Manpower investigates accidents
and health hazards that have arisen at the workplace, so employers
 and employees must proactively comply with this Act. The Ministry
may also conduct checks to ensure that workplaces are safe and
free from health risks.

4-5Work Injury Compensation Act

4-5aCoverage
The Work Injury Compensation Act covers all employees under a
contract of service except self-employed persons, independent
contractors, domestic workers, members of the Singapore Armed
Forces, officers of the Singapore Police Force, the Singapore Civil
Defense Force, the Central Narcotics Bureau, and the Singapore
Prisons Services.

4-5bKey Provisions
An injured employee covered by this Act is entitled to a maximum
of 14 days of fully paid outpatient medical leave, 60 days of fully
paid hospitalization leave, and up to one year on 2/3 pay including
the fully paid outpatient and/or hospitalization leave already
taken. The employee is also entitled to up to $30,000 in medical
expenses for the injury.

When total permanent incapacity occurs, the employee is entitled

to between S$73,000 and S$218,000 in compensation depending
on the employees age and income. The younger the employee and
the more he/she earns, the larger the compensation amount. If the
permanent incapacity is not 100%, the compensation will be
adjusted by multiplying the age/income-relevant amount by the
percentage loss of earning capacity as certified by a panel of
doctors. When an employee dies from work injuries, he/she is
entitled to between S$57,000 and S$170,000 in compensation
depending on his/her income and age at the time of death. The
younger the employee and the higher the income, the larger the
amount of compensation.

4-5cImplications for Employees and Employers

This Act covers work-related injuries only, including injuries
suffered to and from work if transportation to and from the
workplace is provided by the employer. The compensation is
payable regardless of fault as long as it is work-related but it is not
payable when the employee has self-inflicted the injuries or the
injuries arise from his consumption of alcohol or a drug not
prescribed by a medical doctor. The injured employee may choose
to seek compensation in Civil Court but he has to prove that the
injuries sustained are due to the employers negligence or fault.
The employee can only claim compensation either through this Act
 or via a Civil Court. There is ample time (up to 28 days after a claim
is processed by the Ministry of Manpower) for the employee to
make a final choice as to whether he wants to bring the case to a
Civil Court.

4-6Central Provident Fund (CPF) Act

4-6aCoverage
The Central Provident Fund (CPF) Act covers

1. all Singaporeans and Singapore permanent residents who work in

Singapore under a contract of service except those employed in a
vessel as a master, seaman, or apprentice and
2. Singaporeans working as a master, seaman, or apprentice in a
vessel that is not excluded from this Act based on a contract
entered into in Singapore.
4-6bKey Provisions
Both the employer and employee must contribute a portion of the
employees monthly earnings into the latters CPF account. The CPF
account is split into various subaccounts that are subject to
different restrictions of usage. The CPF contribution rates vary
among employees depending on the age of the employee; whether
the employee is a Singaporean or Singapore permanent resident;
whether the employee is employed in the private sector, the civil
service, or a statutory board; and whether he is a pensionable or
non-pensionable employee. The most commonly applicable rates
of contributions are detailed in Figure 4-2. Part-time wage earners
and contract workers are covered by this Act and both the
employers and the workers concerned must contribute the full CPF
as per the rates set by the CPF Board. Self-employed individuals or
independent contractors are required to make contributions to the
Medisave subaccount to meet old age medical needs.

Figure 4-2
For (1) private sector employees; (2) non-pensionable employees (statutory bodies and
aided schools); and (3) non-pensionable employees (ministries). Applicable to (a)
Singapore citizen; (b) Singapore permanent resident (SPR) in the third year and onwards
of obtaining SPR status; and (c) SPR in the first and second year of obtaining SPR status but
who has jointly applied with employer to contribute at full employer and employee rates
(effective January 1, 2014).
 Credited
into

Employee Age Contribution by Contribution by Total Contribution Ordinary Account (% Special Account (% Medisave Account
(Years) Employer (% of Employee (% of (% of wage) of wage) of wage) (% of wage)
wage) wage)

35 & below 16 20 36 23 6 7

Above 3545 16 20 36 21 7 8

Above 4550 16 20 36 19 8 9

Above 5055 14 18.5 32.5 13.5 9.5 9.5

Above 5560 10.5 13 23.5 12 2 9.5

Above 6065 7 7.5 14.5 3.5 1.5 9.5

Above 65 6.5 5 11.5 1 1 9.5

Source: Singapore Central Provident Fund Board, http://mycpf.cpf.gov.sg/Employers/Gen-Info/cpf-

Contri/ContriRa.htm accessed on February 6, 2015.

4-6cImplications for Employees and Employers

The CPF contribution rates can be very complicated. The various
CPF contribution rates presented here are meant to demonstrate
the complexity that may arise when HR policies set by the
Singapore government take into account various factors that are
relevant to situations facing individual employees. Employers must
be well versed with these complexities in the actual operational
setting to function effectively. Employees are, subject to the
relevant limitations, allowed to use their CPF monies to buy public
and private properties, invest in approved instruments, pay for
tertiary education, pay for hospitalization expenses, and the like.
The flexibility injected into the CPF system has made the scheme
very effective in improving the livelihood of millions of
Singaporeans and permanent residents.

4-7Employment of Foreign
Manpower Act and Immigration Act
4-7aCoverage
The Employment of Foreign Manpower and Immigration Acts
cover all foreign employees in Singapore. The Employment of
Foreign Manpower Act covers all foreigners (who are not
 Singapore citizens or permanent residents) who work or seek
work in Singapore. Both foreign employees and self-employed
foreigners must apply for work passes to work in Singapore. All
employers are bound by this Act when they employ foreign
employees for work or for training. The Employment of Foreign
Manpower Act is administered by the Ministry of Manpower and it
oversees all matters relating to the employment of foreigners in
Singapore. The Immigration Act is administered by the Ministry of
Home Affairs and it controls the entry and stay of all foreigners in
Singapore.

4-7bKey Provisions
There are three categories of Employment Pass: P1, P2, and Q1
Pass. These Passes are for foreigners seeking professional,
managerial, executive, and specialist jobs.

P1 Pass for applicants earning a fixed monthly salary of more than

S$8,000.
P2 Pass for applicants earning a fixed monthly salary of more than
S$4,000 (but not more than S$8,000) and in possession of
recognized qualifications.
Q1 Pass for applicants earning a fixed monthly salary of more than
S$3,300 and in possession of recognized qualifications.
Compensatory factors such as skills and years of experience may
be taken into consideration for Q1 applications.

The S Pass is for foreigners who earn a fixed monthly salary of at

least S$2,200. S Pass applicants are assessed on a points system,
taking into account multiple criteria including salary, education
qualifications, skills, job type, and work experience.

The Work Permit (WP) is for foreigners who:

Want to work in Singapore; and

Earn a monthly basic salary of not more than S$2,200.
A prospective employer must first apply to the Controller of Work
Permits for a WP before employing a foreign worker. All foreign
workers must be at least 18 years old at the time of the WP
application. In addition, Malaysian applicants must not be 58 years
or older; non-Malaysian applicants must not be 50 years or older.

The Work Permit (Foreign Domestic Worker) is meant for foreign

domestic workers who wish to work in Singapore households.
Applicants for foreign domestic worker WP must be at least 23 but
less than 50 years of age.
 The Personalized Employment Pass (PEP) is a scheme to facilitate
the contributions of global talent to Singapore. The PEP is not tied
to any employer and is granted on the strength of an EP holders
individual merits. A PEP holder is able to remain in Singapore for
up to six months in between jobs to evaluate new employment
opportunities. The following groups of foreigners will be eligible
for a PEP:

Oerseas foreign professional whose last drawn fixed monthly salary

overseas was at least S$18,000 (not more than six months prior to
the application).
Employment Pass holders who earned at least S$12,000 in fixed
monthly salary.
The EntrePass is for foreign entrepreneurs who wish to start a
business in Singapore. The business must be a registered company
in Singapore with a paid-up capital of at least S$50,000 and at least
30% owned by the entrepreneur. The business must not be more
than 6 months old when the applicant files the application. In
addition, the business must meet at least one of these conditions:

1. receives funding or investment from a recognized third-party

venture capitalist (VC) or business angel who is accredited by a
Singapore government agency;
2. holds an intellectual property (IP) that is registered with an
approved national IP institution;
3. has ongoing research collaboration with a research institution
recognized by Agency for Science, Technology and Research
(A*STAR) or institutes of higher learning in Singapore; and
4. is an incubatee at a Singapore government supported incubator.
Under the Immigration Act, a foreigner may enter Singapore on a
social visit pass for a limited period of time (e.g., two weeks) and
try to secure a new job during the stay.

4-7cImplications for Employees and Employers

The employer must ensure that all the requirements and
regulations pertaining to employing a foreign employee are met,
else they may be punished with a fine and/or imprisonment.
Employees and the employers face more restrictions and
conditions as they go down the skills level. In general, Singapore
welcomes both skilled and unskilled foreign employees but highly
skilled foreign employees are given more favorable conditions to
enter and work in Singapore.

4-8Retirement and Reemployment

Act
4-8aCoverage
The Retirement and Reemployment Act covers all Singaporeans
and Singapore permanent residents who are employed as
employees under a contract of service except these employees (via
Retirement and Reemployment (Exemption) Notification 2011):

Foreigners on Work Permit, S Pass, and Employment Pass.

Officers in the Police Force, Prisons, Narcotics, Civil Defense, and
Corrupt Practices Investigation Service.
Persons enlisted for regular service in the Singapore Armed Forces.
Auxiliary police officers.
Public officers eligible for retirement benefits under the Pensions Act.
Persons in the service of a statutory body who is eligible for pension
under the Pensions Act.
Cabin crew providing in-flight services on board commercial aircrafts
Employees working not more than 20 hours per week.
Employees on fixed-term contract of not more than 2 years, including
any extension of contract done within a 6-month period.
Employees employed on specific projects on a fixed-term contract.
Employees in jobs where age is a bona fide occupational
consideration, as approved by Minister for Manpower.
Employees recruited at age 55 or above (but if they have worked at
least 3 years with the company when they turn 62, their employers
have to offer reemployment from age 62 to 65 (this age limit will
be raised to 67 soon) if the employees are fit to work and have
performed satisfactorily).
Employees covered by approved retirement benefit schemes before
1993.
4-8bKey Provisions
The retirement age is currently set at 62 years but the government
may increase it to 67 years. When an employee reaches 62 but has
not reached 65 (this age limit will be raised to 67 soon), the
employer must offer him/her reemployment unless his/her work
performance is not satisfactory or a medical doctor has certified
that he/she is not fit to work. The reemployment can be for 13
years (covering up till before the employee turns 65 (this age limit
will be raised to 67 soon). If a position cannot be found for the
eligible employee, the employer must pay a sum to help the
employee look for alternative employment. An employee below the
retirement age cannot be dismissed based on age. Employers are
allowed to reduce the pay of an employee upon reemployment at
age 62 (or subsequently) but the reduction must be based on
reasonable factors other than age. An employee below the
retirement age who feels that he/she has been dismissed based on
age can file a complaint to the Minister for Manpower.
4-8cImplications for Employees and Employers
This Act effectively requires that an employer must have good
reasons to terminate the service of an employee because in the
absence of a good reason for termination, the employee can view
the termination as a dismissal based on age and raise the issue
with the Minister for Manpower.

4-9Industrial Relations Act

4-9aCoverage
The Industrial Relations Act covers all employees on a contract of
service. The Ministry of Manpower has specific powers to
administer the day-to-day operations of the Act.

4-9bKey Provisions
This Act establishes the Industrial Arbitration Court (IAC) as the
highest court to adjudicate all industrial matters that may arise
between an employer and a labor union. The President of the IAC
enjoys the same rights, privileges, protection, and immunity as a
Judge of the Supreme Court.

If the majority of a class of employees are members of a labor

union, the employer must give due recognition to it and negotiate
with the class of employees as a whole. A class of employees of
which only a minority are members of a labor union may be given
voluntary recognition by the employer. Managerial or executive
employees are allowed to bargain collectively if they are members
of their own labor union but they must not create a conflict of
interest by virtue of their work duties and responsibilities vis--vis
the employing establishment. A labor union that represents non-
managerial or non-executive employees can now represent eligible
managerial or executive employees as a group in collective salary
negotiation. It can also represent the individual managerial or
executive employee based on the latters individual contract of
service in matters relating to unfair dismissal, breach of contract,
workplace victimization, reemployment (post-62 years of age), and
retrenchment benefits. A manager or executive is eligible for the
limited employment protection to the extent that his/her work
responsibilities and duties do not create a conflict of interest with
the employer.

The Ministry of Manpower will help to draw the line as to who is or

who is not eligible to be protected by a labor union. If a dispute
arises as to who can or cannot be represented by a labor union, the
final adjudicating authority is the IAC.
 A labor union can represent the eligible group or groups of
employees and collectively negotiate with the employer on all
matters pertaining to the workplace except:

Promotion from a lower grade or category to a higher one.

Transfer of an employee if it is not detrimental to his terms of
employment.
Recruitment when a vacancy arises.
Retrenchment as a result of redundancy or restructuring.
Dismissal based on misconduct and reinstatement ordered by the
Minister after an unjust dismissal takes place.
Assignment of duties or tasks that are consistent or compatible with
the terms of employment.
Either the employer or the organized labor may serve the other
party a notice to negotiate on any workplace issue not listed above.
The party being served the notice must accept the notice within 7
days and both parties must reach an agreement within 14 days
after the notice was first served. After these periods, a dispute may
be deemed to have arisen and either party may notify the
Commissioner of Labor. If an unresolved dispute arises between
the organized labor and the employer, the dispute must first go to
the Ministry of Manpower for conciliation. The Ministry may call a
compulsory conference and both the employer and the organized
labor must attend the conciliation hearings.

A collective agreement setting the terms and conditions for the

entire class of employees (including non-union members who
happen to be in the class) is gazetted as an official law and it is a
legally binding document recognized by and enforceable via the
IAC. It must last between 2 and 3 years and the IAC has specific
powers to alter the contents of a collective agreement, such as
when the language used is ambiguous or when the economic
conditions are so unforeseeable that the originally agreed-upon
terms and conditions of the collective agreements should not be
taken as they are.

The IAC has a ten-member employee panel and another ten-

member employer panel. These panels provide expert advice and
adjudication resources to help the IAC exercise its power.

4-9cImplications for Employees and Employers

The Industrial Relations Act has been playing a critical role in
ensuring the success of Singapores industrialization efforts since
the late 1960s. It lays the groundwork for industrial disputes to be
resolved speedily and in an orderly way, and promotes a conducive
environment for investment. The strong interventionist approach
 adopted by the government via this Act aims to ensure Industrial
peace with justice: Peace for the workplace and investment
environment and justice for both employers and employees. A
long-term perspective is taken when the government reconciles
and adjudicates the differences between employers and the
organized labor. A key to the successful implementation of this Act
is the attentiveness to the concerns of both employers and
employees as displayed by the professionally trained officers of the
Ministry of Manpower. Exceptional listening and conflict resolution
skills of the mediating personnel are as important as the legal
provisions contained in this Act.

4-10Trade Unions Act

4-10aCoverage
The Trade Unions Act covers all trade unions in Singapore. A trade
union can be a labor union or an employer union.

4-10bKey Provisions
A trade union (including a federation of trade unions) is defined as
any association or combination of workmen or employers, whether
temporary or permanent, whose principal objective is to regulate
relations between workmen and employers for all or any of the
following purposes:

1. to promote good industrial relations between workmen and

employers;
2. to improve the working conditions of workmen or enhance their
economic and social status;
3. to achieve the raising of productivity for the benefit of workmen,
employers, and the economy of Singapore.
A trade union must be registered within 1 month after it is formed.
The Registrar of Trade Unions may issue a certificate of
registration if he is satisfied:

1. that a trade union applying for registration has complied with the
provisions of this Act;
2. that the objects, rules, and constitution of the trade union do not
conflict with any of such provisions and are not unlawful and that
such rules and constitution are not oppressive or unreasonable;
3. that the trade union is not likely to be used for unlawful purposes
or for purposes inconsistent with its objects and rules; and
4. that, where the trade union is an association or combination of
workmen in a particular trade, occupation, or industry, it is not
likely to be used against the interests of the workmen in that
particular trade, occupation, or industry.
 The Registrar of Trade Unions may refuse to issue a certificate of
registration if he is:

1. not satisfied that the trade union has complied with the provisions
of this Act;
2. of the opinion that any one of the objects or rules or the
constitution of the trade union is unlawful or conflicts with any
provision of this Act;
3. of the opinion that the constitution or any of the rules of the trade
union is oppressive or unreasonable;d. of the opinion that the
trade union is likely to be used for unlawful purposes or purposes
inconsistent with its objects and rules;
4. of the opinion that the trade union is likely to be used for unlawful
purposes or purposes inconsistent with its objects and rules;
5. of the opinion, where the trade union is an association or
combination of workmen in a particular trade, occupation, or
industry, that the trade union is likely to be used against the
interests of the workmen in that particular trade, occupation, or
industry; or
6. satisfied, where the trade union is an association or combination of
workmen in a particular trade, occupation, or industry, that there
is an existing trade union registered in respect of that particular
trade, occupation, or industry.
A certificate of registration of a trade union may be withdrawn or
canceled by the Registrar:

1. at the request of the trade union upon its dissolution to be verified

in such manner as the Registrar may require;
2. if he is satisfied

i. that the certificate of registration was obtained by fraud or

mistake;
ii. that any one of the objects or rules of the trade union is unlawful;
iii. that the constitution of the trade union or of its executive is
unlawful;
iv. that the trade union is being used for any unlawful purpose or for
any purpose inconsistent with its objects and rules;
v. that the trade union has rescinded any rule providing for any
matter for which provision is required by Section 38 of this Act
(key provisions about the operations of the trade union) or has
willfully and after notice from the Registrar:

1. contravened any provision of this Act or allowed any rule to

continue in force which is inconsistent with that provision; or
2. allowed any rule to continue in force which is in the opinion of the
Registrar oppressive or unreasonable;
vi. that the funds of the trade union are expended in an unlawful
manner or on an unlawful object or on an object not authorized by
the rules of the trade union; or
vii. that the trade union has ceased to exist;
3. if he is satisfied in the case of a trade union of workmen in a
particular trade, occupation, or industry, that it is being used or is
likely to be used against the interests of workmen in that particular
trade, occupation, or industry; or
4. if he is of the opinion in the case of a trade union of workmen in a
particular trade, occupation, or industry and having regard to the
existence of another trade union or other trade unions of workmen
in the same trade, occupation, or industry that it is necessary in the
interests of the workmen in that particular trade, occupation, or
industry, to cancel or withdraw the certificate of registration of the
trade union.
In the case of (b)(d) above, the Registrar must give the trade
union a prior notice of at least 2 months in writing specifying the
ground on which the certificate of registration of the trade union is
to be withdrawn or canceled. The union is given a chance to defend
itself against the de-registration.

If any trade union does not apply for registration in due time, or if
the registration of any trade union is refused, withdrawn, or
canceled, then:

1. the trade union shall be deemed to be an unlawful association and

shall cease to enjoy any of the rights, immunities, or privileges of a
registered trade union, but without prejudice to any liabilities
incurred or to be incurred by the trade union which may be
enforced against the trade union and its assets;
2. the trade union shall not, nor shall any of its officers, members, or
agents on behalf of the trade union, take part in any trade dispute
or promote, organize, or finance any strike or lock-out, or provide
pay or other benefits for its members during a strike or lock-out;
3. the trade union shall be dissolved; and
4. no person shall, except for the purpose of defending proceedings
against the trade union or dissolving the trade union and disposing
of its funds in accordance with the rules, take any part in its
management or organization, or act or purport to act on behalf of
the trade union or as an officer of the trade union.
A trade union shall not enjoy any of the rights, immunities or
privileges of a registered trade union until it is registered. No suit
or other legal proceedings shall be maintainable in any civil court
against any registered trade union or any officer or member
thereof in respect of any act done in contemplation or in
 furtherance of a trade dispute to which a member of the trade
union is a party on the ground only that:

1. the act induces some other person to break a contract of

employment; or
2. it is in interference with the trade, business, or employment of
some other person or with the right of some other person to
dispose of his capital or of his labor as he wills.
A suit against a registered trade union or against any members or
officers thereof on behalf of themselves and all other members of a
trade union in respect of any tortuous act alleged to have been
committed by or on behalf of the trade union shall not be
entertained by any court unless it is for matters not in
contemplation or in furtherance of a trade dispute. The objects of a
registered trade union shall not, by reason only that they are in
restraint of trade, be deemed to be unlawful so as to render any
member of that trade union liable to criminal prosecution for
conspiracy or otherwise or to render void or voidable any
agreement or trust.

A registered trade union shall not commence, promote, organize,

or finance any strike or any form of industrial action affecting the
whole or any section of its members without obtaining the consent,
by secret ballot, of the majority of the members so affected. A
registered trade union the majority of whose membership consists
of employees in non-managerial or non-executive positions shall
not commence, promote, organize or finance any strike or any
form of industrial action in connection with any trade dispute
between members employed in managerial or executive positions
and represented by the trade union on an individual basis.

Employees who are at least 16 years of age may join a trade union
as a member of a class of employees represented by the union.
However, a unions constitution may raise the age limit. People
above 18 years but below 21 years of age may be a member of the
executive or a trustee of a trade union subject to the approval of
the Minister. Only Singaporeans are allowed to be an executive or
employee of a trade union. The appointment of employees,
executives, or trustees of a trade union is subject to various types
of scrutiny, such as criminal records, citizenship, and bankruptcy
status. The Minister has the power to grant exceptions in most of
these cases.

4-10cImplications for Employees and Employers

The formation and management of trade unions in Singapore is
tightly controlled by the Government to ensure that employees
 rights are well protected. This Act gives specific privileges to the
trade union but these privileges can be exercised only after the
trade union has been formed on a proactive, win-win platform.
Singapore strives to make the pie bigger for everyone instead of
enlarging the share of the pie of any particular interest groups
(employers vis-a-vis employees). The attention of the labor or
management movement is thus steered by this Act toward
collaborative efforts rather than toward industrial conflicts.

4-11Trade Disputes Act

4-11aCoverage
The Trade Disputes Act covers all collective industrial actions
taken by a body of persons employed in any trade or industry in
the form of a strike (not working at all) or a go-slow (e.g., a
concerted work-to-rule action that results in a limitation,
restriction, or delay in the performance of any duties connected
with their employment).

4-11bKey Provisions
An industrial action is illegal if it has any other objective than the
furtherance of a trade dispute within the trade or industry in
which the persons taking part in the industrial action are engaged.
It is also illegal if it is designed or calculated to coerce the
government or it is in furtherance of a trade dispute that the
Industrial Arbitration Court has cognizance. The employer can lock
out (close the workplace or suspend the work) in response to an
industrial action subject to the same conditions as for an industrial
action. A lock-out in response to an illegal industrial action is not
illegal. Individual labor union members are free to take part or not
to take part in a legal industrial action. A labor union cannot
penalize its members for taking part or not taking part in an
industrial action. Peaceful picketing during a legal industrial action
is allowed for the purposes of communicating information and
peacefully persuading anyone to or not to work. It is illegal for
anyone to intimidate anyone else to or not to take part in an
industrial action. An intimidation occurs when a person:

uses violence to or intimidates such other person or his wife or

children, or injures his property;
persistently follows such other person about from place to place;
hides any tool, clothes, or other property owned or used by such
other person, or deprives him of or hinders him in the use thereof;
watches or besets the house or other place where such other person
resides or works or carries on business or happens to be, or the
approach to such house or place;
 follows such other person with two or more persons in a disorderly
manner in or through any street or road.
4-11cImplications for Employees and Employers
This Act clarifies what an employee, an employer, or a trade union
can or cannot do during an industrial action. The basic idea is to
protect the individuals right to choose to or not to take part in an
industrial action. It penalizes people who engage in an illegal
industrial action and anyone, including a labor union, who tries to
stop anyone else from taking or not taking part in an industrial
action illegally. It gives some space for anyone to peacefully
persuade another not to work during an industrial action and also
offers the employer some protection in terms of, for example,
locking out the striking employees to safeguard his own properties
or interests.

4-12Criminal Law (Temporary

Provisions) Act
4-12aCoverage
The Criminal Law (Temporary Provisions) Act covers all
employers and employees in Singapore who are in the essential
services shown in Figure 4-3.

Figure 4-3
Essential Services in Which Employees Right to Take a Strike Action Is Limited
Essential Services
1. Banking services, including services relating to transactions in securities and futures
contracts.
2. Broadcasting services.
3. Bulk distribution of fuel and lubricants.
4. Civil defense services provided by the Singapore Civil Defense Force.
5. Clearing and settlement services relating to transactions in securities and futures contracts
and transactions in the banking system.
6. Drug enforcement services provided by the Central Narcotics Bureau.
7. Electricity and gas services.
8. Fire services, including rescue and fire-fighting services provided by the Civil Aviation
Authority of Singapore.
9. Information services and undertakings provided by the Ministry of Information,
Communications and the Arts and its agencies.
10. Information technology services to support the processing of applications for permits for
the import, export, and transshipment of goods.
11. Newspaper services.
12. Pollution control and environmental monitoring and assessment services provided by the
National Environment Agency.
13. Port, dock, and harbor services and undertakings including services relating to the tracking
and safe navigation of vessels in the territorial waters of Singapore and marine services
and facilities and port services and facilities as defined in the Maritime and Port Authority
of Singapore Act (Cap. 170A).
14. Postal and telecommunication services and undertakings.
15. Prison services.
16. Private and public health services, including services relating to the collection of blood for
the use of hospitals and the pharmaceutical services.
17. Public transport and air transport services, including ground handling services.
18. Refuse or waste collection services provided by any public waste collector licensee licensed
under the Environmental Public Health Act (Cap. 95).
19. Services provided by the Air Traffic Controllers and the Operations and Licensing
Assistants of the Civil Aviation Authority of Singapore.
20. Services provided by the Immigration and Checkpoints Authority.
21. Services relating to dealings in securities, trading in futures contracts, and leveraged
foreign exchange trading provided by the holder of a capital markets services license under
the Securities and Futures Act (Cap. 289).
22. Sewerage and waste water treatment services.
23. Veterinary public health services provided by the Agri-Food and Veterinary Authority,
including the inspection of primary food (meat and meat product, fish and fish product,
egg, raw milk, fruit, and vegetable) at the point of import and before distribution to retail.
24. Water reclamation services.
25. Water services.
26. Weather information provided by the Meteorological Services Division of the National
Environment Agency.
27. The following undertakings performed for the Singapore Armed Forces:

1. the construction, maintenance, and repair of military installations;

2. the design, development, production, manufacture, supply, transport, delivery, repair, and
maintenance of weapon systems (including military aircraft, ships, submarines and
vehicles, arms, explosives, computer hardware and software and other military equipment)
and spares and components thereof;
3. the land, air, and sea transportation of military personnel and equipment;
4. the management and operation of warehouses, military retail outlets, storehouses, ferry
terminals, cookhouses, and camp complexes;
5. the security functions performed at military installations or buildings;
6. the supply, transport, and delivery of military supplies, including rations and construction
materials; and
7. the surveillance, testing, and disposal of ammunition.
28. All undertakings of whatever nature of:

1. a securities exchange, a futures exchange, a clearing house, or an exchange holding

company approved under the Securities and Futures Act (Cap. 289);
2. Singapore Customs;
3. SNP SPrint Pte. Ltd.;
4. the CISCO Recall Total Information Management Pte. Ltd.;
5. the Monetary Authority of Singapore in managing the Singapore dollar exchange rate; and
6. the Monetary Authority of Singapore under the Currency Act (Cap. 69).
4-12bKey Provisions
No employee in the following essential services is allowed to go on
strike:

Water services;
Gas services;
Electricity services.
No employee is allowed to go on strike in the rest of the essential
services:

1. Unless a 14-day notice of a strike action has been served to the

employer;
2. Before the date of striking specified in the notice of intention to
strike;
3. During the pendency of any proceedings.
Where employees are prohibited or limited from taking a strike
action, the employer cannot lock out the employees.

4-12cImplications for Employees and Employers

Disputes between employees and employers may affect the lives of
many people who rely on the essential services. The limitations on
employees right to go on strike are meant to minimize the
disruptions that employers or employees in the essential services
may cause to the users or the public. Note that nothing in this Act
talks about the protection for labor unions if they choose to go on a
strike legally. This is covered under the Trade Unions Act.

4-13Enlistment Act
4-13aCoverage
The Enlistment Act covers all Singaporean and permanent resident
employees under a contract of service who are required to perform
full-time national service, operationally ready national service, or
mobilized service or to report for mobilized service in the Police
Force.

4-13bKey Provisions
An employee who has at least 6 months of service is entitled to,
after completing the compulsory service as required under this
Act, return to the same employer in an occupation and under
conditions not less favorable than those which have been
applicable to him had he not been in service. The employee,
however, loses this entitlement if he commits an offence under the
Singapore Armed Forces Act and is required to serve longer than
 the originally required period under this Act. Also, employees who
are on a fixed-term contract of service (for a certain period of time)
do not enjoy this entitlement. It is an offence for the employer to
dismiss an employee based on the compulsory duty or liability that
the employee must fulfill under this Act, except when the employee
has committed an offence under the Singapore Armed Forces Act
and is required to serve longer than originally required or when
the contract of service is for a certain period of time. A person
between the age of 16 years 6 months and 40 years is liable to be
called up for the compulsory service but if the person holds an
officer rank, is a senior military expert, or is skilled in an
occupation needed by the armed forces, he may be called up for the
compulsory service up till 50 years of age.

4-13cImplications for Employees and Employers

The requirement to serve the country under the Enlistment Act
concerns national survival. Employers in general understand the
need and so in general both employers and employees have no
problems complying with this Act.

4-14Holidays Act
4-14aCoverage
The Holidays Act binds the government and it is applicable to
Singapore.

4-14bKey Provisions
Public holidays for each year are declared under this Act.

Employer and employees are not stopped or affected by this Act in

terms of having another day in substitution for the declared public
holiday.

This Act does not affect the operation of the Employment Act (Cap.
91) relating to rest days, hours of work, shift workers, holidays,
and other conditions of service.

4-14cImplications for Employees and Employers

All employees including government employees are entitled to
observe all the declared public holidays. The employer, however,
may by an agreement with the employee substitute the declared
public holiday with another day so as to ensure smooth operations
of their business or organization.

4-15Skills Development Act

4-15aCoverage
The Skills Development Act covers all employees in Singapore
regardless of nationality and job grades.

4-15bKey Provisions
All employers must contribute 0.25% of their employees gross
monthly salary (up to the first S$4,500) to the Skills Development
Fund every month. The Central Provident Fund Board is the
collecting agency for the Fund and the Fund is managed by the
Singapore Workforce Development Agency (WDA), which uses the
Fund to subsidize approved training programs for all eligible
employees.

4-15cImplications for Employees and Employers

This Act requires all employers in Singapore to subsidize training
and development for all eligible employees so that their skills can
be improved. Employers should try to send their employees for
training so that the trained employees can add more value to their
business operations. The training programs are highly subsidized
by the Fund (about 8090% of the program fees and 8090% of
the trainees absentee payroll). Employers who do not send their
employees for training programs offered by the WDA are in effect
subsidizing their competitors employee training because the
0.25% levy paid under the Act is an expense or a form of
government tax and is not refundable.