Changes to Employment Legislation in Singapore - Essay Example

? CHANGES TO EMPLOYMENT LEGISLATION IN SINGAPORE TABLE OF CONTENTS Introduction 3 2 Reasons for the changing make up of the workforce in Singapore since the start of the 21st century 3 3 Reasons to review Employment Act 5 4 Characteristics of Managers & Executives, and Workmen 7 5 Changes from the perspective of the National Trades Union Congress (NTUC) 8 6 Changes from the perspective of- The Singapore National Employers Federation (SNEF) 10 7 Conclusion 11 8 References 12 1. Introduction “An open exchange of views on wage increases and wage dispute is part and parcel of a free enterprise system, to which Singapore subscribes” (Chew and Chew, 1995, p. 107). This perspective best describes the employee and industrial relations in Singapore. The trade unions are lawful and they help to resolve the conflicts between the employees and employers (Clegg, 1975, 14-25). The Singapore system is a cooperative Tripartism, wherein the union, government and the management participate. The Industrial and Employment Laws are amended as per the perspectives of the Tripartite. These laws are amended based on certain changes in the Singapore market, work forces, Labour relations and several other essential factors. 2. Reasons for the changing make up of the workforce in Singapore since the start of the 21st century The Singapore Tripartism Forum or the STF), created by NTUC (National Trades Union Congress), Singapore National Employers Federation (SNEF) and Ministry of Manpower (MOM), was launched on the 24th of January 2007 by Prime Minister, Mr Lee Hsien Loong. It is a forum which is designed to enhance the strength of tripartism; the tripartners being the Union, Government and the employers. The forum provides an effective framework which can help to overcome the economic challenges which are being encountered by Singapore. The economic competitiveness and ‘labour-management relation harmony’ would be benefitted by the inclusion of this framework. Objectives as per. Chuan-Jin (17 April 2012) are: Job re-creation Enhancing skills Raising retirement age, Upgrading of the workforce, Flexible wage system Promotion of the fair employment practices as per John Benson, Ying Zhu, PH. 2011. The tripartite partners are as follows: The Ministry of Manpower: As per the Ministry of Manpower (2012), this organisation aspires to develop globally competitive labour /workforce. It also aims at developing a better workplace and achieving a cohesive society. In addition, the aim is to achieve a secure and stable economic future. The National Trades Union Congress (NTUC): It is a national level confederation of trade unions in public sectors and industrial domains representing 500,000 workers. It comprises of 62 unions and 6 taxi associations, which are all affiliated. The objective of this organisation is to make the workers employable for their lifetime and to enhance the social status of these workers. As per NTUC (2010), it aims at enhancing the competitive environment and also for enhancing the health conditions of the employees. These laws apply to all ages and nationality. The Singapore National Employers Federation (SNEF) This federation was set up in 1980. It is a trade union of employees, which is meant to preserve industrial harmony. It is dedicated to help the employees to achieve excellence. As per the Annual Report SNEF (2009), SNEF has over 2000 members employing 54000 workers. It plays a key role in facilitating tripartite partnership. As expressed by Clegg (1975, p. 309-316), tripartism “theme is that men associate together to further their common interests and desires; their associations exert pressure on each other and on the government; the concessions which follow help to bind society together; thereafter stability is maintained by further concessions and adjustments as new associations emerge and power shifts from one group to another.” As per the publication, Changes to Employment Act (2009), Ministry of Manpower, the following factors are the base reasons for the amendment in the Employment Act: Shifts in workforce profile Increase in wages Shortening of employment tenures There has been a substantial progress in the wages of the vulnerable workforce, that is, the low wageworkers. The vulnerable workforce’s change of wages has increased the requirement of amendment of the Employment Act. Chart: From 1997-2008, the Number and proportion of Employed Residents (Full Time) with monthly income of less than $1200 Figure 1- Source: Labour Force Survey, Ministry of Manpower (2012) 3. Reasons to review Employment Act As per a speech by Lee Hsien Loong (2012), the low wageworkers are having certain issues related to their work and this includes the fact that the wages are not keeping up with the rest of the workforce. To add to this, the workforce earning low wages is stuck financially no matter how much effort they put in to upgrade. It clearly shows that due to the changes in the work profile, there are certain sections that need to be considered and policies need to be redefined for their survival and benefits. As per NTUC Media Release, Movement’s proposed changes to the Employment Act, the Ministry of Manpower, Singapore had announced a review of the existing Employment Act in April 2012. According to Athukorala & Prema-Chandra (2000), owing to high rate of immigration, Singapore has a diverse workforce demographic profile. According to Ministry of Man Power (2012), Singapore has immigrants from China, India, Malay and other regions. The workplace policies therefore need to be designed in such a manner that there is a lot of workplace harmony. The literacy rate is very high and Singapore easily bridge the gap between Asian and western lifestyle. There has been a more diverse workforce that includes professionals like managers and executives, commonly referred to as PMEs and a more diverse workforce, which includes the low wageworkers as well. The Employment Act was introduced in 1968 and was reviewed in 2008 because of the changes in the workforce profile. These changes were made so that the Act becomes scalable for the introduction of the new work forces. Post feedback of National trade union Congress (NTUC) as per Janice Heng (2012), there are several amendments which have been made to the Employment Act for the protection of the PMEs and the vulnerable group of workers. There are about 32% of PMEs in Singapore out of the total number of residents. The net number is 630,000 as per Janice Heng (2012). Since 2001, there has been a rise of over 27%. The PMEs cannot access the Labour court if their basic pay is not more than $4500. This is not apt and NTUC demands for more Protection of the PMEs under the Employee Act of Singapore (2012). As per Part IV of the Employment Act, the overtime payments and the retirement benefits are different for the workmen and non-workmen, where the workmen jobs are the blue collar workers who earn less than $4500 as per Janice Heng (2012). The non-workman window has its ceiling at $2000. The amendments made in the Employment Act would enable the inclusion of more and more workers in the non-workers domain so that they can enjoy the benefits. The ceiling of the non-worker is being increased via these amendments from $2000. Since the last Amendment in 2008, the median salary has also increased and it is ensured via NTUC that these changes are not prejudiced against the existing workforce. It is their motto to review the act on regular basis so that the policies are updated with the changing Singapore’s workforce profile. Protecting the vulnerable work force is also one of the major concerns which has led to the reviewing of these acts. The following changes are proposed to ensure that the vulnerable groups receive a higher protection as per Ministry of Manpower (2012): Ensuring that the low-wage workers have employment contracts and payslips Retrenchment benefits are provided for workers which have less than 3 years of service experience Under Section 18A, the workers who had a transfer of Employment are given a better protection. There is a greater clarity of the working hours in case of the shift workers. These enhancements would be benefitting 1,350,000 of the total workforce who are non-PMEs. Apart from these enhancements, the amendments are focussed on the better protection of the outsourced workers and to add to that, these amendments are focussed towards the protection of the short-term contractors and freelancers. These enhancements ensure that retrenchment benefits are gained by these diverse work profiles. 4. Characteristics of Managers, Executives and Workmen 4a. Managers and Executives The Managers and the executives are the professions who have certain supervisory function. They have the authority to influence and to make decisions. They look after the issues related to recruitment and discipline. These professionals also see to the termination of jobs and assessment or rewards. They look after the running of various business level activities including the policies of the enterprise. The managers and executive workforce also includes the professionals having the tertiary skills and knowledge. This includes the professionals such as lawyers, dentists, accountants and doctors. These professionals would also be covered under the act. However, the junior managers who are earning $4500 or less as basic monthly salary, would be partially covered under the act as per Janice Heng (2012). 4b. Workmen This section of workforce involves manual labour and all the workers who fall under the following category are termed as the workmen: As per Interpretation of ‘Workmen’, Attorney General's Chambers (2012): A person who is unskilled or skilled and is doing some kind of manual work. This may include any apprentice or artisan but exclude the domestic servant or seaman. A person who is supposed to work on some mechanically driven device. These include the transportation vehicles which are used to transport people on hiring bases. The people who are employed to supervise any workman and which are supposed to perform any manual work together with the former are also termed as workmen. A workman is a person who is employed for the purpose of manual labour on partly basis and is tenured as per the performance. If an employee has been employed by any employer on partly basis in some capacity, then that person is deemed to be workman. The tenure for which the workmen work, should come under any one of the mentioned slabs of Part III Payment of Salary, Attorney General's Chambers (2012). In the First Schedule, Employment Act, 2012 following persons are specified to be the workmen: i. Cleaners ii. Labourers iii. Bus and train inspectors iv. Construction workers v. Machine assemblers and operators vi. Train, van, bus and lorry drivers vii. Machinery and metal workers viii. Workmen employed on fixed, daily rates at the premises of the employee This section covers both the local as well as the foreign employees. A distinction is not made in the temporal employee or the contract based daily-rated employee or the tenured employee. The employees who work for less than 35 hours a week are covered by the part-time employee regulation. This provides flexibility for both the employee and the employer. 5. Changes from the perspective of- The National Trades Union Congress (NTUC) (The Chosen Group is the Vulnerable Groups of Workers) As per Annexure A, Review of the Employment Act (2012), following subjects are taken into consideration: Employment contracts and pay slips Retrenchment benefits Section 18A transfers Hours of work Sick leave 5a. Employment Contracts and Pay Slips According to the former clause, the employment contract might be verbal or written. To add to this, there was no requirement that the employer of the concerned vulnerable employee should provide the payslip of service. To amend this clause as per Part III, Payment of Salary, Attorney General's Chambers (2012), the provision of monthly payslips has been enforced. The contract would now be written and the contract should include the basic terms such as the job title, its scope, fixed term contract, the commencement date, allowances and salary. It also specifies the working hours and the benefits of job. The method of termination is also mentioned in it. The employee’s payslip should also contain the breakdown mentioning the deductions made. This kind of payslip and formal contract ensure that the complete agreement made between the employer and the workmen is completely formal. The deductions and the breakdown make things clearer and more understandable for the vulnerable section as per Part III, Payment of Salary, Attorney General's Chambers (2012). The job scope and the job title’s inclusion help the vulnerable section to get future employment with ease. These kinds of inclusions would legalise the employment of the vulnerable section and the employer cannot terminate them without providing a legal reason for the same. 5b. Retrenchment Benefits Under Section 45, Employment Act, (2012, p. 38), “No employee who has been in continuous service with an employer for less than three years shall be entitled to any retrenchment benefit on the termination of his service by the employer on the ground of redundancy or by reason of any re-organisation of the employers' profession, business, trade or work.” The current clause states that the employees who have offered less than three years of service to any employer or organisation, are not entitled to receive any retrenchment benefit. It applies to all the employees covered under the Part IV, Employment Act. The changes which are proposed as an amendment to the Employment Act include the reduction of the three year timeline. Now the retrenchment benefits could be obtained within the tenure of three years. 5c. Section 18 A transfers Under the section 18A, Employment act of Singapore (2012, p. 21), according to the current clause, it is unclear that which type of information should be provided to Union. No protection is offered if the new employer or the transferee is wound. As per the proposed change the specifications are laid down as to which information is meant to be offered to the Union and which information does not. A union whose inclusive members are in minority post transfer should not be ceased to represent the workers for two years. 5d. Hours of Work Under the Section 38 of the Employment Act (2012, p.35), as per the current clause, there is no provision for the rest period post 12 hour shift. The provision does not apply on resuming work post ICT, that is, In-Camp Training. There are some amendments made in this section for the betterment of the vulnerable section. There is an inclusion of a minimum rest period between the shifts. In addition, before the starting of another shift, there should be a rest day. This provision ensures that the vulnerable groups are not subjected to excessive work and their health is prioritised in the overall processes. Adequate rest in between ensures that the vulnerable workforce does not get over consumed. A clear plan of how and when the shifts should be provided, are now stated clearly. These are meant to bring about safety at work. Minimum periods of rest should be provided to the employees post ICT. This is one of those benefits which can result in better state of the vulnerable section of the workforce in Singapore. 5e. Sick Leave Under the Section 89 of the Employment Act (2012, p.61) as per the current clause, the MCs of company appointed doctors are only accepted and recognised for the purpose of Sick Leave. However, as per the latest amendments, the MCs from the traditional Chinese practitioners are also accepted. This has led to a betterment of the vulnerable workforce as they can now get themselves diagnosed by the easily accessible Chinese medical practitioners. The medical certificate provided thereafter would be easily accepted. 6. Changes from the perspective of the Singapore National Employers Federation (SNEF) As per the Proposed Amendments to the Employment Act, Ministry of Manpower (2012), following subjects are taken into consideration: 6a. Extending Coverage of the Employment Act: The workers who earn nearly $4500 and the non-workmen employees who earn nearly $2000 are entitled to coverage under Part IV of the Employment Act. Since the last review of Attorney General's Chambers, Singapore, the median gross salaries have escalated by nearly 25% as per Chart 1, Appendix C, and specifying monthly trend over the years as per Proposed Amendments to the Employment Act (2013). The salary threshold for non-workmen needs to be adjusted in accordance to this change. 6b. Safeguarding the employee’s salary against the unauthorised deduction The Employment Act of Singapore (2012) facilitates the guidelines for authorised deductions that the employers might make from the salary of a worker. Up to 50% deductions could be made and these deductions could be made on domains like accommodation, food, amenities and many more as per as per proposed amendments to the Employment Act (2013). This limit needs to be reduced and a limit needs to be set so that the interests of the low wage workers are safeguarded. The employers now need to show the proof of loans before the deductions could be allowed. There are many amendments made to increase the awareness of the employees towards their salary entitlement. This requires an amendment over the existing rule where it is not compulsory to provide the payslip receipt to the employees at the end of each month. The employers should provide a detailed record of employment and providing written pay slips to the employees upon request. 7. Conclusion There are many steps taken by the tripartite in order to bring the amendments in the Employment Act of Singapore. All these changes are targeted towards building better labour relations and in establishing a highly competitive environment. These changes are directed towards establishing a fair policy which helps in safeguarding the rights of the workmen as well as the non-workmen, especially the low wage workers. This group is one of those workgroups of Singapore that has earlier been subjected to exploitation and underpayment. For the same reason, these changes are very substantial. Due to changing work profile of employees, such changes in the Employment Act of Singapore are extremely beneficial for sustainable employee welfare. 8. References Attorney General's Chambers (2012). 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