Singapore Employment Update

The employment law world continues to see considerable developments. Most drastically is a proposed change to completely disallow non-competes by the US. This is putting it simply. The complexities tie into competition law principles as well as non-poach agreements, both of which our Team discussed in November last year. In any event, this is an important area and we will update on this in due course.

For now, following on from changes in 2022 and more to be expected in 2023 in Singapore, we provide a quick run-down on critical developments in employment law as we start the year. We touch on workplace harassment concerns and discrimination issues, both of which continue to be spotlight issues, workplace safety and health matters, new schemes relating to S Pass and Work Permit holders, and the new Progress Wage Mark which could impact the right of a company to tender for government contracts. In light of upcoming developments on discrimination rules, we also share some recommendations for you to start the year strongly.

1.  Discrimination rules expected to be enshrined under new legislation in 2023

1.1  The White Paper on Singapore Women’s Development issued on 28 March 2022 provides that the Tripartite Guidelines on Fair Employment Practices (“TGFEP”) will be enshrined in law. Currently, when there is non-compliance with the TGFEP, MOM can impose administrative penalties (such as debarment on applications of work passes). Once law, statutory penalties are expected to be imposed. Effectively, this means that MOM will have greater enforcement powers.

1.2   It naturally follows that you do need to review existing employment protocols for common discrimination pitfalls. For example:

a)  Employee recruitment. Look into the different stages – from job advertisements, to the interviewing, short-listing and hiring stages. Do not have a pre-determined candidate in mind as you go through this process. Pay particular attention to how you hire foreigners under the Fair Consideration Framework as issues tend to crop up there.

Employee management. Look into the range of issues including performance management or even re-employment discussions. The issues go to trainings and other benefits employees are given, appraisals, bonuses to be paid, promotions, and more. Failure to manage these properly can create issues if and when you eventually need to terminate these employees.

c)  Employee termination. Look into the range of issues including why you terminate and whether you provide the employee a reason for the termination. If for misconduct, please be reminded to conduct a due inquiry, and to conduct it well. We remind that due inquiry goes beyond making mere inquiries. The concerned employee must be informed of the allegations and evidence against them and be given an opportunity to defend himself. In all, the due inquiry must be a fair and an impartial process.

d)  Employee retrenchment. Look into the range of issues including how you select employees to be retrenched, and also whether and how you pay severance to the different groups of employees. Importantly, age must never be a factor on which employees are selected for retrenchment. There are also other non-discrimination related issues to note, such as how to exit them in a sensitive way.

Please also note that MOM is vigilant of employers engaging employment agencies to circumvent their obligations. Therefore, be reminded to work closely with your employment agencies to ensure that e.g. declarations for work pass application to MOM are accurate and truthful. This is to ensure that your company does not inadvertently fall foul of the upcoming legislation.

1.4   The new legislation is expected to be introduced sometime in 2023. The specific details of the new legislation are yet to be issued.

2.  Workplace Harassment remains a critical issue employers must manage.

2.1Statistics on cases filed with the Protection from Harassment Court from 5 October 2022 show a worrying substantial increase in various types of harassment concerns as highlighted by Minister for Law, Mr K Shanmugam in Parliament in October 2022. Whilst no specific numbers were shared as regards workplace harassment, one extrapolates that there must be a similar increase. The work that we handle also reflects this where an increasing number of terminations have been brought about because of harassment concerns.

2.2   As we start 2023, it is critical to ensure that policies on harassment are duly updated, and importantly there is sufficient awareness creation. It may sound mundane, but in the case of sexual harassment, not many know that making inappropriate statements can result in allegations. Updating aside, the employer needs to be clear as to the spectrum with which it will operate; i.e. where there is zero tolerance and where some degree of compassion can be shown and remedial guidance provided. It is a workplace after all and we do want to ensure the right balance is struck.

3.  M-SEP Scheme launched to improve flexibility to hire S Pass and Work Permit holders

3.1   On 13 December 2022, the Ministry of Trade and Industry (“MTI”) and MOM announced the launch of the Manpower for Strategic Economic Priorities (“M-SEP”) Scheme. The M-SEP Scheme will allow “qualifying firms” to temporarily hire S Pass and Work Permit holders above the prevailing Dependency Ratio Ceiling (“DRC”) or S Pass sub-DRC which applies to that company for a 2-year period.

3.2   Under the M-SEP Scheme, a “qualifying firm” is a company that participates in programmes or activities in line with Singapore’s key economic priorities (“Condition 1”) and commits to hiring and/or training local Singaporeans (“Condition 2”). There are various parameters to note – qualifying firms will be:

    a)   Allowed to obtain additional S Pass and Work Permit quotas of up to 5% above their base workforce headcount;

    b)   Subject to a cap of 50 additional workers per firm;

    c)   Provided the additional quotas for a 2-year period; and>

    d)   Required to show compliance with Conditions 1 and 2 and that they have maintained their local workforce during the 2-year M-SEP Scheme period. If not, renewal requests will be rejected, and the company will be suspended from the M-SEP Scheme for 2 years.

4.  Updates to the Workplace Safety and Health (“WSH”) framework in Singapore

4.1   2022 saw a total of 45 workplace fatalities, the highest number since 2016. This led to a six-month heightened safety period, which the MOM had put into effect till 28 February 2023. In the meantime, MOM continues to emphasise WSH matters, which have become very prominent.

4.2   On 19 Sep 2022, MOM had launched the Code of Practice on Chief Executives’ and Board of Directors’ WSH Duties (“Code”). The Code expounds on the WSHA and provides greater clarity on and how company directors can better discharge their duties and uphold WSH standards at their workplaces. The duties and obligations are not new, but given that they are now expressly stated, the issues are being expressly elevated to the board level. A failure to review, consider and take appropriate steps to delegate to the right experts can create liability issues for directors.

4.3  On this, Section 48(1) WSHA holds company directors responsible for offences under the WSHA unless they had exercised due diligence to prevent the same. This is no different from existing rules, and Section 157 of the Companies Act. Hence, it is important that company directors familiarise themselves with the Code and take appropriate steps to set up a suitable committee or identify a lead to have responsibility. Steps ought to also be taken to ensure that regulator reporting is provided to the board so that they can apprise the safety and health standards of the organisation appropriately.

5.   Government tenders called from 1 March 2023 require suppliers and their sub-contractors to be accredited with the Progressive Wage Mark for the duration of the contract period

5.1  In a first, and what is reflective yet again of the fact that to improve employment conditions, economic considerations are built in, a new accreditation scheme is introduced to ensure that lower wage workers are financially uplifted. The accreditation is a Progressive Wage Mark.

5.2   To receive Progressive Wage Mark accreditation employers must:

    a)  hire at least one Singaporean or permanent resident worker covered by the prevailing Sectoral or Occupational Progressive Wages;

    b)  pay the relevant workers Progressive Wages, and

    c)  pay all other local workers at least the Local Qualifying Salary.

5.3   Apart from the Progressive Wage Mark, a new scheme known as the Tripartite Standard on Advancing Well-Being of Lower-Wage Workers (“TS-LWW”) has been introduced. The key aim of the TS-LWW is to guide on progressive practices that provide better support for lower-wage workers in workplace health and safety, training and career development, and rest area provision.

5.4   This is overall an important area to uplift employees. Importantly, it mandates smaller sub-contractors to hire carefully if it does want to participate, even as a sub-contractor, in government contracts. This thus is another area that employers do need to pay particular attention to, and ensure due diligence captures this.

The Employment Law landscape continues to develop in Singapore. From discrimination to WSH issues to wage uplifts, the authorities are responding strongly and implementing more stringent rules. There are more to come this year. An audit of your employment-related processes is important. If you wish to chat, please feel free to contact us singaporelabor@transatlanticlaw.com