The Employer’s Guide to the Singapore Employment Act: Essentials of Singapore’s Primary Labour Law

Singapore secretary and employer

Employee-employer relationships are governed by the Singapore Employment Act. Considered as the primary labour law in Singapore, the Employment Act provides the minimum statutory requirements for wages, hours of work and other terms and conditions of employment for all types of employees.

Singapore Employment Act Prevails Over Contractual Provisions

In Singapore, both the employee and employer are free to negotiate and stipulate the contract of service. Once, the provisions of the employment contract have been voluntarily agreed upon, it will be considered the governing law of the parties.

However, while the employer and the employee are free to stipulate upon their contract terms, the Employment Act shall at all times take precedence over the agreement. The governmental purpose behind the statutory enactment is to regulate all kinds of employment relations and ensure harmonious industrial ties between labor and management. Thus, if there are terms and conditions in a contract of service less favorable or repugnant to the relevant provisions of the Employment Act, these will be deemed illegal and therefore, null and void.

Coverage of the Singapore Employment Act

As a rule, the Employment Act applies to all kinds of employees who are under a contract of service. The exceptions to this rule are the following:

  • Executives or managers exercising executive and supervisory functions with a monthly basic salary of more than $4,500
  • Domestic workers
  • Seafarers
  • Staff of a Statutory Board or Singapore Government

Employees who are not covered by the Employment Act are governed by their specific contract of service.

What are the Most Important Provisions of the Singapore Employment Act?

Employer Payroll

Here are the essential provisions of the Singapore Employment Act which must be strictly complied with by all employers:

  1. Salary

The Employment Act does not mandate a minimum wage requirement or bonus payments for employees. However, the employer must pay the salary earned by a worker under a contract of service, other than payment for overtime work, at least once a month within the 7th day after the salary period. Overtime work must be paid within the 14th day after the salary period.

As to salary deductions, employers are not permitted to make deductions unless said deductions are authorised under the Employment Act, ordered by a competent authority or the Courts.

Failure to comply with the provisions of the Employment Act regarding salary is considered a punishable offence. The liability includes imprisonment or payment of fine.

  1. Working hours

The Ministry of Manpower has stringent rules regarding working hours and conditions for overtime work of employees. Employees are entitled to work no more than 6 consecutive hours without a break or period of leisure nor work beyond 8 hours in a day or 44 hours in a week. Shift workers, on the other hand, cannot work for more than 12 hours per day. Employers are mandated to provide at least 1 unpaid rest day per week.

  1. Leave benefits
  2. Annual leave

The employee must have worked for at least 3 months with the employer to qualify for an annual leave. An employee has at least 7 days of paid annual leave for the first year of service, with an additional day of leave for every succeeding year of service. However, the standard practice of employers is to provide at least 14 days of paid annual leave per annum, higher than the minimum number of leaves under the Employment Act.

  1. Sick Leave

Entitlement of the employee to sick leave depends on the length of his service, with a maximum of 14 days paid sick leave.

The following table summarises the guidelines regarding entitlement to sick leave pay:

Length of Service of EmployeeNumber of Leave Days to Which Employee is Entitled
at least 3 months but less than 4 months·         5 days of sick leave for every year

·         15 days of hospitalization leave

at least 4 months but less than 5 months·         8 days of sick leave per year

·         30 days of hospitalization leave

at least 5 months but less than 6 months·         11 days of sick leave per year

·         45 days of hospitalization leave

at least 6 months of work·         14 days of sick leave per year

·         60 days of hospitalization leave

To be entitled to paid leaves, he must inform the employer of his illness within 48 hours and present pertinent medical certificates in support of his medical condition.

  1. Termination

Either the employee or the employer can terminate the employment relationship. As a rule, the aggrieved party must give the other party a written notice of the termination in accordance with their stipulated notice period. Should there be no agreed period in the contract, the length of notice will depend on the employee’s length of service.

To terminate the working relationship before the notice period, a sum amounting to the salary earned during said period must be paid by the party seeking the termination. Should the ground for termination be anchored on the willful breach of contract, the contract can be terminated by aggrieved party without notice to the other party.

Singapore Employment Act: Will there be New Changes to this Statutory Enactment?

Since its last review in 2012 and 2013, the Employment Act has not undergone extensive modifications. However, in 2018, this labour statute may potentially be subjected to proposed changes. The Ministry of Manpower (MOM) recently announced that it is conducting a thorough review of the Employment Act to keep pace with the evolving labour force profiles and employment landscapes.

Among the core changes sought to be introduced is the extended coverage of the Employment Act. The proposal contemplates the inclusion of managers or executives with monthly basic salary of more than $4,500 in the list of employees covered by the Employment Act.

Another Change Sought is Increase of Annual Leave and Overtime Pay to more Vulnerable Employees

At present, the Employment Claims Tribunals adjudicate salary-related disputes while the Ministry of Manpower resolves wrongful dismissal claims. The Ministry of Manpower is also looking to streamline the procedure for these two interconnected legal processes so distressed employees no longer to have to go to different venues for case resolution.

To know more about how your company can strictly comply with the provisions of the Employment Act, get in touch with Corporate Services. In addition to our corporate secretarial solutions, our team of payroll management specialists can assist your company with requirements on payroll processing, e-pay slips, leave management, employee benefits computation and salary calculations. Contact us and get a free quote today.

Posted in Company Secretarial Service, Payroll services - Left.