Industrial Relations (Amendment) Act 2010
The Industrial Relations Act (the “Act”) has been amended with effect from 1 February 2011 to establish a new scheme for the mediation of certain disputes involving employees who are employed in professional, managerial or executive positions (“PMEs”) and their employers.
Only the following disputes may be the subject of mediation:
1. Any dispute relating to a breach of contract of employment by the employer of an executive employee;
2. Any dispute relating to salary due to an executive employee; or
3. Any dispute relating to the retrenchment benefit payable or to be paid to an executive employee by his employer.
The Act is also amended to update and align the penalties therein with those under the Employment Act.
Changes have also been effected to the Employment Act with effect from 1 February 2011. Most notably, s 2(2) will be changed to provide that a person employed in a managerial or an executive position who is in receipt of a salary not exceeding S$4,500 a month (currently S$2,500) will be regarded as an employee for the purposes of some provisions of the Employment Act. This will allow more junior managers and executives to avail themselves of the adjudication process for salary claims.
The Employment Act will also be amended to cap a Labour Court order at S$20,000 for successful salary claims made by PMEs. Those PMEs wishing to claim a higher amount should pursue their claims in the civil Courts.
The Ministry of Manpower (the “MOM”) has made changes to the Employment of Foreign Manpower (Work Passes) Regulations (the “Regulations”) to clarify existing rules regarding the employment of foreign manpower. This includes amendments to the Work Pass conditions. The MOM has issued circulars to business employers, employment agencies and employers of foreign domestic workers. It is stated in the Circular for Business Employers that the revised regulations will apply to all existing and new work passes from 1 February 2011.
The key changes relevant to business employers are listed in the Annex to the Circular for Business Employers. The following are some of the matters that have been clarified or changed:
1. Cross-deployment: Employers cannot cross-deploy their Work Permit and S Pass holders across sectors. For example, employers should not deploy food processing workers from the manufacturing sector to work in the services sector as cooks.
2. Salaries: Employers must pay their Work Permit holders no less than the fixed salary amount declared in the work pass application, regardless of whether there is actual work.
3. Repatriation: When the foreign worker’s work permit or visit pass expires or is cancelled or revoked and if the foreign worker is not earlier employed by another employer, the employer must repatriate him to the international port of entry that affords reasonable access to his hometown within his home country. It is not sufficient to simply send the foreign worker out of Singapore. The foreign worker may be repatriated to a different destination, if he requests it, provided the employer notifies the Controller of Work Passes (the “Controller”).
4. Medical: Arrangements for foreign workers to pay part of their medical bills are only allowed for employers of non-domestic foreign workers because these employers want to include their workers in their corporate healthcare plans (with a co-payment element) on top of mandatory medical insurance. Businesses that wish to have such arrangements for their employees’ medical costs may do so provided they comply with the conditions set out in the Regulations.
5. Prohibition against “phantom workers”: Employers of Work Permit or S Pass holders must ensure that every Singapore citizen or Permanent Resident in respect of whom they make Central Provident Fund contributions is actively employed by them and not a “phantom worker” employed for the purpose of helping the employer become eligible for a higher foreign manpower quota.
6. Notifying Controller of cessation of employment of PEP holder: Employers of Personalised Employment Pass (“PEP”) holders are currently required to notify the Controller upon the PEP holder’s commencement of employment. Under the amended Regulations, employers of PEP holders are required to notify the Controller when the PEP holder has ceased employment as well. Notification must be made within seven days of the cessation of employment.
The penalty for any breach of a work pass condition remains a fine of up to S$5,000, a jail term of up to one year, or both.
Allen & Gledhill LLP