Singapore Employment Act 2013

SINGAPORE EMPLOYMENT ACT -2013

OVERVIEW

As a regional business hub and an open economy, Singapore has an
eclectic mix of human capital. The Singapore government has a well-
thought out and structured legislation in place in the form of the
Singapore Employment Act (SEA), which is the main labor law of the
country. The SEA clearly spells out the basic terms and conditions of
The Singapore government has a well-
thought out and structured legislation
employment and the rights and responsibilities of employers as well
in place in the form of the Singapore as employees under a contract of service.
Employment Act (SEA), which is the
main labor law of the country . The
SEA clearly spells out the basic terms The Singapore government also ensures that the Act, while in line with
and conditions of employment and the
rights and responsibilities of employers
the international legislations, also provides adequate protection to all
as well as employees under a contract vested parties in the process of employment. Developing a proactive
of service.
and harmonious labor, industrial and government relationship has
remained the top priority of the legislation.

The following overview of the Singapore Employment Act aims
to provide a basic understanding of the legislation so that both
prospective entrepreneurs and employees are aware of their rights
and duties under a contract of service in Singapore.

Last updated on 22 February 2013 Copyright © 2013 Rikvin Pte Ltd

BACKGROUND

The relationship between employer and employee is determined
largely by the contract of employment between them. Generally,
under Singapore Law, parties are free to contract as they choose
and any matters arising between them would have to be resolved by
looking at either the expressed and/or implied terms of the contract
in question.
The relationship between employer
and employee is determined largely by
the contract of employment between However, legislations are in place to regulate the terms of contract
them.
to prevent unreasonable restrains and limitations on the parties
involved. Common law and specific statutes govern the terms of
contracts of employment.

The principal statutes regulating employment in Singapore are
contained in Employment Act. Other pertinent statutes shaping
employment practices include the Workplace Safety and Health Act
(“WSHA”), which came into effect on March 1, 2006; the Children
Development Co-Savings Act (Cap 38A) (“CDCSA”); the Retirement
Age Act (Cap 274A) (“RA”); the Trade Unions Act (Cap 333) and the
Industrial Relations Act (Cap 136) (“IRA”).

The Employment Act (Cap 91) (“EA”) was first passed in 1968 and was
last amended on January 1, 2009. In May 2012, Singapore’s Ministry
of Manpower announced a major review of the Act following the
massive change in employment landscape that was fast departing
from conventional practices in terms of time, payment, mode of
work, type of people etc.


SCOPE OF COVERAGE

Scope of Coverage

The EA covers every workmen, (regardless of nationality) who
is under a contract of service with an employer in Singapore. It
does not make any distinction between a temporary employee,
contract employee, daily-rated employee or employee on tenured
employment. The term “workmen” includes manual laborers,
drivers of commercial vehicles and certain other categories of
workers.

Exclusions & Partial Coverage

The act does not apply to persons holding positions such as
manager or executive, and also excludes seamen, domestic
workers, government employees or employees of statutory
boards.

Junior managers and executives earning basic monthly salaries
worth S$4,500 and below are only covered partially on the basic
payment of salary.

Professionals with tertiary education and specialized knowledge/
skills such as doctors and lawyers, and whose employment terms
are comparable to those of managers and executives are not
covered by SEA.

Part IV of the Singapore Employment Act, which prescribes
certain minimum requirements regarding rest days, hours of
work, holidays, annual leave, sick leave, payment of retrenchment
benefits, retirement benefits and certain other conditions of
service, are applicable only to:

• Workmen earning under S$4,500 in basic monthly salaries,
and
• Employees earning no more than S$2,000 in basic monthly
salaries.

It must be noted that the Employment of Part-Time Employees
Regulation covers part-time employees who work for less than 35
hours a week.


THE EMPLOYMENT CONTRACT

UNDERSTANDING CONTRACT OF SERVICE
(COS) OR EMPLOYMENT CONTRACT
What constitutes a Contract of Service

Commonly referred to as Employment or Appointment Letter or
Offer Letter, a Contract of Service (CoS) is usually a written agreement
about the terms of employment/service between an employer and
employee. Although there are oral Contracts of Service in modern
practice, both parties prefer to have written agreement, where the
terms are clearly set out to rule out ambiguity. An apprenticeship
contract or agreement is also considered a CoS.

Commonly referred to as Employment The SEA dictates the minimum standards for the terms and
or Appointment letter or Offer Letter,
a Contract of Service is usually a conditions of the employment contract and such terms must be
written agreement about the terms equal to or more favorable than the conditions set out by the SEA.
of employment/service between an
employer and employee. Where the terms of a contract are less favorable than the provisions
of the EA the provisions of the Act will take precedence over such
less favorable contract terms.

Key Clauses of Contract of Service

A Contract of Service essentially contains the following key terms
of service:

• Job designation and scope of job;

• Commencement date of work;

• Details of salary and allowances, if any;

• Hours of work per day/week/shifts;

• Rate of overtime payment;

• Rest days;

• Employee’s benefits, e.g. annual leave, sick leave and
hospitalization leave;

• Termination of employment contract and notice period.


TERMINATION OF CONTRACT OF SERVICE

Typically, a CoS clearly lays out the terms of • An employee can use his annual leave during
termination, relating to the manner of notice to be notice period if the employer approves such an
served, period of notice, termination benefits and in application for leave. In such cases, the employee
the case of executive-level positions, Non-Disclosure shall be paid for the full notice period.
Agreements and restrictive covenants are also part of
the termination clause. • An employer cannot force the employee to
consume his annual leave during the notice period
The provisions relating to the termination of if the employee does not wish to do so.
employment contracts are set out in Part II of the
SEA. Where the terms of termination are not expressly • Sick leave taken during the notice period shall form
mentioned in the contract, the provisions of SEA will part of the notice period.
govern.
• Salary-in-lieu of notice shall not be subjected to CPF
Both contracting parties - an employer and an deductions and contributions, but salary earned
employee - have the right to terminate a contract of during the notice period shall be subjected to CPF
service. Termination can be effected in one of the deductions and contributions as usual salary.
following manners as the situation warrants:
• Payment of all outstanding salary and any sum
A. With Notice due, is to be made on the termination date or, if
this is not possible, then within 3 days of it.
A written notice is required and must comply with the
notice period agreed by the parties of the contract. B. Without Notice
The notice period shall commence from the day when
the notice is given. The notice period is same for both Both employer and employee may terminate a contract
parties of the contract and on mutual consent, notice of service without giving a notice when a party of the
can be waived. contract breaches the contractual terms. In lieu of
notice, the party who breaks the contract will have to
In the absence of a previously agreed period of notice, pay to the other party a sum equal to the salary that
the parties shall comply by the following guidelines set the employee would have earned during the notice
out in the SEA. period.

An employee may terminate a contract of employment
Length of Service Notice Period
without giving a notice to the employer, if:
Less than 26 weeks 1 day
26 weeks to less than 2 years 1 week • The employer fails to pay salary within seven days
after salary is due; or
2 years to less than 5 years 2 weeks
5 years and above 4 weeks • If the employee is required to perform duties that
are not within the terms of the contract of service.
Key considerations
An employer may terminate an employee without
• Any unutilized annual leave can be encashed by
giving notice , if:
the employee.
• The employee is absent from work continuously
• Annual leave can be used to offset the notice
for more than two working days, without approval
period and to bring forward the last day of work. In
or good reason or without informing or attempting
such instances, the employer shall not pay for the
to inform the employer of the reason for absence.
annual leave thus used to offset the notice period
and the employee shall be paid only until his last
day of work.


TERMINATION OF CONTRACT OF SERVICE

Note

It must be noted that employers cannot change the terms of contract without
the consent of the employee. Where there is no agreement, either party may
choose to end the employment relationship by serving the appropriate notice
to the other party.

Failure to accept notice of resignations by employee is an offence and
employers who are guilty shall be liable on conviction to a fine not exceeding
S$5,000 or to imprisonment for a term not exceeding six months or to both.

Termination of employment contract on grounds of Misconduct

If an employee is found guilty of misconduct upon proper enquiry, an
employer has the right to terminate the employee without notice. Breach of
duty, expressed or implied, will constitute misconduct and acts of misconduct
would also include dishonesty, theft, willful negligence, willful disobedience
etc. Employers cannot change the
terms of the contract without
Employers must ensure proper enquiry is conducted on the allegations without the consent of the employee...

any bias and the employee is provided with an opportunity to adequately
present his case.

Under the Employment Act, the employer may suspend the employee from
work during an inquiry, for a period not exceeding one week. The employee
should be paid not less than half his salary for the suspended period. If the
inquiry does not disclose any misconduct on the part of the employee, the
employer must restore to the employee the full amount of salary that was
withheld.

Appeals against unfair terminations must be made in writing, within one month
of such dismissal, to the Ministry of Manpower. If the appeal is justified, the
Minister may consider reinstating the employee in his former employment or
ordering a sum of money as compensation, as the Ministry deems fit.


SALARY AND DEDUCTIONS

Payment of Salary

Part II of the Employment Act (EA) contains the Deductions from Salary
regulations regarding salary payment. Employees in
managerial and executive positions who earn basic The Act allows deductions from an employee’s salary
monthly salaries of S$4,500 and below are only for the following reasons only:
covered partially by the EA on the basic payment of
salary. The provisions regarding deductions are not • For absence from work.
applicable to them.
• For damage to or loss of goods or loss of funds
The Employment Act requires that salaries be paid to entrusted to an employee, who is proven guilty
employees within seven days, from the end of salary on due enquiry. (Deductions must not exceed 25%
period. Failure to do so is considered an offence. of the employee’s one month’s salary, and such
deductions may only be made on a once-off basis.)
Salaries must be paid at least once every month.
However, the employers are allowed to make salary • For cost of meals supplied by the employer at the
payments in shorter intervals. request of the employee.

The Act does not provide any stipulations regarding • For house accommodation or for amenities and
minimum wage/salary. The amount of salary and other services supplied by the employer and accepted
accompanying allowances are to be mutually agreed by the employee.
by the parties of the contract of service.
• For the recovery of advances, loans or adjustment
Salary constitutes remuneration including allowances, of overpayments of salary. (To be made in
if any, in exchange of the work performed according installments, not spreading beyond 12 months
to the contractual agreements. However, the following and cannot exceed 25% of the salary due for the
does not constitute a salary: period)

• The value of accommodation or quarters, supply • For income tax payment.
of light, water, medical attendance or other
• For CPF contributions.
amenities;
• For contributions to superannuation scheme or
• Pension or provident fund contribution paid by the
provident fund or any other scheme at the request
employer;
of the employee in writing.
• Travelling allowance;
• For payments to any registered co-operative
• Payments to defray special expenses incurred in society with the written consent of the employee.
the course of duty;
• For any other purpose which may be approved
• Gratuity payable on discharge or retirement; or upon application from time to time by the Minister
for Manpower
• Retrenchment benefits (if provided).
Note: Maximum deductable sum is 50% of the salary
due for the salary period, not including deductions made
for absence from work, recovery of loans/advances,
income tax or for the purpose of payments to be made
to registered societies at the consent of the employee.
However, if the contract of service is terminated, then
in order to recover all sums due from an employee, the
deductions from his last salary may exceed 50%.


HOURS OF WORK, OVERTIME & REST DAYS

Provisions regarding Hours of Work, Overtime & Rest
Days are contained in Part IV of the Employment Act.
It must be noted that these provisions are applicable
to Workmen, whose monthly salary is no more than
S$4,500, and other employees, whose basic monthly
salary is no more than S$2,000.

The EA requires that every employee who is covered
by the Act must be informed of the daily working
hours, the number of working days in each week and
the weekly rest days.

Normal Hours of Working

Normal work hours for an employee, as provided by the Payment for Overtime
EA, is 8 hours a day or up to 44 hours a week. However,
if an organization follows a five-day workweek, then Every employee who works beyond the normal work
the employee may have to put in more than the eight hours as provided under the EA must be paid for
hours per day, yet are not required to work for more overtime work. The Act provides that such overtime
than nine hours per day or 44 hours in a week. pay must be at least 1.5 times the hourly rate of pay
and such payment must be made within 14 days of the
A shift worker is allowed to work up to 12 hours in last salary period. It is mandatory to make overtime
a day, and average working hours per week cannot payment to an employee if his basic salary is S$2,000
exceed 44 hours over a continuous three-week period. or less a month, or to a workman if his basic salary is
S$4,500 or less a month.
Maximum Hours of Working
Rest Days
An employee is allowed to work for a maximum of
12 hours within a workday except under special Every employee is entitled to one whole day (midnight
circumstances. Employers, who require their to midnight) of rest day in a week. If Sundays are not
employees to work more than the maximum daily the rest days for an employee, then the employer must
working hours, are required to apply for overtime provide a monthly roster informing the employee of
exemption from the Ministry of Manpower. Such his rest days for the month at the beginning of each
overtime for an employee cannot exceed more than 2 month.
hours beyond the maximum working hours.
The gap between two rest days cannot be more than
Break Time 12 days and in the case of a shift worker, the rest day
can be a continuous period of 30 hours.
Employees are generally entitled to breaks between
work. In general, they cannot be made to work Rest days are not paid days and the employer cannot
continuously for more than six consecutive hours, but force an employee to work on the rest day unless there
if the nature of work is such that it has to be performed is a special circumstance. In such cases, depending on
continuously, then an employee may be required to whose behest the work was initiated and the number
work eight hours continuously, but must be provided of hours worked, the employee must be paid ranging
with a break, of at least 45 minutes, for food and from half day’s salary up to two days salary.
refreshments.


CENTRAL PROVIDENT FUND (CPF)

Central Provident Fund (CPF) is a savings scheme, to uphold
the financial security of Singaporeans and Permanent
Residents. It is a comprehensive scheme addressing the
needs of a person not only after retirement but also
their home-ownership, medical requirements, asset
enhancement and the protection of dependants.

Employers are required to pay the employer’s and employee’s
share of CPF contributions every month for all employees Employers are required to pay the
employer’s and employee’s share
(Singapore Citizens and Singapore Permanent Residents) at
of CPF contributions monthly for all
the rates set out in the CPF Act. The contributions payable Singapore Citizens and Singapore
should be based on the employee’s actual wages earned Permanent Residents.
for the month. Payment to the CPF board must be made
within 14 days from the end of the month for which CPF
contributions are due.

The employer can deduct the employee’s share of the
contribution from the salary at the time of payment of
wages.


EMPLOYMENT OF CHILDREN & YOUNG PERSONS

Part VIII of the Employment Act and The Employment of Children and Young
Persons Regulations contains the provisions regarding employment of children.
A child must be at least 13 years of age to be employed and must be engaged in
suitable forms of work as defined by the Act. A child aged between 13 and 15
years of age cannot be engaged in any industrial undertaking or vessel unless it is A child must be at least 13 years of age
under the personal charge of parents. to be employed and must be engaged
in suitable forms of work as defined by
the Act.
Employers engaging Young persons, aged between 15 and 16 years of age, must
inform the Commissioner of Labor within 30 days of such employment and submit
a medical report certifying the young person’s fitness for employment.

Persons below 16 years of age are not allowed to work in places with hazardous
conditions or conditions that are injurious to health. They cannot be made to work
in or near machineries in motion, or ineffectively insulated electrical equipments.
They cannot be employed in underground work.

Subject to the following conditions, children can be employed as workmen, that
is, work involving physical labor.

• They cannot work during the night.
• For a child, the hours of work cannot exceed six hours in a day and a break of
30 minutes must be provided after three hours of work.
• For a young person work cannot exceed seven hours in a day and a break of
30 minutes must be provided after four hours of work.
• They are not allowed to work on their rest days without the permission of the
Commissioner for Labor.


LEAVE AND HOLIDAYS
Annual Leave

Employees covered under the EA are entitled to There is no expressed provision for marriage and
annual leave according to their period of service with compassionate leave. It depends on terms of contract
the employer and the employee must have been or mutual agreement between employer and
working for the employer for at least three months to employee.
be eligible for such entitlement. Where an employee is
not eligible for annual leave, the employer may grant Sick Leave
unpaid leave to the employee. Also, if an employee’s
leave days have exceeded permitted number of annual Employees covered under the EA are allowed paid sick
leave, then the employer is allowed to deduct from the leave provided:
employee’s salary.
• He has worked for the employer for at least three
An employee who has completed one year of service, months;
is entitled to 7 days of annual leave and thereafter 1
• Informs the employer or at least makes reasonable
more day for every additional year of service until the
attempts to inform of his absence within 48 hours;
eighth years of service and thereafter 14 days. Please
refer to the table below for annual leave entitlement • He is certified by an approved medical practitioner.
under Part IV of the Singapore Employment Act.
An employee, who has worked for more than six
Year of service Days of leave months with an employer, is entitled to 14 days of paid
One 7 outpatient sick leave and 60 days of paid hospitalization
leave. New employees, who have worked for more
Two 8
than three months, are entitled to 5 days of paid
Three 9 outpatient leave and 15 days of paid hospitalization
Four 10 leave. Such new employees get 3 days and 15 days of
Five 11 paid outpatient and hospitalization leave respectively,
for every additional month of service until they acquire
Six 12
six months of service.
Seven 13
Eight or more 14 Salary to employees on paid sick leave must be paid at
his gross rate of pay. If an employee has worked for at
Where an employee has been in service for less than a least three months, his employer is legally obliged to
year, then the annual leave entitlement must be pro- bear the medical consultation fees. Reimbursement of
rated in proportion to the service period. other charges depends on the terms of contract or the
collective agreement signed between the employer
Annual leave taken on a half working day such as a and the union.
Saturday, will still be considered as one day of Annual
leave. However, it is left to the employer’s discretion Public Holidays
whether to treat it as half-day leave. If less than full-
day of leave is taken by an employee, if the fraction is All employees covered by the Employment Act are
half or more, it will still be considered as one full day entitled to 11 paid public holidays in a year. Upon mutual
of annual leave. agreement, the public holiday can be substituted for
any other day. If the holiday falls on a rest day, the next
The annual leave entitlement can be forfeited if the working day will be a paid holiday.
employee is absent from work without permission or
reasonable excuse for more than 20% of the working If an employee is required to work on a public holiday,
days or if the employee is terminated on grounds of then the employer is required to pay an extra day’s
misconduct. An employee’s annual leave entitlement salary at the basic rate of pay for working on the public
that remains unutilized beyond 12 months will also be holiday, in addition to the gross rate of pay for that
forfeited. holiday.


MARRIAGE & PARENTHOOD

The Singapore government is keen on fostering a Extended Protection During Maternity Period
pro-family environment and as part of its Marriage
& Parenthood package 2013, several enhancements In order to prevent unfair dismissal and retrenchment
were announced to the existing entitlements of of pregnant employees, an enhanced protection
parents and would-be parents. The following is a brief scheme has been announced. From 1 May 2013, if a
overview of the work life enhancing schemes that pregnant employee is retrenched or dismissed without
were announced, which will result in some changes to sufficient cause during any point of her pregnancy, the
the provisions in EA. employer will be required to pay her the maternity
benefits. To qualify for such coverage during the entire
Shared Parental Leave & Paternity Leave pregnancy period, the employee must have worked for
a minimum period of three months with the employer.
From 1 May 2013, working fathers, including those
who are self-employed, are entitled to share 1 week Currently the, law requires payment of such benefits
out of the 16 weeks’ maternity leave, subject to the for termination or retrenchment of an employee
agreement of the mother and provided that they meet within three months or six months respectively from
the following criteria under CDCA : the date of estimated delivery or confinement.

• The child is a Singapore Citizen born on or after 1 Maternity Benefit for Short-term Contract Workers
May 2013;
Working women, who currently do not qualify for
• Mother qualifies for Government-Paid Maternity maternity leave, such as those on short-term contract
Leave; work, can now benefit from the Government-Paid
Maternity Benefit scheme which allows them to enjoy
• Father is lawfully married to the child’s mother. Government-Paid Maternity Leave, in the form of a
cash benefit which is capped at S$10,000.
The shared parental leave is to be consumed as a
continuous block within 12 months of the birth of the It is equivalent to the government-paid portion of
child. Upon mutual agreement with the employer, it maternity leave and calculated based on the mother’s
can be taken flexibly within the first 12 months of the income in the 12 months before childbirth. Working
child’s birth. mothers will be entitled to the new benefit as long
as they have worked for a total of 90 days in the 12
Working fathers, meeting the criteria below will be calendar months before giving birth. The child must be
entitled to 1 week of Government-Paid Paternity Leave Singaporean and born on or after 1 January 2013.
for all births.

• Child is a Singapore Citizen born on or after 01 May
2013;

• The child’s parents are lawfully married;

• Father must have served his employer for a
continuous duration of at least 3 calendar months
immediately preceding the birth of the child

Such leave is to be taken within 16 weeks of the birth of
the child and it can be flexibly taken within 12 months
of the birth of the child if there is a mutual agreement
between the employer and employee.

The government funding for the paternity leave and
shared parental leave for qualifying fathers is capped
at $2,500 including CPF contributions.


MARRIAGE & PARENTHOOD

Extended Child Care Leave

Currently, parents are entitled to childcare leave of The following criteria must be met to qualify for
6 days annually if their children are aged 7 years and adoption leave:
below. In order to cater to the requirements of parents
with children slightly older kids, that is, primary school • The adopted child is below the age of 12 months
going age, an extended childcare leave package has at the point of ‘formal intent to adopt’, i.e. Court
been introduced. Application to adopt (for local child) or issuance
of in-principle approval for Dependant’s Pass (for
From 1 May 2013, each parent will be entitled to 2 foreign child);
days of Government-Paid Child Care Leave per parent,
annually, if they have a Singapore Citizen child between • The adopted child is a Singapore Citizen;
the ages of 7 and 12 years.
• If the child is a foreigner, one of the adoptive
The following criteria must be met in order to qualify parents must be a Singapore Citizen;

• Child is between 7 and 12 years of age on or after • For a foreign child, the child must become a
1 May 2013; Singapore Citizen within 6 months of the child’s
adoption.
• Child is a Singapore Citizen;
• The adoptive mother is lawfully married at the
• Parent is lawfully married; point of ‘formal intent to adopt’;

• Parent must have served his or her employer for a • The mother has served the employer for at least
continuous duration of at least 3 calendar months; 3 calendar months, or was engaged in the trade,
business, profession or vocation preceding the
The Government‘s funding is capped at S$500 per day point of ‘formal intent to adopt’;
including CPF contributions.
• The Adoption Order is passed within 1 year from
Note: Parents with children in both the age groups, the point of ‘formal intent to adopt’.
that is, children aged under 7 years and children aged
between 7 and 12 years are entitled to total of six days Qualifying mothers are entitled to consume the leave
leave annually per parent. from the date of Court Application to Adopt or from the
date of issuance of In-Principal Approval of Dependent
Adoption Leave Pass for the child, as the case may be.

Currently, in order to help mothers of adopted child
to care and bond with the child, the Government
reimburses up to 4 calendar weeks of Government-
Paid Adoption Leave (subject to a cap of $10,000) to
employers who voluntarily grant adoption leave to
their employees.

From May 1 2013, adoption leave has been made
statutory and employers are required by law to provide
the same to qualifying mothers. Adoption leave is
required to be consumed within the first birthday of
the child.


RETIREMENT

The statutory retirement age is 62 years. However, scheme in place, it may impose high costs on the
according to the recently-enacted Retirement and Re- employer; therefore they are allowed to renegotiate
employment Act (RRA), employers are required to make the salary & benefits part of the employment and such
an offer of re-employment to eligible employees, who adjustments must be reasonable and just.
turn 62, up to the age of 65. The employees must have
satisfactory work performance and must be medically If the employer is unable to accommodate the employee
fit to be eligible for this. All Singapore Citizens and on retirement to a suitable job, the employer may make
Permanent Residents, unless exempted by MOM, are a one-time Employment Assistance Payment (EAP) to
eligible for this re-employment provision. enable the employee to financially manage himself
until he finds another job. For employees with more
Re-employment Terms than 18 months service, the EAP amount could be 3
months of salary. A minimum amount of S$4,500 and
An offer of annually renewable re-employment a maximum amount of S$10,000 could be considered.
contract can be made until the employee turns 65
years of age. However, employers are advised to make Employers are advised to refer to the Tripartite
a three-year contract to provide a greater sense of Guidelines on Re-employment of Older Employees,
certainty to the employees. to ease the re-employment process for their retiring
workers.
The terms of re-employment must be fair and
measures must be taken to avoid disputes. The In case of any disputes that the employee has with the
employer must carry out re-employment process in re-employment, he may seek the union’s assistance or
a congenial manner and a consultative approach with report to the Commissioner of Labor. If the employee
the employee who must present an open mind for the is not offered a re-employment contract, a report must
proposal discussed. be made within 1 month of last day of employment; and
for unacceptable terms of contract of re-employment
Salary/wages can be adjusted based on the revised or non-payment or inadequacy, EAP reports must be
nature of duties and responsibilities, productivity etc. lodged within six months of last day of work.
Where there is a seniority-based wage and benefits


RETRENCHMENT

A retrenchment exercise must be carried out The benefits are not stipulated by the Act and depend
responsibly and all efforts must be taken to ensure on the mutual agreement between the employer and
that the affected employees receive all payments and employee and the financial situation of the company.
compensation according to the contract or as agreed Benefit payments do not attract CPF contributions.
mutually by the trade union and employer.
Temporary Lay-offs & Shorter work weeks
Notice of Retrenchment
As an alternative to retrenchment, which will
Any impending retrenchment program must be made adversely affect employees, employers have the
known to the affected employees prior to serving option of implementing temporary lay-offs and shorter
the notice of retrenchment. The notice period of workweeks to mitigate the impact.
retrenchment must meet the minimum stipulation set
out by the EA as below: Shorter workweeks cannot last more than two months
and the reduction cannot be more than two days in a
Length of service Notice Period week.

Less than 26 weeks 1 day Employees must be paid at least half of their gross
26 weeks to less than 2 years 1 week salary during the lay-off period. Companies paying half-
2 years to less than 5 years 2 weeks day salary during layoffs may allow their employees to
go on half-day paid annual leave, thus the employees
5 years and above 4 weeks will get their full salary. However, employees are not
allowed to consume more than 50% of their annual
Retrenchment Benefits
leave for this purpose.
Employees who have a minimum service period of
three years are entitled to benefits on retrenchment.
Though employees who have less than three years of
service are not entitled to benefits, the company may
provide some benefits on grounds of compassion.


THE WORKRIGHT INITIATIVE

Work Right

In order to protect vulnerable worker groups such
as elderly and low-waged workers from unfair
treatment and deprivation of the rights they are
entitled to, the Ministry of Manpower (MOM) and
Central Provident Fund (CPF) Board have embarked
on a two-pronged strategy to ensure compliance
with the CPF Act and Employment Act (EA).

The WorkRight Initiative undertaken by the two
bodies employs an educational and enforcement
approach to ensure compliance with the provisions
and aims to promote prompt payment of CPF
contributions, on-time payment of salary, overtime
payment, provision of paid annual and sick leave,
and adherence to working-hour requirements,
among others.

It also enforces heftier punishments on employers
who do not comply with said regulations and
serves as a platform to educate workers to act as
whistleblowers against errant employers.


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Main Line : (+65) 6320 1888
Fax : (+65) 6438 2436
Email : info@rikvin.com
Website : www.rikvin.com

Reg No 200100602K
EA License No 11C3030

This material has been prepared by Rikvin for the exclusive
use of the party to whom Rikvin delivers this material.
This material is for informational purposes only and has
no regard to the specific investment objectives, financial
situation or particular needs of any specific recipient.
Where the source of information is obtained from third
parties, Rikvin is not responsible for, and does not accept
any liability over the content.

Copyright © 2013 Rikvin Pte Ltd

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