Who is covered under the Employment Act?

Incisive-Law-Employment-Act

Knowing your rights under the Employment Act.

While most non-salary related employment disputes are governed by contract, it is nonetheless pertinent for employees to know whether they are protected under the Employment Act (and for employers (and their relevant human resource personnel) to know what rights different employees are entitled to).

The Employment Act excludes “any person employed in a managerial or an executive position”. Although there is no definition of “managerial and executive position” in the Employment Act, guidance from the Ministry of Manpower has been to the effect that “managers and executives” are employees with executive and supervisory functions, whose duties would usually include one or more of the following:-

1. Influencing or making decisions on issues such as recruitment, discipline, termination of employment, performance assessment and rewards;

2. Formulating strategies and policies of the enterprise; or

3. Managing and running the business.

An exception to the above is that a person employed in a managerial or an executive position earning S$4,500/month or less, will be regarded as an employee covered under the Employment Act save for Part IV of the Employment Act. Part IV of the Employment Act sets various minimum standards, including:

    • A maximum of 8 hours a day or 44 hours a week of contractual working hours for non-shift workers;
    • Overtime allowance for work done over these contractual working hours;
    • 1 rest day per week; and
    • Annual leave of up to 14 days.

Employment Claims Tribunal – What Does This Bode?

Incisive-Law-Employment-Tribunal-Claim

As of 1 April 2017, the Employment Claims Tribunal (ECT) has been convened to replace the Labour Court in adjudicating statutory and contractual salary-related disputes up to a claim limit of S$20,000*.

The ECT does not have jurisdiction to handle non-salary related claims (e.g. claims in relation to non-compete / confidentiality clauses).

Employment claims in the ECT will be heard by legally qualified Tribunal Magistrates in accordance with Singapore court processes.

Parties will not be allowed to be legally represented in the ECT proceedings itself, although there is no restriction against parties seeking legal advice on the matter. For instance, lawyers will be able to assist in advising on the merits in advance of the hearing but will not be present at the hearing.

If the employee is still employed by the company, the claim must be brought within 1 year after the dispute arose. Otherwise, within 6 months from the last day of work.

Looking at the setup of the ECT, in our view, its aim is to encourage parties to focus on a commercial resolution (at least for claims below S$20,000*) which may not have a direct co-relation to the merits of each party’s position, although being aware of the relative merits may facilitate the process of reaching a compromise in certain cases.

*A higher claim cap of S$30,000 would apply to cases that have undergone a formal mediation process either through the Tripartite Alliance for Dispute Management (“TADM”) or mediation assisted by unions recognised by the Industrial Relations Act. If the claim exceeds the maximum amount, the excess amount will have to be foregone to be able to enter into a settlement agreement or to enable the case to be heard by the ECT.

Employer’s Duty of Care

Incisive-Law-Employment-Law-Duty-of-Care

It is no surprise that there is a common law duty of care owed by employers to their employees, but many employers may not appreciate that the duty of care is also owed to former employees when their prospective employers request references.

Further, the standard of care in such a situation had not previously been considered by the Singapore Court of Appeal until a decision in July 2016 where the Singapore Court of Appeal clarified the principles and factors that the Singapore courts will apply and take into account.

  • Employers owe a duty of care to their employees, whether former or present, when preparing a performance reference. This does not change even if the applicant was an ‘agent’ rather than an employee, because the factors that lead to a finding that an employer owed its employee such a duty of care may also be present in the context of some relationships between principals and agents.
  • When writing a reference for its employee, an employer has to exercise reasonable care to ensure that
    a) the facts stated in the reference were true; and
    b) any opinions expressed there were based on, and supported by, facts which were true.
  • The employer also has to exercise reasonable care to ensure that the reference does not give an unfair or misleading overall impression of the employee, even if the discrete pieces of information which it contained were factually correct.
  • The employer is required to exercise reasonable care to disclose any further information relating to information that had already been provided, where to withhold such further information would render the information already disclosed incomplete, inaccurate or unfair.
  • Subject to the foregoing qualifications, the employer is not required to give a full and comprehensive reference or to include all potentially material facts about the employee in the reference.
  • An employer should not include in the reference, whether explicitly or implicitly, any mention of complaints or other allegations against the employee that the latter had no knowledge of and had not been given an opportunity to explain or defend himself against.
  • In assessing what constituted reasonable care, regard would be had to the gravity of any adverse suggestion or inference contained in the reference. The greater the gravity of any adverse suggestion or inference, the more closely would the employer’s conduct be scrutinised to ascertain whether it had taken reasonable care to ensure that the suggestion or inference in question (a) was based on facts which were true and accurate; and (b) was, in view of those facts, fair and reasonable.

While this decision is much welcomed for adding some clarity to the question of standard of care, the real question is how far does it ease the role of the human resource personnel and management team of large organisations who may face numerous requests for references on a regular basis?