Singapore Employment Act: What You Should Know

Singapore Employment Act: What You Should Know

Being a leading business destination, Singapore boasts a vibrant working landscape. The employment contracts, working terms and conditions are generally regulated by the Employment Act Singapore has in place since 1968. In order to ensure positive and productive work environment and avoid serious disputes or penalties, both employees and employers should know their rights and responsibilities.  Below is the basic information pertaining to the Singapore Employment Act.  


What is the Employment Act?


The Employment Act is the main labour law in Singapore. It spells out the essential terms and conditions of employment, outlining the employer’s and the employee’s rights and responsibilities bound by a contract of service.

The contract of service should include the commencement date of the employment, job title and scope, hours of work, probation period, remuneration, benefits, notice period, conditions for termination and code of conduct.

Foreign employees, who hold Singapore Employment Pass are covered by the Employment of Foreign Manpower Act.  


Who is covered under the Employment Act?


All employees holding a contract of service with their employers are covered by the Singapore Employment act, regardless if they work on a full-time, part-time, temporary or contract basis.

Employees who work less than 35 hours a week, are covered by the Employment of Part-Time Employees Regulations. In terms of salary, the person can be paid on an hourly, daily or monthly basis.


Who is not covered under the Employment Act?


The employment Act does not cover individuals in managerial or executive positions whose monthly basic salary is more than S$4,500. A person is considered a manager or executive when he has supervisory functions. His duties include defining company strategies, managing business operations, influencing the recruitment process and assessing employee performance.

The Act is also not applicable to statutory board employees and civil servants, as well as seafarers and domestic workers.  


What are the areas governed by the Employment Act?



The key areas governed by the Singapore Employment Act are contract termination, absence leaves and payment of salary.

The Employment Act outlines the employer’s and employee’s liabilities on termination of contract,  with or without notice.  

The employer can dismiss the employee without prior notice, should the latter be found to have breached a condition of the employment contract or been absent from work for more than two days in a row without prior permission. In this case, the employer pays the employee the salary in lieu of notice.

employment act in singapore

If the employee is previously notified about the contract termination, the notice period is counted based on the terms of the employment contract.

The Employment Act also stipulates the terms of salary payment; namely the salary period, the time of payment and the authorised deductions. Employers who fail to comply with the salary obligations are liable to a fine, imprisonment or both punishments. The employer should allow employees to take their sick leave, with a maximum duration of 14 days. Employees are also entitled to annual leave.

The Employment Act also aims to safeguard employee rights regarding rest days, maximum hours of work and overtime pay. An employee is entitled to maternity leave, subject to conditions, including that the parents are lawfully married and that the employee has been working at the employer’s place for a minimum of three months. The length of maternity leave is 16 weeks.   


What are the requirements of the Employment Act?



From 1 April 2016, employers need to maintain employees’ paperwork including employee records, key employment terms as well as itemised pay slips. The aim is to minimise misunderstandings and disputes at work. Employers who do not comply with these requirements is treated as a civil contravention and may result in administrative penalties.



How to learn more about the Employment Act?



In 2016, the Singapore Ministry of Manpower and the CPF Board introduced the WorkRight initiative. It allows employees and employers to learn more about their rights and obligations set out in the Singapore Employment Act and Central Provident Fund (CPF) Act.


Its areas of focus encompass the payment of CPF contributions, the timely payment of salaries, the overtime pay, the provisions for paid annual and sick leaves, as well as the adherence to the working hours requirements.

If you are still unsure of the specificities of the Employment Act and how it applies to your company’s employees, you can contact professional services firms, like AM Corporate Services, for expert advice. The specialists will guide you on how to best enact the terms and conditions of the Employment Act at your workplace.