Singapore offers a highly educated and skilled workforce and
competitive wage rates.
Singaporeans have always been and continue to be committed
to making their industries internationally competitive. As Singapore progresses
to a knowledge-based economy, the nature of work, workplaces and workplace
practices are being aligned to the new demands of the economy.
The government authority tasked with employment matters is
the MOM within which the Labor Relations Department (LRD) promotes and
maintains industrial peace and stability in Singapore by balancing the
interests of employers and employees and providing a legal framework to achieve
this balance. The LRD also formulates policies on industrial relations and
reviews labor and employment laws regularly to ensure their continued relevance
to both employers and employees. The four main types of services provided by
the LRD are as follows:
- advisory services on terms and conditions of employment
- investigation into claims and complaints regarding
- conciliation of employment/trade disputes
- adjudication of employment disputes.
Employment conditions are usually provided for in contracts
of service entered into between employers and employees and/or in the
collective agreement entered into between employers and the trade unions
representing these employees. For employees who fall within the ambit of the
Employment Act (Cap 91), the provisions of the Employment Act must be observed
to the extent that it sets out certain basic employment conditions that apply
on a mandatory basis.
Depending on the particular industry/employer, there may be
trade unions that negotiate workplace agreements between employers and
Aside from the Employment Act, other statutes that may apply
to an employment relationship include the Retirement Age Act (Cap 274A), the
Workplace Safety and Health Act (Cap 354A), the Work Injury Compensation Act
(Cap 354), the Central Providen Fund Act (Cap 36),
the Children Development Co-Savings Act (Cap 38A), the Employment of Foreign
Manpower Act (Cap 91A), the Industrial Relations Act (Cap 136), the Trade
Unions Act (Cap 333), the Trade Disputes Act (Cap 331), and the Skills
Development Levy Act (Cap 306). Other more specific legislation may also apply,
for example, depending on the industry sector of the employer.
Substantive amendments were recently made to the Employment
Act, with the changes coming into effect on 1 January 2009. These amendments
sought to keep pace with changes in the workforce profile and to update
employment standards and benefits, especially for vulnerable workers.
It is important to note that the Employment Act does not
extend to all employees. An “employee” under the Employment Act is defined as
“a person who has entered into or works under a contract of service with an
employer and includes a workman and any officer or employee of the government
included in a category, class or description of such officers or employees
declared by the President to be employees for the purposes of this Act or any
provision of it; but does not include any seaman, domestic worker or, subject
to subsection (2), any person employed in a managerial or executive position or
any person belonging to any other class of persons whom the Minister may, from
time to time by notification in the Gazette, declare not to be employees for
the purposes of this Act.” Persons employed in managerial or executive
positions but who earn a basic monthly salary of S$2,500 and below enjoys
statutory protection against nonpayment of salary and may access the MOM Labor
Court for salary claims.
It is also worth noting that the Employment Act prescribes
certain minimum conditions for workmen who are in receipt of a salary not
exceeding S$4,500 a month and employees who are in receipt of a salary not
exceeding S$2,000 a month (this ceiling applies as of 1 January 2009).
For employees falling within the Employment Act, the
employer may stipulate conditions of employment which are more favorable than those
set out in the Employment Act. Conversely, a contract of employment or service
which provides for conditions which are less favorable than those prescribed in
the Employment Act are illegal and are null and void to the extent that they
are less favorable.
Employees not covered by the Employment Act are usually
governed by their employment contracts with the employer and any other
reasonable and lawful rules, regulations and policies as may from time to time
be implemented by the employer (whether in the form of an employment handbook
Wages and bonuses
The salary to be paid to an employee is subject to negotiation
between an employer and an employee (or the trade union). Singapore has no
minimum wage law. Wages are determined by market forces.
Although not legally required, many companies in Singapore
reward their employees with bonuses that range (generally) from one to three
months’ salary depending on the employer’s and employee’s performance.
Apart from variable bonuses which hinge on the company’s and
the individual’s performance, some companies also provide an annual wage
supplement (AWS). Commonly known as the 13th month salary payment, the AWS
represents a single annual payment (up to a maximum of three months’ salary) to
employees which supplements the total amount of annual wages earned by the
employee. The payment of AWS is not mandated by law and is payable only if
required under the terms of the employment contract or a collective agreement.
All employees falling within the ambit of the Employment Act
are entitled to a maximum of 14 days’ paid sick leave a year if no hospitalization
is necessary and an additional 46 days paid sick leave a year if hospitalization
is required. Other than that, an employee’s entitlement to sick leave will vary
from contract to contract although it is common practice to provide employees with
at least 14 days of sick leave per year.
Part IV of the Employment Act (which only applies to
employees who are in receipt of a salary not exceeding S$2,000 a month and
workmen who are in receipt of a salary not exceeding S$4,500 per month)
provides that an employee who has at least three months of continuous service
with an employer will be entitled to a minimum of seven days paid annual leave
in the first year of service and an additional day’s leave for each year worked
thereafter up to a maximum of 14 days. For employees who are not covered by the
Employment Act, their entitlement to annual leave will depend on their contract
of employment. Most employees are commonly given 14 to 21 days’ paid annual
leave (depending on length of service).
It is common for employers to provide two or three days’
leave without loss of pay for employees who suffer the death of a close
The Employment Act and the Children Development Co-Savings
Act (CDCSA) provide maternity protection and benefits for female employees. The
protection and benefits provided differ between the two statutes.
The CDCSA applies to all female employees working in
Singapore (including those employees who fall within the ambit of the
Employment Act) provided they fulfil certain qualifying criteria, as follows:
- the employee’s child is a citizen of Singapore at the time
- the employee was lawfully married to the child’s natural
father at the time of conception or before the child’s birth
- the employee has been employed by the employer for at least
90 days before the birth of the child.
Prior to 31 October 2008, employees who qualified for
maternity leave under the CDCSA were entitled to paid maternity leave of 12
weeks. This has been enhanced to 16 weeks with effect from 31 October 2008
regardless of the birth order of the child.
For the first two births, the first eight weeks of maternity
leave will be employer-paid. The last eight weeks will be funded by the
government (capped at S$20,000 per birth, including CPF contributions). For the
third and subsequent births, the full 16 weeks will be funded by the government
(capped at S$40,000 per birth, including CPF contributions).
Female employees who do not satisfy either of the first two
criteria set out above but who fall within the ambit of the Employment Act and
satisfy the third criterion (ie, they have been employed by their employer for
at least 90 days before the birth of the child) will be entitled to 12 weeks of
maternity leave under the Employment Act. Where the employee has fewer than two
children of her own at the time of delivery, she is entitled to be paid her
usual salary for the first eight weeks of maternity leave. In the case of
multiple births (eg, twins, triplets, etc) during the first pregnancy, the
employer is still required to pay the next eight weeks of maternity leave for
the next birth.
It should be noted that a female employee who qualifies for
maternity leave under the CDCSA will not be entitled to claim the same benefits
under the Employment Act.
The CDCSA and the Employment Act both provide for childcare
leave entitlement. Under the CDCSA, an employee is entitled to a total of six
days of paid childcare leave per year (regardless of the number of children)
- the employee’s child is a Singapore citizen
- the employee is legally married to the other parent, or was
married to the other parent at the time of, or at any time after, conception
(where the child is not an adopted child); or where the child is an adopted
child, the employee was married, widowed, or divorced when the employee adopted
- the employee has any child (including any legally adopted
or step-child) who is below seven years of age at the time the application for
childcare leave is made or any child who celebrated or will be celebrating his
or her seventh birthday during the calendar year (i.e., January 1 to December
31) in which the application for childcare leave is made
- the employee has worked for the employer for at least three
Where the employee has been employed for at least three
months but for less than 12 months, the six days’ paid childcare leave may be
pro-rated by the employer, subject to a minimum of two days. The employee will
be entitled to be paid at his/her gross rate of pay for every day of childcare
leave that is taken, however where an employee has already taken three days of
paid childcare leave, the amount of payment the employee is entitled to receive
from his/her employer for each subsequent day of childcare leave that is taken
is capped at S$500.
If the employee does not meet either of the first two
criteria set out above but is covered under the Employment Act and fulfils the
third and fourth criterion set out above, he/she will be entitled to a total of
two days of paid childcare leave per year (regardless of the number of
children) under the Employment Act. Where the employee qualifies for paid
childcare leave under the Employment Act, the employee will be entitled to be
paid at his/her gross rate of pay for every day of such childcare leave that is
It should be noted that for so long as an employee is
entitled to paid childcare leave under the CDCSA, he/she will not be entitled
to paid childcare leave under the Employment Act.
Under section 23 of the Enlistment Act (Cap 93), an employer
must grant leave of absence to any employee required to report for national
service, mobilized service under section 73 of the Police Force Act (Cap 235),
or voluntary service in the division of the Singapore Armed Forces known as the
People’s Defense Force under the Singapore Armed Forces Act (Cap 295) or in the
Special Constabulary under the Police Force Act (Cap 235).
There are generally 11 public holidays each year in
Singapore (with minor fluctuations when holidays fall at weekends) and an
employee who falls within the ambit of the Employment Act is entitled to a paid
holiday for each of them.
The National Wages Council (NWC) is usually convened when
there is a need to review wage guidelines. Following its review, the NWC makes
recommendations that apply to all employees (management, executives and
rank-and-file employees), unionized and non-unionized companies and in both the
public and private sectors. However, implementation of these recommendations is
not mandatory and employers in the private sector have the discretion to elect
whether or not to adopt them.
Employees who have been terminated “unlawfully” may seek
appropriate redress under the Employment Act or common law.
Under the Employment Act, an employee who considers that he
or she has been dismissed without just cause or excuse may, within one month of
dismissal, make representations in writing to MOM to be reinstated in his or
her former employment. Upon satisfaction on the part of the Minister that the
employee has been dismissed without just cause or excuse, the Minister may
direct the employer to reinstate the employee in the former employment (although
this is rare) and to pay the employee an amount that is equivalent to the wages
that the employee would have earned had he or she not been dismissed. The
Minister may alternatively direct the employer to pay the employee such amount
of wages as compensation as may be determined by the Minister but not to
reinstate his or her employment. Disputes which cannot be resolved amicably
through the above means will be referred to the Labor Court for adjudication.
Alternatively, if the manner of dismissal contravenes the
terms of the employment contract, the employee can make a claim for breach of
contract against the employer. For an employee falling outside the ambit of the
Employment Act, the employee can also seek redress in the form of damages for
breach of contract.
There are no
statutory requirements for the employer or employee to furnish reasons for
termination of an employment contract.
Termination of employment at retirement The Retirement Age
Act states that it is unlawful for an employer to dismiss any employee who is
aged below 62 years because of his or her age. This Act, however, applies only
to employees who are Singapore citizens or Permanent Residents.
Certain categories of employees are exempted from the ambit
of the Act including, but not limited to, persons employed to work on a
specific project for a fixed term.
By 2012, the Singapore Government intends to enact
re-employment legislation to enable more people to continue working beyond the
current statutory retirement age of 62, up to 65 in the first instance and
subsequently, up to 67. In April 2008, the Tripartite Implementation Workgroup,
a body set up to focus on implementation issues and to help companies adopt
re-employment legislation, released an advisory known as the Tripartite Advisory
on the Re-employment of Older Workers which identified good practices in areas
such as pre-retirement planning and re-employment consultation, job
arrangements upon re-employment and re-employment contract durations. Following
this, in March 2010, the Tripartite Implementation Workgroup released
guidelines (the Tripartite Guidelines on the Re-Employment of Older Employees)
to better prepare employees for the proposed re-employment legislation. These
guidelines are to serve as the basis for drafting the proposed re-employment
legislation and identify good re-employment practices that employers should
consider adopting in the following areas:
- planning and preparing employees for re-employment
- the re-employment contract
- recognizing the contributions of re-employed employees
- providing assistance to eligible employees whom employers
are unable to re-employ.
Unions represent the industrial interests of certain
categories of employees who are entitled to become its members. Typical trade
union activity is to negotiate collective agreements with employers on behalf
of its members.
The MOM maintains a Registry of Trade Unions, the primary
function of which is to regulate the following:
- formation and dissolution of trade unions
- safe custody and lawful utilization of union funds
- impartial and proper election of union officers.
All trade unions have to be registered under the Registry of
Trade Unions otherwise they are illegal. The Registry also provides advisory
services to trade union officers and members on matters relating to the laws
and regulations on trade unions.
Increasing emphasis is being placed on the importance of
occupational health and safety in Singapore which is reflected in legislation
The Work Injury Compensation Act requires employers to
maintain insurance for employees who are involved in manual work or non-manual work
(where the employee’s total earnings do not exceed S$1,600 per month). It is
not mandatory for employers to buy insurance for employees who are involved in
non-manual work and have monthly earnings of above S$1,600. Nonetheless,
employers will be required to pay compensation in the event of a valid claim,
even if they do not buy insurance for this group of employees.
- The Workplace Safety and Health Act, which sets out a
framework for the promotion of safe practices in all factories and workplaces
of various risk levels and industries and
- The Work Injury Compensation Act (which replaced the
Workmen’s Compensation Act with effect from 1 April 2008) which covers all
employees except self-employed persons, independent contractors, domestic
workers, members of the Singapore Armed Forces and officers of the Singapore
Police Force, the Singapore Civil Defense Force, the Central Narcotics Bureau
and the Singapore Prison Service.
The MOM also requires employers to purchase and maintain
insurance for medical expenses of foreign workers. This requirement applies to
all foreign workers on work permits (including foreign domestic workers) or S
passes. For medical insurance policies taken up or renewed on/or after 1
January 2010, the insurance coverage must be at least S$15,000 per year for
each worker’s inpatient care and day surgery during his/her stay in Singapore.