Review of Employment Act (Phase 1)

Transcription

1 Review of Employment Act (Phase 1) National Council of Social Service HR Networking Session 26 Mar 2014 A Great Workforce A Great Workplace 1

2 Background Employment Act (EA) sets basic employment terms, shapes the relationships and strikes a balance of responsibilities between employers and employees. Rationale for current review - To ensure that EA remains relevant in response to: i. Changing workforce profile, particularly the proportion increase in Professionals, Managers and Executives (PMEs) ii. Rising wages (25% since the last review) iii. Evolving employment norms and practices, e.g. shortening employment tenures 2

3 Scope of Review Two Phases A Great Workforce A Great Workplace Phase Scope Phase I (Current) Phase II (from 4Q 2013) 1. Better protection for more workers 2. Flexibility for employers 3. Raise employment standards 1. Enhance protection for employees in nontraditional work arrangements, i.e. contract work, self-employment & outsourcing 2. Better approaches to facilitate employment dispute resolution between employers and employees 3

4 Thrust of EA Phase I Review Better protection for more workers WHILE Giving employers more flexibility to implement the changes 4

5 1. Better protection for more workers 5

6 Current EA Protection General Protection Timely payment of salary Public holidays Paid sick leave & hospitalisation leave Protection against unfair dismissal etc. Working Hours Related Protection Hours of work Overtime (OT) payment Rest day Annual leave etc. 6

7 Better Protection for More Workers A Great Workforce A Great Workplace Employees who are PMEs Non- Workmen (non-pmes white collar workers) Current PMEs earning < $4,500 receive only salary protection - All protection (general + working hours related) for non-workmen earning <$2,000 - Only general protection for nonworkmen earning > $2,000 Going forward - PMEs earning <$4,500 will receive general protection in the EA - Due to the nature of work, PMEs will continue to be excluded for working hours related protection - All protection (general + working hours related) for non-workmen earning <$2,500 - Only general protection for nonworkmen earning > $2,500 Workmen (non-pme blue collar workers) - All protection (general + working hours related) for workmen earning <$4,500 - Only general protection for workmen earning > $4,500 * The salary thresholds above refer to the employees salary excluding OT payment, bonus payments, annual wage supplements, productivity incentive payments and any allowances 7

8 Better Protection for More Workers A Great Workforce A Great Workplace PMEs Earning $4,500 Current Salary Protection New Salary Protection General Protection Non-Workmen Earning $2,000 - $2,500 Current Salary Protection General Protection New Salary Protection General Protection Working hours related Protection 8

9 2. Flexibility for Employers 9

10 Flexibility for Employers OT Payment for Non-workmen OT payable to non-workmen will be capped at the salary level of $2,250, while extending the right to claim OT to those who earn < $2,500 Salary / month Formula to Calculate Hourly Basic Rate Calculation of Hourly Basic Wage (Current) Overtime Hourly Wage (New) Overtime Hourly Wage $1, x Monthly Basic Rate of Pay 52 x x $1, x 44 = $ 8.40 $8.40 x 1.5 =$12.60 $8.40 x 1.5 =$12.60 (No change) $2, x $2, x 44 = $ Not covered on OT pay $11.80 x 1.5 =$17.70 $2, x $2, x 44 = $ (OT payable capped at salary level $2,250) Not covered on OT pay $11.80 x 1.5 =$

11 Flexibility for Employers Dismissal Protection for Junior PMEs Current PMEs earning < $4,500 are not protected against unfair dismissal Going forward This group will receive general protection including protection against unfair dismissal. This means: Such an PME will be able to appeal against an employer for dismissal without notice on grounds of misconduct However, in cases where notice is given, the PME needs to have served a minimum period of one year with their employers before they are eligible to seek redress against unfair dismissals 11

12 Flexibility for Employers Public Holidays for Junior PMEs Current PMEs earning < $4,500 are not protected for paid public holidays Going forward This group will receive protection for paid public holidays. Employers will be allowed to grant time offin-lieu for PMEs if required to work on public holidays, subject to mutual agreement. In the absence of mutual agreement, at least half a day off in-lieu has to be granted. 12

13 Flexibility for Employers Obligations for Cosmetic Procedures Current Employers are obliged to provide paid sick leave and medical examination expenses of their employees. Going forward Employers will be exempted from having to grant paid sick leave and bear medical examination expenses in respect of cosmetic consultations and procedures. This will take reference from the Medisave withdrawal rules [Implementation details tbc] 13

14 Flexibility for Employers Others Current Employers are required to prepare employees roster of rest days and pay OT in accordance to schedules as defined in the EA: a) Prepare employees roster of rest day before start of the month and b) Pay OT no later than 14 days from the end of the salary period. Going forward Allow employers to seek exemption from Commissioner from such requirements, in exceptional circumstances where business operations justify. * Note: Any exemption granted on time for OT payment will be once-off as grace period for employers to make necessary systems changes to be in line with the 14-days timeline 14

15 3. Raising Employment Standards 15

16 Raise Employment Standards Payslips & Salary Records Current Employers are not required to provide payslips. Only employers of workmen are required to keep salary records. Going forward Employers will be required to provide written itemised payslips. This includes breakdown of salary components e.g. allowances, deductions Employers will be required to maintain detailed employment records of all their employees. This includes: Salary and sick leave records for all employees Working hours and attendance records for all employees with working hours related protection Smaller companies may have difficulties in complying, and we will give them some lead time to adjust after the amended legislation comes into effect first half of

17 Raising Employment Standards Safeguard for Salary Current Employees salaries are protected from any deductions by employers other than those authorised under the EA. Examples of authorised deductions: Deductions for damage or loss of goods entrusted to employee Cost of food, accommodation, amenity and services provided by the employers Going forward A 25% sub-cap will be imposed for deductions for accommodation, amenities and services (within the existing 50% limitation) Currently, the maximum amount of all deductions in respect of any one salary period is 50% of the employee s salary* * The following are excluded from the 50% cap: (i) deductions for absence from work, (ii) deductions for income tax, (iii) recovery of advances or loans and (iv) payment to any cooperative society in respect of subscriptions, entrance fees, instalments of loans 17

18 Raising Employment Standards - Others A Great Workforce A Great Workplace Current Employees with less than 3 years of service with the same employer are not entitled to retrenchment benefits. When employees are transferred to another company in an event of a restructuring, employment terms of the affected employees are protected by their preexisting collective agreement (CA) until it expires. Going forward The non-eligibility period for retrenchment benefits will be reduced to 2 years. Extend pre-existing CA for at least 18 months (even if the CA is expected to expire before that). This means that new employers receiving transferred employees ( transferee ) will need to recognise the trade union for the duration of the CA (or extended CA) until it expires 18

19 Timeline for Phase 1 EA Review Mar 2013: Announcement at COS 2 nd Half 2013: Introduction of Amendment Bill at Parliament 1 st half of 2014: Changes to take effect 19

20 Thank You 20