For an employer, It is a bag of mixed feelings on the proposed amendments. It is however no surprise the executive and managerial employees who earn higher salaries welcome the changes.
We think these changes level the benefits to employees as a whole and perhaps it is time for employers to ensure that their company’s grievance procedures are in place internally to manage any unfortunate disputes.
The amendments impact all executives of a Company especially those employees who previously were not afforded any protection because their income was above the statutory limit of $4,500.00.
The 3 major changes are as follows:
1. Applicability of EA
Before the amendments, the provisions of the Act (except for rest days, hours of work and other conditions of service) did not apply to Professionals, Managers and Executives (“PMEs”) earning a monthly salary above $4,500.
With effect from 1 April 2019, the provisions in the Act (except for rest days, hours of work and other conditions of service) apply to all PMEs regardless of the monthly income.
This means that provisions relating to sick leave, maternity benefits and wrongful dismissal will equally apply to PMEs.
The rationale for the amendments is that PMEs make up more than half the local workforce and they should be given the benefit of the Act.
It must follow that employers should be fully aware of the changes to ensure that the employment agreements and employment handbooks are updated in compliance with the revised obligations under the Act.
2. Sick Leave & Hospitalisation Leave
The amendments will now provide employees more flexibility when obtaining a medical certificate.
Employers are now required to recognize medical certificates issued by any registered medical practitioner.
Previously, if an employee wanted to take paid sick leave, he would be required to consult a registered medical practitioner employed by the Government or the company doctor.
Employers are of course concerned whether more employees may be encouraged to take sick leave since it would now be easier to obtain a medical certificate from your neighbourhood GP. On the other hand, this amendment is in line with standardising that any registered medical practitioner is competent to treat a patient.
Further, the definition of “hospitalisation leave” has been extended. It now includes employees who have been discharged from the hospital but are still unwell to require hospitalisation leave during that period so that the employee can rest at home. It seems the rationale is that if it was not hospitalisation leave, the employee would have to use his sick leave which is limited to 14 days for each employee.
3. Wrongful dismissal claims
For PMEs who wish to make a claim for wrongful dismissal against their employers, the amendments have shortened the length of employment required from 12 months to 6 months.
This effectively means that after a period of 6 months of service, if the employee is dismissed for whatever reasons and the employee feels aggrieved, the employee would be able to make a claim. While a bigger group of employees would fall within this provision, we are of the view that this number of employees filing wrongful dismissal claims are unlikely to be high.
The other amendments, although less impactful, are
- Leave For PMEs – Before the amendments, annual leave for PMEs was governed by what was stated in the Employment Agreement. Now, PMEs will be entitled to at least 7 to 14 days of paid annual leave. It seems to suggest that PMEs may no longer be offered 14 days but given 7 days when they start and it would be for the PME employee to negotiate for more leave days;
- Suspension of PMES for longer than 1 week – Employers may suspend (for example gross misconduct) a PME employee for a period exceeding 1 week by applying and obtaining an approval from MOM but the employee shall be paid half his salary for such period;
- Salary Deduction by Consent – Salary deductions will now be allowed if the employee consents to the deduction in writing. Therefore, if an employee agrees to his salary being deducted, the employer cannot be faulted unless the employee withdraws his consent;
- Query By Commissioner on Employer’s Retrenchment Benefits – Employers can be called upon by the Commissioner of Labour to provide information on any retrenchment benefits available to employees.
In light of the recent amendments, many companies have yet to update their employment agreements and employment handbook.
Companies are to set out the rights and obligations of the employees to protect the Company’s interest and to avoid any misunderstandings. This includes updating the Employee Handbook on leave policies and putting in place a good process for grievance procedures.
If an employee issue can be resolved internally, the Courts need not have to be involved and precious manhours are not wasted at the tribunals.