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Lesson 3: Employment Act

Key Points:
1.Who are covered under the Employment Act:
- Any person regardless of nationality, who works under a contract of
service except:
Domestic Worker [NOTE: NOT FDWs]
Statutory board employee or civil servant
Manager or executive with monthly basic salaries of > $4500
(not covered under any law/act but can use common law)
- For employees working < 35 hrs/week, they are covered by the
Employment of Part-Time Employees Regulations
2.Determining whether employee is employed in managerial/executive
position: [LOOK AT SCOPE]
- Given direct authority or has substantive influence on hiring, firing,
promotion, transfer, reward or discipline of other employees, or
- Main duties are the formulation of strategies & policies of the
enterprise, and the management and running of the business
- Includes professionals with tertiary education and specialized
knowledge/skills and whose employment terms are comparable to
those of managers and executives (e.g. lawyers, doctors)
- An employee (local or foreign) whose work involves mainly manual
- Includes:
Any skilled/unskilled person engaged in manual work
Any person employed in the operation or maintenance of
mechanically propelled vehicles
Any person supervising manual workers, but also performs
manual work > their working time
Any person whom Minister declares to be workman in a gazette
Any person who has a job specified in the First Schedule of the
Employment Act (cleaners, construction workers, factory
production workers, drivers, all workmen employed on piece
rates in the premises of employer, metal and machinery

4.Contract of Service:

any agreement, where one person agrees to employ another as an

employee [NOTE: engage may not mean employ; e.g. engage
in the form of a letter of appointment/employment
employer cannot change the terms and conditions of employment
unless employee agrees to it
contract is in effect when new recruit turns up for work on appointed
starting date!
includes apprenticeship contract/agreement

5.Contract for Service:

Contract of Service
Has an employer-employee r/s

Employee does business for

May be covered under EA
Includes KETs

Contract for Service

Has a client-contractor type of r/s (i.e.
person is usually self-employed or
provide service on freelance basis for
a fee)
Contractor carries out business on
own account
Not covered under EA
Statutory benefits do not apply

Factors in identifying a contract of service:

Control (i.e. who decides on recruitment/dismissal of person?)
Ownership of factors of production (e.g. who provides the tools
& equipment?)
Economic Considerations (e.g. does the person carry on the
business on his own account or for the employer?)

6.Important Point about EA: From 1 April 2016, employers are required to
issue Key Employment Terms (KETs) + itemized pay slips in writing to their
employees covered under the Employment Act
6.1 Key Employment Terms (KETs):
- Employers must issue KETs in writing to all employees who:
Enter into a contract of service on or after 1 April 2016
Are covered by the EA
Are employed for 14 days or more (refer to length of contract,
not the no. of days of work)
- Employers must issue KETs within 14 days from start of employment
(recall: foreigners need both IPA & KETs)
- Format can be soft or hard copy, including handwritten
- Must include the following 17 items:
o Full Name of Employer
o Full Name of Employee
o Job title, main duties & responsibilities
o Start date of employment

o Duration of employment (if employee is on fixed-term contract)

o Working arrangements (daily working hours; rest day; no. of
working days per week)
o Salary Period
o Basic salary (for hourly, daily or piece-rated workers, employers
should also indicate basic rate of pay like $X per hour, day or
o Fixed allowances
o Fixed deductions (CPF for locals)
o Overtime payment period (if different from salary period)
o Overtime rate of pay
o Other salary-related components (bonus, incentives)
o Type of Leave (annual; outpatient sick leave; maternity leave;
childcare leave; hospitalization leave)
o Other medical benefits (insurance, medical/dental benefits)
o Probation period
o Notice period
6.2 Itemized Pay Slips:
- To be given with payment to employee
- IF unable to give together, to be given within 3 working days of
- In the case of termination/dismissal, employer must give pay slip
together with outstanding salary
- Format can be soft or hard copy, including handwritten
- Must include the following 12 items:
o Full Name of Employer
o Full Name of Employee
o Date of Payment (or dates if pay slips consolidate multiple
o Basic Salary (for hourly, daily or piece-rated workers, indicate
basic rate of pay like e.g. $X per hour + total no. of hours or
days worked or pieces produced)
o Start & End date of Salary Period
o Allowances paid for each salary period (include all fixed & adhoc allowances)
o Any other additional payment for each salary period (bonuses,
rest day pay, public holiday pay)
o Deductions made for each salary period (include all fixed & adhoc deductions)
o Overtime hours worked
o Overtime pay
o Start & End date of overtime payment (if different from start &
end date of salary period)
o Net salary paid in total

7.Transfer of Employment:
- Employers have the right to transfer an employee to another employer
if organization is being restructured. (i.e. merger, take-over, sale of
parts of company or setting up a subsidiary company)
- Employee may be transferred to a related company such as a
subsidiary or a totally unrelated company
- Employees terms & conditions remain the same unless he/she agrees
to change them
- Terms & Conditions CANNOT be less favorable to employee than the
- Cannot restrict an employees right to join trade unions; participate in
union activities and organize trade unions.
- Employees have the right to:
Be notified of the transfer & of matters relating to the transfer
Be given the opportunity to consult employer
Preserve the original terms & conditions of employment under
new employer
- Employees have the obligation to serve new employer in same way as
with their original employer
- Employers obligations:
Notify affected employees or their union of impending transfer
within a reasonable timeframe
Inform affected employees about terms of transfer, so that they
or the union can hold consultations with company
Ensure there is no break in employment during transfer
Ensure terms of employment are NOT less favorable after the
- New Employers obligations:
Inform the previous employer of matters that will affect
employees, so that they can inform employees within a
reasonable period
Take over previous employers rights, powers, duties, liabilities
Keep unchanged any terms & conditions of employment for
transferred employees unless transferred employees agree to a
8.Termination of Contract:
- May arise from expiry of contractual period (NO NEED serve notice)
Completion of specific project (I.e. piece-rated contract)
Completion of specific time period (I.e. specified time contract)
NOTE: for permit holders, expiry date of permit is NOT considered
as a time specified employment!
- Decision of either party to end contract with appropriate notice in
accordance with:
Contractual agreement, OR
Section 10 under EA

< 26 weeks
26 weeks to < 2 years
2 years to < 5 years
5 years and over

1 day
1 week
2 weeks
4 weeks

WITH notice:
Notice must be in writing
Notice period includes the day the notice is given
Notice given in accordance with contract of service; if contract is
silent (did not express), Section 10 applies
By mutual consent, notice can be waived

WITHOUT notice:
The party who breaks the contract is liable to pay salary in lieu
of notice period
Willful breach of contract:
o By employer: failure to pay salary within 7 days after
salary is due
o By employee: absent continuously for > 2 days w/o prior
permission or reasonable excuse or w/o informing or
attempting to inform the employer of the excuse

9.Dismissal: [IMMEDIATE]
- An employer may after due inquiry into the misconduct, dismiss without
notice an employee on grounds of misconduct (NOTE: poor
performance is NOT misconduct!)
- Misconduct (breach of duty or discipline inconsistent with the implied or
express conditions of an employees contract of service):
Conflict of interest
Confidentially breach of trust

Inquiry to follow rules of natural justice:

No man shall be a judge in his own cause
No man shall be condemned unheard

An employer may suspend an employee from work during an inquiry:

Suspension period CANNOT exceed 1 week
Employee should be paid at least of his/her salary during

If no misconduct was found, employer must restore full amount

of any salary that was withheld during suspension period
If misconduct was found, employer may do one of the following:
o Terminate employees service w/o notice; issue letter of
o Instantly downgrade employee
o Instantly suspend employee from work w/o pay for not
more than 1 week

An employee who considers dismissal to be unfair may seek recourse

under Section 14 of the Act:
Within one month of dismissal, appeal in writing to Minister of
Manpower to be reinstated to his former employment
If dismissal is unfair, Minister may order employer to:
Reinstate employee to his former employment AND to pay the
employee the amount of wages he would have earned had he
not been dismissed
Pay compensation
Ministers decision is FINAL!

From 1 April 2014, for Managers & Executives:

- There is no minimum service requirement for appeals against
dismissals w/o notice or w/o salary-in-lieu of notice on grounds of
- For dismissals with notice or salary-in-lieu of notice, employee must
have at least 12 months of service with same employer before seeking
redress + employee need to substantiate their claims
10. Salary:
- Does NOT include:
Value of house accommodation, supply of amenities
Employers voluntary contribution to any pension/provident fund
Travelling allowance/concession
Reimbursed expenses
Gratuity payment
Retrenchment benefit

Allowances: [chargeable to CPF; taxable]

Transport (fixed or variable)
Meal (fixed or variable)
Housing (fixed)
Mobile (fixed or variable)
Skill (fixed)
Responsibility (fixed but should make it variable)

Overtime (fixed or variable)

Hardship (fixed)
Attendance (benefit in kind)
Travelling (if overseas posting; otherwise its reimbursement)

NOTE: e.g. if company give $15 for a to and fro trip to worksite whenever you
travel to site, this is a VARIABLE allowance because it says whenever!

Reimbursements: [non-taxable]
Uniform (if its purchase of uniform)
Training (also can be benefit in kind)
Mobile (reimbursement if submit phone bill)

11. Salary Payment:

- Salary period shall not exceed 1 month
- Only 1 agreed salary period for both salary and overtime payment
- Salary: within 7 days after end of salary period
- Overtime: within 14 days after end of salary period
- NOTE: salary & overtime period can be different
- Resignation (with notice): salary should be paid on day of termination
of contract
- Resignation (w/o notice): within 7 calendar days of termination of
contract from last day of work
- Dismissal & Termination: day of dismissal/termination or within 3
working days
12. Incomplete Month:
- Occurs when an employee:
Terminates his employment other than on the last day of the
Commences his employment other than on the first day of the
Takes no pay leave during the month
On Reservist training during the month

Salary for an incomplete month =

13. Authorized Deductions:

From 1 April 2014, a 25% sub-cap will be imposed for authorized

deductions for accommodation, amenities & services (within the
existing 50% cap on authorized deductions)
NOTE: the max amount of deductions of any one salary period is 50%
of his salary but this does NOT include deductions made for:
Absence from work
Recovery of advances/loans
Payments with consent of employee to cooperative societies
recovering advances, loans or overpaid salary
Absence from work (unpaid leave)
Cost of meals supplied by employer at request of employee
Accommodation, amenities & services (cannot exceed 25% of
one month salary)
CPF contributions
Contributions to superannuation or provident fund
Payment to cooperative societies/charity organizations
Any other purpose approved by Minister
Damage to/ loss of goods/money entrusted where such damage
or loss is directly attributable to neglect or default
o Employee must be given opportunity to show case
against deduction
o Deduction is either one time OR cannot exceed 25% of 1
months wages
Recovery of advances/loans/adjustments of overpayment
May be by installments spread over
May be by installments
not more than 12 months
Cannot exceed 25% of salary due for Cannot exceed 25% of salary due for
each salary period
each salary period
NOTE: be careful! Since advance
Come up with loan schedule
cannot exceed 12 months, must
make sure that the money owed can
be paid finish by 12 months (with the
25% cap) , otherwise cannot claim
back all the money

14. Part IV of Employment Act:

- Applicable only to workers earning between $2500 - $4500 per month
- NOTE: salary of $2500 - $4500 excludes overtime, bonus, AWS,
productivity incentives & any allowances
15. Minimum Standards Stipulated in EA:
Applicable to all employees under All employees covered by EA
EA except those covered in Part
Hours of Work
Public Holidays
Sick Leave
Rest Day
Annual Leave
16. Key Definitions:
- Week: continuous period of 7 days commencing at midnight on Sunday
(i.e. Monday to Sunday)
- Working Hours do NOT include any intervals for rest, meal-break, teabreak
- Contractual Hours of Work: [NOTE: exceed any one of these 2
conditions below = overtime]
Not more than 6 hours without a break
Not more than 8 hours a day or 44 hours a week
- Under Section 38,
Exception: If nature of work is such that an employee may be
required to work 8 hours continuously, break should be an
aggregate of 45 minutes.
- Under Section 40, (shift work)
Average working hours over any continuous period of 3 weeks are
NOT more than 44 per week.

Basic Rate of Pay = basic salary; used to calculate:

Payment of OT
Salary for work on PH
Salary for work on Rest Days

Gross Rate of Pay = basic salary + allowances except:

o OT payments
o Bonus/AWS
o Reimbursement of expenses

o Productivity incentive payment

o Travelling, food and housing allowances
---- Used to calculate:
Salary for PH
Notice Pay
Approved paid leave
Sick Leave & Hospitalization Leave
---- 2 methods for calculating gross rate of pay for shift workers:
1st shift = no allowance
2nd shift = $5
3rd shift = $10


Standardizing the rate by calculating a simple average

Average allowance per shift = ($0+$5+$10)/3 = $5
Hence, when employee goes on leave, he is to be paid a shift
allowance of $5 for each day of his leave, irrespective of the shift on
which he is scheduled to work
Continuing to pay allowance as though employee has worked for
the day
- If employee goes on leave when he is scheduled to work on 1 st
shift, he is not paid any shift allowance but if he goes on leave when
he is scheduled to work on 3rd shift, he is paid $10

17. Overtime:
- Overtime payable for work beyond contractual hours

Maximum working hours including overtime per day is 12 hours (unless

exempted by the Commissioner)
Maximum hours of overtime per month is 72 hours (unless exempted
by the Commissioner) [NOTE: does NOT include work on Sunday
because Sunday is supposed to be a rest day]
Overtime is not compulsory except in the event of emergency & for
certain essential services
Overtime rate: not < 1.5 times the hourly basic rate of pay
OT not applicable to those covered under Part IV
Can claim overtime if you are:
A non-workman earning up to $2500/month
A workman earning up to $4500/month


18. Rest Day:

- An employee is entitled to 1 rest day in a week
- The rest day can be any day of the week and informed by employer
before the beginning of each month
- Longest interval between 2 rest days = 12 days
- It is NOT a paid day
- CANNOT compel employees to work on rest day unless under very
exceptional circumstances
- For shift workers (starting work before 12 midnight & ending after 12
midnight), if employer is unable to give 1 whole day, rest day can be a
continuous period of 30 hours
- Work on Rest Day at Employers Request:
Up to the normal
> and up to the
Beyond normal daily
working hours for 1 day normal working hours
working hours
for 1 day
1 days pay at basic rate 2 days pay at basic rate 2 days pay at basic rate
of pay
of pay
of pay + overtime pay
E.g. suppose working hours stipulated in contract is from 9am-6pm, if
worker is called back to work from 3pm-10pm, only served 3 official
working hours--- pay 1 days pay at basic rate of pay + OT(4 hours)

Work on Rest Day at Employees Request:

Up to the normal
> and up to the
working hours for 1 day normal working hours
for 1 day
days pay at basic
1 days pay at basic rate
rate of pay
of pay

19. Annual Leave

- Minimal entitlement of paid leave:

Beyond normal daily

working hours
1 days pay at basic rate
of pay + overtime pay

1st year
2nd year
3rd year
4th year
5th year
6th year
7th year
8th year and above

7 days
8 days
9 days
10 days
11 days
12 days
13 days
14 days

Must fulfill both qualifying conditions:

At least 3 months service
Leave computation is based on anniversary year
An employee is entitled to pro-rated annual leave (i.e. in proportion to
number of completed months of service in that year if he has been in
service for at least 3 months)
E.g. John has been working at a company for 3 months and 20 days.
What is his annual leave entitlement?
Answer: 3/12 x 7 = 1.75 (i.e. 2 days)
Note: 1.25 will up to 1.5 [ALWAYS round up]
Forfeiture of Annual Leave:
If absent from work w/o permission or reasonable excuse for >
20% of working days in the months or year
If not taken within 12 months after the end of every 12 months
continuous service
If dismissed for misconduct

20. Public Holiday:

- All employees are entitled to 11 paid public holidays as gazette
- By mutual agreement, public holidays can be substituted for any other
- Must fulfill both qualifying conditions:
No holiday pay if employee on approved no pay leave
Employee must NOT absent himself w/o consent or reasonable
excuse one day before or one day after the PH
- If PH falls on a rest day, the next working day shall be a paid holiday
- If PH falls on a non-working day, the employer may either:
Pay an extra days pay at gross rate of pay, OR
Grant a day off-in-lieu
- NOTE: if you work 5.5 work week,
& PH fall on Saturday, then worker should take off on that day &
employer either pay day at gross rate of pay or grant day off-inlieu
- If employee works on PH, he should be paid:
One extra days basic rate of pay + one days gross rate of pay
- NOTE: OT rate remains as at least 1.5 even for PH!
- From 1 April 2014, by default, at least day off-in-lieu has to be
granted if employee worked for a period not exceeding 4 hours on that

holiday or a full off day-in-lieu if employee worked > 4 hours on that


21. Sick Leave:

- Must fulfill 3 qualifying conditions:
Must have at least 3 months service with company
Sick leave certified by company doctor OR by a government
doctor (including doctors from approved public medical
Inform or attempted to inform employer within 48 hours

Maximum 60 days of sick leave: up to 60 working days for

hospitalization leave (INCLUDES the 14 days outpatient sick leave

No. of months of
Paid Outpatient Sick
Paid Hospitalization
service completed
Leave Entitlement
Leave Entitlement
5 days
15 days
5 + 3 = 8 days
15 + 15 = 30 days
8 + 3 = 11 days
30 + 15 = 45 days
11 + 3 = 14 days
45 + 15 = 60 days
NOTE: e.g. if 5.5 months of completed service, choose the 5 months
NOT entitled to paid sick leave:
On rest days, PH, annual leave, non-working days or no pay
For period covered by Workmens Compensation
Employer is legally obliged to bear medical consultation or examination
fees ONLY for employees with at least 3 months service
From 1 April 2014, employers will be exempted from having to grant
paid sick leave and bear medical examination expenses for treatment
which in the opinion of a medical practitioner performing the medical
examination is for cosmetic purposes.

22. Other Benefits of Employment:

- Retrenchment Benefits:
Only for employee with 2 years or more continuous service
Quantum not specified
- Retirement Benefits:
SG citizen or PR
Joined employer before turning 55
- It is a contractual obligation of the employer to pay for AWS(13 th
month), Bonuses & Annual Wage Increases if these are provided for:

In the employment contract OR

Collective agreement
Maternity Protection & Benefits
Paternity Leave & Shared Parental Leave for Fathers
Childcare Leave & Extended Childcare Leave for Parents
Unpaid Infant Care Leave for Parents

23. Children Development Co-Savings Act (CDCA) Part III

OR Employment Act (EA) Part IV
Paid Maternity Leave
- Qualifying Conditions:
All female employees except
Managerial & Executive staff
Employed for at least 3 months
before the date of delivery
Fewer than 2 living children at
time of delivery, except for multiple
birth for 1st delivery

Child is a Singapore Citizen
Employed for at least 3 months
before the date of delivery
Childs parents are lawfully

EA (12 weeks)
4 weeks pre-natal leave + 8 weeks
post-natal leave
For 1 2 births, first 8 weeks (4 weeks
pre-natal and 1st 4 weeks of postnatal) paid by employer

For 3rd and subsequent births, still

entitled to 12 weeks of maternity
leave but it will be unpaid

CDCA (16 weeks)

4 weeks pre-natal leave + 12 weeks
post-natal leave
For 1 2 births, first 8 weeks (4 weeks
pre-natal and 1st 4 weeks of postnatal) paid by employer. Next 8
weeks paid by Govt. capped at
For 3 and subsequent births, the full
16 weeks will be funded by Govt.
capped at $10k/week

The last 4 weeks may be taken

flexibly by self as unpaid or annual
leave within a 12-month period from
the birth of child upon mutual

The last 8 weeks may be taken

flexibly by self as unpaid or annual
leave within a 12-month period from
the birth of child upon mutual

Employer prohibited from giving any notice of dismissal to an employee

who is on maternity leave

The employer will be required to pay maternity benefits (8 weeks for

both EA & CDCA) to the employee if she is retrenched or dismissed
w/o sufficient cause during any stage of her pregnancy
NOTE: to qualify, the employee must have served her employer for at
least 3 months & obtained a doctors certification of pregnancy prior to
receiving the notice of dismissal/retrenchment
Under EA, employee cannot work for another employer during the
period of maternity leave --- forfeiture of maternity leave
Employee must give at least 1 weeks notice & informs employer as
soon as practicable of delivery. Otherwise, only entitled to the
payment during maternity leave
A female workman can be employed during the night (i.e from 11pm to
6am the following day) BUT the Employment (Female Workmen)
Regulations 1988 prohibits a pregnant female workman from night
work unless:
She has given her consent in writing
She is not certified unfit by a doctor to do night work

Paternity Leave (under CDCA)
- From 1 May 2013, working fathers will be entitled to 1 week of
Government-paid Paternity Leave
- Eligibility Criteria (must meet all):
Child must be a SG citizen
Parents are lawfully married
Father must have worked with employer for a min. of 3 months
preceding the delivery of the child

Consumption Rules:
Default to be taken as a block leave (according to your working
days; e.g. father who works 3 days in a week will be entitled to 4
days of Paternity Leave) within 16 weeks after the birth of the
Can also be taken flexibly in days, within 12 months from the
birth of the child, subject to mutual agreement between
employer and employee

Paternity Leave will be funded by the Govt. (capped at $2,500/week,

inclusive of CPF contributions)
From 1 Jan 2017, working fathers will be entitled to 2 weeks of
paternity leave.

Shared Parental Leave (under CDCA)
- From 1 May 2013, working fathers will be allowed to share 1 week of
working mothers existing Government-paid maternity leave, subject to
their spouses agreement
- Eligibility Criteria (must meet all):

Child must be a SG citizen

Parents are lawfully married
Childs mother is eligible for Government-paid maternity leave

Consumption Rules:
Default to be taken as a continuous block of 1 week
Can also be taken flexibly in days, within 12 months from the
birth of the child, subject to mutual agreement between
employer and employee

Entitlement: given in a block of 1 week or none

Shared Parental Leave will be funded by the Govt. (capped at
$2,500/week, inclusive of CPF contributions)
From 1 July 2017, working fathers will be able to share 4 weeks of their
spouses 16 weeks of maternity leave, subject to their spouses


Childcare Leave
Under CDCA
Working parents are entitled to 6
days of paid childcare leave per
parent per year with an overall cap
of 42 days, if they fulfill the
following conditions:
Child is < 7 years old
Child is SG citizen
Employee has served
employer at least 3
The first 3 days will be employerpaid and the last 3 days
government paid (capped at $500
per day)

Under EA
- 2 days paid childcare
leave per year (minimum 2
days, no pro-ration)
- Total leave taken for any
child is subject to a
maximum of 14 days

(i) For employee with any child
(including legally adopted child or
stepchild) aged 7 or below
(ii) Employed for at least 3

Extended Childcare Leave (under CDCA)
- Working parents are entitled to 2 days of Government-paid Extended
Childcare Leave per parent per year, capped at 12 days, if they fulfill
the following conditions:
Child is aged 7 to 12 years old (inclusive)
Child is a SG citizen
Employee has served at least 3 months

For parents with > 1 child, the total childcare leave entitlement will be
based on the youngest child. Parents with children in both age groups,
i.e. those below 7 years old as well as those between 7 to 12 years old
(inclusive), will have total child care leave entitlement capped at 6 days
per year.
Government-paid portion is capped at $500/day, inclusive of CPF

Childcare Leave & Extended Childcare Leave
- Entitlement Year = 12-month period
- Unused leave lapses at the end of entitlement year
- No encashment
- Just like maternity leave, also CANNOT offset against notice period
- No. of paid childcare leave/extended childcare leave an employee is
entitled to under both EA or CDCA is based on a per parent basis &
capped at a maximum of 6 days per year
- NO pro-ration of childcare leave under EA (2 days, with minimum 3
months service to qualify)
- Pro-ration of childcare leave allowable under CDCA for employees with
< 1 year of service or termination of contract in the last year of
Unpaid Infant Care Leave (under CDCA)
- Qualifying Conditions:
Child is a SG citizen
Childs parents are lawfully married
Parent has worked for employer for at least 3 months
Youngest child is aged below 2 years

Key Features:
6 days per year for each parent until child turns two
Capped at 6 days per year regardless of number of children
under two
Parents can take both paid childcare leave & unpaid infant care
leave (i.e. max of 12 days in total)
24. Penalties for Infringement of EA:
- Conviction of general offences in the EA:
1st offence: Fine of up to $5k &/or 6 months jail
Subsequent offences: penalty upon conviction of general
offences in the EA is a fine of up to $10k &/or 12 months jail
Maximum composition fine has also been raised from $1k to $5k
per charge

Failure to pay salary in accordance to S21, S22, S23:

1st offence: Fine between $3k and $15k &/or a max of 6 months
Subsequent offences: Fine between $6k and $30k &/or a max of
12 months jail