inbrief

Employment law
in Singapore – an
overview

Inside
The employment law landscape
Commencing employment
Key minimum employment rights
Terminating employment
Other important matters
inbrief

Introduction
The employment law landscape As mentioned above, employees in Singapore
Singapore’s rapid economic can be categorised as EA Employees and Non-EA
Employment law in Singapore can be described as
development since it gained Employees.
“employer friendly” and the relationship between
independence in 1965 is well the employer and employee is regulated largely In outline, the EA covers every employee
documented. This economic success, by the contract of employment between them. (regardless of nationality) who is under a contract
combined with the country’s lightly Generally under Singapore law, parties are free to of service with an employer, except:
regulated business environment, has contract as they choose and any matters arising
• any person employed in a managerial or
long made it a natural “hub” for between them would have to be resolved by
executive position earning more than S$4,500
looking at the express and/or implied terms of the
many multinational employers. This as a basic monthly salary1
contract in question.
in-brief provides an overview of some • any seaman
The Employment Act of Singapore (Chapter
of the key aspects of employment law
91) (“EA”) is the primary statute regulating the • any domestic worker
in Singapore.
employment relationship. This provides for the
• any person employed by a Statutory Board or
Our Hong Kong office was opened basic terms and conditions at work for employees
the Government
to meet a growing demand from covered by the EA.

many of our clients for coordinated In terms of employment protection and rights, Managers and executives are employees with
employment and immigration/global Singapore divides its workforce into two different executive and supervisory functions. They also
categories - employees who are covered under include professionals with tertiary education and
mobility support across the Asia Pacific
the EA (“EA Employees”) and employees who are specialised knowledge or skills whose employment
region (including Singapore).
not covered under the EA (“Non-EA Employees”). terms are like those of managers or executives
This publication provides general The employment terms and conditions of Non- – such as lawyers, accountants, dentists and
guidance only; expert advice should EA Employees are principally governed by their doctors. Part IV of the EA, which provides for
employment contracts. rest days, hours of work and other conditions of
be sought in relation to particular
service, applies only to:
circumstances. Our Hong Kong office This policy was designed by the government in
the first years after independence to support • workmen earning not more than a basic
can source Singaporean law advice monthly salary of S$4,500 (a workman being
economic development, by ensuring that
through its links with local firms in someone whose work mainly involves manual
employment regulation was not so unduly
Singapore. restrictive that it impeded the influx of foreign labour); and
capital and talent. • non-workmen covered under the EA earning
While the employment environment remains not more than a basic monthly salary of
lightly regulated to this day by European S$2,500.2
standards, recent years have seen an increasing
flow of laws to address specific issues related to In addition, employees working less than 35
Singapore’s maturing economy and workforce. hours a week, are covered by the Employment
Employees now receive more entitlements and (Part-Time Employees) Regulations which
protections. This can be seen in new statutory provide certain flexibility for both the employers
leave entitlements such as the laws regulating and employees, including the pro-rating of
paternity leave, maternity leave, adoption leave employment benefits, encashment of annual leave
and shared parental leave, and the recently and provision of rest days.
announced extension of the EA to wider
Types of employment
categories of employees
Contracts can be indefinite or for a fixed term.
Unlike in many other Asian countries, there are no
restrictions on the use of fixed-term contracts.
Commencing employment

Structuring the employment relationship

A foreign entity is able to directly engage
1 Please note that this salary cap will be
employees in Singapore, although it cannot carry
removed in 2019.
on business in Singapore without first setting up a 2 Please note that this salary cap will be
subsidiary, branch or representative office. increased to $2600 in 2019.
 inbrief

The employment contract of the EA. An employee who has served his/her qualify for this leave, the male employee must be
The EA requires all employers to issue key employer for not less than three months shall be legally married to the child’s mother at the time of
employment terms (“KETs”) in writing. In outline, entitled to paid annual leave of 7 days in respect conception or becomes lawfully married between
employers must issue KETs in writing to all EA of the first year of continuous service with the conception and birth or within 12 months of the
Employees who: same employer, and one additional day for every child’s birth. The child must also be a citizen of
subsequent year with the same employer, but Singapore.
• enter into a contract of service on or after 1 subject to a maximum of 14 days’ annual leave.
April 2016; Shared Parental Leave
For employees not covered under Part IV of the
• are covered by the Employment Act; and EA, their entitlements to annual leave will depend Since 1 July 2017, working fathers are able to
on what has been agreed in the contract of share up to four weeks of leave from their wives’
• are employed for 14 days or more.
employment. 16 weeks of maternity leave (provided for under
KETs must include as a minimum certain specific the CDCA), as long as the mother agrees. This
items, covering details of key employment terms Sick Leave applies to working parents of Singapore citizen
such as job title, working arrangements, salary and children born on or after 1 July 2017.
EA employees who have worked for their
overtime payments, bonuses, leave entitlement,
employer for at least three months are entitled to
medical benefits and notice period. The EA does Childcare, Unpaid Infant Care and Adoption
paid sick leave of:
not contain any provisions relating to probationary Leave
periods, but probations of anywhere between one • up to 14 days per year (where hospitalisation Childcare, Unpaid Infant Care and Adoption leave
month and six months are common. is not required); and is also available to employees if certain criteria are
All employers are also required to make and keep • up to 60 days where hospitalisation is met under the CDCA.
employee records and give itemised pay slips to required.
employees covered by the EA. Wages and social insurance
Maternity Leave There remains no minimum wage despite a
As part of a drive to boost Singapore’s birth rate, continuing debate as to whether or not one
Key minimum employment rights all female employees are generally entitled to paid should be implemented. Many employers
maternity leave and are protected from dismissal nonetheless choose to have regard to guidance
An employee’s minimum employment rights
during maternity leave. provided by the National Wages Council when
depend on whether he or she is an EA Employee
setting wages.
or a Non-EA employee. Generally, minimum The EA and the Child Development Co-savings Act
entitlements apply to EA Employees only. For Non- of Singapore (Chapter 38A) (“CDCA”) provides Singapore has a comprehensive social security
EA employees, any employment rights must be maternity protection and benefits in Singapore. system called the Central Provident Fund (“CPF”).
agreed and specified in the employment contract. The CDCA provides extended maternity leave It was established to provide financial security to
benefits beyond those laid out in the EA, but with employees when they retire, but also provides
Working time housing, education, medical and death benefits.
more stringent eligibility requirements. A CDCA
Only employees covered under Part IV of the EA eligible employee is entitled to a total of 16 weeks Coverage is mandatory for Singaporean citizens
have limits on their working time. In general, an of maternity leave whereas an employee who and permanent residents and the employer is
employee covered under Part IV of the EA is not derives her maternity leave entitlements from the required to make contributions to its employees’
required to work more than 8 hours (or 9 hours EA is entitled to 12 weeks of maternity leave. CPF accounts. The contribution rates vary
if the employee works 5 or less days per week) a depending on factors such as the employee’s age
To qualify for paid maternity leave under the and salary. It is common for employers to offer
day or 44 hours per week. The employee is also
CDCA, the child must be a Singaporean citizen additional benefits to more senior employees.
not required to work more than 6 consecutive
and the employee must have worked for her
hours without a break. If the employee works
employer for at least three months before the
overtime at the request of the employer, the
child’s birth. Prior to 1 January 2017, it was a
employee shall receive overtime pay at the rate of Terminating employment
requirement for the child’s parents to be lawfully
not less than one and a half times his/her hourly It is relatively straightforward to terminate
married. However, since 1 January 2017, single
rate irrespective of the basis on which his rate of employment in Singapore, which has what could
mothers can now benefit from the 16-week paid
pay is fixed. be described as a US-style “at will” termination
maternity leave under the CDCA.
regime. An employer is not required to state its
Annual leave reason for terminating employment, so long as
Paternity Leave
An employee covered under Part IV of the EA termination is effected in accordance with the
Since 1 January 2017, fathers are entitled to two
is eligible for annual leave under section 43(1) contract.
weeks of paternity leave under the CDCA. To
inbrief

Statutory minimum notice periods apply to EA it does have specific legislation that outlaws
Business transfers
Employees, ranging from one day to four weeks, certain discrimination, such as age discrimination
depending on their length of service. Termination (in the context of retirement by the employer) EA Employees are protected on business or asset
notice is generally set out in the contract for Non- and discrimination against pregnant employees transfers and their employment will automatically
EA employees. It is possible for an employer to pay (the Employment Act prohibits employers from be transferred to the buyer on the basis of their
the employee salary in lieu of notice. serving notice of termination on employees who existing terms of employment. The employment
are on maternity leave or on such a day that the of Non-EA Employees on the other hand does
There is no form of statutory severance payment not transfer automatically. The transfer of Non-EA
notice will expire during their absence). Sexual
and it is not common for employers to make such Employees is a matter to be contractually agreed
harassment is a criminal offence in Singapore
payments. between the existing employer, the buyer and the
regardless of whether or not it takes place at work.
There is no legislation specifically relating to The national constitution provides generally for Non-EA Employees.
collective or individual redundancies although the equal protection of the law, but challenges on
Ministry of Manpower (“MoM”), the government constitutional grounds are rare. Employers should
labour authority, has produced guidance which also bear in mind guidelines for good employment Data protection
employers should follow in such situations. practices issued by the Tripartite Alliance for Fair Under the Personal Data Protection Act 2012 an
Employment Practices (part of MoM). Whilst such employer is permitted to collect, use and disclose
On 1 April 2017, the Employment Claims Tribunal
guidelines have no force of law, they should be an employee’s personal data for managing or
(“ECT”) was set up for the purposes of providing
adhered to by employers as failure to do so may terminating the employment relationship, so long
employees and employers with an accessible and
subject an employer to closer scrutiny by MoM. as the employee has been notified.
expeditious platform to resolve salary-related
disputes. The ECT is a division of the State Courts
and replaces the role of the Commissioner for
Labour in adjudicating statutory salary-related Protecting the business
claims under the EA, CDCA and the Retirement Non-compete, non-solicitation and non-poaching For further information
and Re-employment Act of Singapore. Claims restrictions are generally unenforceable, unless they on this subject please contact:
in the ECT are heard by legally qualified Tribunal are regarded as reasonably necessary to protect the
Magistrates in accordance with the Singapore employer’s legitimate business interests. Kathryn Weaver
court processes. The ECT covers all employees Partner
(except domestic workers, public servants and T + 852 2972 7133
seafarers) regardless of salary levels. Employee representation [email protected]

In addition to resolving salary-related claims the Employees are not obliged to join unions but
jurisdiction of the ECT will be expanded in 2019 to union membership and collective agreements are Catherine Leung
common in certain industries, such as transport Legal Director
enable it to determine wrongful dismissal claims
and manufacturing. There are some 70 registered T + 852 2972 7188
(which are currently determined by the MoM).
employee trade unions, most of which are [email protected]
Employees can also claim for a breach of contract
in the civil courts. affiliated with the national federation of trade
unions, the National Trade Union Congress. Louise Le Pla
Senior Associate
T + 852 2972 7138
Discrimination
[email protected]
At present, Singapore does not have any
overarching discrimination legislation. However,

This publication provides general guidance only:

Universal Trade Centre expert advice should be sought in relation to
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Central email ([email protected]) if you would prefer
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