HRM231 Study Unit 2 - Legal Influences PDF

HRM231 Study Unit 2 Legal Influences © 2024 SUSS. All rights reserved. SU2 - 1  Introduction By the end of this unit, you should be able to: Explain the di...

HRM231 Study Unit 2 Legal Influences © 2024 SUSS. All rights reserved. SU2 - 1  Introduction By the end of this unit, you should be able to: Explain the difference between a contract for service and of service. Discuss the common law duties of the employer and employees. SU 2 Understand and apply the key provisions of the Employment Act. Discuss the developments in retirement and re-employment legislation. Understand and discuss the impact of the Employment of Foreign Manpower Act on local employment issues. © 2024 SUSS. All rights reserved. SU2 - 2  Contract of Service (Employment) Is the contract between an individual employee and the employer Employee: works under a contract of service Independent contractor: works under a contract for service © 2024 SUSS. All rights reserved. SU2 - 3  Legislation Most legislation relating to employment only applies if there is an employment relationship in existence → must be working under a “Contract of Service”. © 2024 SUSS. All rights reserved. SU2 - 4  Elements of an Employment Contract Clear intention of the parties to be bound Clear communication of an offer by the employer Clear and unconditional acceptance by the employee Payment of wages in exchange for work performed Establishment of the terms of the contract – written and to comply with the KETs Binding © 2024 SUSS. All rights reserved. SU2 - 5  You are an employee….. Works exclusively for the employer who pays your remuneration; The employer provides tools required to get the work done; The employer states the duties; The employer decides on the working hours; The employee must perform services according to his/her capabilities; Payment into a pension/provident fund; You are entitled to paid-vacation pay; The employer pays or reimburses all expenses paid in getting the job done; You receives a salary or hourly wage; You reports to work on a regular basis. © 2024 SUSS. All rights reserved. SU2 - 6  You are an independent contractor….. Free to take on work from other sources; Provides tools and equipment to get the job done; Decides on how the task is to be carried out; Decides on the hours of work; May hire others to get the job done; No benefits of sorts from the client; No vacation pay, and no restrictions on hours of work, or time off; All expenses are paid for by you; You are paid by the job as based on its contracted value; Submits an invoice to the client for payment; You are not bound to accept work. © 2024 SUSS. All rights reserved. SU2 - 7  Tests to determine employment Control test – the question is not only whether the owner or employer controls the person, when the job is to be done but also how it is to be done. – Who decides on the hire and fire of the workers? – Who pays for the workers’ salaries and how? – Who determines the production method, timing and process of production? – Who assigns and delegates work? © 2024 SUSS. All rights reserved. SU2 - 8  Tests to determine employment Ownership of factors of production – Who provides the tools and equipment? – Who provides the working place and materials? Economic considerations – Is the business carried out on the person’s own account or is it for the employer? – Can the person share in profit or be liable to any risk of loss? – How are earnings calculated and profits derived? © 2024 SUSS. All rights reserved. SU2 - 9  Tests to determine employment Organizational Test - Is person an essential part of employer’s organization? – Under a contract of service, a person is employed as part of the business and his work is done as an integral part of the business. – Under a contract for service, his work, although done for the business, is not integrated into it but an accessory to it. © 2024 SUSS. All rights reserved. SU2 - 10  Contract of service vs. Contract for service Contract of service Contract for service Has an employer-employee Has a client-contractor type of relationship relationship Employee does business for the Contractor carries out business employer on their own account May be covered under the Not covered by the Employment Employment Act Act Includes terms of employment Statutory benefits do not apply such as working hours, leave benefits, etc. © 2024 SUSS. All rights reserved. SU2 - 11  Duties of the Employer Duties under the Employment Act Duties under the Central Provident Fund Act Duties under the Retirement and Re-employment Act Duties under the Workplace Safety and Health Act Duties under the Work Injury Compensation Act Duty of care Duty to indemnify Duty not to discriminate © 2024 SUSS. All rights reserved. SU2 - 12  Duties of the Employee Implied duties – Obey reasonable orders that fall within scope of employment – Use information and property of employer in reasonable manner – Keep confidential information confidential during and after employment – Devote agreed hours of employment to employer’s business © 2024 SUSS. All rights reserved. SU2 - 13  Duties of the Employee Employee has special skill or professional qualification – Perform work in accordance with the standard required of such skill or profession – May be liable for negligence in performance Fiduciary Duty – Employees owe a fiduciary duty to employer – Devote all energy, initiative and talents to employer – Failure is grounds for termination Normal Duty – Employees have duty to act in best interests of employer Cannot earn secret profits © 2024 SUSS. All rights reserved. SU2 - 14  What is the Employment Act? The Employment Act is Singapore's main labour law. It provides for the basic terms and conditions at work for employees covered by the Act. Foreign employees holding a work pass are also covered under the Employment of Foreign Manpower Act, which outlines an employer’s responsibilities and obligations for employing foreigners. © 2024 SUSS. All rights reserved. SU2 - 15  Who is covered by the Employment Act The Employment Act covers every employee (regardless of nationality) who is under a contract of service with an employer, except: – Any seafarer; – Any domestic worker; and – Any person employed by a Statutory Board or the Government. © 2024 SUSS. All rights reserved. SU2 - 16  Who is covered by the Act? An employee can be employed in the following terms: – Full-time – Part-time – Temporary – Contract © 2024 SUSS. All rights reserved. SU2 - 17  Contract of Service Essential clauses of Contract of Service A contract of service must include the following clauses: Commencement of employment; Appointment – job title and job scope; Hours of work; Probation period, if any; Remuneration; Employee's benefits (e.g. sick leave, annual leave, maternity leave); Termination of contract – notice period; and Code of conduct (e.g. punctuality, no fighting at work). © 2024 SUSS. All rights reserved. SU2 - 18  Key Employment Terms → 1st April 2016 Employers are required to issue KETs in writing to employees covered under the Employment Act. – Enter into a contract of service on or after 1 April 2016. – Are employed for 14 days or more. – Within 14 days from the commencement of employment See details of KETs in the MOM website – Full name of employer – Full name of employee – Job title, main duties and responsibilities © 2024 SUSS. All rights reserved. SU2 - 19  KETs – Start date of employment – Duration of employment – Working arrangements – Salary period – Basic salary – Fixed allowances – Fixed deductions – Overtime rate of pay – Other salary-related components – Type of leave – Other medical benefits – Probation period – Notice period – Place of work (optional) © 2024 SUSS. All rights reserved. SU2 - 20  Areas covered under the EA ▪ Terms & conditions ▪ Hours of work, overtime ▪ Rights & duties pay, working days, rest ▪ Contract of service days, holidays ▪ Termination ▪ Leave entitlement ▪ Grievance ▪ Retrenchment ▪ Salary: payment & ▪ Annual wage deduction supplement © 2024 SUSS. All rights reserved. SU2 - 21  Core Provisions under the EA All employees in Singapore, with the exception of seafarers, domestic workers and public officers, are covered for core provisions such as: Proper employment records Minimum days of annual leave. Paid public holidays and sick leave. Timely payment of salary. Statutory protection against wrongful dismissal. © 2024 SUSS. All rights reserved.  Who is covered under Part IV? Part IV of the Employment Act, which provides for rest days, hours of work, and other conditions of service, only applies to: – A workman (doing manual labour) earning a basic monthly salary of not more than $4,500. – An employee who is not a workman, but who is covered by the Employment Act and earns a monthly basic salary of not more than $2,600. – Note: Basic salary excludes payment of overtime, bonus, annual wage supplement, productivity incentive payment, reimbursement for special expenses and all allowances. © 2024 SUSS. All rights reserved. SU2 - 23  What is covered under Part IV of the Act? ✓ Rest day ✓ Work on rest day ✓ Hours of work ✓ Overtime ✓ Shift work © 2024 SUSS. All rights reserved. SU2 - 24  Overtime pay Overtime work is all work in excess of the normal hours of work (excluding breaks). You can claim overtime if you are: – A non-workman earning up to $2,600. – A workman earning up to $4,500. The overtime rate payable for non-workmen is capped at the salary level of $2,600, or an hourly rate of $13.60. For overtime work, your employer must pay you at least 1.5 times the hourly basic rate of pay. Payment must be made within 14 days after the last day of the salary period. Overtime payment is calculated using the “basic rate of pay” © 2024 SUSS. All rights reserved. SU2 - 25  Maximum hours of work As an employee, you are not allowed to work more than 12 hours a day. If an employer requires employees to work more than 12 hours a day (up to a maximum of 14 hours), they must apply for an overtime exemption. An employee can only work up to 72 overtime hours in a month. Work on rest day or public holidays is not counted in the 72-hour overtime limit, except for work hours done beyond the usual daily working hours on those days. Employers can apply for an exemption if they require employees to work more than the 72 hours of overtime in a month. © 2024 SUSS. All rights reserved. SU2 - 26  Exemptions not granted Any work where mental concentration is paramount to ensure safe operations → e.g. crane operators, scaffolders Any work involving continuous and manual operation of machinery Work activities in extreme thermal conditions Work activities undertaken in a compressed air environment Work activities undertaken by young persons and pregnant women Work involving strenuous physical demand from manual handling of objects or machinery for prolonged hours. Work at elevated heights where workers are liable to fall a distance of more than 3 meters © 2024 SUSS. All rights reserved. SU2 - 27  Work on rest days or public holidays Overtime on a rest day or public holiday is calculated as follows: For up to half For more than Beyond your If work is your normal half your normal daily done daily working normal daily working hours hours working hours At the 1 day’s 2 day’s 2 day’s salary + employer’s salary salary overtime pay request At the Half day’s 1 day’s 1 day’s salary + employee’s salary salary overtime pay request © 2024 SUSS. All rights reserved. SU2 - 28  Rest days Your employer must provide at least 1 rest day per week. Your employer cannot compel you to work on a rest day, unless under exceptional circumstances. The employer determines the rest day, which can be on a Sunday or any other day. If the rest day is not a Sunday, your employer should prepare a monthly roster and inform you of the rest days before the start of each month. The maximum interval allowed between 2 rest days is 12 days. © 2024 SUSS. All rights reserved. SU2 - 29  Who is a manager or executive? In general, managers and executives are employees with executive and supervisory functions. Their duties and authority may include one or all of the following: – Influencing or making decisions on issues such as recruitment, discipline, termination of employment, performance assessment and reward. – Formulating strategies and policies of the enterprise. – Managing and running the business. They also include professionals with tertiary education and specialised knowledge or skills whose employment terms are like those of managers or executives. For example, lawyers, accountants, dentists and doctors. © 2024 SUSS. All rights reserved. SU2 - 30  Who is a workman? Generally, workman is someone whose work involves mainly manual labour. This includes someone who falls under any of these categories: – Does manual work (including artisans and apprentices, but not seafarers or domestic workers). – Operates or maintains commercial vehicles with passengers. – Supervises manual workers, but also performs manual work more than half their working time. Has a job specified in the First Schedule of the Employment Act, namely: – Cleaner. – Construction worker. – Labourer. – Machine operator and assembler. – Metal and machinery worker. – Train, bus, lorry and van driver. – Train and bus inspector. – Workman employed at piece rates at an employer's premises. © 2024 SUSS. All rights reserved. SU2 - 31  Termination What is termination? Who can terminate a contract? Can your employer reject your resignation? What to do during termination? Termination with notice Termination letter Start and end of the notice period Waiver of notice period Termination without notice © 2024 SUSS. All rights reserved. SU2 - 32  Termination of Contract © 2024 SUSS. All rights reserved. SU2 - 33  Termination due to employee misconduct What is misconduct? Holding an inquiry Actions after an inquiry Appeals against unfair dismissal When to appeal? © 2024 SUSS. All rights reserved. SU2 - 34  Just Cause Employee conduct that amounts to a fundamental breach of the employment contract – Just cause dismissal requires no notice. Must be based on employee wrongdoing or a failure to perform the job All accrued annual leave to be forfeited Must conduct an inquiry prior to dismissal © 2024 SUSS. All rights reserved. SU2 - 35  Just Cause Grounds – Serious absenteeism – Consistent tardiness – Serious misconduct – Willful disobedience – Habitual negligence of duty – Incompetence – Harassing other employees – Drinking on the job – Immoral conduct © 2024 SUSS. All rights reserved. SU2 - 36  For purpose of due inquiry Employer can suspend the employee for up to a period of 1 week with half pay and if the misconduct is not proven, to reimburse the employee the full amount that was withheld If the employer, after due inquiry chose not to terminate the services of the employee, can instead do the following: - Instantly downgrade the employee; or - Instantly suspend the employee without pay for a period not exceeding 1 week © 2024 SUSS. All rights reserved.  Termination other than misconduct Progressive Discipline 1. Counselling 2. Verbal warning Time period between stages must be reasonable 3. 1st written warning Employee to be provided with support for performance 4. Final written warning improvement 5. Termination* © 2024 SUSS. All rights reserved.  Termination other than Misconduct Termination other than misconduct: Requires notice period as per the employment contract Must be based on employee failure to perform All accrued annual leave can be taken during notice period subject to approval and/or encash No need to conduct an inquiry prior to termination © 2024 SUSS. All rights reserved. SU2 - 39  Termination other than Misconduct Alternatives to termination for non-performance: ▪ Suspension of the employee, with or without pay ▪ Transfer of the employee to a more suitable role ▪ Demotion of the employee to a lower responsibility position © 2024 SUSS. All rights reserved.  Payment of Salary ▪ An employer is liable to pay his employee(s) within seven days after the end of the salary period, in accordance to the provisions of Part III of the Employment Act. ▪ Failure to pay salaries in accordance with provisions of the Employment Act is an offence. ▪ Employees who are not paid for work done can report employers for investigation. © 2024 SUSS. All rights reserved. SU2 - 41  Salaries and Wages ▪ The Act does not control the rates of salaries or wages to be paid by an employer. ▪ Where a contract of service is terminated or an employee dismissed, the salary or other money due to the employee must be paid on the last day of service or within three working days after the date of termination or dismissal ▪ Where an employee terminates his or her contract of service after due notice, their salary should be received on the last day of employment © 2024 SUSS. All rights reserved. SU2 - 42  Salaries and Wages ▪ Where an employee leaves without giving due notice to his or her employer, the salary should be received no later than 7 days from the last day of employment ▪ All salaries or wages must be paid on a working day and during working hours at the place of work unless the employee agrees to a different place, or unless the salary is payable into the employee’s bank account ▪ All salaries / wages are calculated based on the “gross rate of pay” ▪ The annual wage supplement is limited to one month's wages since 1988 © 2024 SUSS. All rights reserved. SU2 - 43  Authorized Deductions absence from work without good reason; repayment of a loan; income tax; CPF contributions; the costs of goods entrusted to you which are lost or damaged because of your negligence; and if you agree, for housing accommodation and meals. Note: subjected to a cap of 50% © 2024 SUSS. All rights reserved. SU2 - 44  Annual Leave ▪ Entitled to take paid annual leave if they have worked for the employer for at least 3 months. ▪ 7 days of annual leave for the first year of service and increasing every year by one day up to a maximum of 14 days ▪ Any leave taken will be considered a full-day’s leave, even if it is taken on a half working day. (Employers have to option to treat it as half-day leave) ▪ If the employees are covered under Part IV of the EA, the employer must allow you to carry forward any unused annual leave to the next 12 months. © 2024 SUSS. All rights reserved. SU2 - 45  Paid Sick Leave Employees are not eligible to apply for paid sick leave if they fall sick during: ▪ Rest days ▪ Public holidays ▪ Non-working days ▪ Annual leave ▪ Unpaid leave © 2024 SUSS. All rights reserved. SU2 - 46  Falling Sick while on Annual Leave Clause 44(4A) of the Employment Act states that “… no employee shall be entitled to paid sick leave … on any day of paid annual leave” However, if the employee falls sick while on annual leave, he/she may discuss with the employer whether the employee can cancel the annual leave and take sick leave instead Most CA allows an employee to cancel the annual leave and take sick leave instead Prevailing Practice: A term could be implied into an employment contract by custom. © 2024 SUSS. All rights reserved. SU2 - 47  When in dispute…. ▪ Generally, in order for a term to be implied by the courts into a contract, the term must: Be both reasonable and equitable; Be implied so as to give business efficacy to the contract and/or that it is so obvious that the implication “goes without saying”; Be clear and unambiguous; and Not contradict any terms of the contract. © 2024 SUSS. All rights reserved. SU2 - 48  Beyond Legislations Other than the provisions in the EA – employers are also required to abide by the Tripartite Guidelines on Fair and Progressive Employment Practices. Recruit and select employees on the basis of merit (such as skills, experience or ability to perform the job), and regardless of age, race, gender, religion, marital status and family responsibilities, or disability. Treat employees fairly and with respect and implement progressive human resource management systems. Provide employees with fair opportunity to be considered for training and development based on their strengths and needs to help them achieve their full potential. Reward employees fairly based on their ability, performance, contribution and experience. Abide by labour laws and adopt the Tripartite Guidelines on Fair Employment Practices. © 2024 SUSS. All rights reserved.  Retirement and Re-employment Act (RRA) Employers must offer re-employment to eligible employees who turn 63, up to the age of 68. Under the Retirement and Re- employment Act (RRA), the minimum retirement age is 63 years. However, employers are required to offer re-employment to eligible employees who turn 63 up to age 68, to continue their employment in the organisation. Note: Impending changes from Year 2030 – Retirement age: 65 and Re-employment up to 70 years. © 2024 SUSS. All rights reserved. SU2 - 50  RRA Retirement and re-employment ages apply as follows: Retirement Re-employment Age Age Age Born before 1 July 1955 62 67 (> 67 years old on 1 July 2022) Born between 1 July 1955 & 30 June 1960 (between 62 - 67 years old on 1 July 2022) 62 68 Born after 1 July 1960 (< 62 years old on 1 July 2022) 63 68 © 2024 SUSS. All rights reserved.  Eligibility You are eligible for re-employment if you: Are a Singapore citizen or Singapore permanent resident. Have served your current employer for at least 2 years before turning 63 for employees hired at age 55 and above. Have satisfactory work performance, as assessed by the employer. Are medically fit to continue working. © 2024 SUSS. All rights reserved. SU2 - 52  Eligibility You are eligible for re-employment but your employer is unable to offer you a position, then your employer must: Transfer the re-employment obligation to another employer, with your agreement, OR Offer you a one-off Employment Assistance Payment (EAP). © 2024 SUSS. All rights reserved. SU2 - 53  Employment Assistance Payment (EAP) a. The EAP is to help eligible employees who are not re-employed tide over a period of time while they look for another job. The EAP amount could be 3.5 months of salary. b. There should be a minimum EAP amount to help the lower-wage workers as they may have greater difficulty seeking alternative employment if they are not re-employed. A minimum EAP amount of $6,250 could be considered. c. There should be a maximum EAP amount to moderate the financial burden on employers and to prevent the EAP from encouraging employees to stop working. A cap of $14,750 could be considered. © 2024 SUSS. All rights reserved.  Employment Assistance Payment (EAP) In the event that the employer cannot offer re-employment for the whole of the 5-year period, some amount of EAP is payable. For employees who have been re-employed for at least 30 months since age 63, a lower EAP amount of 2 months of salary could be considered, subject to a minimum of $4,000 and maximum of $8,500. In addition to the EAP, employers are encouraged to provide outplacement assistance, to help employees find alternative employment. © 2024 SUSS. All rights reserved.  Contract Your re-employment contract should be for at least 1 year, renewable every year up to age 68 Salary and benefits Your salary may be adjusted based on factors such as new duties or responsibilities. You should negotiate these changes with your employer when you finalise your new contract. A good reference is the Tripartite Guidelines on Re-employment of Older Employees. © 2024 SUSS. All rights reserved. SU2 - 56  Negotiating a re-employment contract Employers Identify eligible employees for re-employment. Begin discussions as early as 6 months before your employee turns 63. For eligible employees, offer a re-employment contract at least 3 months before their retirement date. For employees who do not qualify, inform them early so that they can better prepare for their retirement or seek other employment opportunities. Refer to the Tripartite Guidelines when making your re-employment offer. Ensure terms and conditions are fair and reasonable. © 2024 SUSS. All rights reserved. SU2 - 57  Negotiating a re-employment contract Employees Make your job preferences known early in the consultation process. Be flexible and keep an open mind about possible changes to your job arrangement or employment terms. © 2024 SUSS. All rights reserved. SU2 - 58  Effectiveness of RRA??? The workforce participation rate at 60 years and above is just under 60% - hence not all workers can benefit from the RRA; The EAP is an escape clause for employers in fulfilling the purpose of re-employment to 68 years; Rank & file workers are more likely to benefit from re- employment as these workers are difficult to come by and provide the numbers for employers to qualify for the quota entitlements of work permits for foreign guest workers; PMEs are less likely to be given re-employment as there are less opportunities up the hierarchy; Keeping the PMEs till the age of 68 or beyond may impact succession planning © 2024 SUSS. All rights reserved. SU2 SU2- -5959  What is the EFMA The Employment of Foreign Manpower Act prescribes the responsibilities and obligations for employing foreign employees in Singapore. It covers regulations and enforcement for: – Work passes – Offences Covers any person issued a work pass - Employment Pass, S Pass and Work Permits Outlines responsibilities relating to work passes, including applications, cancellations, medical insurance, levy, cancellation and repatriation. © 2024 SUSS. All rights reserved. SU2 - 60  Are Foreign Manpower covered by the EA? Are entitled to: Salary Hours of work, overtime and rest days Public holidays Annual leave Sick leave © 2024 SUSS. All rights reserved. SU2 - 61  Types of Passes Employment Pass (EP) EPs are issued to foreign professionals, specialists, middle management and highly qualified foreigners. The minimum qualifying salaries for new Employment Pass (EP) applicants is currently at $5,000 (financial services - $5,500) and will revised to at least $5,600 on 1st January 2025. (financial services - to $6,200.) Older candidates will continue to require a higher salary to qualify. Employers are required to apply for EPs on behalf of the foreigners and passes are specific to the employer and the foreigner. Should the EP holder change job, the new employer will have to apply for a new pass on his/her behalf. © 2024 SUSS. All rights reserved. SU2 - 62  Types of Passes S Pass S Passes are issued to mid-level skilled workers. Based on a points system - assessed on a range of factors such as their qualifications, skills, employment type, work experience, and a basic monthly salary of at least S$3,150. (financial services - $3,650) Minimum qualifying salaries for new S Pass (SP) applicants will be revised to $3,300 from 1st January 2024 (financial services - to $3,800). Quota on number of S Passes a company may employ. The S Passes granted are part of the quota of the company’s total WPs. Employers pay a foreign worker levy though at a much lower rate than for WP holders they employ. Must also purchase medical insurance for their S Pass employees. © 2024 SUSS. All rights reserved. SU2 - 63  Types of Passes Work Permit (WP) Foreigners who command monthly salaries of generally no more than $1,800 can be brought in to work under the WP or R Pass. Access to such workers is, however, restricted to sectors that have difficulties recruiting Singaporean workers, specifically, the construction, manufacturing, marine, process and services sectors. Dependency ceilings, specifying the ratio of foreign to local workers that a firm may employ, vary by sector depending largely on the difficulty of attracting local workers. © 2024 SUSS. All rights reserved. SU2 - 64  Changes to the FCF FCF job advertisement requirements extended to all E & S Pass applications. Employers are now required to open the job advertisement to 14 calendar days w.e.f. 1st September 2022 © 2024 SUSS. All rights reserved.  Foreign workforce numbers Dec 2023 Dec 2022 Dec 2021 Employment Pass 205,400 187,300 161,700 S Pass 178,500 177,900 168,800 Work Permit (Total) 1,113,000 1,033,500 849,700 Foreign workforce numbers (mom.gov.sg) © 2024 SUSS. All rights reserved. SU2 - 66