HRM231 - S2 Canvas

HRM231 Study Unit 2
Legal Influences
© 2021 SUSS. All rights reserved.

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.
• 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.
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

Legislation
Most legislation relating to employment only applies if

there is an employment relationship in existence →
must be working under a “Contract of Service”.

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

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 worker 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.
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.
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?

• 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?

• 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.

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.

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
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

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
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.

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.

Who is covered by the Act?
• An employee can be employed in the following terms:

– Full-time
– Part-time
– Temporary
– Contract

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).

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

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)

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:
• Minimum days of annual leave.
• Paid public holidays and sick leave.
• Timely payment of salary.
• Statutory protection against wrongful dismissal.

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.

What is covered under Part IV of the Act?
✓ Rest day
✓ Work on rest day
✓ Hours of work
✓ Overtime
✓ Shift work
✓ Payment of retrenchment benefits
✓ Payment of AWS or other variable
payment

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.

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.

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
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

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.

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.

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.
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

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

Termination of Contract

Termination due to employee misconduct
• What is misconduct?
• Holding an inquiry
• Actions after an inquiry
• Appeals against unfair dismissal
• When to appeal?

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

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
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.

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

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
▪ The annual wage supplement is limited to one month's wages

since 1988

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%

Maternity Leave
• Refer to Study Guide, SU2, section 3.3.6

Retirement and Re-employment Act (RRA)
• Employers must offer re-employment to eligible employees who turn

62, up to the age of 67. Under the Retirement and Re-employment
Act (RRA), the minimum retirement age is 62 years.
• However, employers are required to offer re-employment to eligible
employees who turn 62, up to age 67, to continue their employment in
the organisation.
• In September 2014, the Tripartite Committee on Employability of Older
Workers (Tricom) recommended that the Government encourage
employers to voluntarily raise the re-employment age from 65 to 67
years old.
• Note: Impending changes from Year 2022 to 2030

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 3 years before turning
62
• Have satisfactory work performance, as assessed by the employer
• Are medically fit to continue working
• Are born on or after 1 July 1952 (1st July 2017)
• If you are eligible for re-employment but your employer is unable to
offer you a position, then your employer must offer you a one-off
Employment Assistance Payment (EAP) → min $5.5k to max $13k.
(1st July 2017)

Contract
• Your re-employment contract should be for at least 1 year,
renewable every year up to age 67
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.

Negotiating a re-employment contract
Employers
• Identify eligible employees for re-employment.
• Begin discussions as early as 6 months before your employee turns
62.
• 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.
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.

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 67 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 67 or beyond may impact
succession planning
© 2021 SUSS. All rights reserved. SU2 - 47
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.

Are Foreign Manpower covered by the EA?
Are entitled to:

• Salary
• Hours of work, overtime and rest days
• Public holidays
• Annual leave
• Sick leave

Types of Passes
Employment Pass For foreign professionals, managers and executives.

Candidates need to earn at least $4,500 a month and
have acceptable qualifications. (w.e.f. 1st September
2020)
Financial sector - $5,000 w.e.f. 1st December 2020
S Pass For mid-level skilled staff. Candidates need to earn at
least $2,500 a month and meet the assessment
criteria. (w.e.f. from 1st October 2020)
Work Permit For semi-skilled foreign workers in the construction,
marine, process or services sector.
Note: The new salary criteria came into effect for renewal applications from 1 May
2021.

Changes to the FCF
• FCF job advertisement requirements will be extended to all new

S Pass applications. Employers are now required to open the
job advertisement to 28 calendar days from the previous 14
calendar days.
• w.e.f. 1st October 2020

Foreign workforce numbers
Jun 2020 Dec 2020

• Employment Pass 189,700 177,100
• S Pass 188,800 174,000
• Work Permit 940,200 848,200
https://www.mom.gov.sg/documents-and-publications/foreign-workforce-numbers

HRM231 - S2 Canvas

Uploaded by

Copyright:

Available Formats

HRM231 - S2 Canvas

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

HRM231 - S2 Canvas

Uploaded by

Copyright:

Available Formats

HRM231 Study Unit 2

© 2021 SUSS. All rights reserved.

By the end of this unit, you should be able to:

• Is the contract between an individual employee and the

© 2021 SUSS. All rights reserved.

Most legislation relating to employment only applies if

© 2021 SUSS. All rights reserved.

• Clear intention of the parties to be bound

© 2021 SUSS. All rights reserved.

• Works exclusively for the employer who pays your remuneration;

• Free to take on work from other sources;

• Control test – the question is not only whether the owner

© 2021 SUSS. All rights reserved.

• Ownership of factors of production

© 2021 SUSS. All rights reserved.

• Organizational Test - Is person an essential part of

© 2021 SUSS. All rights reserved.

Contract of service Contract for service

© 2021 SUSS. All rights reserved.

• Duties under the Employment Act

© 2021 SUSS. All rights reserved.

• Employee has special skill or professional qualification

• The Employment Act is Singapore's main labour law. It

• Foreign employees holding a work pass are also covered

© 2021 SUSS. All rights reserved.

• The Employment Act covers every employee (regardless of

© 2021 SUSS. All rights reserved.

• An employee can be employed in the following terms:

© 2021 SUSS. All rights reserved.

Essential clauses of Contract of Service

© 2021 SUSS. All rights reserved.

• Employers are required to issue KETs in writing to

• See details of KETs in the MOM website

© 2021 SUSS. All rights reserved.

– Start date of employment

© 2021 SUSS. All rights reserved.

All employees in Singapore, with the exception of seafarers, domestic

© 2021 SUSS. All rights reserved.

• Part IV of the Employment Act, which provides for rest

© 2021 SUSS. All rights reserved.

© 2021 SUSS. All rights reserved.

• Overtime work is all work in excess of the normal hours of work

© 2021 SUSS. All rights reserved.

• As an employee, you are not allowed to work more than 12 hours a

© 2021 SUSS. All rights reserved.

Overtime on a rest day or public holiday is calculated as follows:

© 2021 SUSS. All rights reserved.

• Your employer must provide at least 1 rest day per week.

© 2021 SUSS. All rights reserved.

• In general, managers and executives are employees with executive

© 2021 SUSS. All rights reserved.

▪ Terms & conditions ▪ Hours of work, overtime

© 2021 SUSS. All rights reserved.

© 2021 SUSS. All rights reserved.

© 2021 SUSS. All rights reserved.

© 2021 SUSS. All rights reserved.

• Employee conduct that amounts to a fundamental breach

© 2021 SUSS. All rights reserved.