Access to compensation for work-related injuries in Singapore, for both local and foreign workers, has expanded significantly.
Background
On 1 April 2008, the Workmen’s Compensation Act was renamed the Work Injury Compensation Act (Act). The Act’s scope was also amended. It now applies to all employees, regardless of salary level, subject only to limited exceptions (for example, domestic workers and members of the armed forces).
Previously, the Act only applied to manual workers and to non-manual workers earning less than 1600 SGD per month. It is estimated that the revised Act now covers some 2.1 million employees in Singapore, which is 850,000 more than previously.
The revised Act aims to provide an expedient, low-cost, no-fault compensation system for injuries by accidents arising out of and in the course of employment and occupational diseases.
Key changes
In addition to the expanded scope of coverage, the revised Act also:
- adjusts the maximum and minimum limits for compensation to take into account the increase in wages since the limits were set in 1995. The minimum compensation for death and total permanent incapacity has been increased to 47,000 SGD and 60,000 SGD respectively. The maximum compensation has been raised to 140,000 SGD and 180,000 SGD respectively
- simplifies how medical expenses are compensated. The revised Act removes the previous sub-limits for hospital charges and instead introduces an overall cap of 25,000 SGD per accident per employee on an employer’s total liability for medical expenses
- enhances the penalties and offences under the Act, and provides for the Ministry of Manpower to be able to enforce the payment of compensation on a worker’s behalf, and
- streamlines the accident reporting requirements under the Act and aligns them with those under the Workplace Safety and Health Act. Instead of having to report all accidents, including minor ones, employers are now required to report an accident only if it results in a death, or in the injured employee being unfit for work for more than three consecutive days, or being hospitalised for at least 24 hours or if the employee contracts an occupational disease.
Implications for employers
The Act is likely to have the biggest impact in higher-paid, non-manual industries, which have previously not been subject to workers’ compensation legislation. Employers in these industries will now need to be aware of and comply with their obligations under the Act. Although insurance is currently not compulsory for these categories of employees that are newly covered by the Act, employers may well elect to take out insurance to cover their potential liability.
This article was written by George Cooper, Practice Leader, and Celia Yuen, Senior Associate, Freehills Workplace Law & Advisory–Asia.
There is an ever-increasing focus for the government and employers on workplace health and safety obligations and outcomes in Singapore workplaces.
Background
In March 2005, the then Minister for Manpower sent a clear message to the Singapore business community that his ministry was about to get serious about workplace safety and health. He set a target to halve the number of work-related fatalities to 2.5 per 100,000 workers by 2015 (the rate was 4.9 in 2004).
Key aspects of the legislation
To achieve the target set by the minister, the Workplace Safety and Health Act (WSH Act) was introduced in 2006 to repeal and replace the Factories Act and switch a formerly prescriptive legislative approach to a broader performance-based liability regime. The WSH Act aimed to do this by:
- imposing general duties of care on various stakeholders (for example employers, occupiers, principals and workers)
- requiring employers, in particular, to proactively identify and mitigate risks and hazards at the workplace, and
- increasing penalties to reflect the cost of poor safety management.
Expanded coverage
The WSH Act initially only applied to workplaces deemed a ‘factory’ under the old legislation, with the intention that it would be expanded over time to cover all workplaces in Singapore.
The first wave of expansion occurred on 1 March 2008, when six new sectors were brought within the WSH Act’s scope, namely:
- healthcare activities
- veterinary activities
- hotels, food and beverage sectors
- water supply, sewerage and waste management activities
- landscape care and maintenance service activities, and
- services allied to transportation of goods.
Increased prosecutions
The number of prosecutions under the WSH Act doubled from 44 in 2006 to 88 in 2007, with 19 prosecutions already concluded as at the end of March 2008. This, along with the increased number of workplace inspections and a practice of ‘naming and shaming’ non-compliant employers show that the Ministry of Manpower is serious about achieving its 2015 target.
It seems to be working. The fatality rate is trending down: 4.9 in 2004, 4.0 in 2005, 3.1 in 2006 and 2.9 in 2007. The original target appears well within reach. In fact, Prime Minister Lee announced a new target in April, no more than 1.8 workplace fatalities per 100,000 workers by 2018.
Implications for employers
Given the Singapore Government’s obvious focus on this issue and the ministry’s increased enforcement efforts, it is important for employers, occupiers and principals in all industries to be aware of their present and future obligations under the WSH Act. They should then implement safety management systems to assist in meeting these obligations, thereby avoiding criminal liability under the WSH Act.
This article was written by George Cooper, Practice Leader, and Steven Raman, Solicitor, Freehills Workplace Law & Advisory–Asia.
Seven former employees of Citibank appeared in the Singapore District Court on 23 January 2008 on charges relating to alleged unauthorised access to computer data at the bank. Some of the accused face additional charges concerning alleged disclosure of customer information and destruction of evidence.
Background
The individuals worked in Citibank’s private banking division until mid-2006 when a number of them left the bank to join a competitor, UBS.
Citibank had previously issued civil proceedings against six of the individuals, alleging unauthorised transfer of confidential customer and internal information to personal email accounts, shortly before their departure from Citibank. Citibank claimed damages against the individuals based on alleged loss of 50 million SGD of business to UBS. The proceedings were settled out of court for undisclosed amounts.
However, Citibank’s complaint to the Commercial Affairs Division (CAD) of the Singapore Police and Monetary Authority of Singapore (MAS) was investigated separately and ultimately resulted in the recent charges.
Grounds for prosecution
Most of the charges relate to alleged unauthorised access to computer data, as prohibited under the Computer Misuse Act. ‘Enhanced punishment’ applies to the banking sector meaning that the maximum penalty for each offence is particularly severe, a fine of 100,000 SGD and/or 20 years in jail.
Disclosure of customer information in breach of the Banking Act is also alleged against some of the individuals (maximum penalty of 125,000 SGD fine and/or three years in jail), as is destruction of evidence in breach of the Penal Code (punishable by fine and/or up to two years in jail).
The seven accused were each granted bail of between SGD 10,000 and 40,000. A trial is expected to take place later this year.
Significance of case
This is the first prosecution of its kind in the Singapore banking sector. The case has drawn widespread interest given the burgeoning private banking industry in Singapore (which partly stems from the existence of the Republic’s strict banking secrecy laws), the great demand for private bankers in the current climate and the propensity for movement of personnel between employers.
While customers may identify with the individual banker rather than the bank itself, employees generally do not have any right to retain or use confidential or sensitive information relating to their employment, for purposes extraneous to that employment. Such information remains the property of the employer.
Implications for employers
The present case demonstrates that the restrictions on employee access and use of such information are particularly tight in the banking sector, and particularly where computer data is concerned. Banking employees and prospective new employers should be aware of the very serious civil and criminal law issues involved.
This article was written by George Cooper, Practice Leader, and David Brooker, Solicitor, Freehills Workplace Law & Advisory–Asia.
The Employment Contract Law (ECL) or ‘Roudou-Keiyaku-Hou’ came into effect in Japan on 1 March 2008. The ECL seeks to codify various principles that have been established in judicial decisions in Japan over a number of years.
Background
The enactment of the ECL was reportedly prompted by an increase in the number of labour disputes in Japan in recent years.
According to the Health, Labour and Welfare Ministry of Japan, there were some 103,000 inquiries regarding labour contracts in the 2002 financial year, which had increased to around 187,000 by the 2006 financial year.
Key features of new ECL
Basic requirements
The ECL provides that an employment contract should be entered into, and amended, by agreement on equal footing between an employer and an employee and, as far as possible, confirmed in writing.
Requirements for amendment of rules of employment (‘Shugyo-kisoku’)
The ECL provides that an employer can amend the rules of employment either by obtaining the consent of the employees, or alternatively by announcing the amended rules to the employees, provided that the amendments are reasonable.
Restrictions on dismissal
Unilateral termination of employment by an employer will not be valid unless there is a ‘persuasive reason’. If the court finds that the termination lacks a persuasive reason, then the employment contract is deemed not to have been terminated.
Restrictions on termination of fixed-term employment contracts
The ECL prohibits the dismissal of an employee prior to the end of a fixed-term contract, except where there is a compelling reason. It also prohibits the practice of repeated renewals of fixed-term contracts.
Implications for employers
In practice, the ECL is unlikely to have any real impact on the ultimate decisions that are reached in the Japanese courts. For this reason, it has been subject to criticism by commentators who feel that the current legal regime is in need of real reform.
Nevertheless, foreign investors who are unfamiliar with Japanese labour law and practices may welcome the ECL as a useful guide and a more transparent and accessible enunciation of the general principles that have previously been set out only in court decisions.
This article was written by George Cooper, Practice Leader, and Celia Yuen, Senior Associate, Freehills Workplace Law & Advisory–Asia.
Thailand’s new Labour Protection Act B.E. 2551 (2008) (LP Act) came into effect on 28 May 2008.
Key changes
The LP Act makes some important amendments to its predecessor, the Labour Protection Act B.E. 2541 (1998). Some of the key changes are listed below.
New protections for outsourced workers
Under existing definition provisions, business operators are deemed to be the employer of outsourced workers engaged in the production process or core business of the operator, even where the operator does not directly supervise the work or bear responsibility for payment of wages. These definition provisions have been moved to the body of the Act and new provisions included to the effect that such outsourced workers are entitled to fair benefits and treatment, in line with direct employees of the operator performing the same work, without discrimination.
Unfair contracts
New provisions empower the court to review employment contracts, rules and orders, and determine whether they afford undue advantage to the employer. The court may order that such a term or rule is enforceable only to the extent that it is fair and appropriate.
Sexual harassment
The pre-existing provisions only protected female and child employees. They have been broadened to cover all employees.
Notice of termination for probationers
Changes have been made such that notice of termination of employment must be given even where the employment is terminated during a probation period, that is, a notice period of at least one pay cycle (or payment of wages in lieu).
Hours of work
The existing cap on (ordinary, non-overtime) working hours is eight hours per day and 48 hours per week. Under the new provisions, where less than eight hours are worked on a given day, the balance can be carried forward and added to another day, to extend the maximum working hours to nine hours (subject to the same weekly cap of 48 hours). However, a special rate of pay (x1.5) applies to the additional work beyond eight hours per day.
Accumulated annual leave pay-outs
Under the changes, employees who resign or whose employment is terminated, even for serious cause, are entitled to a pay-out of accumulated but untaken annual leave (a pro-rata payment for the current part-year is still only payable where the employment is terminated by the employer other than for serious cause).
Annual reporting obligations
There are new provisions requiring employers with 10 or more employees to lodge forms with the relevant labour authority in January each year, stating the conditions of employment and work at the workplace. Such employers are also obliged to notify the authority during the year if there is any change to the reported matters.
Implications for employers
Employers in Thailand need to be mindful of the above changes and ensure that their human resources systems and practices are consistent and compliant with the law. The changes concerning fair treatment of outsourced workers and review of unfair employment terms are particularly significant.
This article was written by George Cooper, Practice Leader, Freehills Workplace Law & Advisory–Asia.
The Hong Kong Legislative Council passed the controversial Race Discrimination Ordinance in July 2008.
Background
It could be said that the introduction of race discrimination legislation in the Hong Kong Special Administrative Region is well overdue. The legislation complements existing legislation which prohibits discrimination on the grounds of gender, family status and disability.
The effective date of the new law has not yet been announced, but is expected to be in early 2009.
Key provisions
The new law renders discrimination (both direct and indirect) and harassment on the ground of race unlawful in a number of areas, including not only employment and the engagement of contract workers, but also other fields such as education and the provision of facilities, services and premises.
In the field of employment, race discrimination against both job applicants and employees is prohibited, including in relation to matters such as the terms and conditions of employment, access to promotion and training opportunities, and access to other benefits, facilities and services.
The new law does contain an exception for ‘genuine occupational qualifications’. However, this is defined narrowly and may only be relied upon to justify race discrimination where persons of a particular race are required for authenticity purposes (for example, dramatic performance) or for jobs involving the provision of personal services to persons of a particular racial group where a familiarity with language, culture and customs is required.
Vicarious liability
Employers will be prima facie liable for the unlawful actions of their employees in the course of their employment, whether or not the actions were done with the approval or knowledge of the employer. However, it is a defence against this liability if the employer can prove that they took such steps as were reasonably practicable to prevent the employee from doing the act in question.
Potential litigation
Some commentators have predicted that the new law will lead to a significant increase in employment-related litigation in Hong Kong. Under the new law, the Equal Opportunities Commission may investigate and conciliate complaints of race discrimination or harassment. Legal proceedings are heard by the District Court, which has broad powers to order remedies including damages, employment or re-employment of the complainant.
Implications for employers
For companies with operations in Hong Kong, the new law is significant, particularly in light of the liability of employers for the actions of their employees. Its implementation may necessitate a review of company recruitment processes, policies and practices, and equal opportunity training content.
This article was written by George Cooper, Practice Leader, and Celia Yuen, Senior Associate, Freehills Workplace Law & Advisory–Asia.
In our second edition of the Freehills Asia-Pacific Employee Relations Review in February 2008 we looked at the likely impact of the November 2007 change of government on workplace relations in Australia.
First tranche of changes passed
The first stage of the Federal Government’s Forward with Fairness reform legislation is now in operation, with the Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008 (Cth) (Transition Act) taking effect on 28 March 2008.
The most immediate impact of the first stage of reform concerns making Australian Workplace Agreements (AWAs). Employers and employees are no longer able to make AWAs. Some employers are still able to use Individual Transitional Employment Agreements (ITEAs).
Further details about the Transition Act are available in our second edition. Some amendments to the Bill were made prior to it being passed. As part of the first stage of reform, consequential amendments were also made to the Workplace Relations Regulations 2006. The regulations are important because they prescribe procedural obligations for parties making workplace agreements, including ITEAs.
The procedure for lodging ITEAs is substantially similar to the previous process for lodging AWAs. There are some small differences in the Employer Declaration form required to be lodged with the Workplace Authority in relation to the No Disadvantage Test (NDT) (as opposed to the previous Fairness Test).
Second tranche of changes to come
As we reported in our second edition, the second step in the reform process will involve more substantial legislation to introduce the balance of the Australian Labor Party’s policy proposals. The draft legislation is due to be released later in 2008, and is likely to cover:
- the 10 ‘National Employment Standards’ (NESs), discussed below
- changes to the unfair dismissal laws
- the introduction of the new enterprise bargaining regime, including ‘good faith bargaining’, and
- the establishment of ‘Fair Work Australia’ to perform roles currently undertaken by the Australian Industrial Relations Commission, Australian Fair Pay Commission, Australian Building and Construction Commission, Workplace Authority and Workplace Ombudsman.
It was originally thought that the second tranche of changes would take effect on 1 January 2010. However, there have been some recent suggestions by the government that some reforms could come into effect before this date, particularly those relating to the unfair dismissal regime.
National Employment Standards released
The key development in respect of the second tranche of changes has been the release of the new NESs. A first draft of the NESs had previously been released in February 2008 for public comment and a final version was released on 16 June 2008.
The NESs contain details of the 10 minimum conditions which will apply to Australian employees, whether or not covered by awards or workplace agreements. As minimum conditions, the NESs will form the foundation of entitlements for all employees in Australia.
The 10 NESs cover:
- maximum weekly hours of work
- request for flexible working arrangements
- parental leave and related entitlements
- annual leave
- personal/carers leave and compassionate leave
- community service leave
- long service leave
- public holidays
- notice of termination and redundancy pay, and
- fair work information statement.
Further information about the NESs is available from the government’s media release.
Although the NESs are not intended to commence until January 2010, they will in the meantime form an important part of the award modernisation process currently being undertaken by the Australian Industrial Relations Commission.
Implications for employers
More details on the second tranche of reforms are expected to become available later in the year. In the meantime, employers are advised to familiarise themselves with the new NESs and to consider how they are likely to impact upon their workplace relations practices from 1 January 2010.
This article was written by George Cooper, Practice Leader, and Celia Yuen, Senior Associate, Freehills Workplace Law & Advisory–Asia.
The level of minimum entitlements to parental leave has recently been a hot topic in a number of countries throughout the Asia-Pacific region.
Background
Parental leave entitlements vary greatly from one jurisdiction to the next in the Asia-Pacific region. For countries that do have a statutory entitlement to parental leave, the length of that entitlement can vary from six weeks to two years and can be paid, unpaid, partly paid, or a combination of paid and unpaid. In some countries both male and female employees have access to parental leave entitlements, while in others only maternity leave is available.
Upcoming changes in Australia
As described in our article above about workplace relations reform in Australia, one of the matters to be covered in the new National Employment Standards (NESs) to apply from 1 January 2010, is parental leave.
Currently in Australia, both male and female employees may access a period of up to 12 months unpaid parental leave in order to be the primary caregiver for their child. Parents can share the 12-month leave period between them, but cannot take the leave concurrently with each other.
Under the new NESs, each parent will be entitled to take up to 12 months unpaid parental leave, for a total of up to 24 months between the parents. The leave cannot be taken concurrently. Furthermore, if one parent wishes to extend their 12-month leave period, they will have a right to request up to 12 months additional unpaid leave (subject to a cap of 24 months between the two parents). An employer will be required to agree to the request, unless they have reasonable business grounds for refusing the request.
The changes have been quite controversial in Australia, and have sparked a debate over the introduction of a component of paid parental leave entitlements, which seems unlikely in the near future. Interestingly, however, the changes proposed for Australia in 2010 have strong similarities with recent changes in two other jurisdictions—Taiwan and South Korea.
Recent changes in Taiwan
In Taiwan, male and female employees of certain employers have since 2002 had an entitlement to take up to two years parental leave between them.
In December 2007, this statutory right was significantly extended in scope. The entitlement had previously applied only to companies that employed more than 30 workers. Now employers of any size are obliged to provide this unpaid parental leave, provided that the minimum service requirements are met.
A further interesting development in Taiwan relates to the extent to which employees on parental leave receive payment from the country’s employment insurance fund. One of the campaign promises of the recently elected President, Mr Ma Ying-Jeou, was that employees on parental leave would receive monthly payments at 60 per cent of their salary for up to two years.
It appears that the proposed payment entitlement will be assessed at various stages of implementation, with the first stage (six months pay at 60 per cent of salary) to be considered by the legislature in the coming months.
Recent changes in Korea
The government in South Korea recently introduced various measures to increase the country’s fertility rate which, at an average of 1.2 births per woman, is currently one of the lowest in the world.
Prior to the recent changes, legislation in South Korea provided for an entitlement to 90 days maternity leave, 60 days of which was paid leave provided by the employer. There was also an ability to take up to a total of one year of unpaid childcare leave for either male or female employees.
From June 2008, mothers and fathers of newborns now have an entitlement to share unpaid childcare leave of up to one year each (for a total of two years). During the leave period, the parent on leave is entitled to receive a monthly payment of 500,000 won (US$483) from their employment insurance.
In addition, a new and separate entitlement to three days of paid paternity leave at the time of the birth has been introduced. This is the first time that paternity leave has been recognised in South Korea.
Proposals to increase paid parental leave in India and the Philippines
In addition to Australia, Taiwan and South Korea, parental leave has been a topic of interest in other countries throughout the region, including India, the Philippines and Singapore. In India, a proposal is currently being considered to increase employer-funded paid maternity leave from three months to six months. In the Philippines, the proposal under consideration is to double the current paid leave entitlement (which is funded by the Philippines Social Security System) of 60 days maternity leave to give women an entitlement to 120 days paid maternity leave.
Upcoming changes in Singapore
In Singapore, a raft of upcoming changes were announced in the 2008 National Day Rally speech given by Singapore’s Prime Minister. Though these key changes were initially slated to commence in 2009, community pressure has led the government to bring the commencement date forward, and the government is now aiming for an October 2008 commencement. In summary, the key changes are as follows.
Extended paid maternity leave
Maternity leave will be extended from 12 weeks to 16 weeks for married mothers with Singapore-citizen children. The additional four weeks will be treated in the same way as weeks 8–12 are currently treated (paid at the ordinary salary rate, subject to caps and reimbursable to the employer by the government). This paid maternity leave entitlement will be extended to apply beyond the fourth child. And the period of qualifying service with an employer to be eligible for paid maternity leave will be reduced from 180 days to 90 days.
New protections for pregnant employees
If an employer dismisses an employee (with or without notice) without sufficient cause, within the last six months of her pregnancy, the employer will be required to pay her maternity leave benefits. In addition, if an employer retrenches an employee within the last three months of her pregnancy, the employer will be required to pay her maternity leave benefits.
Extended paid childcare leave
All married male and female parents of Singapore-citizen children under seven years, who have at least three months service with their employer, will be entitled to six days paid childcare leave per year. This is a significant increase from the entitlement to two days paid leave, from which managerial, executive and confidential staff are currently excluded.
New unpaid infant care leave
All married male and female parents of Singapore citizen children under two years, who have at least three months service with their employer, will be entitled to an additional six days unpaid infant care leave per year.
Implications for employers
Managing a diverse workforce in the Asia-Pacific region is a challenge for multinational employers, made no less difficult by the constantly changing framework of legislative entitlements, of which parental leave is just one example. Even where legal compliance is easy, market conditions or best practice may necessitate affording employees entitlements that are more generous than the minimum. Employers should keep abreast of the changes and regularly review their policies and practices for consistency and compliance with current local laws.
This article was written by George Cooper, Practice Leader, and Celia Yuen, Senior Associate, Freehills Workplace Law & Advisory–Asia.
Endotes
1. Media release
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