18 April 2020
P. Sivakumar and Elizabeth Winy
The COVID-19 pandemic, as well as the various measures taken by the Singapore government to prevent the further spread of the virus in Singapore, has had a significant impact on employers and employees in Singapore.
This article aims to provide some guidance on some of the various rights and duties of employers and employees during this time, as well as the various employment-related legislation and advisories issued by the government in light of the pandemic. This article does not cover every advisory issued and you are encouraged to check here as well as the websites of the relevant ministries for advisories pertaining to your particular areas of business.
1. Employers’ Health and Safety Obligations
The COVID-19 (Temporary Measures) Act and Infectious Diseases (Measures to Prevent Spread of COVID-19) Regulations 2020 are legally binding on employers. The Infectious Diseases Act further stipulates that employers may be criminally liable, and stop or remedial orders may be issued, if an employer does not comply with the various directives that have been issued.
While the advisory notices issued by the various government bodies are in themselves recommendations and may not be legally binding on employers, non-compliance with the advisories by employers may be considered to be conduct which increases the chances of the transmission of COVID-19, which could in turn render the employer criminally liable under the Workplace Safety and Health Act and/or the Infectious Diseases Act, or otherwise liable in a civil suit claim for negligence.
Under the Workplace Safety and Health Act, occupiers of workplaces (including employers) must take reasonably practical measures to reduce the risk of workplace accidents or injury, failing which criminal liability may result. While what is reasonable may depend on factors such as number of employees, space constraints, etc., generally, if the various advisories are complied with, the chances of running afoul of the law are reduced.
Complying with the various advisories will also lessen the chances that an employer will be held negligent should an employee who contracts COVID-19 at the workplace sue the employer for negligence resulting in the infection of the employee.
Thus, it is imperative for employers to observe all the various advisories as far as reasonably possible, even after the end of the circuit breaker period from 07 April 2020 to 04 May 2020 (both dates inclusive) (the “Control Period”).
2. Payment of Workers
Employees are still entitled to receive pay for their work during the Control Period. The Ministry of Manpower (“MOM”) has issued an advisory to employers for the year ahead in light of the pandemic and the changes in business operations following the implementation of the Control Period.
In addition, employers who implement cost-saving measures during the Control Period must notify MOM online if it is registered in Singapore, has at least 10 employees, and implements cost-saving measures that result in employees’ salaries falling below 75% of gross monthly salary for local employees or 75% of basic monthly salary for foreign employees.
During this period, employers will no longer need to need to seek the approval of the Controller of Work Passes to reduce the salaries of foreign workers.
a. Implementing Pay Cuts
One way that employers might seek to cut costs during this period is by varying the pay of their workers. Generally, once an employment contract is entered into, one party cannot make changes to it unilaterally.
However, one party may make unilateral changes to a contract if the contract expressly provides for such changes to be made, e.g. a variable component of the employee’s salary that may be adjusted at the employer’s discretion.
If there are no such provisions, a variation to a contract may only be enforceable if the variation is agreed to by both parties, or where the counterparty receives consideration as a result of the variation. For example, if an employer decides to place an employee on no-pay leave, it could be argued that the employee would be getting the leave period as consideration.
b. The Jobs Support Scheme
Given the natural slowing down of business during the Control Period and the months thereafter, employers may be concerned about how to allocate salaries to their employees during this time. The Jobs Support Scheme (“JSS”) aims to support employers and encourage them to retain and continue to pay their employees. Do note that the JSS only applies towards the payment of salaries of Singapore Citizens and Permanent Residents in employment during the qualifying months.
According to an advisory released by MOM, employers will receive three pay-outs of JSS in April, July and October 2020 based on the qualifying months of salaries paid. These pay-outs are intended to support the salaries of local workers between 25% to 75% on the first $4,6000 of gross monthly salaries for local workers.
The calculations of the JSS pay-out amounts are based on the salaries already being paid to workers, and employers should note that reductions to employees’ salaries or imposition of no-pay leave between February 2020 to July 2020 will result in the 2nd and 3rd JSS pay-outs being reduced correspondingly to reflect the amount being paid to workers. More information on the computations of the pay-outs and eligibility for the JSS can be found here.
c. Payment of Local Employees
The following recommendations from MOM relate to the payment of local employees during the Control Period:
a) Local employees who are working full-time in essential services, or employees in non-essential services who are telecommuting from home, should be paid their prevailing salaries, including the employer’s contributions to CPF.
b) Local employees earning a gross monthly salary of up to $4,600 who are not working full-time but have been assigned work to complete at home, should be paid their prevailing salaries, including the employer’s contributions to CPF.
c) Local employees earning a gross monthly salary of more than $4,600 who are not working full-time but have been assigned work to complete at home, should be paid using all the enhanced JSS pay-out to provide a baseline pay to employees, including the employer’s share of the CPF contributions. On top of this, additional salary should be paid for work done on a pro rata basis.
d) Local employees who are not working full-time, and have not been assigned work by their employer, should be paid using all the enhanced JSS pay-out to provide a baseline pay to employees, including the employer’s contributions to CPF.
In the event that following these guidelines, the employee’s salary is still below his monthly salary before the Control Period, the employer should consider alternatives to make up for the loss in payment. Suggested measures to make up for the shortfall can be found here.
d. Guidelines for Payment of Foreign Employees
To assist employers to cut costs, there shall be a waiver of the March 2020 Foreign Worker Levy (“FWL”) due in April 2020. Employers are also entitled to a one-off FWL rebate of $750 for each Work Permit or S Pass holder for levies paid in 2020. This rebate is not applicable to employers of Employment Pass holders as there is no FWL payable.
Employers who do benefit from the FWL waiver and rebate will not receive the daily allowance paid to employers of foreign employees on Quarantine Orders or Stay-Home Notice going forward. Further information on eligibility for the daily allowance can be found here.
The JSS pay-outs do not apply to employees who are not Singapore Citizens or Permanent Residents. However, given the rebates in place, employers should provide salary support for foreign employees, including payment for upkeep and well-being of their more vulnerable foreign employees.
MOM’s advisory recommends the following relating to the payment of foreign employees during the Control Period:
a) Foreign employees who continue to work full-time during the Control Period should be paid their prevailing salaries;
b) For foreign employees who are not able to work during the Control Period, employers should continue to be responsible for their maintenance and upkeep and work out mutually agreed salary and leave arrangements with the unions and employees, especially for the low-wage work permit holders who may need more support.
3. Management of Manpower
It is a common concern amongst both employees and employers that the slowing down of business during the Control Period and the months thereafter may lead to an excess of manpower in companies, which can strain company resources. The Tripartite Guidelines on Managing Excess Manpower and Responsible Retrenchment strongly urges employers to only consider retrenchment as a last resort, after all other options to retain and manage excess employees have been exhausted. In addition, the payment of retrenchment benefits (e.g. if provided for in the employment contract), may pose a further financial burden on the employer.
The Employment Act requires employment contracts to be terminated by notice or salary in lieu of notice unless there is misconduct or a wilful breach of the employment contract. In addition, any employee falling under the Employment Act can challenge their termination within 1 month of said termination by lodging a claim with the Employment Claims Tribunal on the ground that there was no just cause or reason for their termination.
Alternatively, employers may consider implementing cost-saving measures to reduce unnecessary expenditure of the company. Save for the exceptions highlighted above, it is not necessary for employers to obtain prior approval from MOM before implementing cost-saving measures. However, employers must consult the employees and union (where applicable) and obtain their consent before implementation, and employees should be given the opportunity to consider these measures and voice their concerns, due to the possible implications of the cost-saving measures on the employees’ livelihoods.
The following are examples of cost-saving measures suggested by the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment:
a) Redeploy employees to alternative roles within the company, as the business requires;
b) Implement flexible work schedule, flexible work arrangements, a shorter work-week, or temporary layoffs;
c) Adjust salaries in line with tripartite norms; and
d) Implement no-pay leave as a last resort after having considered or implemented other measures.
In the event that retrenchment is inevitable, employers are expected to follow the recommendations in the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment, including the following:
a) Complying with the Mandatory Retrenchment Notifications requirement under the Employment Act (i.e. MOM and unions);
b) Selecting employees for retrenchment fairly;
c) Communicating retrenchment to employees early;
d) Offering retrenchment benefits at the prevailing norm; and
e) Providing employment facilitation to affected employees.
4. Where an Employee has Contracted COVID-19
Employees undergoing treatment for COVID-19 at a hospital will be considered as being on paid hospitalisation leave. The Singapore Government sponsors the cost of all COVID-19 treatment except where the infected individual had travelled out of the country after 27 March 2020 notwithstanding the issued travel advisories. For employees who have used up their paid hospital leave while being treated for COVID-19, employers may grant additional paid hospital leave or outpatient sick leave.
Where an infected employee was confirmed to have been in the workplace while infected with COVID-19, employers must conduct a thorough cleaning and disinfection of the workplace areas accessed by the infected employee in accordance with the Interim Guidelines for Environmental Cleaning and Disinfection of Areas Exposed to Confirmed Case(s) of COVID-19 in Non-Healthcare Premises established by the National Environment Agency. These areas are to be completely vacated and cordoned off.
All employees who had been in contact with the infected individual should self-isolate and monitor their health closely for the next fourteen days from their last exposure to the infected employee. Employers are expected to report to and work together with the Ministry of Health contact tracing officers to identify employees who may have had close contact with the infected individual.
In the case of employees who have been contact-traced to confirmed cases of COVID-19, employers are expected to allow the employee to carry out any Quarantine Orders or other orders issued by the relevant authorities. Employees issued with Quarantine Orders are expected to carry them out to completion and abide by any and all restrictions contained in the Quarantine Order. Employers are not to discourage the employee from complying with the Quarantine Order nor instruct or expect the quarantined employee to perform tasks that contravene the Quarantine Order.
Employees undergoing Quarantine Orders are to be similarly treated as being on paid hospitalisation leave. The same considerations should be given to such employees who have used up their paid hospitalisation leave by the grant of additional paid hospital leave or outpatient sick leave.
Director, BR Law Corporation
Associate, BR Law Corporation
Post date. Edit this to change the date post was posted. Does not show up on published site. 18/4/2020
The materials in these articles have been prepared for general informational purposes only and are not legal advice or a substitute for legal counsel. If you require legal advice for your particular circumstances, please consult a suitably qualified legal counsel. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. You should not rely or act upon this information without seeking professional counsel. Whilst we endeavour to ensure that the information in these articles is correct, no warranty, express or implied, is given as to its accuracy and we do not accept any liability for error or omission.
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