April 1, 2015
The employment landscape in Singapore is never static and Singapore employment laws are periodically reviewed to keep up to date with changes in the broader landscape. In line with the increase in the number of executives in the Singapore workforce in recent years, employment laws have been updated to provide better protection for executives. For example, the Employment Act was amended with effect from April 2014 to offer more comprehensive protection to managers and executives (those earning basic monthly salaries of up to S$4500 a month).
In the area of industrial relations, significant changes to the Industrial Relations Act (IRA) came into effect on 1 April 2015. The changes to the IRA will allow rank-and-file trade unions to collectively represent executives over most industrial matters (with the exceptions being matters such as promotions of employees, intra-organisational transfers that are not detrimental to the employment terms, terminations for redundancy, and dismissals/reinstatements under certain circumstances). This represents a step forward for executive rights in Singapore, as they presently only enjoy individual representation (and not as a class) by rank-and-file trade unions for a limited number of matters relating to:-
Quantum of retrenchment benefits;
Disputes arising from breach of employment contract;
Victimisation for participation in union activities; and
Dismissal without just cause or excuse.
In addition to the new room for collective representation, the scope of individual representation for executives by trade unions will also be expanded to include disputes relating to re-employment under the Retirement and Re-employment Act.
Representation of executives
Since there are a variety of ways in which executives may be represented by trade unions, employers and trade unions are encouraged to work together openly to seek a suitable arrangement. For example, employers and trade unions may draw up memoranda of understanding (MOU) on classes of executives that can be represented by the trade unions (both for individual representation and/or collective representation). In addition, employers and trade unions may mutually agree on eligibility for representation based on the employees’ salaries and the proportion of executives within the employing company.
To prevent situations of conflict or ineffective management, certain categories of executives are restricted from being represented by a trade union. Such categories of executives include those who:-
are in senior management or those who control or supervise major business operations, are accountable for operational performance, plan business policies and strategies and provide leadership to other employees;
have decision-making powers on any industrial matter including employment, termination of employment, promotion, transfer, reward or discipline of other employees;
represent the employer in industrial negotiations with the trade union;
have access to confidential information relating to budget, finances, industrial relations or salaries and personal records of other employees; or
are in a role that would result in a conflict of interest if they are represented by a trade union.
Considerations for employers
Unlike individual representation by a trade union which is an automatic right for executives, a trade union that intends to collectively represent executives would first have to seek recognition from the employer before a collective agreement can be negotiated with the employer. If a collective agreement for executives is to be negotiated and signed, employers should be aware of the potential implications of having an additional set of employment terms and conditions apply to the employment relationship.
For example it is common to find express retrenchment benefits in collective agreements. If such express retrenchment benefits are to be included in executive collective agreements too, employers must be prepared to negotiate with trade unions to prevent an excessive liability to pay retrenchment benefits. Provisions relating to grievance procedures, long-term illness leave and annual wage supplements are also examples of provisions commonly found in collective agreements and it will be interesting to see if these end up in collective agreements for executives too.
Thus, if they have not already done so, employers should prepare themselves for a trade union seeking recognition for collective representation of its executive employees, especially in a case where the employer has many eligible executives who would likely qualify for collective representation and who may find membership in that particular trade union attractive. Employers should also be prepared to negotiate the terms of a collective agreement for executives if necessary, and to also engage early with trade unions if they wish to draw up various MOU to decide which categories of executives may be represented by trade unions.