The commercial uncertainty caused by Covid-19 has hit businesses hard. With the exception of essential services, the Government has ordered all businesses to be suspended for one month from 7 April to 4 May 2020.
Employees, in turn, are feeling the brunt of the ongoing economic standstill. Many have had to suffer pay cuts, a reduction in working hours, or possibly even being laid off or put on no-pay leave.
If you are an employee facing changes to your employment, this article may help shed some light on what your employer can or cannot do during this difficult period.
The most pressing question by far: can my employer terminate my employment?
Yes. Your employer can terminate your employment any time as long as the termination process complies with the law (i.e. the terms of your employment contract, and/or the Employment Act).
What this means is that any termination, if carried out, must be in accordance with the terms of the termination clause in your employment contract. Your employer must either allow you to finish serving your notice period (which is usually stipulated in your contract) and pay you during this period, or if your employer wishes for you to stop work immediately, pay you your salary in lieu of the notice period.
If you do not have an employment contract or if your contract does not specify a notice period, the Employment Act provides a default notice period depending on how long you have worked at the company.
In the current climate, businesses may terminate the employment of workers because there is excess manpower (in other words, no business to justify keeping on workers). This is known as redundancy or retrenchment. The Government is trying to minimise redundancy through the Job Support Scheme. In addition, the Government has also released guidelines to ensure fair and transparent dismissal of workers during the Covid-19 period. We will explain these guidelines further below in this article.
If your employer is terminating your employment without allowing you to serve the requisite notice period or compensating you in lieu for it, you may wish to consider highlighting to your employer that it is not legal to do so. Alternatively, speak to a lawyer to further understand your rights.
Can my employer make me go on unpaid leave?
Technically, your employer cannot “force” you to go on unpaid leave. If your employer wishes to do this, they must first obtain your consent or agreement.
But if times are bad, your employer may present you with one of two options: either you take unpaid leave, or be retrenched. This is not illegal. As explained above, your employer can retrench you (i.e. terminate your employment contract) at any time provided the termination procedure complies with the law. Sometimes, this termination alternative is unspoken (employers may be hesitant to present such a harsh ultimatum), so you should be aware of the consequences that may follow if you were to reject taking unpaid leave.
If your employer offers the option of taking unpaid leave, it may mean that your employer believes that business will improve when the economy starts to do better. You should take this into consideration when deciding whether or not to agree to go on unpaid leave.
Your employer cannot request that you go on unpaid leave to serve a Stay-Home Notice (SHN) or Quarantine Order (QO). Your employer may be punished by the Ministry of Manpower (MOM) if they do so.
Can my employer cut my salary?
Yes, but only with your consent. The amount of salary you draw is an important term of your employment. Under the law, your employer is not allowed to unilaterally vary the terms of your employment contract. Therefore, in order to cut your salary, your employer must first seek your consent.
In addition, a reduction in salary should usually come with a reduction in your working hours or job scope. It is not fair for an employee to be paid less, but yet asked to work the same amount of time.
Together, a salary reduction and corresponding decrease in work hours and/or scope constitute a variation to the terms of the employment contract. This variation is best recorded in writing. Employers will usually ask affected employees to sign an addendum to the employment contract, or to acknowledge an email or letter communicating the changes.
As an employee, you can choose not to accept the variations. However, if you do not agree to a pay cut, your employer may have to let you go.
Can my employer cut my salary just because I am working from home?
No. If you are working the same amount of hours, your employer cannot reduce your pay just because you are now working from home. Any pay reduction must be the result of an agreement between employer and employee (see above). Working from home, in and of itself, is sufficient to warrant a pay cut.
Can my employer reduce my working hours?
Yes, but only with your consent. Again, this amounts to a significant change to the terms of your employment contract, and can only be implemented with your agreement.
It is rare for employment contracts to guarantee the employee a minimum number of working hours. However, if your contract has a clause to this effect, you should speak to a lawyer to further understand your rights.
Can my employer force me to clear my annual leave?
Tricky. Employment contracts will usually state how many days of annual leave you are entitled to, and that when you can go on leave is subject to the approval of your employer. However, employment contracts rarely state that an employer dictate when a worker takes annual leave.
Therefore, your employer cannot force you to consume annual leave in this period. What they can do, however, is to encourage or urge you to go on leave. You will still have to be paid when you consume annual leave, so your employer is not technically saving any money by asking you to do so. However, having staff consume annual leave in a period of slow business activity will mean that, when the economy recovers, staff can devote more time and energy to helping the business recuperate (since they will have little or no annual leave left to consume by then).
Also, bear in mind that if you are asked to take annual leave but refuse to do so, your employer may choose to optimise its manpower by implementing other options available to them, e.g. pay cuts, retrenchment etc.
If you go abroad for non-essential travel during this time (e.g. booked a holiday, but refuse to cancel it and insist on going), you may have to serve a SHN or QO either at your holiday destination and/or upon your return to Singapore. But because your trip was non-essential, MOM now allows your employer to require that you use your annual leave to serve the SHN or QO. If you do not have enough annual leave to serve the SHN or QO, MOM also allows your employer to require that you use advance annual leave (e.g. your leave allowance for the next year) to serve the SHN or QO.
Can my employer change my employment from full-time to hourly-rated?
Yes, but only with your consent. To become a part-time employee, both you and your employer are legally required to sign a new employment contract or to amend your existing contract.
Your new or amended employment contract must, among other things, state:
- Your hourly basic rate of pay;
- Your hourly gross rate of pay, with your allowances (e.g. for food, for transport, etc.) stated in detail;
- Your number of working hours per day (or per week); and
- Your number of working days per week (or per month).
I am on long-term paid sick leave or maternity leave. Can I be forced to go on unpaid leave during this period instead of staying on sick or maternity leave.
There is no clear guidance on this.
If you are on sick leave, it is likely that your employer may be able to ask that you go on unpaid leave instead, but only with your agreement.
If you are on maternity leave, it is likely that your employer may not be able to request that you take unpaid leave. In fact, your employer may be obliged to continue paying your salary during the period of your maternity leave.
I am on maternity leave. Can my employer terminate my employment?
If you have worked in this job for more than three months, no. If your employer wants you to leave, they must pay you full salary for the period of your maternity leave. Failing to do so is an offence.
Can my employer refuse to pay bonuses or refuse to increase my pay?
If your employer has already declared the bonus or the pay raise (but not paid it), your employer may not be able to now refuse to pay the bonus/raise altogether. However, your employer can delay the payment of the bonus/raise until such time the business recovers.
If your employer has not declared the bonus or pay raise, your employer is under no obligation to offer any bonus or raise. Bonuses are pay raises are discretionary; whether or not they will be offered is a decision that employers are free to make on their own accord.
Has the Government done anything to ensure that I can stay employed or that I am treated fairly during this time?
The Government has stepped up to lighten employers’ burdens. Under the Solidarity Budget announced on 6 April 2020, the Government will cover up to S$3,450 for monthly salaries paid in April 2020 to all local employees. The April 2020 payout will be the first of three, with the second and third payouts to follow in July and October 2020 respectively.
This is specifically intended to encourage employers to continue to retain and pay local employees, in order to help them keep their jobs. It also encourages employers not to put local employees on no-pay leave – or even retrench them.
There are also guidelines on the proper retrenchment of employees. On 30 March 2020, MOM, NTUC and the Singapore National Employers Federation (the Tripartite partners) updated their guideline on responsible retrenchment . Briefly, these guidelines recommend that employers should not immediately resort to retrenchment in order to cut costs. Instead, employers should:
- First, consider alternatives to retrenchment such as training, redeployment to other work areas, flexible work schedules, wage adjustments, or no-pay leave. Retrenchment should only be considered as a last resort.
- Second, if retrenchment is necessary, to carry out out fairly and based on objective criteria. The retrenchment should be communicated properly to employees, and the appropriate notice periods and benefits be given.
If necessary and appropriate, you may wish to draw your employer’s attention to these Government measures. If you suspect that you have been treated unfairly or inappropriately by your employer during this period, you may wish to reach out to a lawyer to discuss your concerns.