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Singapore – Major Employment Law Changes Announced

Significant changes to the Employment Act (“EA”) were announced in Parliament in March 2018. Details of the amendments are likely to be made public later this year, and these amendments are expected to become law by 1 April 2019 (“Effective Date”).

The key major changes are:

– Senior managers and executives will be covered under the EA.
– Statutory protection against unfair dismissal will be expanded.
– Part IV of the EA on working time protections will cover more employees.

More details on these upcoming changes are set out below.

1. EA extended to cover senior managers and executives

Currently, the EA applies to:

(a) All non-managerial and non-executive employees regardless of salary (“rank & file”); and

(b) Managerial and executive employees earning up to S$4,500 per month (“junior PMEs”).

The EA amendment will remove the salary cap for managerial and executive employees, so that senior managers and executives (regardless of salary, position or the confidential nature of their jobs (“senior executives”) will be covered by the EA from the Effective Date.

Effect of amendment

This major change will result in all core employee benefits under the EA being extended to senior executives, in addition to the rank & file and junior PMEs currently covered by the EA. These core benefits include:

– Annual leave, paid sick leave / hospitalisation leave;
– Paid public holidays;
– Timely payment of salary;
– Maternity protection;
– Childcare leave;

Right to preserve existing terms and conditions in employment transfers resulting from sale of business and business restructuring; and

Statutory protection against dismissal “without just cause or excuse” (“unfair dismissal”).

In particular, the extending of annual leave to all employees is significant because this statutory entitlement is currently only available to non-managerial and non-executive employees who are earning up to a specified salary cap (“Part IV employees” – see section 3 below). The announced changes now suggest that statutory annual leave is likely to be moved out of Part IV of the EA so as to apply to all employees. It remains to be seen whether any other Part IV provisions will be extended to all employees.

2. Unfair dismissal protection expanded

The implication of extending the EA to all managers and executives also means that senior executives will be entitled to statutory protection against unfair dismissal if they meet the criteria under section 14 of the EA. This means that all managers and executives, including senior executives, will have recourse to the Employment Claims Tribunals (“ECT”) if they consider that their employment had been terminated “without just cause or excuse”.

This is another important change as currently, claims in relation to unfair dismissal are heard by the Ministry of Manpower (“MOM”). From the Effective Date, employees who seek recourse in respect of both unfair dismissal and salary-related claims will not have to submit two separate claims through the MOM and ECT respectively, and can instead bring their claims to the ECT.

In relation to unfair dismissal, it has been announced that the ECT will have jurisdiction over the following types of unfair dismissal:

– Dismissal on grounds other than poor performance, misconduct or redundancy;
– Dismissal of pregnant employees; and
– Constructive dismissal / forced resignation.

Second Manpower Minister Josephine Teo has said that the MOM will work with employers and the labour movement to produce a set of answers to frequently asked questions on what amounts to unfair dismissal.

3. Extension of Part IV protection to more non-workmen

The salary criteria for protection of non-workmen under Part IV of the EA will also be amended. Currently, Part IV applies to employees who are non-managerial and non-executive.

(a) Workmen earning up to S$4,500 per month; and

(b) Non-workmen earning up to S$2,500 per month.

The EA amendment will increase the salary cap for non-workmen to S$2,600 per month so that more non-workmen will be covered under Part IV of the EA from the Effective Date. Key Part IV protections include maximum working hours, mandatory rest days and statutory overtime pay.

Further, the salary cap for calculating overtime pay for non-workmen will be amended. Currently, the hourly basic rate of pay for non-workmen who earn S$2,250 or more per month is calculated based on a monthly salary of S$2,250 (even if the monthly salary is more than S$2,250). However, from the Effective Date, this cap will be increased to S$2,600.

What these EA amendments mean for employers

After details of the amendments are released later this year, employers should undertake a review of their employment documentation and procedures to ensure compliance with the extended statutory obligations, especially in relation to (i) senior executives; (ii) non-workmen earning between S$2,500 and S$2,600 (who are non-managerial and non-executive); and (iii) substantiating grounds for dismissal for all levels of employees.

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Christopher Ferdico joins Berry Law Firm

Continuing its rapid growth, Berry Law Firm added significant legal firepower at the end of 2017 with the addition of Christopher Ferdico. A 23-year Veteran of the Army and a seasoned trial attorney with experience at the most prestigious levels of practice in Nebraska, Mr. Ferdico joined in December 2017 as Lead Trial Attorney. Beyond providing guidance on each of the Firm’s existing practice areas, he also immediately added substantial experience to the Firm’s firearms law practice, military law, employment law, and administrative law.

During his time in the Army and National Guard, Lieutenant Colonel Ferdico was awarded both the Bronze Star and the Meritorious Service Medal, among other awards. He deployed to both Kosovo and Iraq, serving with the 101st Airborne Division during the invasion of Iraq. In 2010, he returned to Iraq as the Brigade Judge Advocate, focusing on Operational Law, Intelligence Law, Administrative Law, and Military Justice as he advised senior combat commanders.

Mr. Ferdico was the 4th new attorney addition to Berry Law Firm in 2017, adding to the vigorous growth that earned Berry Law Firm a place in the Inc. 5000 list for fastest growing businesses in 2017. As the Firm has expanded its levels of service in Omaha, it has also increased representation throughout Southeast Nebraska, including Gretna, Bellevue, Ashland, Aurora, York, and Geneva. The firm now has 6 locations in the U.S. and serves Veterans nationwide.

Mr. Ferdico adds even more areas of practice to Berry Law Firm’s already extensive arsenal. He has a breadth of litigation and appellate experience in the areas of personal injury, premises liability, products liability, and administrative law, while also having litigated a wide variety of felony and misdemeanor criminal defenses. He has been appointed as a Special Assistant Attorney General to lead a special investigative task force for the State of Nebraska, and in 2011 was awarded the President’s Professionalism Award from the Nebraska State Bar Association.

An avid defender of the 2nd Amendment, Mr. Ferdico is also well regarded in the firearms community. He is a member of the National Rifle Association and is Berry Law Firm’s representative to the National Shooting Sports Foundation (NSSF).

Mr. Ferdico received both his undergraduate and law degrees from Creighton University, and was awarded his Juris Doctor cum laude.

Contact Berry Law Firm at 402-466-8444 or via www.jsberrylaw.com

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Key 2018 legal changes every SME should know about

Employers are being urged to ensure their businesses are prepared for forthcoming legal changes before the New Year kicks in – or risk falling foul of the law.

Employment law and corporate and commercial solicitors at Kirwans law firm have issued a warning prior to a raft of new legislation taking effect next year, reminding business owners of the dangers of ignoring the legal updates.

Lindsey Knowles, employment solicitor at Kirwans said:

“We know that 2018 is going to be a key year for businesses, and it’s vital that owner/managers are prepared.

“While large companies will have their own HR and legal teams which will have been planning for these changes for many months, smaller enterprises may not have had the opportunity to prepare.

“That’s why we’re calling for business owners to take stock now, and ensure that they’re well-equipped to deal with the new legislation and regulations that 2018 will bring.”

Here, Lindsey and her colleague, corporate and commercial solicitor James Pressley, run through the key changes expected in 2018.

Publication of gender pay reports

Under the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, all private and voluntary sector employers in England, Wales and Scotland with at least 250 employees will be required to publish information about the differences in pay between men and women in their workforce by April 4, 2018. The information shared will be based on a pay bill ‘snapshot’ date of April 5, 2017.

It is believed that the Equality and Human Rights Commission could investigate employers who fail to publish the data.

The Government Equalities Office and ACAS have produced joint guidance on pay gap reporting and the Gender Pay Gap reporting website can be found here – www.gov.uk/report-gender-pay-gap-data

Changes in the Tax Treatment of Termination Payments

Under existing rules, the first £30,000 of a genuine termination payment for loss of employment can be paid free of income tax, with the balance being subject to income tax but free of employer and employee NICs.

From April 2018, a termination payment that falls within the income tax exemption will, after it hits the £30,000 limit, be liable for both income tax and employer NICs. There will, however, continue to be an unlimited employee NICs exemption for payments relating directly to the termination of employment.

All payments in lieu of notice (PILONs) will also be subject to income tax and employer and employee NICs from April 2018. The new rules will apply whether the payment is contractual or whether it is made on a purely compensatory basis due to an employer’s failure to serve proper notice.

The changes mean that any payments which would have been treated as earnings if the employee had worked their notice period, including other salary-related payments, benefits and expected bonuses, will also be subject to income tax and employer and employee NICs.

In addition, payments on termination for ‘injury to feelings’ in relation to death, disability or injury will, from next April, no longer be eligible for exemption from tax and NICs. The exemption will only apply where there is an injury or disability of a physical or psychological nature that is sufficient to cause the employee to be unable to perform his or her job properly.

A payment made for injury to feelings for discriminatory acts which take place prior to termination of employment remains outside these reforms and can continue to be paid free of income tax and NICs.

Restriction of employment allowance for illegal workers

Since April 2014, businesses have been able to claim a reduction of up to £3,000 a year on their employers’ NICs. From April 2018, however, employers will be excluded from claiming the allowance for one year if they have:

• Employed a worker who was subject to immigration control;
• Been penalised by the Home Office;
• Have exhausted all appeal rights against the penalty.

Tax- Free Childcare

Tax-Free Childcare was introduced on April 21 2017, and has been gradually rolled out this year, with parents of children aged under four (as of August 31 2017), and parents of disabled children aged under 17 able to enter the scheme first. The scheme is also available to eligible parents of all children under the age of 12.

Tax-Free Childcare doesn’t rely on employers offering the scheme, unlike the current scheme Employer-Supported Childcare, and any working family can use Tax-Free Childcare, provided they meet the eligibility requirements.

However, employees are not required to switch to Tax-Free Childcare if they don’t wish to. Employer-Supported Childcare will continue to accept new entrants until April 2018, and parents registered by this date can continue to order vouchers beyond 2018 for as long as their employer continues to run the scheme or until their child is 15-years-old, or 16 if disabled – whichever is sooner.

Changes to the National Living Wage

The recommendations of the Low Pay Commission have been accepted by the Government, which means that from April 2018 the National Living Wage will increase from £7.50 to £7.83 per hour. The National Minimum Wage, which applies at varying rates to employees aged under 25, will also rise as follows:

• Age 21 to 24 – from £7.05 to £7.38 per hour
• Age 18 to 20 – from £5.60 to £5.90 per hour
• Age 16 to 17 – from £4.05 to £4.20 per hour
• Apprentice rate – from £3.50 to £3.70 per hour

General Data Protection Regulation (GDPR)

The GDPR is an EU law which applies to the UK from May 25, 2018, and even though the UK is leaving the EU, the regulation will still be implemented.

The GDPR will supersede current legislation to protect people’s personal information, introducing tougher fines for non-compliance, and giving people more control over how companies use their data.

GDPR will provide individuals with easier access to their own data, as well as a right to know when high risk personal information has been hacked, such as information about health, religious belief or genetic data. It will also mean that people have a right to be forgotten.

The new rules will mean that, rather than simply ticking a box to opt out of receiving marketing information, individuals will have to give explicit consent for their data to be processed. This can be seen in the cases of website visitors being asked to check a box agreeing with a specific statement such as ‘I DO want to receive marketing information’ or, ‘I DO NOT want to receive marketing information’.

Data controllers must then keep a record of how and when that consent was given. The individual can also withdraw that consent at any point.

The new regulations mean that any business that has been running a soft opt-in system will be unable to use that database of customers from May 25, 2018.

Penalties for failure to comply, or for breach of regulations will be tough, with the amount of fines being handed down reaching as high as 4% of turnover, or €20 million, whichever is greater.

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Deloitte makes long-awaited assault on legal market

Big four accountancy firm Deloitte today confirmed it will join its fellow heavyweights with a move into legal services. The firm has previously rejected the option of expanding into the UK legal sector but has now announced plans to branch out.

As an alternative business structure, Deloitte will provide managed services such as automated document review and contract management, and will provide consulting services to help in-house legal departments to exploit new technology.

Deloitte will also extend its existing legal services in employment law, tax litigation and immigration.

Matt Ellis, managing partner for tax and legal at Deloitte, said the aim is not to replicate a traditional legal practice but instead to initiate a different approach.

‘We’re planning to use our technology and advisory skills to transform legal services and help address many of the challenges lawyers, whether in practice or in-house, are facing in today’s increasingly complex legal environment,’ said Ellis. ‘By automating repetitive processes and completing routine tasks in a fraction of the time, lawyers will be able to spend more time on specialist areas.’

New services will be on offer early this year and Deloitte will apply for an alternative business structure licence. The company says it is ‘investing in new staff’ but has not given a figure for how many lawyers will be recruited.

Deloitte Global will start a complementary legal management consulting business in 10 countries, comprising a team of more than 100 professionals.

The company’s 2016 survey of in-house legal departments found that 62% of legal counsel, general counsel and business leaders wanted to significantly review and transform the way in which their legal function operated.

Deloitte joins fellow big four competitors in trying to tap into the legal services market and potentially replace traditional law firms. PwC legal services has 17 partners, 31 directors and a 350-strong team in total, based in London, Belfast, Birmingham, Leeds and Manchester, with plans confirmed last year for further growth. KPMG and EY have also expanded into the legal market through alternative business structures.