Legal update

22 October 2015

Author: Laure de Panafieu


Legal update: Sarah Lawrence, senior legal consultant at DLA Piper in Dubai, gives an overview of legislation and case law HR professionals should be aware of

Laure de Panafieu, head of employment and incentives for Linklaters Asia, gives an overview of legislation and case law HR professionals should be aware of

Tightening of expat rules in Singapore
 
The recently introduced Fair Consideration Framework has been further amended, in a bid by the Singapore government to increase job opportunities for the local population. Against the backdrop of political elections in September, the minimum salary bar for foreigners to bring their relatives to the country was raised to S$5,000 (for spouses and children) and S$10,000 (for parents). Employers will now also be required to publish the salary range of vacancies being advertised to Singapore citizens or permanent residents on the government’s jobs bank for a 14-day window before an employment pass application can be made for the role.
 
The Ministry of Manpower has also announced that it will review and identify organisations deemed to have discriminatory HR practices, and that additional reporting requirements or appropriate sanctions may be imposed.
 
Rule changes affecting foreigners have also been introduced in Indonesia, where employers are now generally required to have at least 10 Indonesian employees for each foreign employee.
 
Claiming damages beyond notice pay
 
The court also confirmed that employees may be able to recover heads of damages beyond their contractual notice where the breach of implied term of trust and confidence gives rise to consequences beyond the employment contract’s premature termination – for example, where employees have suffered financial loss from psychiatric illnesses or impairment of future employment prospects.
 
In the Robinson case, the company had actually paid the employee four months’ pay in settlement, when his notice period was only two months. Surprisingly, the employee’s claim was limited to financial losses arising from the premature termination of his employment.
 
As such, the court applied the normal measure of damages for wrongful dismissal cases – notice pay subject to mitigation – and his appeal was dismissed. But the judgment is still significant for employers in Singapore, as it opens the door for employees to claim damages beyond notice pay where trust and confidence has been breached.
 
Paternity leave gets a boost
 
New fathers in Singapore can now receive two weeks’ leave, as part of the government’s attempts to address the falling birth rate in the city-state. The increase is voluntary at present, but applies retroactively from 1 January 2015 and is subject to government funding (capped at S$2,500 per week). The civil service is among the early adopters.
 
Hong Kong has recently introduced a statutory right to three days’ paternity leave for fathers employed on continuous contracts. During paternity leave, fathers will be entitled to receive 80 per cent of their salary, provided they have been continuously employed for 40 weeks or more, failing which leave will be unpaid.
 
Dismissing staff in Vietnam
 
The Vietnamese government has recently issued new legislation in an attempt to create a clearer avenue for companies to legally dismiss employees for underperformance – previously a difficult task.
 
While Vietnam’s 2012 Labour Code had always provided a right for employers to dismiss an employee who “repeatedly fails to perform work in accordance with the terms of the labour contract”, this was expressed in broad and vague terms and was in practice very hard to enforce.
 
Companies are now permitted to specify performance criteria in their internal labour rules, once they have obtained the trade union’s opinion. Criteria should be sufficiently measurable to enable performance to be properly assessed, and may then constitute a sufficient basis to dismiss underperformers.
 
The recent Governmental Decree indicates that those rules can be issued separately from the employer’s official internal labour rules, which require registration with the labour authority.
 
Additional material by Linklaters Singapore (Chaiyee Oh and Joel Cheang) and Hong Kong (Winnie Ng and Ben Harris), in collaboration with its alliance firms: Allens in Vietnam (Linh Bui and Mai Loan Nguyen) and Widyawan & Partners in Indonesia (Yolanda Hutapea and Ani Simanjuntak).