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International arbitration report
In this edition, we focused on the Shanghai International Economic and Trade Arbitration Commission’s (SHIAC) new arbitration rules, which take effect January 1, 2024.
Managing social risks in the workplace and building an inclusive corporate culture: key takeaways regarding Singapore’s upcoming workplace fairness legislation
Singapore | Publication | outubro 2023
Singapore has recently seen the issue of new guidelines for employers facing the additional challenges of the modern working environment such as hybrid working arrangements. The guidelines recognise that discrimination and harassment of employees can take place over online communications platforms or social media, in addition to during in-person social activities between employees such as networking events and team dinners.
Further, in recent years, there has also been a growing trend of promoting non-work related causes in the workplace, such as environmental issues, social justice concerns and championing rights for marginalized communities. Care is needed to ensure that employees are not unfairly penalized or given poor performance reviews because they have chosen not to support these causes due to their personal beliefs.
In Singapore, these social risks are addressed through guidelines published by the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP) – an independent body established by the Ministry of Manpower (MOM), the National Trades Union Congress and the Singapore National Employers Federation. While these guidelines are not legally binding, a breach of the guidelines may lead to the MOM imposing administrative penalties on an employer, such as restrictions on hiring foreign workers.
However, there is a recognition that the overall framework for workplace fairness needs to be strengthened in order to ensure that workers are adequately protected, while at the same time preserving workplace harmony and supporting business growth in Singapore. Singapore’s Workplace Fairness Legislation (WFL), which is due to be implemented in 2024, seeks to achieve these goals.
Content
- What does the upcoming Workplace Fairness Legislation (WFL) 2024 entail?
- How will WFL help Singapore businesses steer away from social risks and build a more inclusive corporate culture that embraces our multireligious and multicultural society?
- What are the likely concerns that businesses might face with increased regulatory oversight in the workplace (e.g., worries over signaling a trend towards affirmative action or increasing the risk of a litigious culture in the workplace)?
- What practical measures (like adopting a local addendum to group-wide policies) can businesses in Singapore implement to manage these social risks?
What does the upcoming Workplace Fairness Legislation (WFL) 2024 entail?
The upcoming WFL focuses on four key areas which are broadly summarised below.
1. Strengthening protections against workplace discrimination
The WFL seeks to strengthen protection against workplace discrimination by prohibiting discrimination in respect of five categories of protected characteristics: (i) age, (ii) nationality, (iii) sex, marital status, pregnancy status, caregiving responsibilities, (iv) race, religion, language, (v) disability and mental health conditions.
An employer that makes an adverse employment decision at any stage of employment because of any protected characteristic risks breaching the WFL. Such decisions can take place during the entire employment life cycle from hiring to dismissal.
The WFL will co-exist with TAFEP’s existing guidelines on workplace discrimination – the Guidelines on Fair Employment Practices – and any affected employees may continue to seek assistance from TAFEP. TAFEP will also consider ways to take stronger enforcement measures against non-cooperative employers, such as publicly naming and shaming employers in egregious cases.
2. Provisions to support business needs and national objectives
The government recognises the importance of protecting the practical needs of businesses and broader national objectives, such as caring for Singapore’s ageing population and preserving the multi-religious nature of Singapore’s society. Certain decisions by employers that are driven by practical needs or which promote these national objectives will therefore be exempt from the WFL. For example:a. employers will be allowed to consider a protected characteristic in employment decisions if it is a genuine and reasonable job requirement;
b. religious organisations will have the discretion to make employment decisions based on the religious requirements for any job role; and
c. employers will be allowed to favour persons with disabilities and seniors aged 55 years and above over other groups in hiring decisions, even if there are other equally or more qualified candidates. This recognises the need to facilitate employment opportunities for these groups of people.
3. Processes for resolving grievances and disputes while preserving workplace harmony
To preserve workplace harmony and maintain a non-litigious workplace culture, the WFL will require companies to put in place proper grievance handling processes, so that aggrieved employees and employers can attempt to resolve disputes amicably. The WFL will also require claims of workplace discrimination to undergo compulsory mediation under the Tripartite Alliance for Dispute Management, with the Employment Claims Tribunal (ECT) adjudicating such claims as a last resort.
While workplace harassment will not be regulated by the WFL, the requirement to implement a proper grievance handling process will also help facilitate the resolution of such disputes and prevent unnecessary escalation. In addition, companies will be prohibited from retaliating against employees for reporting workplace harassment, for example, by wrongfully dismissing them or depriving them of their contractual benefits.
Victims of workplace harassment can also continue to seek recourse under other laws such as the Protection from Harassment Act 2014 and the Penal Code 1871, or seek assistance from TAFEP. Where complaints are received, TAFEP will ensure that employers carry out proper, independent investigations into harassment complaints, take disciplinary action against harassers where appropriate, and implement proper harassment prevention policies and procedures to prevent future incidents.
4. Ensuring fair outcomes through redress for victims of workplace discrimination, and appropriate penalties for breaches
The WFL will provide for a range of penalties against non-compliant employers and culpable individuals including corrective orders, work pass curtailment and financial penalties. This allows penalties to be calibrated depending on the severity of the breach, and is a significant improvement over the current regime where work pass curtailment is the primary enforcement lever.
For less severe breaches, the MOM will seek to mend the employment relationship where practicable and educate employers on rectifying incorrect practices. For breaches of a more moderate severity, the MOM may impose administrative penalties of up to a few thousand dollars. For more severe breaches, MOM may bring an action against the company and the decision-maker(s) in Court and seek larger financial penalties to be imposed, and also curtail the company’s work pass privileges.
On the flipside, to guard against frivolous or vexatious claims by employees, the ECT will be empowered to strike out such claims and award costs of up to S$5,000 to be paid by the claimant to their employer.
How will WFL help Singapore businesses steer away from social risks and build a more inclusive corporate culture that embraces our multireligious and multicultural society?
Building an inclusive corporate culture is recognised as being crucial to ensure that employees feel welcome and protected in the workplace.
It is hoped that the threat of enforcement action under the WFL, and the ensuing financial and reputational risk , will incentivize employers to take action. Under the current regime, the only real recourse for victims of workplace discrimination is to approach TAFEP . TAFEP has limited powers against non-cooperative employers beyond the suspension of work pass privileges, which may not be an effective deterrent in all cases (for example, where the employer in question does not hire foreign employees).
The WFL will also seek to ensure that employees who report workplace discrimination and harassment will be protected from retaliatory actions by their employers. This provides assurance to employees that they can seek redress without fear of repercussions.
Overall, the upcoming implementation of the WFL sends a clear signal to both employees and employers that workplace fairness is a matter to be taken seriously and that unfair treatment is not to be tolerated. This will shape workplace norms and expectations moving forward.
What are the likely concerns that businesses might face with increased regulatory oversight in the workplace (e.g., worries over signaling a trend towards affirmative action or increasing the risk of a litigious culture in the workplace)?
To some businesses, the upcoming introduction of the WFL may raise concerns that employees will be encouraged to litigate against their employers if they are upset with employment decisions that go against them. Allowing employers to favour persons with disabilities and seniors when making hiring decisions may also raise concerns that there will be a trend towards affirmative action – that employers may eventually be obliged to favour certain minorities and marginalised groups when hiring, even though there may be more suitable candidates.
The WFL will contain safeguards to avoid such outcomes. To avoid unnecessary litigation, the WFL will set out a clear dispute resolution framework to filter discrimination claims through an internal grievance handling process, then mediation, and finally, adjudication by the ECT as a last resort. The focus at mediation will be on educating employers on correct practices and mending the employment relationship, rather than monetary compensation. As the WFL will signal strongly to employers that workplace discrimination is unacceptable, it is also likely that the overall number of discrimination cases will drop in the long term.
As for affirmative action, the Guidelines on Fair Employment Practices will continue to uphold principles of fair and merit-based employment. The favouring of seniors and persons with disabilities is a limited exception that must be considered in the context of Singapore’s rapidly ageing population, the particular vulnerabilities of these groups, and the benefit of having these individuals continue to contribute to the workforce. To date, there is no indication that this exception will be extended to other groups, who can be supported through other approaches such as ensuring access to education and upskilling.
What practical measures (like adopting a local addendum to group-wide policies) can businesses in Singapore implement to manage these social risks?
MNCs often adopt a consistent group-wide global policy to address key social risks. The common practice is to apply principles from other jurisdictions as it is generally open to employers to adopt standards that go above and beyond what Singapore law prescribes. In certain other countries, it may be necessary to adopt a local addenda to the group-wide policy to take into account the prevailing cultural or religious norms and attitudes.
In addition to setting policies, employers also have to take an active role in conducting regular training to educate employees and shape mindsets, as concepts of workplace fairness may be new to some employees. Key employees who are tasked with handling complaints in the workplace, such as HR leaders and senior management, should also undergo training on how to resolve workplace disputes amicably.
Importantly, businesses should implement a grievance-handling process and equip its HR managers to handle internal investigations or engage external counsel to provide guidance and advice. This will ensure that concerns regarding workplace issues are properly handled and resolved.
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