Singapore

1. More restructurings

While Singapore has fared relatively better than most countries in containing the COVID-19 pandemic, Singapore’s unique position (in particular, its small population, lack of a hinterland, and a heavy reliance on global trade and tourism) means that it remains highly susceptible to regional and global forces. The global economic downturn has led the country to enter a technical recession, and this is likely to persist until the global economy recovers.

The Singapore Government has announced a slew of measures (under the Re-align Framework), which will be enacted soon to help businesses that have been significantly impacted by the pandemic. However, these measures apply to narrow categories of contracts only. And whilst the Jobs Support Scheme subsidies will continue to offer additional relief in the form of cash payments in January and April 2021, no commitment has been given around extending these subsidies beyond then.

Arising from this, it is likely that many companies will continue to face cash flow issues, and may need to restructure in order to stay afloat. This could mean hiving off unprofitable business lines and undertaking various cost-saving measures such as hiring freezes, pay cuts and retrenchment exercises. In anticipation of this, the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment was recently updated. However, it continues to warn companies that retrenchments should not be used pre-emptively, but should only be utilised as a last resort when all other measures short of retrenchments have been considered and found to be unsuitable.

Companies seeking to restructure will need to carefully consider the range of options available to them in order to chart a way forward during these tumultuous times without inviting enhanced scrutiny from the authorities.

2. Digital transformation of the workplace

It is no understatement to assert that COVID-19 has accelerated the digital transformation of the workplace. Two common threads which have emerged from the pandemic are, firstly, that work is no longer confined to the workplace and, secondly, that employees are only truly satisfied when given the flexibility to choose how and where to work. In this context, remote working has proven not only to be practical and cost-effective, but also a godsend during these turbulent times.

As more employers jump on the bandwagon, we anticipate that there will be permanent changes to the way businesses and companies are run, which will have a direct knock-on impact on an employer’s rights and obligations within the employment relationship. Firstly, increased digitalisation will necessitate enhanced data privacy and cybersecurity protections not only to ensure continued adherence to the law, but also to guard against potential hacks and data breaches at the hands of sophisticated miscreants.

Secondly, remote working is likely to create interesting legal conundrums, particularly as the law may struggle to keep pace with these developments. Take, for example, the definitions of “work” and “workplace”, which have always been defined in relation to where an employee is physically performing his duties. Such a definition, whilst flexible, is likely to create an unintended issue insofar as it envelopes the home within the statutory definition of a workplace. This gives rise to the slightly absurd possibility that an employer could be liable for the health and safety of its employees at home just because they are working from home.

Employers will therefore need to ensure that systems and processes remain adequate to handle the “new normal” of telecommuting and to ensure that they have the necessary infrastructure to meet the challenges of the digital age.

3. A focus on mental health and wellness

The Singapore Government recently published the Tripartite Advisory on Mental Well-being at Workplaces to encourage employers to better consider the mental health of employees at work and to take the necessary steps to foster a positive working environment. While the Advisory provides only non-binding recommendations at an individual, team and organisation level, this is nevertheless a watershed as it finally represents a recognition that mental health issues are real medical conditions with real consequences for people.

Such a move is a positive step in the right direction and should be lauded. Regretfully, however, we are already seeing the weaponisation of mental health, with an increasing number of employees raising allegations of emotional harm and mental distress against employers. While investigations have affirmed that some of these claims are undoubtedly legitimate, we notice a consistent and disturbing trend whereby many such allegations have arisen in more dubious circumstances (typically involving either an internal investigation concerning the employee or the imminent termination of the employment for performance reasons or misconduct).

Coupled with an increasing awareness of the Employment Claims Tribunal and its emphasis on fast and affordable dispute resolution, it is evident that some employees have realised that such allegations often make for effective and convenient schemes with which to retaliate against employers. For their part, employers who are averse to negative publicity often find themselves held to ransom, and effectively forced to settle an unmeritorious claim than to be dragged through a legal process and the court (of public opinion).
We do not anticipate that such schemes will abate, and more employees will want to have their day in court. Within the gamut of personal injury claims, psychological harm and mental distress are especially easy to assert, difficult to disprove, and no longer taboo. Employers will need to ensure that internal processes are up to scratch and that all employee-facing policies and decisions remain above reproach so as to guard against any such claims being made.

4. A shifting emphasis towards maintaining a strong Singaporean core of employees

The World Bank has constantly ranked Singapore among the top countries in the world for its ease of doing business. Such a reputation has been honed through the years by a combination of geopolitical realities (Singapore is a small country with no natural resources and no internal market) and shrewd government policies (incentivising companies to establish regional headquarters and branch offices through a mix of subsidies, tax incentives, and employment policies designed to make it easy to hire and fire employees).
This has been reinforced most recently by the introduction of the Tech.Pass, which is a new immigration visa to allow tech entrepreneurs, leaders or technical experts from around the world to come to Singapore to perform frontier and disruptive innovations. Whereas work passes have always been controlled by the Ministry of Manpower, the Tech.Pass will instead be administered by the Economic Development Board (the government agency responsible for economic growth).

In spite of these continued business friendly policies, and in line with global trends, there has been a palpable shift towards protectionism by the Singapore Government. Within the past year alone:

• the salary threshold for an Employment Pass was increased twice, with even higher thresholds for applicants within the Financial Services sector;
• the Fair Consideration Framework was amended to require employers to advertise job vacancies on MyCareersFuture (formerly the Jobs Bank) for a longer period of time, and to consider all local applicants before opening such applications to foreigners; and
• the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment was also amended, and it warns employers against undertaking retrenchment exercises that might end up weakening their Singaporean core of employees.

We do not expect the Singapore Government to swing to the extreme and exclude foreigners completely as this would be economic suicide. The Singapore Government recognises this and has shown through its policies that it continues to welcome foreigners who can grow the economy and create jobs for locals. We nevertheless expect the Singapore Government to maintain its heightened scrutiny of companies’ employment and hiring practices going forward in order to ensure that local employees are not unfairly excluded from the job market.

5. A new data privacy regime

The Personal Data Protection Act has recently undergone a slew of changes aimed at strengthening the data privacy regime in Singapore and bringing the law into alignment with global standards such as the EU’s General Data Protection Regulation. These changes are due to be enacted in early 2021 and create several new obligations for employers and other custodians of personal data, such as:

• notifying and taking remedial action in the event of a data breach;
• creating a new right of data portability;
• enhancing current rules on telemarketing and spam control; and
• increasing financial penalties for breaches of any data privacy regulations.

The new data protection law also recognises that whilst consent for the collection, use and disclosure of personal data is paramount, there are often situations where express consent simply cannot be obtained (or cannot be obtained in a timely manner). In such situations, the new act will recognise a wider scope of deemed consent and further statutory exceptions to the requirement for consent. These exceptions are designed to make it easier for organisations such as companies to collect, use and disclose personal data of employees and prospective employees without undertaking the cumbersome and time-consuming process of seeking consent beforehand.

Companies will need to familiarise themselves with the new data privacy regime and to put in place the necessary measures to ensure compliance with the new requirements, particularly in respect of data breaches. The increased financial penalties, which will allow the Personal Data Protection Commission to impose financial penalties of up to S$1 million or 10% of an organisation’s annual turnover in Singapore, whichever is higher, demonstrates the importance of the issue going forward. It is evident that, unlike the past, sanctions for non-compliance will no longer amount to slaps on the wrist.