Applications for Employers to be Exempted from Compliance with Employment Act

Ms Sylvia Lim asked the Minister for Manpower from 2007 to 2016 (inclusive) (a) how many applications has the Commissioner for Labour received from employers to be exempted from compliance with the Employment Act under section 41A of the Act; (b) how many employers have been granted such exemptions and from which industries do they come from; (c) what obligations have been exempted and on what justifications; and (d) what proportion of those granted exemptions have had repeat approvals.

The Employment Act (EA) regulates the provision of rest days and public holidays and prescribes limits to overtime work. Different rates of pay apply for overtime, rest days and public holidays. Also, working hours, including overtime, cannot exceed 12 hours a day and, on a monthly basis, overtime cannot exceed 72 hours.

Section 41A of EA provides the flexibility for the Commissioner for Labour to exempt companies from these requirements, after considering the companies' operational needs as well as the workplace safety and interests of workers.

Overtime limit exemptions are generally granted only to companies with unexpected short-term business needs. The main exception is the security industry for which a Tripartite Committee has been working to make more and better use of technology to become more manpower-efficient.

As for exemptions related to overtime pay, rest days and public holidays, they are granted only to companies and industries with uneven and seasonal fluctuations in business demand. Such exempted companies are allowed to compute their workers' weekly working hours over a longer period to determine the eligibility for overtime pay, or to schedule their employees' rest days and public holidays in-lieu more flexibly over a longer period.

Between 2007 and 2016, about 320 employers applied for overtime limit exemptions on average annually. Of this, 270 employers were granted exemptions each year. The companies were predominantly from the security, manufacturing and transport and storage industries.

Excluding security companies, about 20% of the companies which were granted overtime limit exemptions were also exempted in the preceding year.

The Ministry of Manpower (MOM) has progressively tightened overtime limit exemptions. The maximum exemption period was shortened from two years to one year in 2012. Since then, employers who apply for repeat overtime limit exemptions are also required to submit their plans or measures implemented to reduce their reliance on these exemptions. As a result, approved overtime limit exemptions decreased by 60%, from 8,700 company-months in 2011 to 3,400 in 2016.

On exemptions related to overtime pay and flexible scheduling of rest days and public holidays in-lieu, MOM received an average of three to four applications annually in the last 10 years. About two-thirds were approved. They were predominantly from event management companies or the manufacturing and marine industries.

In conclusion, while such exemptions provide flexibility to businesses, there are safeguards in place to ensure that workers’ interests are well protected. First, employers must obtain the written consent for the exemptions from all affected workers. Second, applications from employers with previous EA infringements and poor workplace safety records will be rejected. Third, the unions must agree to the exemptions, where applicable. Lastly, for safety reasons, overtime limit exemptions are not granted for high-risk vocations, such as those which involve operations of heavy machinery.