Review of Minimum Annual Leave Entitlement of Seven Days under Employment Act

Sir, I thank the Member for raising this Parliamentary Question because he is quite passionate about this topic and has asked this several times before.

While the Employment Act stipulates a minimum entitlement of seven days of annual leave, this increases by one day per year of service with the same employer. In 2022, over 90% of full-time resident employees aged 25 to 64 had more than seven days of annual leave. In addition, 64.6% of full-time resident employees aged 25 to 64 had 15 days or more of annual leave, higher than the 61.1% in 2018.

Annual leave entitlements must be seen alongside other entitlements that similarly support employees in balancing their work and personal needs. These include paid public holidays, sick leave and parental leave, which we have just recently enhanced. Besides employees' needs, reviews of leave entitlements must also take into account the impact on business costs. There are no plans to review the annual leave entitlements for now, but we encourage more employers to review their employment benefits holistically to better attract and retain talent in our currently tight labour market.

Thank you, Sir. I thank Senior Minister of State for the reply. First, could I just check whether the Ministry of Manpower (MOM) is concerned that by increasing the minimum annual leave entitlement, it will result in lower productivity in the company? Because I think it might be the other way, that a more well-rested workforce will be a more productive workforce.

Second, I think three years ago, the Senior Minister of State shared in this House that the worry is that increasing annual leave entitlement would entail business costs. It has been three years, so I did give the Senior Minister of State a good break. Could he just share an update on what exactly are these business costs? And also, whether – taking into account my first point – where a more well-rested workforce will be a more productive workforce and that might actually negate some of these business costs that MOM is concerned about?

Sir, I thank the Member for his questions. The issue of giving more entitled leave and raising business costs is not something straightforward. But I think if you look at it from a very simplistic way: if more people do go on more leave, then the company's operations will require some backfilling, which may then require them to hire more extra people to backfill the persons who are on leave. So, in that more direct way, you can look at it as raising some form of business cost.

But I think when we talk about being more productive, having more leave itself is not the only way to have people getting more rest and therefore becoming more productive. Productivity can come from many ways: through better training; better redesign of the job; and better equipment, for example, for those that need to perform manual tasks.

We are looking at this from a more holistic way, by ensuring that there are avenues for other forms of work arrangements, including flexible work arrangements, and also equipping our workers with better skills and leveraging technology to be a multiplier of productivity.

So, all this will work in concert to make sure that the person or the workers themselves are able to be more productive, while also ensuring that there is a flexible arrangement to allow them to have more balance of their work needs as well as personal needs. So, we are looking at it more from multiple angles, rather than just fixing the problem with more entitled annual leave.