How did COVID change employment law?

Many aspects of HR practice have been plunged into legal grey areas

How did COVID change employment law?

Labour laws in Singapore have hardly changed since the outbreak of COVID-19, according to one leading lawyer. However, that doesn’t mean that companies are in ‘business as usual’ mode when it comes to managing the employee experience. “We have had no new employment laws,” says Goh Seow Hui, partner at Bird & Bird ATMD. “However, the way we work [and] the way HR practices are organised are undeniably different. I think a more accurate way of putting it would be that because of COVID we’re finding new and different ways to deal with age-old issues.” 

Let’s say, for instance, there’s a case of misconduct at work. Before deciding to take any disciplinary action against an accused worker, the Ministry of Manpower (MOM), Singapore’s authority on labour-related laws and policies, states that employers must conduct a thorough investigation and clearly prove that misconduct has taken place. Only then can they exercise their legal right to terminate, demote or suspend the employee. That being said, with remote work being the norm now, things are no longer so straightforward. 

“You decide to investigate misconduct, but then employees are not in the office – they may not even be in Singapore,” Goh told HRD. “Trying to do all of that remotely and getting all your facts right can be a challenge. HR now has to find a new way, a remote way, of dealing with the things they’ve always had to deal with. I think that is the change.” 

 As well as navigating the murky waters of COVID-19, employers had to keep up with constantly changing rules as the pandemic progressed. Guidelines from MOM and its tripartite partners were frequently updated to reflect the situation on the ground, and that included the spread of the virus as well as the economic fallout. It’s no wonder, then, that phones at employment law firms were ringing off the hook with constant queries about what could and couldn’t be done during the crisis. 

Whether their litigation services actually went into play was another thing, but lawyers had to be on hand to dole out accurate and relevant advice by the minute. Legal firms that were quick on their feet and were able to relate to employers’ evolving challenges were therefore highly rated in HRD’s inaugural 5-Star Employment Law Firms list. Business leaders appreci-ated that lawyers helped them mitigate legal risks as they figured out how to retain a semblance of normalcy for employees following the overnight transition into a virtual nightmare. 

COVID-19 and employee rights 

It goes without saying, then, that since organisations transitioned into a fully remote or hybrid way of working, many aspects of HR practice were plunged into legal grey areas. Investigating misconduct may not be as common an experience for business leaders, but terminations, retrenchments, hiring and onboarding are. When you’re forced to carry out those tasks through a screen, the lack of human touch isn’t only cold and jarring, it can lead to misunder-standings that may result in a spurned employee. And if they don’t go straight to MOM to file a complaint against you, they can do something much more destructive – use social media as a modern-day megaphone to call you out on your behaviour. It doesn’t take long for these cases to go viral and, once they do, MOM or TAFEP (the Tripartite Alliance for Fair and Progressive Employment Practices) may just come knocking on your door. 

Some employers, advisably, decided to play it safe by contacting their lawyers before exercising their legal right to implement cost-cutting measures like pay cuts or terminating staff

“During the peak of COVID-19 and lockdown, I’d say almost every couple of hours we’d get a new query from employers on whether they could reduce salary without consent and by how much they could reduce it by,” says Thomas Choo, partner at Clyde & Co Clasis Singapore. “They asked, ‘Can we furlough this employee? Can we put them on unpaid leave? Can we change permanent staff to a contract term? Can we not pay retrenchment benefits?’ So [top queries were] everything around cost-cutting, retrenchments, or looking towards termination rights.” 

Sometimes the queries required less legal expertise but were nonetheless important in mitigating risks to the employer, Goh explains. At Bird & Bird, the most common enquiry received at the start of the ‘circuit breaker’ was around navigating pay cuts. In anticipation of cash flow issues or a business shutdown, business leaders approached Goh’s team to find out how to manage pay cuts in a way that presented the least risk to their companies. 

Later in the year, when businesses resorted to retrenchments to keep their operations running, Goh found herself becoming more of a communications consultant. 

“When retrenchments were a big topic for us, we found that most employers generally wanted to work out reasonable severance packages,” she says. “And we worked with them on the communications to explain to employees why [there were layoffs]. Because sometimes it’s not so straightforward. If the whole company is shutting down, it’s easy to say that ‘you’ve been let go’, but if the business is continuing and only certain people have been singled out for retrenchment, communicating that piece of bad news requires thought and  

Legal implications of remote work 

While issues like cost-cutting and retrenchments are likely to be a temporary issue for most companies, remote work isn’t. Choo believes that the working arrangement can lead to a “huge number of legal implications”. 

“The question would then become whether the arrangement is actually abroad or domestic,” he tells HRD. “What are the rights of the employee? Are the employee benefits actually based on where the company is located or where the employees are physically working from?” 

Besides managing the complicated issue of an employee’s legal rights, there’s also the risk of breach of confidentiality. Many business leaders have said that varied local legalities, in addition to tax concerns, are likely to shut down any thoughts of hiring a remote worker who’s permanently based overseas. That aside, confidentiality may remain a concern even when an employee is based locally. This is likely why some large corporations involved their lawyers when they drew up formal work-from-home policies. 

“In the past, policies were just a paragraph or two covering [things like] you being able to work from home, what you can take from the office to your home, and the number of hours you’ll be working. Where the legal side comes in has more to do with linking back with the employee handbook,” Choo says. 

“What happens if there’s a breach of confidentiality, for example – a huge topic nowadays. Can you share laptops? These are things that sometimes HR or leadership don’t really pick up from the outset. Lawyers are roped in to prepare for these scenarios and how to address a situation if there’s a breach. Is it a miscon-duct? We’ll link it together with the employee agreement and employee handbooks.” 

All in all, when asked to share the best legal advice for employers to avoid trouble in the evolving ‘normal’, the two lawyers agree that leaders simply have to be more human.

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