The 25-employee threshold
Section 4(1)(a) says the Act does not apply, except for section 26, to an employer that employs fewer than the "prescribed number" of individuals. Section 4(2) sets that number at 25, or any other number the Minister notifies in the Gazette. MOM's explanation is that small firms get more time to build HR capability, and that the exemption will be reviewed in five years.
What applies at each size
| Duty | Fewer than 25 employees | 25 or more employees |
|---|---|---|
| No discriminatory decisions based on protected characteristics | Tripartite guidelines (not the Act) | Required by the Act |
| Written grievance process (section 27) | Not required by the Act | Required |
| Inform all employees of the process in writing | Not required by the Act | Required |
| No retaliation (section 28) | Not under the Act | Required |
| Fair consideration in work pass applications (section 26) | Applies | Applies |
How employees are counted
This is the open question. The Act talks about employing fewer than the prescribed number of "individuals" but does not itself say whether part-time staff, interns or staff on short contracts count, or on which date the count is taken. MOM and TAFEP are expected to publish guidance before the Act starts. Until then, the safe approach is to count every person you employ.
If you are close to 25
Growing companies cross the line without noticing. If you have around 20 staff or plan to hire, set up the grievance process now. It costs little, the Act may start while you are still growing, the threshold itself may change, and a working process protects you from claims under the tripartite guidelines anyway. It is also easier to introduce while the team is small than in the middle of a dispute.
Who else is protected
The Act protects job applicants as well as employees, because it covers hiring decisions, decisions during employment (such as pay, promotion and training) and dismissal. Religious organisations may make employment decisions based on religion, and an employer may consider a characteristic where it is a genuine requirement of the job. See the full guide for the list of protected characteristics.
Common questions
Do companies with fewer than 25 employees need a grievance process?
Not under the Act at the start. Employers with fewer than 25 employees are excluded from the Act except section 26, so the section 27 grievance duty does not apply to them. They should still follow the Tripartite Guidelines on Fair Employment Practices, and MOM will review the exemption in five years.
Do part-time staff count towards the 25?
The Act does not say. It refers to employers that employ fewer than 'the prescribed number of individuals' and leaves the detail to the Minister. Until MOM publishes guidance, plan as if every person you employ counts.
Can the 25 threshold change?
Yes. Section 4(2) sets the prescribed number at 25 or any other number the Minister notifies in the Gazette.
Are job applicants protected?
Yes. The Act covers hiring decisions as well as decisions during employment and dismissal, so an employer must not reject an applicant because of a protected characteristic.