Atlas Insights: South Africa's GEPF prepares for new early withdrawal legislation, Singapore set to implement Workplace Fairness Legislation (WFL) and more
South Africa's GEPF prepares for new early withdrawal legislation
South Africa’s Government Employee Pension Fund (GEPF) is getting ready for a new law allowing early withdrawal of retirement income. The legislation, including the Revenue Laws Amendment Bill and the Pensions Fund Amendment Bill, is pending presidential approval and is set to take effect in September 2024.
Under the new system, beneficiaries’ retirement savings will be split into two components: a savings element and an invested component. The savings element, comprising one-third of beneficiary’s pensionable service, allows annual capped withdrawals, while the larger invested component remains inaccessible until retirement or death. Withdrawals from the savings component will be treated as taxable income.
The legislation has sparked debate. Critics argue that pension funds should solely support retirement, not address societal issues like the aftermath of COVID-19 or unemployment. They have warned that this could lead to long-term retirement shortfalls. Conversely, proponents believe it could curb the trend of beneficiaries resigning to access their pensions prematurely, a problem mainly seen in private sector funds.
New Workplace Fairness Legislation in Singapore
Singapore is set to implement the Workplace Fairness Legislation (WFL) in the second half of 2024, aimed at enhancing fair employment practices. This legislation will cover all employment stages, from hiring to termination, and requires employers to establish proper grievance handling processes.
The WFL will apply exclusively to employees and prospective employees. However, small firms with fewer than twenty-five workers will be exempt from its requirements, with this exemption set for review in five years.
Some of the key features of the WFL:
1. Prohibition of Workplace Discrimination:
Discrimination based on protected characteristics such as nationality, age, sex, marital status, pregnancy status, caregiving responsibilities, race, religion, language, disability, and mental health conditions is prohibited.
Applies to all employment stages, including recruitment, performance appraisal, and dismissal.
2. Job Advertisements:
Must focus on job requirements and avoid stating preferences based on protected characteristics.
3. Fair Consideration in Hiring:
Employers submitting Employment Pass and S Pass applications (work permits in Singapore) must advertise vacancies on MyCareersFuture and consider all applicants fairly, unless exempted.
4. Grievance Handling Processes:
Employers must establish clear processes for handling grievances.
Enforcement and repercussions
Violations of the WFL will be met with enforced measures based on the severity of the breach:
Low Severity: Corrective orders from the Ministry of Manpower (MOM), such as requiring firms to review hiring processes or individuals to attend corrective workshops.
Moderate Severity: Administrative penalties imposed by the MOM, potentially up to several thousand dollars, and work pass curtailment.
High Severity: Prosecution in court with the MOM seeking significant civil penalties against the firm or decision-maker.
Lesotho Updates Labour Act, 2024
Lesotho has introduced the Labour Act, 2024, which consolidates all existing labour and employment laws to provide a comprehensive framework for regulating employment relations and promoting fair labour practices. Effective from April 2, 2024, this Act replaces the Labour Code Order, 1992, and includes several significant changes aimed at aligning with global standards and enhancing employee welfare and rights.
Some of the key changes introduced by the Act:
Working Hours: The Act allows for the average of working hours per month to increase from 180 to 195 hours, which aims to provide flexibility and support economic growth. This provision has faced opposition from trade unions, however.
Leave Benefits:
Maternity Leave - Extended from 12 to 14 weeks, with seven weeks before and after the expected birth date.
Stillborn Child - Employees are entitled to three weeks of leave.
Paternity leave - 14 days. Previously this was zero.
Family responsibility leave - As advised by a medical doctor.
Bonding leave - 14 days for adopted child.
Bereavement leave - Five days for the loss of an immediate family member.
The Act aims to ensure national laws on working conditions, wages, and dispute resolution are consistent with international practices. It also aims to attract foreign investment by providing a stable and fair labour market. It aims to enhance productivity and efficiency by minimising labour disputes, strikes, and other disruptions.