In this issue, we will be highlighting some of the key legislative changes relating to the Work Injury Compensation Act, Telecommunication Act, Income Tax Act, as well as new regulations for pay TV agreements, rules for revenue accounting, and URA building guidelines.
Amendments to Work Injury Compensation Act
Amendments to the Work Injury Compensation Act have been approved by Parliament and will take effect from June 2012. The amendments aim to strike a fair balance between compensation for injured employees and the obligations placed on employers/insurers, as well as ensure that the Work Injury Compensation Act framework remains expeditious such that employees are able to receive compensation promptly. They also reflect the increase in cost of healthcare and rising median income. Other changes include expansion in scope of compensable occupational diseases and restriction in scope of compensation for work-related fights.
Amendments to Telecommunications Act
Parliament has passed several amendments to Telecommunications Act. The measures are primarily aimed at eliminating barriers to competition, particularly in markets where one operator controls the network infrastructures as well as participates in retail services. The amendments will accord the Infocomm Development Authority (IDA) further powers to regulate the sector. These include allowing IDA to impose higher penalties, and to suspend or cancel a license if penalties are not paid on time. The Minister for Information, Communication and Arts is also given powers to allow transfer of assets or business of a telco to a separate entity or a takeover by a third party in cases of public emergency. The amendments will also clarify the rights of a telecommunications licensee.
New regulations for pay TV agreements
The Media Development Authority (MDA) has recently released the guidelines to its Media Market Conduct Code (MMCC), aimed at protecting pay TV subscribers from excessively long contracts. Key regulations under the MMCC include a twoyear limit on contract term and a limit on early-termination penalties for contracts that are longer than three months. Pay TV operators will also be required to inform subscribers of charges on sale or renewal of contract. The guidelines will take effect from 1 March 2012.
New rules proposed for revenue accounting
The UK's International Accounting Standards Board (IASB) and US Financial Accounting Standards Board (FASB) have issued amended proposals targeted at creating a revenue recognition model that integrates the International Financial Reporting Standards (IFRS) and US Generally Accepted Accounting Principles. The underlying principle for the proposals is that a company should record revenue for provision of goods or services to a customer to reflect the payment it expects to receive in return. The new rules are more likely to affect companies offering multiple goods and services under single contracts or long-term service contracts.
URA launches new building guidelines
The Urban Redevelopment Authority (URA) has given effect guidelines on the maximum number of dwelling units (DU) for non-landed residential estates and a minimum land plot requirement of 1,000 sq m for flat developments throughout the country. However, the guidelines will only apply to new applications or those submitted after 24 November, and are meant to create communal facilities and enhance landscaping by widening the spaces between buildings. For existing flats and landed housing developments, the aggregate land area of residual plots should also comply with the minimum plot size.
Income Tax (Amendment) Bill 2011 introduced to implement Budget 2011 changes
- The Income Tax (Amendment) Bill 2011 was read the first time in Parliament on 17 October 2011.
- Some of the key Budget 2011 changes highlighted are:
- the enhancement of the Productivity and Innovation Credit Scheme;
- a one-off corporate income tax rebate of 20%, or one-off cash grant to small and medium-sized companies based on 5% of the company's revenue for YA 2011;
- the introduction of the foreign tax credit pooling system;
- the introduction of the new Maritime Sector Initiative; and
- 250% deduction on qualifying donations extended till 2015.
Lack of Quorum at Directors Meeting a Substantive Irregularity
In Chang Benety v Tang Kin Fei and others, the Respondents had breached the company's articles of association for proceeding with meetings in absence of a quorum, to investigate complaints against the Appellants. (The Appellants and Respondents were all directors of the company.)
The Court of Appeal overturned the trial judge's decision and held that the absence of a quorum here was not merely a procedural irregularity because it resulted in substantive injustice. What constitutes substantial injustice depends on
- whether there is a direct link between the procedural irregularity and injustice suffered,
- whether the injustice is real of substantial,
- whether there could have been a different result if not for the procedural irregularity.
On the face of it, there will be a substantive injustice for parties in a deadlock when the quorum requirement is breached. The Court of Appeal emphasized that regard must be given to the nature of resolution passed and the Appellants were placed in a disadvantageous position as a result of the resolution.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.