More Salary Claims And Spike In Dismissal Claims In Singapore: 2019/2020 Employment Standards

Released on 19 November 2020, the 2019/2020 Employment Standard Report details Singapore’s tripartite efforts in helping both employers and employees solve disputes and improve employment practices.

The report was released by the Ministry of Manpower (MOM), Tripartite Alliance for Dispute Management (TADM) and Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP). Tripartite partners include the government (MOM), unions (NTUC) and employers (SNEF).

Read Also: Guide To Understanding The Role Of Singapore National Employers’ Federation (SNEF) And Singapore Business Federation (SBF)

Here are 5 takeaways that both employers and employees in Singapore should take note of.

#1 Salary Claims From Local Employees Rose In 2019 And 1st Half 2020

Salary-related disputes have been on the rise since 2018. There were 1.43 salary claims per 1,000 employees in 2018, 1.53 salary claims per 1,000 employees in 2019, and 1.73 salary claims per 1,000 employees in the 1st half of 2020. 

This is counted in terms of 1,000 employees to better compare against how foreign employees were affected, which we cover in the second point.

#2 Type Of Salary Disputes: Basic Salary, Salary-In-Lieu Of Notice; Overtime Salary And For Work On Rest Days And Public Holidays

While majority of the disputes were over basic salary, other major disputes included salary-in-lieu of notice, salary for overtime work and salary for work on rest days and public holidays. 

There were about 3,700 salary-related claims by local employees in 2018. This jumped to 4,300 claims in 2019. In the 1st half of 2020, exacerbated by COVID-19-led economic disruption, there were already over 2,200 claims – more than half of 2019’s numbers.* This higher figure is in spite of the heavy salary subsidies provided by the government for local employees’ salaries till today.

* As 2020 figures were annualised fair to assume that the number of claims were half of the annualised figure. Claim items in the report’s chart are not exhaustive, hence we rounded up figure as an estimate.

Read Also: Should You Allow Employees To Encash Their Remaining Annual Leave This Year?

#3 Foreign Employees Were Much More Affected In Making Salary Claims

Foreign employees may be at higher risk of being affected by salary-related disputes with employers. The report highlighted that foreign employee salary claims increase from 4.45 claims per 1,000 foreign employees in 2018 to 4.98 claims per 1,000 foreign employees in 2019.

In 2020, the figure came down to 3.96 claims per 1,000 foreign employees. However, the report also mentioned that this was due to groups of workers being quarantined in dormitories, and there was a proactive approach to resolve salary issues without requiring workers to come forward. This was likely a much-needed step to prevent such workers from being further marginalised while already being restricted within the cauldrons of Singapore’s biggest COVID-19 clusters.

As construction work was halted, in circuit breaker, and have only been allowed to gradually restart till today, ensuring workers in dormitories continued getting paid was crucial. MOM kept tighter tabs on salary payments by requiring employers with workers residing in dormitories to pay their salaries electronically since April 2020. 

MOM also expanded a pilot for salary payment declaration to all employers in the construction sector to submit monthly declarations on the status of salary payments to their foreign employees.

The combination of these measures likely helped pull down claims while also serving to keep the situation in the dormitories calm while fighting COVID-19 clusters.

#4 1,506 Dismissal Claims From 1 April 2019 To 30 June 2020

The number of wrongful dismissal claims spiked in the 2nd quarter 2020 – in line with decline in local employment which has raised citizen unemployment to 4.9%. According to the report, many of the claims were related to the abrupt manner of termination rather than employer’s failure to fulfil contractual obligations.

Read Also: MOM Responsible Retrechments – Guideline For Companies To Be Fair And Decent

While there were 1,506 dismissal claims lodged in the period from 1 April 2019 to 30 June 2020, 333 claims were for the period before 1 April 2019. This is because the Employment Act extended coverage – for managers and executives – for wrongful dismissals which only came into force on 1 April 2019.

Read Also: Singapore Employment Act: 10 Statutory Requirements To Pay Employees

20% of the disputes lodged under Section 14 of the Employment Act were privately settled or were withdrawn by the claimants. About 20% of the remaining wrongful dismissal claims were assessed to be substantiated. Typically, employers were not able to show that unsatisfactory performance had documented and/or communicated to the employee under the Tripartite Guidelines on Wrongful Dismissal.

60% of the substantiated cases were resolved amicably, while the rest were referred to the Employment Claims Tribunal (ECT).

60% of the unsubstantiated cases were also resolved at TADM, while the remaining 40% were referred to the ECT.

#5 Claims Were Concluded Quite Quickly

On a positive note, claims concluded relatively quickly – with the Tripartite Alliance for Dispute Management (TADM).

85% of salary claims were resolved with mediation at TADM, without having to be referred to the Employment Claims Tribunal (ECT). All claims at TADM were also resolved with 6 months, with 73% of claims resolved within 2 months.

Of those who lodged salary claims from 1 January 2019 to 30 June 2020, 90% successfully recovered their salaries fully at TADM or the ECT. 5% partially recovered their salaries. Total recovered sum amounted to $23 million.

72% of dismissal claims concluded within 2 months. The remaining 28% of claims were concluded within 2 to 6 months. The total payment by employers to employees who made dismissal claims amounted to $1.4 million.

Proactive Approach By MOM As Singapore Grappled With COVID-19

In addition to its approach in managing employement practices for those with foreign workers in dormitories, MOM also carried out more than 7,300 proactive inspections of workplaces to ensure some 52,400 employees received their salaries promptly and for overtime and work on public holidays or rest days.

Employers who did not breach employment laws wilfully and were non-compliant because they overlooked requirements to keep proper work hour records, were required by MOM to attend corrective clinics on the Employment Act to better understand their obligations and improve. Over 90% of such employers did not have salary claims lodged after attending.

MOM also introduced a new requirement in March 2020 for employers with 10 or more employees to notify them on cost-saving measures affecting monthly employee salaries. MOM received notifications from about 5,000 employers affecting 250,000 employees. About 900 employers with 52,000 affected employees were deemed to be implementing excessive wage cuts based on the tripartite advisories. 330 agreed to review measures while the rest were able to justify the cuts.

One of the key takeaways from the report is that while many disputes were eventually resolved without enforcement measures, MOM found that poor communications and failure to explain cost savings measures resulted in misunderstandings in the first place.

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