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Singapore's employment standards improved in 2021, as salary and dismissal claims and appeals decreased

Singapore's employment standards improved in 2021, as salary and dismissal claims and appeals decreased

The overall incidence of employment claims and appeals lodged to the Ministry of Manpower and the Tripartite Alliance for Dispute Management decreased, from 2.59 per 1,000 incidences in 2020 to 1.73 in 2021.

Employment standards in Singapore improved in 2021, according to Employment Standards Report 2021, a report released by the Ministry of Manpower (MOM) and the Tripartite Alliance for Dispute Management (TADM).

The improvement was based on the "significant fall" in the overall incidence of employment claims and appeals lodged to relevant government bodies – 2.59 in 2020 to 1.73 per 1,000 incidences in 2021.

Diving into the specifics, report analysts revealed that there were 5,882 employment claims and appeals lodged with MOM and TADM in 2021. Of those, 3,784 (or 64%) were lodged by local employees, while the remaining 2,098 (or 36%) were lodged by foreign employees.

"Most of the claims and appeals consisted of salary claims (4,848) and dismissal claims (922)," it was highlighted in the report.

While the number of claims is relatively high, report analysts noted that more than nine in 10 salary claims and eight in 10 wrongful dismissal claims were concluded within two months of lodging the claim with TADM, which is "an improvement" from 2020.

Salary claims

The improvement in remuneration conflicts (i.e., decrease in claims of such nature), shared in the report, could be seen in two domains: the local employees, as well as the foreign employees. For the former, the improvement was "partly driven by a drop in salary claims in the services sector", which saw significant economic growth in 2021. As for the latter, analysts explained that there was "a sharp decline" in salary claims in the construction sector.

"This was due in part to MOM’s upstream interventions to tackle non-payment of salaries over the last two years. TADM also proactively engaged employers to ensure salaries are paid to some 24,000 foreign employees in 2021, without them later having to lodge formal salary claims," the report highlighted.

Further, it was shared in the report that TADM and the Employment Claims Tribunals (ECT) assisted 95% of the employees to recover their salaries in full in 2021, compared to 92% in 2020. In the process, MOM also suspended the work pass privileges of employers who did not fully repay their employees.

"Less than 1% of the salary claims lodged in 2021 involved wilful employers who refused to make full payment of the owed arrears, despite having the means to do so," report analysts said.

Dismissal claims

Singapore's improvement in employment standards is also a result of a decrease in the overall incidence of wrongful dismissal claims in 2021, compared to 2020.

Based on data findings, the overall incidence of wrongful dismissal claims dropped to 0.27 claims per 1,000 employees in 2021 (0.39 claims per 1,000 employees in 2020). Delving deeper, of the wrongful dismissal claims assessed by TADM, approximately a quarter (26%) were substantiated. This had TADM require the affected employers to address the claim such as by compensating the employees, clearing up any miscommunications, and/or facilitating the employee’s job search.

That said, there were 74% unsubstantiated claims in 2021, many of which had arisen from miscommunication between the employer and employee over issues such as work performance. As well, report analysts reiterated that the "affected" employers had fulfilled their contractual or statutory obligations of employment termination with notice.

Overall, more than six in 10 (62%) dismissal claims were resolved at TADM, with the remaining 38% referred to ECT for adjudication.

As for the local-foreign employee specifics, it is noteworthy that the incidence was higher for local employees (0.34 claims per 1,000 local employees), as compared to foreign employees (0.10 claims per 1,000 foreign employees).

Settling disputes

From April 2022, both employers and employees can note that settlement agreements will be allowed to be signed remotely, thereby removing any need for parties to meet in person. This is part of TADM's implementation of its online dispute resolution (ODR) portal to facilitate conversations between parties, which was initially piloted in February 2020.

Following that, by 2023, the enhanced ODR portal will make use of artificial intelligence to nudge and guide parties based on common scenarios so that they can come to a fair settlement.

On a separate note, effective 1 August 2022 (Monday), MOM will cease the cost-saving notification requirement as well as the advisory on Retrenchment Benefit Payable to Retrenched Employees as a Result of Business Difficulties. This is because there is a "sustained fall" in the number of utilisation of the two measures.

For context, the notification requirement was introduced by MOM in March 2020. Employers with more than 10 employees were told to notify the Ministry if they implement any cost-saving measures that affected employees’ monthly salaries. Regarding the advisory, it was an avenue to provide employers more flexibility on retrenchment benefit payments in view of the difficult economic conditions during the peak of COVID-19 in Singapore.

With that in mind, the National Wages Council (WSC) has urged employers not to rely on cost-saving measures as a stop-gap solution to their business challenges and to take a longer-term view of their manpower needs. Employers who need to manage excess manpower should refer to the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment for guidance.

Read alsoSNEF and MOM launch a guidebook for Singapore employers to engage older workers on career and skills development

Images / Ministry of Manpower (MOM) Singapore

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