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Spike in wrongful dismissal claims in Singapore in Q2

SINGAPORE – There was a significant spike in wrongful dismissal claims in the second quarter of this year, in tandem with the decline in local employment during that period.

A total of 436 such claims were lodged under Section 14 of the Employment Act between April and June, compared with between 209 and 279 per quarter in the preceding four quarters, said a report on employment standards released on Thursday (Nov 19) by tripartite groups and the Ministry of Manpower (MOM).

Many of the claims were lodged by employees who were unhappy over the abrupt manner in which they were let go, due in part to restrictions in face-to-face meetings during the circuit breaker period, and “there is no evidence that more employers terminated their employees unfairly to deny them of retrenchment benefit”, said the report.

Observers have expressed concern recently about the possibility of more disguised retrenchments, where employers terminate the employment of workers through other means to avoid paying retrenchment benefits.

There were 69 claims for retrenchment benefits lodged in the second quarter, which is low, said the report by the MOM, the Tripartite Alliance for Dispute Management (TADM) and the Tripartite Alliance for Fair and Progressive Employment Practices (Tafep).

In all, 1,506 wrongful dismissal claims were lodged under the Employment Act and Child Development Co-Savings Act between April 1 last year and June 30 this year, including 75 by employees who said they had been dismissed during pregnancy.

A total of 333 dismissal claims lodged under Section 14 of the Employment Act were by managers and executives who were newly covered under the Act since April 1 last year.

This comes after changes to the Employment Act last year extended the coverage of core provisions to all employees, instead of excluding managers and executives earning above $4,500 a month.

There were another 115 dismissal appeals lodged under the Retirement and Re-employment Act and 65 lodged under the Industrial Relations Act between April 1 last year and June 30 this year. These are heard by the MOM, while claims under the Employment Act and Child Development Co-Savings Act are handled by TADM and the Employment Claims Tribunals.

For dismissal claims lodged between April 1 last year and June 30 this year, 72 per cent were concluded within two months, while the other more complex claims took between two and six months to resolve. The total payment by employers to employees from these was $1.4 million.

As economic conditions worsened over the past year in certain sectors, the incidence of salary claims among local employees has also been going up, said the report.

Salary claims include owed basic salary, overtime pay, salary-in-lieu of notice and maternity leave, for instance.

The figure rose last year to 1.53 salary claims per 1,000 employees, up from 1.43 in 2018. In the first half of this year, the incidence rose to 1.73 on an annualised basis.

Locals refer to Singaporeans and permanent residents. Basic salary and salary-in-lieu of notice were the most common items claimed.

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The incidence of salary claims among foreign employees also rose last year, to 4.98 salary claims per 1,000 employees, up from 4.45 in 2018, partly due to more group claims among foreign construction workers.

But it decreased in the first half of this year to 3.96 on an annualised basis.

With the workers quarantined at dormitories, TADM resolved salary issues that workers raised with the Forward Assurance and Support Team officers on the ground so workers did not have to lodge claims, said the report.

Of the 13,591 salary claims lodged between Jan 1 last year and June 30 this year, 90 per cent of employees fully recovered their salaries at TADM or the Employment Claims Tribunals. About half of the remaining employees recovered part of the owed salaries.

The amount recovered totals about $23 million over that period.

About 2 per cent of claims are unsuccessful because the employers refuse to pay, and these 10 to 12 employers are referred to MOM’s enforcement division.

The percentage of salary claims concluded within two months has declined from 84 per cent in 2018 to 73 per cent in the first half of this year. The report said this was partly due to an increase in the number group claims and more employers facing financial difficulties.

“(Group) claims generally take longer to resolve, as the parties need time to discuss and agree to an acceptable payment schedule. This was further exacerbated during the circuit breaker where face-to-face communication between employers and employees was limited,” said the report.

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