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The increase was observed for both local and foreign employees, due to more challenging economic conditions in 2023.
In the 2023 Employment Standards Report released on 2 August 2024, Singapore’s Ministry for Manpower (MOM) and the Tripartite Alliance for Dispute Management (TADM) revealed that employment standards remained high in 2023, with fewer employment claims and appeals compared to the pre-COVID period.
Additionally, most employment claims at TADM were resolved amicably within two months, with over 80% of disputes resolved and more than 90% of employees fully recovering their salaries and payments.
While the report also indicated an overall increase in the incidence of employment claims and appeals lodged with MOM and TADM, rising from 1.97 per 1,000 employees in 2022 to 2.53 in 2023, the rate remained lower than in the pre-COVID period (2019: 3.04 per 1,000 employees).
The increase was observed for both local and foreign employees, due to more challenging economic conditions in 2023. In particular, the increase was driven by a higher number of salary claims involving foreign employees in the construction sector.
In 2023, a total of 9,397 employment claims and appeals were lodged with MOM and TADM. Local employees filed 4,318 (46%) of these, while foreign employees filed 5,079 (54%). Most claims and appeals were for salaries (8,125) and dismissals (1,194).
Despite the higher volume of employment claims, the resolution rate at mediation remained high. More than 80% of claims were resolved at TADM, with more than 90% of employees fully recovering their salaries and payments through TADM and the Employment Claims Tribunals (ECT). Most employers who couldn't pay faced financial difficulties.
Below are some of the key highlights extracted from the report:
Incidence of employment claims and appeals increased, but remained lower than pre-COVID period
In 2023, the rate of salary claims increased to 2.19 per 1,000 employees, up from 1.68 per 1,000 in 2022, but still lower than the pre-COVID level of 2.68 per 1,000 in 2019.
Local employees
For local employees, the incidence of salary claims rose slightly to 1.32 per 1,000 in 2023, up from 1.29 in 2022. This increase was mainly due to more claims from sectors such as wholesale & retail trade, food and beverage services, and information & communications, which experienced slower economic growth in 2023.
Foreign employees
For foreign employees, the incidence of salary claims surged to 3.91 per 1,000 in 2023, compared to 2.53 in 2022. This rise was driven by more claims in the construction sector, especially from firms facing financial difficulties or liquidation.
Although the incidence of salary claims is higher for foreign employees compared to locals, it remains below the pre-COVID level of 4.98 per 1,000 foreign employees in 2019.
According to the report, in 2023, the average time it took to resolve salary arrears was one month for local employees and 2 months for foreign employees, similar to in 2022.
In 2023, the top three claim items for local employees were:
- basic salary,
- salary in lieu of notice, and
- encashment of unconsumed annual leave.
For foreign employees, the top three claim items were:
- basic salary,
- salary for overtime work, and
- salary for work done on rest days and public holidays.
The top three claim items for both local and foreign employees have remained consistent over the years. Collectively, they accounted for 81% of all salary claims lodged in 2023.
Nine in 10 salary claims were resolved at TADM
Similar to 2022, 90% of salary claims were resolved at TADM within two months. Employees and employers continued to settle employment disputes amicably, with 88% of salary claims resolved at TADM, up from 86% in 2022. The remaining 12% were referred to the ECT for adjudication.
Nine in 10 salary claims were resolved at TADM within two months
The proportion of salary claims that were concluded at TADM within 2 months in 2023 was 90%, similar to 2022.
Nine in 10 employees fully recovered their salaries with assistance from TADM and ECT
In 2023, TADM and ECT helped 94% of employees recover their full salaries, up from 93% in 2022.
Less than 1% of salary claims involved employers who deliberately failed to pay despite having the means to do so. These cases were investigated by MOM for possible Employment Act violations.
A majority of wrongful dismissal claims were resolved at TADM amicably despite a slight increase in incidence of wrongful dismissal claims.
The rate of wrongful dismissal claims rose slightly from 0.26 per 1,000 employees in 2022 to 0.32 in 2023. Despite this increase, 70% of these cases were still resolved amicably at TADM, similar to the 69% resolved at TADM in 2022. The rest were referred to ECT.
As stated in the report, a majority of the wrongful dismissal claims (79%) were resolved at TADM within two months. This is lower than the 86% in 2022, due to the increased number of cases and mismatched expectations between employees and employers.
Of the wrongful dismissal claims lodged in 2023:
- 70% of cases were resolved at TADM while the remaining 30% were referred to ECT for adjudication. This is similar to 2022, where 69% of the cases were resolved at TADM.
- In 56% of the cases that were resolved at TADM, employers were found to have fulfilled their contractual or statutory obligations or were withdrawn after mediation. The remaining 44% involved some form of settlement by the employer such as making goodwill payments, allowing employees to resign, issuing certificates of service, or clearing up miscommunications.
Most wrongful dismissal claims were concluded at TADM within two months
The proportion of wrongful dismissal claims concluded at TADM within two months was 79% in 2023, lower than 86% in 2022.
The total payment by employers to employees amounted to about $1.72mn, which is higher than 2022 due to higher volume of dismissal claims in 2023.
According to a Facebook post by Singapore National Employers Federation (SNEF), the increase was mainly due to salary claims "because of a more challenging business environment in 2023, where the Singapore economy grew by only 1.1% as compared to 3.8% in 2022."
"In addition, [the] vast majority of employers who were arrear in salary payments had genuine difficulties as only 1% were wilful employers who did not pay salaries in full.
"Nonetheless, employers should have a robust grievance handling procedure to try to resolve any employment disputes in the workplace.
"This would also help them better prepare for the upcoming Workplace Fairness Legislation," SNEF added.
READ MORE: MOM charges five Singaporeans for alleged involvement in illegal labour importation case
Lead image / MOM Facebook
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