Singapore saw an overall drop in employment claims and appeals in 2020, despite pandemic challenges posed

A drop in the number of salary claims was also observed, at 2.15 claims per 1,000 employees (2019: 2.68), MOM and TADM's Employment Standards Report 2020 revealed today.

Singapore recorded a drop in the number of salary claims in 2020, at 2.15 claims per 1,000 employees, down from 2.68 in 2019, it was announced today (Friday, 9 July 2021).

In the latest Employment Standards Report 2020, jointly released by the Ministry of Manpower (MOM) and the Tripartite Alliance for Dispute Management (TADM), it was also noted that overall, despite COVID-19 posing increased manpower challenges last year, the overall incidence of employment claims and appeals lodged with both MOM and TADM still fell from 3.04 in 2019 to 2.59 per 1,000 employees in 2020.

A breakdown of data presented in the report - focusing on salary claims, wrongful dismissal claims, and early intervention efforts is shared below.

Slight increase in salary claims among local employees, especially in pandemic-affected sectors

Among local employees, the incidence of salary claims crept up to 1.61 per 1,000 local employees in 2020, from 1.53 per 1,000 local employees in 2019.

According to the report, the incidence was higher in industries such as accommodation & food services activities, information & communications, and construction, some of which were severely impacted by the Circuit Breaker and movement restrictions in 2020.

On the other hand, the incidence of salary claims among foreign employees fell to 3.47 per 1,000 foreign employees (2019: 4.98 per 1,000 foreign employees) but remained higher than that of local employees. For this, the industries with the highest incidence of salary claims were arts, entertainment & recreation, accommodation & food services activities, and construction.

The report noted that "one important reason for the improvement is MOM’s enhanced measures to detect and arrest salary issues among foreign employees since the onset of the COVID-19 pandemic".

Apart from the above, the median duration of salary arrears claimed by foreign employees also saw a drop to 2.3 months (2019: 3.4 months), an indication that foreign employees were reporting their salary claims earlier, although it remained higher compared to local employees (2020: 1.1 months).

Top four claims items lodged

Among local employees, claims on basic salary made up the highest proportion of claims lodged (67%), albeit a little lower than the year before (70%) and in 2018 (69%).

This was followed by salary-in-lieu of notice which remained the same through 2019 and 2020 (29%), but increased from 2018 (25%); encashment of unconsumed annual leave which increased slightly in 2020 (18% vs 2019's 16% and 2019's 14%). 

Such claims, the report stated, arose due to disagreements on whether leave had been taken during the Circuit Breaker for the purpose of encashment and what were the salaries payable during the period of business disruption.

Taking reference from the Advisory on Salary and Leave Arrangements issued by the tripartite partners, TADM guided employees and employers towards fair settlement given that both parties were experiencing hardships brought about by COVID-19.

Meanwhile, claims on salary for overtime work saw a drop to 8% in 2020, from 11% in 2019 and 15% in 2018. 

The results differed for foreign employees, with the top four as follows:

• Basic salary claims: 86% in 2020, down from 93% in 2019 and 90% in 2018.
• Salary for overtime work: Dropped to 44% in 2020, from 67% in 2019 and 66% in 2018.
• Salary for work done on rest day and public holiday: 28% in 2020, lower than 46% in 2019 and 41% in 2018.
• Salary-in-lieu notice: Increased to 13% in 2020, fro 6% in 2019 and 7% in 2018.

Claims for overtime payment have consistently been among the top claim items, particularly among foreign employees, which often arise due to employers’ failure to maintain proper work hour records or computational errors on the overtime rates payable.

Per the report, the reduction in the proportion of such claims in 2020 is due to less overtime work being performed in 2020, and MOM’s initiatives to address this problem.

About 8 in 10 claims were concluded within two months at TADM

Of the above, 84% were resolved at TADM, with the remaining 16% referred to the Employment Claims Tribunals (ECT) for adjudication.

This is slightly lower than the 87% figure in 2019, "as mediated settlements were more challenging to arrive at due to more employers facing financial difficulties."

Among all salary claims, 76% were concluded at TADM within two months, while the remaining complex claims were generally concluded between two and six months.

The proportion of salary claims concluded within two months decreased in 2020 partly due to the weak economic climate which made it more difficult for parties to agree on the payment terms, the report noted.

Last, of the salary claims lodged in 2020, 92% of the employees fully recovered their salaries at TADM and ECT, based on the amount agreed between parties involved in the dispute or the amount ordered by ECT. Of the remaining 8% of employees:

• Five percentage points (pp) recovered their salaries partially. Most of these claims involved employers who were unable to make full payment for their workers’ owed salaries due to financial difficulties. MOM and TADM helped the affected workers recover part of their salary arrears through other means such as by negotiating for settlement payments from security bond insurers or main contractors, or helping lower-wage employees secure financial assistance through the Short-Term Relief Fund (STRF) or Migrant Workers’ Assistance Fund (MWAF).
• The remaining employees did not recover any salaries and were mainly higher-income earners who did not qualify for financial relief through the STRF or MWAF.

MOM had suspended the work pass privileges of all employers who did not fully repay their employees; and the total recovered sum to employees amounted to about S$15mn.

Number of wrongful dismissal claims stabilised in H2 2020

In further updates, the report highlighted that the overall incidence of wrongful dismissal claims remained low at 0.39 claims per 1,000 employees, despite the challenging economic situation in 2020. The incidence was slightly higher for local employees (0.50 claims per 1,000 local employees), as compared to foreign employees (0.14 claims per 1,000 foreign employees).

On a quarterly basis, the incidence of wrongful dismissal claims stabilised in the last two quarters of 2020, following a spike in the second quarter.

Not all employees who seek compensation or reinstatement by lodging dismissal claims were dismissed wrongfully, the report explained. "Some of these claims had arisen due to poor communication by their employers. For instance, many of the dismissal claims in the second quarter of 2020 were lodged by employees who were terminated abruptly (due in part to the restrictions in face-to-face meetings during the Circuit Breaker). Most of these employers have fulfilled their contractual obligations in the contract terminations."

Of the wrongful dismissal claims assessed by TADM:

• About one in four (or 26%) of the claims were assessed to be substantiated. "These employers should have managed the dismissal process better, such as by conducting robust inquiries on misconduct or maintaining proper records to document performance issues. For such cases, TADM will require the employer to address the claims, such as by compensating the employee, clearing up any miscommunications and/or facilitating the employee’s job search."
• The remaining 74% of the claims were assessed to be unsubstantiated. "Many of these claims had arisen from disputes over work performance, poor communication between the employer and employee or business restructuring due to the lacklustre economy. For such claims, TADM will explain to the employees the lack of basis for their claims, help them seek closure to their grievances, and refer them to financial assistance programmes such as the COVID-19 Recovery Grant or job facilitation support where applicable.

Commenting on the findings, Kandhavel Periyasamy, General Manager, TADM, said: "2020 was a challenging year because of COVID-19. Nonetheless, we are thankful that most employers and workers continued to work together towards a common goal of saving businesses while being fair to workers.

The MOM and TADM had proactively introduced targeted initiatives to detect and prevent escalation of salary issues among our migrant workers since the onset of COVID-19. This initiative was successful with the incidents of salary issues among migrant workers coming down significantly. We also required employers with more than 10 employees to declare their cost saving measures to MOM. This allowed us to proactively intervene and resolve unreasonable cost savings measures. This is why the overall incidence of employment claims actually fell in 2020."

Nonetheless, he noted, that the incidence of salary claims among local employees increased slightly, especially in industries more affected by the Circuit Breaker and movement restrictions. "We will watch this trend closely and adapt our interventions and strategies accordingly."

The total payment by employers to employees relating to wrongful dismissal claims amounted to about S$1.8mn.

Early Intervention efforts during COVID-19

Noting further efforts undertaken, the report shared that in recognition of COVID-19's "immense pressure" on businesses, "MOM took proactive measures to prevent downstream employment disputes.

These included:

• A new requirement in March 2020 for employers with 10 or more employees to notify MOM on cost-saving measures that affect employees’ salaries. The Tripartite Alliance for Fair and Progressive Employment Practices also reached out to employers who had made severe wage cuts to check whether their cost-saving measures were implemented fairly and to persuade them to exercise compassion in supporting their employees.
• Since April 2020, employers with workers residing in dormitories are required to pay salaries electronically.
• Since May 2020, all employers in the construction sector need to submit monthly declarations on the status of salary payment to their foreign employees.
• Since June 2020, MOM and TADM have provided additional support for employers and migrant workers:
  • In June 2020, MOM introduced a module via the FWMOMCare mobile application that allows migrant workers to quickly report any salary, bank account and remittance issues.
  • For owed salaries, TADM proactively engaged employers and facilitated salary resolution for about 7,000 migrant workers between June and December 2020, without requiring employees to come forward to lodge these salary claims. 

In a Facebook post noting that last year was particularly challenging for both businesses and workers, Patrick Tay, NTUC's Assistant Secretary-General, shared a note of thanks: "It was with the proactive support of tripartite partners, that we were able to reach out to our members and resolve their employment disputes within the shortest time possible.

"I would like to express gratitude to the many staff and helpers who supported fellow workers through this difficult period. Our colleagues at the U Care Centre and Migrant Workers' Centre have also helped greatly in administering the Short Term Relief Fund and the Migrant Workers’ Assistance Fund to workers whose employers were unable to make full payment of their workers’ owed salaries due to financial difficulties."

He added that NTUC will continue to work with its partners to digitalise efforts and to further smoothen the process of dispute resolution, particularly in light of safety measures and social distancing.