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More employees lodged claims for owed salaries in 2019, most cases fully resolved: Employment Standards Report

More employees lodged claims for owed salaries in 2019, most cases fully resolved: Employment Standards Report

People wearing face masks walk past the skyline of the central business district in Singapore on Jun 9, 2020. (File photo: Reuters/Edgar Su)

SINGAPORE: More employees lodged claims for owed salaries in 2019 compared to the year before, according to the latest Employment Standards Report released on Thursday (Nov 19).

Overall salary claims rose from 2.42 claims per 1,000 employees in 2018 to 2.68 claims in 2019.

It later fell to an annualised 2.46 in the first half of 2020, mainly due to fewer claims from foreign employees, the report said.

Released by the Ministry of Manpower (MOM), Tripartite Alliance for Dispute Management (TADM) and Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP), the report covered a period of one-and-a-half years instead of a year to cover a period of disruption caused by COVID-19. 

READ: Singapore’s jobless rate climbs to 3.6%; more than 20,000 retrenched year-to-date

SALARY CLAIMS AND RECOVERY

The number of salary claims from both local and foreign employees increased from 2018 to 2019. 

Among local employees, there were 1.53 salary claims per 1,000 workers, up from 1.43 in 2018. This was partly driven by a weak performance from the wholesale and retail trade in industry in that year, said the report.

"Apart from basic salary, claim for salary-in-lieu of notice was the most common claim item lodged by local employees," said the report.

"Claims for salary-in-lieu of notice from local employees generally arise when termination of services is conducted verbally, without a written termination letter that indicates the last day of employment and serving of notice of termination."

For foreign employees, the number of salary claims rose from 4.45 in 2018 to 4.98 in 2019, partly due to more group claims by foreign workers in the construction sector, which also had a weaker showing in 2019.

Between 2019 and the first half of 2020, while the number of salary claims increased for local employees due to "economic disruptions of COVID-19", the figure fell for foreign workers.

This is because TADM "proactively resolved" salary issues for foreign employees in dormitories “instead of waiting for these to be lodged as salary claims”, said the report.

Claims for basic salary and pay for overtime work were the most common cases among foreign employees, noted the report, adding that they usually arise from employers’ failure to maintain proper work hour records or computational errors on overtime rates payable.

For salary claims lodged between Jan 1, 2019 and Jun 30, 90 per cent were fully recovered, while 4 per cent of employees partially recovered their salaries.

The total recovered sum was S$23 million. Most salary claims were concluded at TADM within two months, said the report.

WRONGFUL DISMISSAL CLAIMS

Dismissal claims lodged in the second quarter of this year were higher than in previous quarters, said the report, adding that this is in line with the decline in local employment during this period.

"Despite the increase, there is no evidence that more employers terminated their employees unfairly to deny them of retrenchment benefit," said the report, adding that claims for retrenchment benefit remained low at 69 in the second quarter.

"Many of the dismissal claims in 2Q 2020 were lodged by employees who were unhappy over the abrupt manner of termination, rather than failure to fulfil their contractual obligations."

The report noted that since the Employment Act was amended in April 2019 to cover all employees, more than 300 managers and executives - or 23 per cent of all 1,431 wrongful dismissal claims - previously not covered by the Act have lodged wrongful dismissal claims.

The Employment Act was amended to extend core entitlements and protection, including statutory protection against wrongful dismissal, to all employees regardless of salary.

Previously, managers and executives earning more than S$4,500 a month were excluded.

READ: Enhancements made to Employment Act will see more workers protected

Of all wrongful dismissal claims lodged between Apr 1, 2019 and Jun 30, 277 claims were assessed to be substantiated - 60 per cent of these were resolved at TADM, while 40 per cent were referred to the Employment Claims Tribunal.

There were 842 unsubstantiated claims, of which 60 per cent were resolved at TADM, said the report.

Seventy-two per cent of dismissal claims were concluded within two months.

To help employers check and verify that their contractual terms adhere to the Employment Act, authorities noted that they have developed a Key Employment Terms (KET) Verification Tool that is available on MOM’s website.

MITIGATING THE IMPACT OF COVID-19

Noting that the COVID-19 has brought about "unprecedented challenges" in Singapore’s employment landscape, the report said MOM has rolled out several initiatives in the first half of 2020 to help employers and employees cope with the impact of the pandemic.

For instance, employers with workers living in dormitories have to pay salaries electronically.

All employers in the construction sector have to submit monthly declarations on the status of salary payments to their foreign employees.

Employers with 10 or more employees also have to notify MOM of cost-saving measures that affect employees’ salaries to "ensure that salary cuts are reasonable and necessary".

"Employers should not act unilaterally and use financial difficulties as an excuse to not pay salaries while expecting employees to continue working," said TADM general manager Kandhavel Periyasamy.

"Where disputes have occurred which employees and employers are unable to resolve, TADM stands ready to help resolve them fairly and amicably through our advisory and mediation services."

Source: CNA/cc
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