Employment Standards Report 2019/2020

Full salary recovery for majority of claimants; New self-help tool to check on Employment Act requirements.

1. The Ministry of Manpower (MOM), Tripartite Alliance for Dispute Management (TADM) and Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP) have released the 2019/2020 Employment Standards Report. The report, which covers the period from 1 January 2019 to 30 June 2020, highlights the tripartite efforts in helping employers and employees resolve employment disputes and improve employment practices.
   
   Key findings
   
   Overall incidence of salary claims remained low
2. 15,717 employment claims and appeals were lodged with MOM and TADM, of which 13,591 (or 86%) were salary claims. Overall, there were 2.68 salary claims per 1,000 employees in 2019, compared to 2.42 in 2018. The incidence of salary claims subsequently dropped to 2.46 (annualised) in 1H 2020, mainly due to fewer claims from foreign employees.
3. Among local employees:
   • There were 1.53 salary claims per 1,000 employees in 2019, up from 1.43 in 2018. This was partly driven by an increase in claims from the wholesale and retail trade industry, in line with its weak performance in 2019.
   • The annualised salary claims also increased to 1.73 per 1,000 employees in 1H 2020, mainly due to the economic disruptions of COVID-19.
   • Claim for basic salary and claim for salary-in-lieu of notice were the most common claim items.
4. Among foreign employees:
   • There were 4.98 salary claims per 1,000 employees in 2019, up from 4.45 in 2018. This was partly attributed to more group claims among foreign employees in the construction sector.
   • The annualised salary claims decreased to 3.96 per 1,000 employees in 1H 2020, as TADM proactively resolved salary issues of many foreign employees residing in dormitories instead of waiting for these to be lodged as salary claims.
   • Claim for basic salary and claim for salary for overtime work were the most common claim items.
   Full salary recovery for majority of claimants
5. For salary claims lodged between 1 January 2019 and 30 June 2020, 90% of employees fully recovered their salaries owed at TADM or the Employment Claims Tribunals (ECT), with a total recovered sum of about $23 million.
6. When the Employment Act (EA) was amended on 1 April 2019 to cover all employees, the adjudication of wrongful dismissal claims was also shifted from MOM to the ECT. Since then, more than 300 managers and executives who were previously not covered by the EA have lodged wrongful dismissal claims.
7. Between 1 April 2019 and 30 June 2020, TADM assessed 277 wrongful dismissal claims to be substantiated. Of these substantiated wrongful dismissal claims, about 60% were resolved at TADM, while the remaining 40% were referred to the ECT. Another 842 claims were assessed to be unsubstantiated of which 60% were also resolved at TADM.
   
   More dismissal claims lodged in 2Q 2020, in line with decline in local employment
8. Dismissal claims lodged in 2Q 2020 were higher than in previous quarters, 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. Claims for retrenchment benefit remained low at 69 in 2Q 2020.
9. 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. In resolving these disputes, TADM’s mediators helped both parties to voice their challenges and try to see the issue from the other party’s perspective.
   
   Improving compliance with the Employment Act
10. In addition to existing efforts on inspection of workplaces and requiring employers to attend corrective clinics on employment practices, MOM has developed a new self-help Key Employment Terms (KET) Verification Tool to help employers check and verify that their contractual terms on working hours and salary payments comply with the EA. The KET Verification Tool is available here. Paying greater care and attention to ensuring the EA requirements are met would help employers prevent downstream disputes on working hours and salary payments.
    
    Weathering the impact of COVID-19 on livelihoods
11. The COVID-19 pandemic has brought about unprecedented challenges in our employment landscape. To mitigate the impact of COVID-19 on livelihoods, MOM worked closely with the tripartite partners to roll out various initiatives in 1H 2020. These include:
    1. Requiring employers with employees residing in dormitories to pay salaries electronically;
    2. Requiring all employers in the construction sector to submit monthly declarations on the status of salary payment to their foreign employees; and
    3. Requiring employers with 10 or more employees to notify MOM on cost-saving measures that affect employees’ salaries to ensure that salary cuts are reasonable and necessary.
    Building fair workplaces beyond basic employment standards
12. Beyond raising employment standards, MOM and TAFEP have also consistently rolled out efforts to tackle workplace discrimination and build fairer, progressive workplaces. In 2018, MOM conducted a survey among 3,390 establishments and 3,125 jobseekers and employees to find out the state of fair employment practices in Singapore. Based on the findings, 69% of employers had put in place processes to ensure fair hiring practices and this proportion had been increasing steadily since 2010. Notwithstanding the progress made, the percentage of local jobseekers who perceived discrimination during their job search process had increased from 10% in 2014 to 15% in 2018.
13. To tackle workplace discrimination, MOM and TAFEP adopt a two-pronged education and enforcement approach which includes:
    1. Education
       • Providing advisory services to employers related to the implementation of employment practices in line with the EA and Tripartite Guidelines on Fair Employment Practices (TGFEP).
       • Supporting employers with relevant resources, programmes and training on employment matters.
    2. Enforcement
       • Imposing stiffer penalties for all forms of discriminatory hiring practices since Jan 2020: Errant employers that breach the TGFEP will be barred from hiring new foreign workers or renewing existing ones for a minimum of 12 months, up to a maximum of 24 months.
       • Stepping up on investigations and enforcement actions: In 1H 2020, TAFEP investigated about 260 cases of possible discriminatory hiring practices, up from about 160 for the same period in 2019. MOM also suspended the work pass privileges of about 70 employers for discriminatory hiring practices – a significant increase from 35 employers in the whole of 2019.
14. Mr Kandhavel Periyasamy, General Manager, TADM said, “The COVID-19 pandemic has caused business difficulties to employers. In this situation, employers should communicate any financial difficulties to their employees in an upfront and sensitive manner. If cost-saving measures are required, management should lead by example. This would help to build stronger employment relationships and prevent workplace disputes. However, employers should not act unilaterally and use financial difficulties as an excuse to not pay salaries while expecting employees to continue working. 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.”
15. Ms Faith Li, General Manager, TAFEP said, “In these challenging times, it is even more important for employers to abide by the TGFEP and treat jobseekers and employees fairly at all stages of employment. TAFEP has ready resources and programmes to help employers abide by the TGFEP and adopt progressive employment practices. TAFEP also takes a serious view of workplace discrimination. We have stepped up our efforts to scrutinise more cases of potential workplace discrimination and will continue to work with MOM to take action against discriminatory employers.”
16. Ms Christine Loh, Director, Employment Standards Enforcement Department, MOM said, “A progressive employer not only fulfils his employment obligations to his employees but adopts fair and merit-based employment practices too. MOM will continue to raise awareness of employment rights and obligations. MOM will also remain vigilant in investigating discriminatory practices and will take errant employers to task so as to build fair workplaces for all Singaporeans.”
17. The full Employment Standards Report can be downloaded from MOM website.