Employment Standards Improve in 2021 Through Proactive Tripartite Efforts
1. In tandem with Singapore’s economic recovery from the COVID-19 pandemic, the state of employment standards also improved in 2021. This was reflected by a significant fall in the overall incidence of employment claims and appeals lodged with the Ministry of Manpower (MOM) and Tripartite Alliance for Dispute Management (TADM). In addition, a higher proportion of employees recovered their salaries in full, and the overall incidence of wrongful dismissal claims fell in 2021, compared to 2020.
2. These findings are included in the Employment Standards Report 2021 which is released today. The report highlights tripartite efforts in helping employers and employees resolve employment disputes and improve employment practices. It also highlights TADM’s continued efforts in leveraging digital innovations to improve customer experience. More details can be found in the full report: www.mom.gov.sg/esr2021.
Key Highlights from Report
Fall in incidence of employment claims and appeals
3. The overall number of employment claims and appeals lodged with MOM and TADM fell significantly from 2.59 in 2020 to 1.73 per 1,000 employees in 2021. The decrease was due to a fall in salary claims for both local and foreign employees, which made up most employment claims.
a. Among local employees, the decline was partly driven by a drop in salary claims in the Services sector, which saw significant economic growth in 2021.
b. Among foreign employees, there was a sharp decline in salary claims in the Construction sector. This was due in part to MOM’s upstream interventions to tackle non-payment of salaries over the last two years. TADM also proactively engaged employers to ensure salaries are paid to some 24,000 foreign employees in 2021, without them later having to lodge formal salary claims.
Higher proportion of full salary recovery for claimants
4. Looking at the total number of salary claims lodged in 2021, TADM and the Employment Claims Tribunals assisted 95% of the employees to recover their salaries in full, compared to 92% in 2020. MOM also suspended the work pass privileges of employers who did not fully repay their employees. Less than 1% of the salary claims lodged in 2021 involved wilful employers who refused to make full payment of the owed arrears, despite having the means to do so.
Fall in incidence of wrongful dismissal claims
5. The overall incidence of wrongful dismissal claims fell from 0.39 in 2020 to 0.27 per 1,000 employees in 2021.
a. Of the wrongful dismissal claims assessed by TADM, 26% were substantiated.
b. Of the 74% unsubstantiated claims, many of them had arisen from miscommunication between the employer and employee over issues such as work performance. The employers had fulfilled their contractual or statutory obligations of employment termination with notice.
6. More than 9 in 10 salary claims and 8 in 10 wrongful dismissal claims were concluded within two months of lodging the claim at TADM – an improvement from 2020. For salary claims, the improvement was largely due to a drop in the number of claims lodged in 2021. For dismissal claims, the improvement could be partly attributed to the easing of COVID-19 restrictions, which allowed parties to resolve their differences in person with the mediators’ assistance. This was particularly useful for more complex cases, where parties were unable to resolve their disputes remotely.
Removal of Cost-Saving Notification Requirement and Advisory on Retrenchment Benefit as a Result of Business Difficulties
7. As the COVID-19 situation stabilises, MOM has reviewed the need for the following temporary measures that were originally implemented to deal with disruptions to business operations:
a. In March 2020, MOM introduced a requirement for employers with more than 10 employees to notify MOM if they implement any cost-saving measures that affected employees’ monthly salaries. The number of employers submitting new cost-saving notifications has decreased significantly to a monthly average of 8 in 1Q 2022, from the peak of 1,713 employers at the start of the Circuit Breaker in April 2020.
b. In May 2020, MOM issued an Advisory on Retrenchment Benefit Payable to Retrenched Employees as a Result of Business Difficulties due to COVID-19 ("Advisory"). This provided employers more flexibility on retrenchment benefit payments in view of the difficult economic conditions then. The number of cases of employees seeking assistance on retrenchment benefits has since declined to a monthly average of 8 cases in 1Q 2022, compared to its peak of 198 cases in August 2020.
8. Given the sustained fall in number of notifications and assistance sought on retrenchment benefits, MOM will cease the cost-saving notification requirement and remove the Advisory with effect from 1 August 2022. The National Wages Council has urged employers not to rely on cost-saving measures as a stop-gap solution to their business challenges and to take a longer-term view of their manpower needs. Employers who need to manage excess manpower should refer to the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment for guidance.
Enhancing Employment Protection Through Digitalisation, Education and Enforcement
9. Following a successful pilot programme in February 2020, TADM introduced the Online Dispute Resolution (ODR) portal to facilitate conversations between parties. This enables parties to resolve employment disputes more expeditiously, without having to meet in-person. In 2021, about 430 claims were processed using the portal, of which 32% were self-resolved by the parties. Another 56% were concluded virtually at the e-mediation stage, where the mediator used the ODR portal to facilitate conversations between the parties, and guide them to reach a resolution. Enhancements to the ODR process include:
a. From April 2022, Settlement Agreements are allowed to be signed remotely, thereby removing any need for parties to meet in-person; and
b. By 2023, the enhanced ODR portal will make use of artificial intelligence to nudge and guide parties based on common scenarios so that they can come to a fair settlement.
10. As part of education and enforcement efforts on employment laws, MOM also carried out the following initiatives:
a. Launch of Workright School Series in 2022, targeting graduating students in Institutes of Higher Learning. This is a series of talks and events to raise the students’ awareness of employment rights before they enter the workforce. As of May 2022, close to 650 graduating students from ITE College East and ITE College Central have attended the curated talks and events.
b. Use of data analytics from March to December 2021 to identify and proactively audit companies which were at risk of not complying with Progressive Wage Model (PWM) wages. Around 90 companies were found not complying with PWM wages, and regulatory action such as issuance of warning and financial penalties will be taken.
c. Proactive inspections of more than 90% of all private security agencies from April to August 2021, of which about one-third were found with Employment Act breaches. Enforcement actions were taken against those found with serious offences.
11. As Singapore’s economy recovers from COVID-19, the tripartite partners will continue to press on with our efforts to uplift employment standards in a post-pandemic world.