SINGAPORE: In 2023, the Ministry of Manpower (MOM) and the Tripartite Alliance for Dispute Management (TADM) saw a significant rise in salary and wrongful dismissal claims.
Their joint annual employment standards report, released on Aug 2, highlighted that 9,397 employment claims and appeals were filed in 2023, up from 1.97 per 1,000 employees in 2022 to 2.53 per 1,000 in 2023.
The majority of these cases, about 86%, were salary claims, while the rest were primarily wrongful dismissal claims. Nearly half of the claims were filed by local employees, with the rest lodged by foreign workers.
Despite the rise in claims for 2023, the rate remains lower than the pre-pandemic figure of 2.68 per 1,000 employees in 2019.
Increase in salary claims
The rise in cases was driven by higher salary claims involving foreign employees in the construction sector, particularly those employed by companies experiencing business failures, financial issues, or liquidation.
For foreign employees, the rate of salary claims increased from 2.53 per 1,000 in 2022 to 3.91 per 1,000 in 2023.
Local employees also faced challenges, with more salary claims filed by those in wholesale and retail trade, food and beverage services, and information and communications sectors.
These sectors experienced slower economic growth in 2023 compared to 2022, according to MOM and TADM. The Straits Times also reported that managers and executives were notably affected, with about 40% of local salary claims coming from these groups.
For local employees, the rate of salary claims rose slightly from 1.29 per 1,000 in 2022 to 1.32 per 1,000 in 2023.
Overall, salary claims for both local and foreign employees rose from 1.68 per 1,000 in 2022 to 2.19 per 1,000 in 2023. This is still less than the 2019 rate of 2.68 per 1,000 employees.
With the increased number of claims, the total amount recovered from claims increased from S$12 million in 2022 to S$14 million in 2023. The median duration of salary arrears remained the same in 2022, with one month for local employees and two months for foreign employees.
In 2023, the primary claims for local employees were basic salary, salary in lieu of notice, and encashment for unused annual leave. For foreign workers, the main claims were basic salary, overtime pay, and compensation for work on rest days and public holidays.
Nine in ten salary claims were resolved within two months or less at TADM, while the remaining took up to six months, similar to the situation in 2022.
The report noted that 94% of claimants recovered their salaries through TADM or the Employment Claims Tribunals (ECT), a slight increase from the 93% recovery rate in 2022.
An additional 4% of salaries were partially recovered through settlement payments from security bond insurers, main contractors, or financial assistance for lower-wage workers under the Short-Term Relief Fund or Migrant Workers’ Assistance Fund.
The remaining claimants, mainly higher-income earners, did not recover any salaries. MOM imposed sanctions on employers who failed to settle dues, preventing them from applying for or renewing work passes for foreign employees until payments were made.
“Less than 1% of the salary claims lodged in 2023 involved wilful employers who refused to make full payment for the salary arrears despite having the means to do so. MOM investigates such employers with a view of taking enforcement action against them.”
Increase in wrongful dismissal claims
Wrongful dismissal claims also saw an increase, with an incidence rate of 0.32 per 1,000 employees in 2023, up from 0.26 in 2022.
Around 70% of these claims were resolved at TADM, with the remainder referred to the Employment Claims Tribunals (ECT) for adjudication, said MOM and TADM.
In over half of the cases resolved at TADM, employers had met their contractual or statutory obligations or the cases were withdrawn following mediation.
The rest of the cases resulted in settlements, with employers making goodwill payments, allowing employees to resign, issuing certificates of service, or resolving misunderstandings.
The time taken to resolve wrongful dismissal claims increased slightly, with only 79% concluded within two months, down from 86% in 2022. This delay was attributed to the higher volume of cases and mismatched expectations between employees and employers.
Due to the increase in wrongful dismissal claims, the total payment by employers to employees rose to about S$1.72 million in 2023, up from S$1.29 million in 2022.
The report also explained that Empower, a new online platform launched by TADM in August 2023, could simplify the claims process.
It allows employers and employees to negotiate claims privately online before proceeding to virtual mediation, if necessary, using automated tools such as a chatbot and calculators.
For more details on the report, check here. /TISG
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