Salary, wrong dismissal claims in S’pore up in 2024 amid higher job turnover, more business closures

SINGAPORE – The rate of salary claims in 2024 climbed to its highest level since 2019, with 2.63 claims filed per 1,000 employees on the back of more business troubles in a challenging environment.

This rise in claims was largely driven by more dispute cases in sectors such as information and communications, construction and administrative support services.

The Ministry of Manpower (MOM) and the Tripartite Alliance for Dispute Management (TADM) said they received 9,848 salary claims in 2024.

This makes up the bulk of the 11,685 employment claims and appeals lodged in total, which is up by nearly 2,000 cases from 2023.

Most of the remaining claims were for wrongful dismissal. 

In total, employees recovered $19 million in salary claims in 2024, a jump of over 35 per cent from

$14 million the year before

and the highest in recent years.

“The increase is consistent with the higher number of salary claims lodged in 2024,” said MOM and TADM in their joint annual employment standards report released on Aug 26.

Local employees lodged 46 per cent of all claims, while the remaining 54 per cent came from foreign employees.

Salary claims by local employees rose from 1.32 per 1,000 in 2023 to 1.59 per 1,000 in 2024.

The information and communications sector saw a jump in salary claims from locals. It moved from third place in 2023 to the top spot in 2024.

MOM and TADM said this was due to several companies in the infocomm sector facing cash flow issues.

The sector, which most tech firms come under, accounted for 13 per cent of salary claims made by local employees – higher than the 11 per cent lodged in the administrative and support services sector, and 10 per cent in food and beverage (F&B) services.

For foreign employees, the incidence of salary claims increased from 3.91 per 1,000 in 2023 to 4.64 per 1,000 in 2024.

The construction sector accounted for 47 per cent of salary claims lodged by foreign employees, far higher than manufacturing as well as F&B services, with each accounting for 9 per cent of the claims.

“The construction sector continued to be a key contributor of salary claims, due to companies facing business failures, financial difficulties or undergoing liquidation,” said MOM and TADM.

The median amount claimed by local employees has grown in line with rising wages. The exact dollar amount was not disclosed.

The median claim duration held steady at a month’s pay for local employees. For foreign employees, it dropped from more than three months’ pay in 2019 to around two months’ pay in 2024.

The top three claim items for local employees were for basic salary, salary in lieu of notice and encashment of unconsumed annual leave. For foreign employees, the top three claim items were for basic salary, salary for overtime work and payment for work done on rest days and public holidays.

Nine in 10 salary claims were resolved at TADM in 2024, slightly higher than the 88 per cent in 2023. The remaining 10 per cent were referred to the Employment Claims Tribunals (ECT).

However, more claims took longer to settle at TADM, with 13 per cent of cases taking two to six months to resolve in 2024, up from 10 per cent in 2023.

Of the salary claims lodged in 2024, 94 per cent of employees fully recovered their salaries at TADM and ECT, similar to 2023.

About 4 per cent recovered their salaries partially through settlement payments from security bond insurers and main contractors, or they were lower-wage workers who received financial assistance. The rest – mainly high-income earners – did not recover any salaries.

MOM said it disallowed employers who did not fully repay their staff from applying or renewing work passes for foreign employees.

Less than 1 per cent of the salary claims lodged in 2024 involved employers who refused to make full payment for the salary arrears despite having the means to do so, said the authorities.

Meanwhile, there were 1,720 wrongful dismissal claims in 2024. This translates to an incidence of 0.46 claim per 1,000 employees in 2024, up from 0.32 per 1,000 employees in 2023.

Similar to previous years, the incidence was higher for local employees at 0.56 claim per 1,000 local employees, compared with 0.27 for every 1,000 foreign employees.

Among local employees, about 40 per cent of salary claims in 2024 were lodged by managers and executives – similar to 2023. For dismissal claims, the proportion lodged by managers and executives also remained at around 50 per cent. Professionals, managers and executives comprised 43 per cent of Singapore’s resident workforce in 2024.

Of the wrongful dismissal claims lodged in 2024, MOM and TADM said 71 per cent of cases were resolved at TADM. The remaining 29 per cent were referred to the ECT.

In 61 per cent of the cases that were resolved at TADM, employers were found to have fulfilled their contractual or statutory obligations, or the cases were withdrawn after mediation.

The remaining 39 per cent involved some form of settlement by the employer, such as making goodwill payments, allowing employees to resign, issuing certificates of service, or clearing up miscommunications.

The proportion of wrongful dismissal claims concluded at TADM within two months jumped from 79 per cent in 2023 to 86 per cent in 2024. Employers paid out a total of around $2.14 million to employees who made wrongful dismissal claims in 2024, up from $1.72 million in 2023.

“The rise in salary and dismissal claims reflects higher job turnover from retrenchments, dismissals and business closures, and failure or delays in salary payments due to financial difficulties in recent years, rather than a decline in employment standards,” said MOM and TADM.

They also noted that the Tripartite Alliance for Fair and Progressive Employment Practices received 263 workplace discrimination complaints in 2024, up from 220 in 2023.

MOM and TADM said workplace fairness legislation is set to come into force in 2026 or 2027.

In the joint report, they also listed flexible work arrangements and legislated protections for platform workers as examples of efforts to improve employment standards while balancing business needs.

“These initiatives seek to create workplaces that are fairer, more inclusive and harmonious, to benefit both workers and employers.”