Salary, wrongful dismissal claims up in 2023 amid economic challenges: Report

SINGAPORE – After working for over a year in her first full-time job, Chloe fell sick and saw a doctor at a clinic near her home in Kovan in September 2023. But she was not paid for the two days of medical leave she took.

“The human resources manager told me the employment letter stated that only medical certificates from an appointed company clinic or a polyclinic were valid proof for paid medical leave, and it must be followed,” recalled Chloe, who is in her 20s.

“The company doctor was in Clementi, and polyclinics have a longer wait. It was not ideal for me to travel there or wait longer, as I was feeling uncomfortable from the fever,” added Chloe, who did not want her real name used for confidentiality reasons.

She resigned from her job as an account support executive two months later, and filed a claim for the salary she was owed with the Tripartite Alliance for Dispute Management (TADM).

Within two weeks, she received $135 in owed salary.

Chloe is among the workers who lodged successful employment claims against their employers with the Ministry of Manpower (MOM) and TADM in 2023.

More local and foreign employees filed these claims in 2023 amid economic headwinds, said MOM and TADM in a joint annual employment standards report released on Aug 2.

A total of 9,397 employment claims and appeals were lodged with MOM and TADM in 2023. The incidence rate was 2.53 per 1,000 employees, up from 1.97 in 2022.

About 86 per cent of the cases were salary claims and most of the rest were claims for wrongful dismissals.

Locals accounted for almost half of the claims and appeals, while the remainder were lodged by foreigners.

Although the incidence of claims went up in 2023, it was lower than the rate in 2019 before the Covid-19 pandemic.

Sectors facing headwinds

The increase in cases was driven by a higher number of salary claims involving foreign employees in the construction sector, especially those who had worked in firms facing business failures, financial difficulties or undergoing liquidation, said MOM and TADM.

Among foreign staff, the incidence of salary claims went up from 2.53 per 1,000 foreign employees in 2022 to 3.91 in 2023.

Local employees were not spared as well.

More salary claims were filed by those working in wholesale and retail trade, food and beverage services, as well as information and communications sectors.

MOM and TADM noted that these sectors saw slower economic growth in 2023 compared with 2022.

Their spokespeople told The Straits Times that about 40 per cent of salary claims from local employees in 2023 were lodged by managers and executives.

The incidence of salary claims among locals increased slightly from 1.29 per 1,000 local employees in 2022 to 1.32 in 2023.

Overall, salary claims by locals and foreigners went up from 1.68 per 1,000 employees in 2022 to 2.19 in 2023. This is still lower than the 2.68 figure in 2019.  

With more cases filed, the total sum recovered went up from $12 million in 2022 to $14 million in 2023.

The median duration of salary arrears for claims lodged in 2023 was one month for locals and two months for foreigners, similar to 2022.

In 2023, the top three claim items for local employees were basic salary, salary in lieu of notice and encashment of unconsumed annual leave.

For foreigners, the top three claim items were basic salary, salary for overtime work and salary for work done on rest days and public holidays.

Nine in 10 salary claims concluded at TADM took two months or less, with the rest taking up to six months. This was similar to 2022.

The report said 94 per cent of complainants recovered their salaries either at TADM or the Employment Claims Tribunals (ECT), slightly higher than the 93 per cent in 2022.

Another 4 per cent recovered their salaries partially through settlement payments from security bond insurers and main contractors, or through financial assistance for lower-wage workers under the Short-Term Relief Fund or Migrant Workers’ Assistance Fund.

The remaining complainants did not recover any salaries and were mainly higher-income earners.

MOM barred errant employers from applying for or renewing the work passes of foreign employees until the due payments were made.

“Less than 1 per cent 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.”

More wrongful dismissals took longer to settle

As for wrongful dismissal claims, there was 0.32 case per 1,000 employees in 2023, slightly higher than the 0.26 in 2022.

MOM and TADM said that 70 per cent of the claims in 2023 were resolved at TADM, while the remaining ones were referred to ECT for adjudication, similar to 2022.

In slightly more than half of the cases resolved at TADM, employers were found to have fulfilled their contractual or statutory obligations, or the cases were withdrawn after mediation.

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

The proportion of wrongful dismissal claims that were concluded at TADM within two months fell from 86 per cent in 2022 to 79 per cent in 2023.

MOM and TADM attributed this drop to the higher volume of cases and mismatched expectations between employees and employers.

Because of more wrongful dismissal claims, the total payment by employers to employees amounted to about $1.72 million, higher than the approximately $1.29 million paid out in 2022.

Potential of new platform

The report also detailed how Empower, a new online platform TADM rolled out in August 2023, could make settling claims easier.

Empower lets employers and employees privately negotiate claims online first, and then undergo virtual mediation if needed, aided by automated tools like a chatbot and calculators.

However, if Chloe’s experience is any indication, not all claims processes are smooth sailing.

She said her former employer ignored e-mails from her TADM mediator twice, and initially declined to pay her by citing her letter of employment in a reply that was three days overdue.

“I was a little bit worried but I trusted the mediator,” she said.

“(The mediator) stepped in to say their thinking is wrong, and then they accepted it.”

Chloe, who has been working in a new job for the last two months, said: “I didn’t know much about TADM until my parents recommended it to me. Only then did I realise that TADM is an alliance that helps employees know their rights and stand up to their employers.”