Singapore – Public Consultation On Proposed Employment Claims Tribunal.

22 March, 2016

 

INTRODUCTION

 

On 25 February 2016, the Ministry of Manpower (“MOM”) issued a consultation paper seeking public feedback on the key features of a proposed Employment Claims Tribunal (“ECT”). The ECT will address salary-related employment claims for all workers.

 

BACKGROUND

 

At present, there are several avenues for resolving salary-related disputes. For employees covered under the Employment Act (“EA”) (i.e. all employees on a contract of service, except professionals, managers or executives (“PMEs”) earning more than S$4,500 per month, domestic workers, public servants and seafarers), the Commissioner for Labour (commonly referred to as the “Labour Court”) is empowered to inquire into and adjudicate salary-related claims. In addition, PMEs earning up to S$4,500 are also eligible for tripartite mediation in respect of salary- related disputes. For employees not covered under the EA, including PMEs earning more than S$4,500, they would currently have to file salary- related claims with the civil courts. Employees covered under the EA may also bring similar civil claims in relation to salary disputes. 

 

However, the process of filing civil claims can be lengthy and costly. In recognition of this, the MOM, together with its tripartite partners (i.e. the National Trades Union Congress and Singapore National Employers Federation), the Ministry of Law, the Attorney-General’s Chambers and the State Courts, have proposed to establish the ECT to provide a more accessible and expeditious system for resolving salary disputes for most employees, including PMEs not covered under the EA.

 

The proposed ECT will be a Tribunal under the State Courts, similar to the Small Claims Tribunal, and will adjudicate salary-related claims in place of the present Labour Court.

 

We summarise below some of the key features of the proposed ECT.

 

KEY FEATURES OF THE PROPOSED ECT

 

Inclusive coverage

 

The proposed ECT will adjudicate salary-related claims for all employees who have an employment contract with their employers, including PMEs not covered under the EA. Domestic workers, public servants and seafarers, who have alternate avenues for the resolution of their employment disputes, will not initially have access to the ECT. However, the ECT’s adjudication services may eventually be extended to these employees when operations have stabilised.

 

Types of claims

 

The proposed ECT will adjudicate salary-related claims, but not other workplace grievances such as unfair dismissal and discrimination claims. Notably, salary-related claims will include claims provided for in the various employment statutes such as the EA, as well as “salary-related claims expressly provided for in monetary terms in employment contracts”. For example, if the employment contract states that the employee is eligible for one month of year-end cash bonus after completing one year of service, the employee who has worked for at least one year may file a claim with the ECT if he or she did not receive this bonus. 

 

MEDIATION

 

Claimants will be required to undergo mediation, which will be conducted by MOM or MOM- approved mediators, before their cases can be heard by the proposed ECT.

 

Monetary and time limits

 

A claim must be filed for mediation within the following timelines:

 

• (a) within one year from the date on which the claim arises; or
• (b) if the employment relationship has ended, within six months of the end of employment.

 

MOM has proposed that claims heard by the ECT be capped at S$20,000. The limit will be higher (i.e. S$30,000) for claimants who go through the Tripartite Mediation Framework or MOM conciliation under the Industrial Relations Act.

 

Interested persons are invited to submit their responses by 6pm on 23 March 2016.

 

CONCLUSION

 

The features of the ECT are still being formulated, and several issues (as identified below) are apparent at this stage:

 

(a)  Many employment disputes are in one way or another linked to salary. Given the potentially broad meaning of the term “salary-related”, it would be important to determine when a claim can be considered “salary-related” and falls within the ECT’s jurisdiction.

 

(b)  EA employees are currently able to submit salary and other statutory payment claims online, and have their case assessed within 3 days. It remains to be seen how the ECT will fare in this regard, and whether the ECT will have additional powers or be able to grant other remedies not available to the Labour Court.

 

(c)  With the ECT providing a more accessible and expeditious avenue for resolving salary- related claims, the number of such claims is expected to rise. In particular, mid-level PMEs earning more than S$4,500 basic monthly salary may be more likely to bring claims in the ECT since the quantum of their salary-related claims would be higher and they would not have to incur the potentially prohibitive expense of bringing civil claims in the existing courts. Greater accessibility could, however, potentially attract frivolous claims, which raises the question of whether and how the ECT could distinguish and discourage such claims.

 

(d) The consultation document does not state if and when employers can bring claims to the ECT, and whether, when and how parties may appeal ECT decisions.

 

Nevertheless, the MOM has made it clear that the ECT is intended to provide enhanced support for PMEs (including those not covered under the EA), and forms part of a suite of enhanced measures for PMEs. Salary-related claims (in particular, those brought by mid-level PMEs) may increase, and employers would have to devote considerable time and resources to defending such claims. To lower this risk, employers should implement internal processes to address workplace grievances and disputes early. Employers should carefully evaluate and ensure that there is a clear legal basis for any decision concerning an employee that could give rise to a salary-related claim and in this regard, may wish to seek relevant legal advice.

 

We will continue to monitor developments in this area and provide further updates at appropriate junctures. We would also be happy to assist clients with any feedback they wish to provide on the consultation.

 

For details on MOM’s suite of enhanced measures for PMEs, see our Employment Law update dated 22 July 2015 on “Tougher Work Pass Controls for Foreign PMEs and Proposed Amendments to the Employment Act”.