25 September, 2017
The new Employment Claims Tribunal ("ECT") has been established within the Singapore court system and has started handling salary-related disputes from 1 April 2017. Key features of the ECT process for HR dispute resolution are summarised below.
Jurisdiction of the ECT
All levels of employees, including managers and executives, may bring claims regardless of salary or seniority. Exceptions are public servants, domestic workers and seafarers who have other avenues for recourse.
HR disputes which can be referred to the ECT comprise:
- Statutory salary-related claims by employees under the Employment Act, Retirement and Re-employment Act, and the Child Development Co-Savings Act; and
- Contractual salary-related claims by employees; and
- Claims by employers for salary in lieu of notice of termination.
As the ECT is designed to be an expeditious and affordable forum for the resolution of salary-related disputes, it will not deal with other claims such as unfair dismissal or harassment for which employees may turn to other avenues for resolution under the Employment Act or in the civil courts.
Mandatory mediation before HR claims can be brought to ECT
Mediation through approved mediation processes will be mandatory before claims will be heard by the ECT, to encourage the parties to seek to resolve their differences amicably. If a settlement agreement is voluntarily reached after mediation, it can be registered and enforced as a court order. A dispute can be referred to the ECT only if it remains unresolved after mediation.
To encourage claimants to file their salary claims expeditiously before the facts become more difficult to establish, requests for mediation must be brought within 12 months of the dispute arising if the employment relationship is intact.
However, if the employment has ended, the request for mediation must be brought within 6 months of the end of the employment.
Claims will be capped at S$20,000 or S$30,000
HR claims at the ECT will be capped at S$20,000. If the dispute is filed through a trade union or without union assistance, the cap will be a higher S$30,000. This means that if the claim exceeds the maximum amount, the claimant must forego the excess amount to be able to have the case heard by ECT to take advantage of the affordable and expeditious ECT process.
What this means for employers and employees
The ECT will make it easier for all levels of employees who have salary disputes to bring claims of up to S$20,000 – S$30,000 against employers for relatively quick adjudication. Employers who have claims against employees for unpaid salary in lieu of notice will now also have a forum for recovering such payments where a civil claim through the courts might be disproportionately costly.
Employers and employees will need to go through mandatory mediation before going to the ECT. Mediation offers the opportunity for a win-win resolution of HR disputes based on the interests of the parties beyond purely legal rights.
Employers may wish to train their Legal and HR teams on the mediation process to make the most of the opportunities offered by mediation.
For further information, please contact:
Goh Seow Hui, Partner, Bird & Bird
seowhui.goh@twobirds.com
