1 June, 2019
Employees often bring claims against previous employers for wrongful dismissal without a clear idea of the merits of their claims. Likewise, employers are often concerned that they may be unwittingly liable for wrongfully dismissing their employees.
The Tripartite Guidelines on Wrongful Dismissal, released by the Ministry of Manpower, the National Trades Union Congress and the Singapore National Employers Federation on 1 April 2019, pursuant to section 34A of the Employment Claims Act (No.1 of 2016), provide guidance on what constitutes wrongful dismissal and what does not.
Section 20(6A) and section 25(4) of the Employment Claims Act require the Employment Claims Tribunal (and the High Court of Singapore hearing the appeal of a decision of the Tribunal) to follow the guidelines when deciding a claim involving wrongful dismissal. The guidelines are therefore of great assistance to all stakeholders.
The amendments to the Employment Act (Chapter 91), together with the guidelines, came into effect on 1 April 2019. Section 14 of the Employment Act, read together with section 12 (7) of the Employment Claims Act, now allows all employees (except for seafarers, domestic workers and public servants) to bring a claim in the Tribunal for dismissal without just cause or excuse. The Tribunal has the power to order damages of up to S$20,000 (or S$30,000 for union-assisted cases) or order the employee to be reinstated.
Section 2 of the Employment Act defines “dismiss” in the following terms:
“dismiss” means to terminate the contract of service between an employer and an employee at the initiative of the employer, with or without notice and for cause or otherwise, and includes the resignation of an employee if the employee can show, on a balance of probabilities, that the employee did not resign voluntarily but was forced to do so because of any conduct or omission, or course of conduct or omissions, engaged in by the employer… (emphasis added)
The introduction of the above definition into the amendments of the Employment Act on 1 April 2019 removes any doubt that a claim for constructive or wrongful dismissal may exist even when an employee resigns.
The guidelines provide clarification on when notice is and is not required.
When Notice Is Not Required
The only legitimate reason for dismissal without notice is on the grounds of misconduct. However, the employer must have conducted due inquiry before dismissing an employee without notice.
The instances of misconduct are not limited, but the guidelines provide examples such as theft, dishonesty, disorderly conduct at work, insubordination and bringing the organisation into disrepute.
The illustration provided in the guidelines is that of a teacher hitting a student. After giving the teacher a chance to be heard, and the teacher not being able to offer any legitimate explanation for falling short of the conduct expected of him, it may be justified to dismiss the teacher without notice.
When Notice Is Required
All other grounds for dismissal will require notice.
Dismissing an employee by invoking a contractual right to terminate with notice is presumed not to be wrongful. The burden shifts onto the employee to say on what wrongful reason they were dismissed. The employee will need to substantiate the wrongful reason cited. Examples and illustration of wrongful reasons provided in the guidelines are discrimination, deprivation of benefit and punishing an employee for exercising his employment right.
The guidelines also make clear that dismissal with notice on the grounds of redundancy is not wrongful.
Furthermore, where an employer intends to dismiss an employee for poor performance, the employer should substantiate the poor performance by documenting the shortcomings of the employee and ensure that the employee had a chance to improve before dismissing the employee with notice.
Notwithstanding the above, Minister for Manpower Mrs. Josephine Teo pointed out at the second reading of the Employment Amendment Bill in parliament on 20 November 2018 that:
It would not be possible to define all scenarios of what constitutes wrongful dismissal and what does not. Instead, a more feasible approach is to use illustrations and set out principles and parameters that the [Tribunal] must take into account when adjudicating cases.
Indeed, whilst the guidelines do provide clarity and a much-needed framework for stakeholders to assess wrongful dismissal claims, often, the fact patterns before the Tribunal vary. For instance, allegations of misconduct against the employee are often not as extreme as that of the example of the teacher hitting the student provided in the guidelines.
Employees will therefore need to apply the principles provided in the guidelines judiciously to assess the merits of their potential claims against employers. Among other things, they will need to consider first if they were dismissed with notice. If yes, they will then need to ask if the employment contract provided for the employer to terminate the employment contract with notice. If yes, then the employee must recognise that the onus is on him or her to show that the dismissal was for a wrongful reason such as discrimination or deprivation of benefit.
If no notice was given, then the employee could only have been dismissed for misconduct, and the employee must decide if this was indeed the case.
Similarly, employers will need to ask themselves whether the employee conduct giving rise to the intended dismissal amounts to misconduct. If yes, they then need to ask whether a proper inquiry had been conducted to give the employee a chance to respond to the allegations. After a proper inquiry (and provided that the employee does not have legitimate reason), the employer may proceed to dismiss the employee.
However, if the alleged conduct of the employee does not amount to misconduct, notice would be required for dismissal.
The guidelines have indeed provided a framework to help narrow the issues before the Tribunal in determining if there was a wrongful dismissal. The issues before the Tribunal are very likely to be: whether the conduct alleged amounts to misconduct; whether the employer conducted a proper inquiry; and/or whether the employee can substantiate its case that despite notice being given, there is a wrongful reason for the dismissal.
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For further information, please contact:
Cumara Kamalacumar, Duane Morris & Selvam LLP
cKamalacumar@selvam.com.sg
