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Employment Claims Tribunal, Enhanced Tripartite Mediation Come to Singapore

Singapore’s employment landscape has recently witnessed a marked shift toward being more employee friendly, making it easier for a wider range of employees to bring employment claims in a low-cost and expeditious manner.

The recently launched Employment Claims Tribunal (ECT), the enhanced Tripartite Mediation Framework (TMF), and the newly constituted Tripartite Alliance for Dispute Management (TADM) will enhance dispute management in Singapore, empowering employees to resolve their employment claims.

Launch of the Employment Claims Tribunal

On April 1, 2017, the Singapore State Courts launched the ECT to facilitate the affordable and expeditious resolution of employment disputes, including disputes centered around contractual salary-related retrenchment benefits.

Akin to the Small Claims Tribunal, the ECT is intended to provide a speedy, low-cost forum for parties to resolve their employment disputes. The ECT will have simplified procedures and will be led by a judge. Parties to the proceedings must act in person and cannot be represented by a lawyer or an agent. This is significant as it levels the playing field for those employees who have grievances against their employers but lack the resources to engage legal counsel.

The ECT, which is established under the Employment Claims Act, will hear the following types of salary-related claims:

  • Statutory salary-related claims from employees covered under the Employment Act, the Retirement and Re-employment Act, and the Child Development Co-Savings Act. The categories of such statutory salary-related claims include unpaid salary, overtime pay, salary in lieu of notice, employment assistance payments, and maternity benefits. The ECT will assume the functions of what was previously known as the Labour Court at the Ministry of Manpower (MOM).

  • Contractual salary-related claims from employees, including Professionals, Managers, and Executives (PMEs) who earn more than $4,500 per month. Such claims would include payment of allowances, bonuses, commissions, salary in lieu of notice, and retrenchment benefits, provided that these are expressed in monetary terms under a contract. This will bridge the current gap for this group of employees who are not covered under the Employment Act and whose only recourse prior to the establishment of the ECT would be through civil court.

  • Employers may also file claims for salary in lieu of notice with the ECT.

The ECT will only have jurisdiction to hear claims up to S$20,000, or up to S$30,000 for those who go through the TMF or through mediation with assistance from trade unions recognized by the Industrial Relations Act. Salary-related claims that cannot be settled through the TMF at the newly constituted TADM will be heard at the ECT.

Tripartite Alliance for Dispute Management and Enhanced Tripartite Mediation Framework

The introduction of the ECT is supplemented by an enhanced TMF that enables more employees to benefit from tripartite mediation to resolve employment disputes at the TADM. As of April 2017, all PMEs and rank-and-file union members in nonunionized companies now have access to the TMF for a wider range of issues including employment statutory benefits, reemployment issues, arrears of salary, breaches of individual employment contracts, and payment of retrenchment benefits.

The TADM, in addition to conducting the pre-ECT mediation, will serve as the MOM’s approved mediation center for all employees, both union and nonunion. The TADM is also operating a short-term relief fund as of April 1, 2017, with funds used to provide financial relief to low-income claimants whose employers are unable to pay their salaries due to business failure.

Together, the ECT, the enhanced TMF, and the TADM provide a more comprehensive and inclusive dispute management landscape that empowers employees to resolve employment claims with more ease.

Lessons Learned

The launch of the ECT and the TADM in April 2017, combined with the enhanced TMF framework, signal a clear shift toward a more employee-friendly employment landscape in Singapore. It is significant that the ECT requires parties to attend in person without lawyers present. This levels the playing field and removes significant barriers, including cost and access to resources and networks, for employees taking action against their employers.

These major developments should spark a rethink of the employment policies implemented by companies in Singapore. Given this new employment landscape, companies should consider putting in place stronger employee protection measures and more stringent exit procedures for outgoing employees in order to avoid exposing themselves to the risk of unnecessary disputes.

Copyright © 2017 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

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About this Author

Daniel Chia, Morgan Lewis, venture capitalists attorney, fraudulent investments legal counsel, regulatory securities lawyer
Partner

Daniel Chia represents litigation and arbitration clients in investment disputes, shareholder litigation, fraud prosecution and securities and regulatory enforcement proceedings in the banking, finance, and investment industries. Clients, including high-net worth individuals and venture capitalists, seek Daniel’s advice to recover funds from fraudulent and misrepresented investments. He represents clients, either as defendants or plaintiffs, in a wide range of white collar criminal proceedings, including allegations of money laundering, corruption and tax evasion.

65-6389-3053
Kim Seng Lo, Morgan Lewis Law Firm, Singapore, Corporate Finance and Labor Law Attorney
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Kim Seng Lo advises corporate finance clients in a broad range of capital markets, mergers and acquisitions, corporate, and commercial matters. He has spent two decades practicing all aspects of corporate law. Kim Seng advises clients in significant mergers and acquisitions, equity capital markets, and corporate regulatory transactions. Having worked in both private practice and as an in-house counsel, he brings a practical, client-oriented approach to his work.

65-6389-3084
Amarjit Kaur, Morgan Lewis Law Firm, Singapore, Commercial Litigation and Labor Law Attorney
Associate

Amarjit Kaur assists clients in a broad range of commercial litigation and international arbitration matters, with a focus on restructuring and insolvency, corporate construction, and employment law. Her work spans a variety of jurisdictions including Singapore, Indonesia, Japan, and Australia. Amarjit also represents clients in a broad range of civil and commercial matters, such as employment and defamation disputes.

65-6389-3065