Tripartite group recovers S$29m in owed wages; resolves 85% of salary claims within 2 months

SINGAPORE — It was her first full-time job but for Ms Quek, it turned out to be a “scary” ordeal that started when she was served with a lawyer’s letter by her employer on her last day of work.

Her employer had demanded two months’ salary as compensation based on a clause in the work contract — Ms Quek had resigned before completing a year of employment.

The then-23-year-old fresh graduate was a teacher at a local kindergarten and student care centre. She decided to resign in May 2018, eight months into the job. It was then when she noticed the clause in her contract and offered to serve two months’ notice instead.

“My employer told me verbally that she will agree to let me leave… I remember feeling a sense of relief because she did not mention anything about compensation," she told CNA.

But the young teacher said she was suddenly told to leave on July 16, 2018. She received an even bigger shock in the form of the lawyer’s letter when she reached home. The letter informed her she would not be paid for her work in June and July.

“I was super scared and I cried,” recalled Ms Quek, who then turned to the Tripartite Alliance for Dispute Management (TADM) for help.

The dispute management office began arranging for a mediation session, which took place about a month later. But it did not go well as Ms Quek’s employer remained “agitated” and insisted on taking her to court.

Ms Quek recalled feeling afraid but stood her ground, especially after having sought legal advice that the clause in the contract “is not allowed according to local labour regulations”.

It took a few mediation attempts by TADM before the employer agreed to pay Ms Quek her salary for June and July, and a partial amount of her overtime pay, which totalled to about S$2,300.

“Every day in July and August, I was just very scared and worried that I would receive a letter from the court,” she said, sounding slightly emotional. “But I’m relieved that everything was resolved within two months.”

Ms Quek was one of the 14,757 workers who sought help from TADM over salary-related disputes from April 1, 2017 to Dec 31, 2018.

She was also among the majority whose claims were resolved within two months (85 per cent) and through mediation at TADM (84 per cent).

The remaining salary disputes took between two and six months (15 per cent), according to figures released in TADM’s inaugural Employment Standards Report on Friday (Oct 11).

For those that could not be resolved at the mediation stage (16 per cent), they were referred to the Employment Claims Tribunals (ECT) for adjudication.

After getting a resolution at TADM or the ECT, 88 per cent, or 11,494 employees, managed to fully recover their unpaid salaries. This amounted to about S$29 million.

Employers of the remaining 3,263 workers who had salary claims were not ordered to make payment. This was due mainly to withdrawal of claims either before or after mediation when the claimants realised that they did not have valid claims.

MORE CLAIMS BY FOREIGN WORKERS

TADM was set up by the Ministry of Manpower (MOM), National Trades Union Congress and the Singapore National Employers’ Federation in April 2017 to offer advice and conduct mediation for employment and payment-related disputes. 

It comes under the Tripartite Alliance Limited, which also oversees the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP) and the Workplace Safety and Health Council. 

For the 21 months taken into account for the report, TADM said the incidence of salary claims was “low” with 2.42 of such cases per 1,000 employees last year. The overall figure for 2017 was 2.49.

Cases lodged by foreign workers were nearly three times more than that by locals.

The figure stood at 4.45 salary claims per 1,000 foreign claimants last year and 4.41 in 2017. About 60 per cent came from workers in the construction sector, where claim numbers have been “high” over recent years but were exacerbated by weak growth in the sector, the report said.

By comparison, TADM’s figures showed 1.43 salary claims per 1,000 local employees in 2018 and 1.55 in 2017.

The minor drop “was partly driven by the good business conditions in 2017 and 2018, in particular for the manufacturing and services sectors which contributed to the bulk of local salary claims,” it said.

Claims filed by foreign employees also involved larger salary arrears. The typical duration of unpaid wage claims by foreign employees was about two to 6.5 months, compared with the 0.5 to 2 months for locals.

TYPES OF SALARY CLAIMS

The payment of basic salary was the top wage-related dispute, comprising 82 per cent of overall claims from April 2017 to December 2018.

A further breakdown showed this being lodged by 70 per cent of locals and 90 per cent of foreigners.

The report said business failures and “technical breaches” such as errors in calculation or late payroll scheduling, were the reasons behind these claims. The latter stemmed from a lack of understanding among employers of their legal requirements.

For foreign employees, another contributing factor was the “illegal downward adjustments” of salaries done by their employers without first seeking the consent of employees and informing MOM, it added. 

Unpaid wages for overtime work and work done on rest days and public holidays, were the second most common type of claims (42 per cent) and filed more commonly by foreign workers.

Apart from business failures, such disputes typically arise from “poor awareness” among small- and medium-sized enterprises (SMEs) of their legal requirements such as having to issue key employment terms and itemised payslips, according to the report. 

Other common salary-related claims involved unpaid salary in lieu of notice and annual leave, as well as deductions. 

TADM’s general manager Kandhavel Periyasamy said: “When we started TADM, what we wanted was for mediation to be fair and effective as well… An 85 per cent settlement rate, to us, is very good.” 

“We continue to see how we can enhance our processes, improve our systems so that we can continue to help workers and employers as well,” he told reporters after a briefing earlier this week. 

Asked whether the claim numbers could increase and take longer to be resolved given uncertain economic conditions, TADM said it is “concerned”. 

“We will continue to monitor the trend and if there is indeed a spike, we will feedback to MOM to see how we can work proactively to help employers (and) workers,” said Mr Periyasamy.

BEEFING UP WORKPLACE PRACTICES

The inaugural report also outlined a “three-prong approach” by the Manpower Ministry to improve workplace practices. 

The first involves a rectification approach for companies that have committed “less severe breaches”. 

“This recognises that there are employers, especially some SMEs, that have poor employment practices but are unlikely to reoffend once they have corrected their practices,” the report noted, citing incomplete and inaccurate employment records as some examples.

Such companies will be sent to “corrective clinics” run by TAFEP. They are required to correct their lapses and will be subjected to “random follow-up checks”. 

About 380 firms have attended these corrective clinics as of September, the report said. 

Second, MOM is also ramping up enforcement, such as carrying out more than 11,000 proactive workplace inspections in 2017 and 2018.

The report said this has helped about 47,000 employees receive their due employment rights, like timely payment of salary and correct payment for overtime work done.

New operational concepts have also been rolled out to increase enforcement effectiveness.

This includes drawing adverse inferences against employers that do not comply with employment laws, and the issuing of “salary payment declarations”.

For the latter, MOM has been using data analytics to identify employers that are at a higher risk of defaulting on workers’ salaries. It then orders these employers to declare if salaries have been paid up to date or if they are in arrears.

This is a proactive way to “identify salary arrears before they snowball”, TADM and MOM said in a joint press release.

Since a pilot exercise involving 100 construction companies started in February 2018, 123 cases of salary arrears were detected among four of these firms. This led to an early recovery of S$300,000 in salary arrears, with workers generally owed between one to two months' salary.

Taking into account the truthful declarations and quick rectification moves by these four employers, MOM issued stern warnings against them and curtailed their work pass privileges. 

Mr Periyasamy said such an enforcement method sends a message that “MOM is watching” and prompts companies to rectify any egregious infringements.

It is also less resource intensive, compared to workplace inspections, he added.

Education forms the final component of MOM’s approach and the ministry conducts initiatives, such as Workright and the Settling-In Programme, to educate firms and workers on their rights and obligations.

“MOM will continue to raise awareness of good employment practices among employers and educate employees on their rights,” said Ms Christine Loh, director of MOM’s employment standards enforcement department. 

“MOM will also look at improving enforcement and dispute management mechanisms to address various workplace issues and raise Singapore’s employment standards,” she added. CNA

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