Employment Disputes in Singapore

Last updated on March 29, 2019

If you are a professional, manager or executive earning more than S$4,500 per month (“PMEs”), you are not protected under the Employment Act. Your employment disputes are usually governed by the common law of contract instead.

However, there is good news for all PMEs: from April 17 2017, the Employment Claims Tribunal will be established under the State Courts to hear salary-related claims of all contractual employees including PMEs. As a consequence, the Tribunal will take over from the Labour Court and hear statutory salary claims under the Employment Act, Retirement & Re-employment Act and Child Development Co-Savings Act. Claims will include unpaid salary, overtime pay, salary in lieu of notice, employment assistance payment and maternity benefits.

You can read more about the Employment Claims Tribunals in our other article.

Disputes not related to salary are likely to remain out of the jurisdiction of the Employment Claims Tribunal, and settled in the Singapore civil courts, where legal representation by an employment disputes lawyer is preferable.

There are some types of employment disputes not governed by statute, whether the employee is a PME or not. In particular, these disputes pertain to:

  1. Restrictive covenants and training bonds in employment contracts which do not have statutory protection;
  2. Discrimination issues

Restrictive Covenants

Restraint of trade clauses are restrictive covenants imposing constraints on former employees from engaging in competing business activities or soliciting clients from a previous employer. Such clauses include non-compete clauses and non-solicitation clauses.

If a former employee resigns from a company to set up a similar business, whether the employee is in breach of the restrictive covenants in the previous employment contract depends on the Court’s assessment of whether the restrictive covenant:

  1. Serves a legitimate purpose to be protected and the restraint does not go beyond the reasonable measures to achieve that objective
  2. Is reasonable to the all contracting parties (employer and employee) and to the public.

For further reading, please refer to our respective articles on non-compete clauses and non-solicitation clauses.

Training Bonds in Employment Contracts

Can an employer enforce an employment bond? Yes, if effected through a legal contract. Usually, where an employee has to pay monetary compensation for breaking a bond, the issue is to determine whether the employment contract has imposed liquidated damages, which is enforceable if it is a genuine pre-estimate of loss, or whether it is to be construed as a penalty. In the latter case, penalty clauses are not enforceable by the employer.

Discrimination in Employment

There is no comprehensive anti- discrimination law enacted in Singapore. However, some prohibitions are included in various sources of law, for example anti – discrimination has been addressed in the following:

  1. Article 12(2) of the Singapore Constitution protects Singapore citizens from discrimination on grounds of religion, race, descent or place of birth in any law or in the appointment to employment under a public authority that is, every government body or statutory board has an obligation to be an equal opportunity employer;
  2. The Employment Act protects pregnant employees covered under the Act from unfair dismissal for a period before and after confinement;
  3. The Retirement & Re-employment Act (RRA) does not permit employers to dismiss employees below the age of 62 years on grounds of age;
  4. Every contract of employment has an implied term in law that the employer and employee will act with trust and confidence towards each other, though such a term may be excluded by express agreement. As a consequence, an implied term of contract creates an obligation for employers to address complaints relating to discrimination in fulfilling their duty of mutual trust and confidence with the employee.

If dismissed due to discrimination, compensation for unfair dismissal is based on a breach of the implied term of contract under two categories:

  1. Premature Termination losses – benefits the employee would have received if the contract was brought to an end lawfully
  2. Continuing losses – Losses over and above premature termination losses incurred by the employee as a consequence of the breach e.g reputation and loss of future employment prospects in limited cases. For example, this may be possible in a case where the employer has smeared the employee’s reputation in breach of the duty of mutual trust and confidence with the employee.

Lastly, while PMEs may not get much help from the Ministry of Manpower because of the limitations of the Employment Act, the NTUC offers assistance to aggrieved employees regardless of their salary bracket. It has also set up a PME centre in this regard. Depending on your preferences, it might be worthwhile considering being a Union member.

If you require a legal review of your employment situation, you can compare quotations from experienced employment lawyers.

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