Labour Court Recovers $800,000 in Salary Claims From Jan - Apr‘09

MOM provides local workers with an effective avenue for redress

In the first quarter of this year, the Ministry of Manpower (MOM) helped 750 local workers recover about $800,000 in claims. MOM's Labour Court¹ heard around 490 cases, for which Orders were issued for payments to be made to workers. For the remaining cases, employers reached out-of-court settlements with their workers.

2.   Between January and April 2009, 86% of cases were heard and concluded by the Labour Court within two weeks from the first hearing. Some of the cases heard by the Labour Court are detailed below.

Idealsoft Pte Ltd (Salary in lieu of termination notice)

3.   In December 2008, Idealsoft Pte Ltd terminated the services of four employees, without paying salaries in lieu of termination notice. Three of them were also owed salaries. The amounts owed ranged from $1,700 to $6,000.

4.   The Labour Court conducted an Inquiry in January 2009. At the Inquiry, the company claimed that it had a verbal agreement with the employees to waive the two months' notice period. This claim was disputed by the employees. The company did not dispute the salary arrears.

5.   Based on the Inquiry, the Labour Court advised both parties that the two months' notice period was clearly stated in the employment contracts and there was nothing to suggest why the contractual obligation should be overridden.

6.   In light of this advice, the employer reached a settlement with the employees, to pay them salaries in lieu of the notice period, and also to repay any salary arrears. This agreement was documented in a Consent Order issued by the Labour Court. At the company's request, the employees agreed to be paid in instalments. The employees received full payment in early May 2009.

7.   MOM reminds employers that notice periods in employment contracts provide time to the affected party to prepare for the cessation of the employment relations. It benefits both the employer and the employee. Hence, it would be unfair for the employer to deny employees' their notice pay if the workers have no opportunity to serve out the notice period. If employers intend to vary the terms of the employment contract, this should be communicated clearly and put in writing.

Candy Kids Childcare (Paid sick leave and unauthorised salary deduction)

8.   A teacher employed by Candy Kids Childcare took 8 days of hospitalisation leave in December 2008. She went on further hospitalisation leave in February and March 2009. Her employer failed to pay her salaries for February and March 2009. In addition her employer also deducted 8 days of hospitalisation leave taken in December 2008 from her salary for January 2009.

9.   At the Labour Court inquiry, Candy Kids Childcare took the position that the teacher was on probation and hence not entitled to paid sick leave. It was explained to the company that this position was not supported by the law. An employee on probation remains an employee, and time served during the probation must be considered for the purpose of determining eligibility for sick leave. As the teacher had worked for more than six months before going on hospitalisation leave, she was entitled to paid sick leave.

10.   The employer accepted the advice of the Labour Court and a Consent Order was issued for the employer to pay salary for February 2009 and March 2009 and to refund the deduction made from the January 2009‘s salary.

11.   Under the Employment Act, an employee is entitled to pay sick leave if he has served the employer for at least 3 months.

Ah Chiang Motor Works (Annual leave, sick leave and termination notice)

12.   A spray painter employed by Ah Chiang Motor Works was hospitalised for about a month in late 2008. During his hospitalisation leave, his employer terminated his employment and offered him a sum of $2,800 as a settlement. No explanation was given as to how this sum was arrived at. The employee filed a claim for 21 days of unconsumed annual leave, 24 days of hospitalisation sick leave pay and 4 weeks salary in lieu of termination notice.

13.   At a Labour Court Inquiry held in January 2009, the employer explained that it had intended to terminate the worker's employment in accordance with his employment contract. The Labour Court informed the employer that his full obligation to the worker upon terminating his services should have been around $5,300. In light of this advice, the employer paid the full amount to the worker under a Consent Order.

14.   Employers should make full termination payments to their employees. The payment should be computed based on an employee's contractual rights or on a mutually agreed upon amount. Employers are also advised to carry out terminations in a responsible manner. In this case, the employee was on hospitalisation leave when the employer served the notice of termination. Its timing could be perceived as insensitive and could harm employer-employee relations.

MOM Advisory

15.   Workers are advised to refer to their obligations and rights in their employment contracts and the Employment Act. If they feel that the law has not been complied with, they may approach the Ministry for advice and assistance. They can also make an e-appointment through the MOM website or contact MOM at (65)6438 5122.

¹ Information on the Labour Court is at Annex A and B.

Annex A

ABOUT THE LABOUR COURT

1.   The Labour Court is an administrative tribunal presided by senior officers of the Ministry, appointed as Assistant Commissioner for Labour (ACL). When a claim is lodged, the ACL convenes a hearing to inquire into the claims in the presence of all parties involved and issues orders if the claims are substantiated. The decision and orders of the ACL are deemed to be those of a District Court, and may be reviewed only via an appeal to the High Court. The orders issued by the ACL may be enforced by a writ of seizure and sale if they are not complied with. Claims which are not substantiated are dismissed by the ACL.

ASSISTANCE GIVEN TO WORKERS

2.   Since its inception in 1968, the Labour Court has served an important function in enabling workers with valid claims to seek a quick resolution without incurring high costs.

3.   To level the playing field, legal representation is prohibited in the Labour Court proceedings, as unlike employers, workers may not have the financial resources to engage lawyers. Although the Labour Court proceedings are conducted in English, the Ministry provides interpretation services through court-certified interpreters in Mandarin/key dialects, Malay and Tamil. This ensures that workers who are not conversant in English are not at a disadvantage due to their lack of proficiency in English, and will be able to present their case before the Assistant Commissioner for Labour (ACL).

4.   The Ministry also follows up and investigates cases where there is evidence of serious violations of the Employment Act. This is done with the view to taking punitive action, including prosecution, against employers who flout the Employment Act.

Annex B