In Singapore, the termination of employment for employees is governed by both their contract of employment and the Employment Act (“EA”). This doesn’t include domestic workers, seafarers, and any person whom the Minister has excluded via Gazette.
It is a legal requirement that an employee’s employment contract does not contain terms that would be less favourable to that worker than their rights under the EA.
The provisions related to the termination of employment are contained in sections 9-11 of the EA. Ultimately, employment can be terminated in one of three ways:
- If the work is on a contractual basis – when the contract for the work expires or when the work specified in the contract is completed;
- By written notice – your contract will determine the length of this notice. If it does not, then it will be determined in accordance with section 10(3) of the Act.
- Without notice – this is known as summary dismissal.
There are strict regulations regarding the right to terminate without notice, or for summary dismissal. The right to do so can be exercised in one of the following ways:
- One party paying to the other party a sum which is equal to the amount of salary under the notice period; or
- In the case of a wilful breach of a condition of the contract of service: usually, the contract will specify which matters are conditions of the contract, and what would amount to a breach of them because of misconduct, in order to allow summary dismissal. These situations are limited by law: the courts and the Ministry of Manpower (MOM) apply very high standards of proof in determining if a company can rely on misconduct to use the right of summary dismissal.
Misconduct includes dishonesty, theft, bringing the company into disrepute, or disorderly behaviour at work. Employees are granted protection under Singapore law against unfair, unlawful and wrongful dismissal. Although these types of dismissal are commonly claimed when an employee is dismissed without notice, the definition of unlawful/wrongful dismissal is in fact wider than this and includes scenarios where notice was given, but it was seen to be unjust or without sufficient cause.
What constitutes wrongful or unfair dismissal in Singapore?
The MOM published guidelines in December 2018 and again in March 2020 as to what might constitute wrongful dismissal.
In the event that an employee can successfully prove wrongful dismissal, other than bringing the case to court, they can also file a complaint with MOM through Tripartite Alliance Dispute Management (“TADM”). For managers and executives (including foreign employees), this route may only be used if you have worked for your employer for at least six months
According to Section 14(2) of the Employment Act, the employee can file a claim for wrongful dismissal if that employee feels they were dismissed without just cause or excuse. If successful, he or she may win reinstatement of their employment, or compensation.
Examples of wrongful dismissal include:
- Dismissal on discriminatory grounds;
- Dismissal in order to deprive an employee of benefits or entitlements;
- Dismissal to punish an employee for exercising an employment right;
- Dismissal based on grounds which are not substantiated;
- Involuntary resignation.
These examples can be evidenced by the notice that is given (if a reason was provided) or by looking at recent events/conduct in the company (if a reason for notice was not provided or in the case of summary dismissal).
There are various reasons that a dismissal might be considered as being on discriminatory grounds. These include dismissals that are based on age, gender, disability, nationality, family responsibility, pregnancy, religion, or race.
A common scenario where employees suspect they have been dismissed on discriminatory grounds is when they are dismissed following recent discussions on their inability to converse in a preferred language, even though the language is not a working requirement.
A further example would be a situation where an employee can prove that they were the subject of discriminatory remarks made by their employer regarding their religion, or where the employer stated they would rather hire someone of a different religion.
Deprivation of employee benefits or entitlements
Usually, this will involve a dismissal on the grounds of ill-health, as the company may try to deprive (or intend to deprive) the employee of their medical treatment entitlements under the statute and/or their employment contract.
A further common example arises when an employee is dismissed soon after telling their employer that they are pregnant.
Finally, this may include a situation where employees are dismissed with or without notice in a disguised retrenchment situation, so that the company avoids paying retrenchment or redundancy benefits which may be accrued under their contract, or are in contravention of MOM’s guidelines and advisories.
Punishing an employee for exercising an employment right
This basis for wrongful dismissal involves a situation whereby the employer dismisses an employee to punish them for exercising their employment rights.
For example, it could involve a scenario where an employee is terminated shortly after a failed negotiation to reduce their salary. It may also include situations when an employee has their employment terminated after making a legitimate police report, or beginning a claim, against the company for failure to act on workplace harassment and/or bullying.
Other cases include the dismissal of an employee who refuses to work overtime because they must take care of their baby. Employees have a statutory right to refuse overtime. Likewise, an employee has the right to request mediation; they cannot be dismissed if they ask for mediation with the employer for non-payment of salaries.
Grounds which are unsubstantiated
In terminations with or without notice, the most common ground cited is bad/unsatisfactory performance or misconduct.
It is important to remember that, where misconduct or poor performance is cited as the reasons for the dismissal, then it is the employer who bears the burden of proving that ground for dismissal. If the employer is unable to do so, then the dismissal will be considered wrongful.
In cases where misconduct is alleged, the employer must show that there has been some form of due inquiry before they exercise the right to terminate an employee. This means they must give the employee the opportunity to put forward their views and be heard.
The dismissal would also be ruled wrongful if an employer gives any other reason for dismissal with notice and the reason given is proven to be false.
In this situation, the employee is given no choice but to resign. It is also a common scenario in cases of constructive dismissal.
Employees who are claiming this usually state that they were put under duress by their employer, and had involuntarily resigned (or were forced to resign). As a consequence, they were then unable to access certain employment benefits, such as retrenchment or their full notice period as set out in the employment contract.
What is the safest way to terminate an employment relationship?
When terminating someone’s employment, it is always best to do so by giving the proper notice. This is because contractual terminations are presumed not to be wrongful by virtue of the fact that both employer and employee have a legal right under the terms of the contract to terminate the employment.
In this situation, the employee does not give the employee any reason for the termination other than the fact they are relying on their contractual right to terminate.
However, even in this scenario, employers should still be cautious of two situations:
- That there are no facts, situations or incidents which would suggest that the employer’s intention was to terminate using discrimination, or because they wanted to deprive the employee of benefits and entitlements, or because they are punishing the employee for exercising an employment right;
- That it is not a disguised retrenchment. MOM will presume retrenchment when more than 5 employees are terminated within a period of 6 months.
What happens in cases of unlawful or wrongful dismissal?
It will depend on where the matter is heard. For example, if an employee has damages to claim as a result of their wrongful dismissal, they may take their employer to court.
On the other hand, the employee may register a complaint with TADM and escalate the matter to the Employment Claims Tribunal (ECT) if it is not settled through Tripartite Alliance Dispute Management (TADM). TADM and ECT have a maximum claim of S$20,000.00.
In order to calculate potential monetary compensation, the TADM/ECT will assess and determine the following factors as per the Second Schedule of the Employment Claims Regulations 2017:
- Loss of income – this is capped at 3 months of the employee’s gross rate of pay;
- The harm caused to the claimant – this is capped at 2 months of the employee’s gross rate of pay
The award in the ECT may also be adjusted up or down (by 50%) because of any aggravating or mitigating factors that are found to apply.
Aggravating circumstances may include humiliating/degrading conduct toward the employee; physical harm; false accusations made by the employer against the employee; or any deliberate act on the part of the employer to adversely influence the employee’s changes of subsequent employment.
Mitigating factors will include any poor performance or misconduct on the part of the claimant or any insubordination by them.
Is there a time limit to filing my claim?
You would be time-barred from bringing a claim to Court if it is more than 6 years after the date of your dismissal.
If you want to bring a claim to MOM / TADM, you must do so within a month of the date of your final day of employment. This deadline is extended for women who are wrongfully dismissed during their pregnancy; they have up to 2 months to bring a claim from the birth of their child.
What should an employer/employee do when there are claims that the dismissal is unfair, unlawful, or wrongful?
Usually, a company will have its own internal procedures to try to resolve complaints of unfair treatment. It is always a good idea to try and resolve issues internally in the first place.
However, if your issues cannot be resolved internally, you can proceed with a claim in Court, or with a mediation claim with TADM. If TADM fails to resolve the matter, it will then be heard in ECT.
No lawyers are allowed to attend the TADM or ECT proceedings, although you are allowed to get advice from a lawyer on the correct procedures to follow. It could be important to get legal advice before commencing the process in order to know whether or not you have a valid case and to know where is best to commence to claim.
It might also be advisable to engage the services of a lawyer if you are pursuing your case in Court, as there are various documents that need to be drafted and filed in order to commence the action.