Wrongful Dismissal in Singapore

  • Employment
Wrongful Dismissal in Singapore

In Singapore, the termination of employment for employees is governed by two things: their employment contract, and the Employment Act (EA) (This does not include domestic workers, seafarers, and other individuals excluded via Gazette by the Minister).

By law, an employee’s employment contract must not contain terms deemed less favourable to the employees compared to their rights stated under the Employment Act. The EA’s Section 9-11 contains provisions related to an employee’s termination of employment.

Simply put, there are three ways in which employment may be terminated:

  • If it is contract work: Employment may be terminated when the contract expires, or when the specified work is completed.
  • By written notice: Employment may be terminated if the length or duration is stated in the contract, or in accordance to Section 10(3) in the absence of these provisions.
  • Without notice: Referred to as a summary dismissal.

The right of an employer to terminate without proper notice—or summary dismissal—is stringently regulated. It may be exercised by either party paying the other party a sum equivalent to the amount of salary under the notice period, or if there exists a party’s wilful breach of a condition in the contract of service.

Typically, an employment contract provides further descriptions of the matters presumed to be conditions of the contract, and when its breaches are deemed misconduct to allow the company a summary dismissal. However, such scenarios are limited. Both the courts and the Ministry of Manpower (MOM) apply high standards when determining whether a company can rely on misconduct to exercise their right for a summary dismissal.

The only valid reason for dismissal without any notice is misconduct. This includes dishonesty, theft, disorderly behaviour in the workplace, or bringing the company into disrepute.

Under Singapore laws, employees are protected against unlawful, unfair, and wrongful dismissal. While unlawful, unfair, and wrongful dismissal is commonly applied in situations in which an employee terminates an employee without notice or summarily, the definition of wrongful dismissal is broader than such situations. It also includes scenarios wherein an employee’s employment is terminated without sufficient or just cause, and situations where notice was given.

What is a Wrongful Dismissal?

In December 2018 and again in March 2020, the Ministry of Manpower published guidelines on what constitutes a wrongful dismissal.

Should an employee be able to prove that he or she has been dismissed wrongfully, they may, apart from bringing a case to court, file a complaint with the Ministry of Manpower through the TADM or Tripartite Alliance Dispute Management (Managers and executives may only take this route if they have served their employers for at least six months).

According to the Employment Act’s Section 14(2), the employee is given cause to lodge a claim for wrongful dismissal should the employee feel that he or she was dismissed without just excuse or cause. Should the employee be successful, then he or she may obtain either compensation or reinstatement of employment.

Some examples of wrongful dismissal include:

  1. Dismissal on discriminatory grounds;
  2. Dismissal to deprive an employee of obtaining entitlements or benefits;
  3. Dismissal to punish an employee for exercising an employment right;
  4. Dismissal based on grounds that are unsubstantiated; and
  5. Involuntary resignation.

The above-mentioned examples may be evidenced by the notice given—if a reason was provided. If reason was not provided in the notice or if the employee was dismissed summarily, the above may be evidenced by recent events or conduct in the company.

Discriminatory Grounds

If a dismissal is based on a person’s gender, age, disability, nationality, race, religion, pregnancy, or family responsibilities, then it may be deemed as on discriminatory grounds.

A common situation that employees suspect they were dismissed on grounds of discrimination is when they are let go after recent discussions on their incapacity to converse in a chosen language—even if that language was not a working requirement.

Another example could be a situation wherein the employee proves that the employer made discriminating remarks about their religion, or if the employee stated that they would prefer to hire an individual belonging to a different religion.

Depriving Employees of Entitlements or Benefits

Cases involving an employee’s deprivation of entitlements or benefits typically arise when an employee is ill or is in poor health, and the company opts to deprive the employee of their medical entitlements under the statute and/or the employment contract.

Another common case is when an employee is dismissed shortly after the employer is informed that the employee is pregnant.

At times, employees are also dismissed with or without notice in a disguised retrenchment situation. This way, the company can avoid paying retrenchment or redundancy benefits that may be accrued contractually or are in contravention of the Ministry of Manpower’s guidelines and advisories.

Punishing an Employee for Exercising Employment Rights

This ground comprises situations wherein an employer dismisses an employee as punishment to the employee for exercising his or her employment rights.

This ground involves scenarios where there is termination of an employee soon after an unsuccessful negotiation with the employer to reduce the salary of the employee. It may also include situations wherein the employee is terminated after filing a police report or instigating a claim against the company for its failure to act upon a known situation of bullying and/or harassment in the workplace.

Other potential scenarios include an employee’s dismissal after declining to work overtime because he or she needs to care for their baby, as they have a legal right to refuse to work overtime. An employee may also not be let go if he or she requests undergoing mediation with the employer due to the non-payment of salaries, as employees have the right to request for mediation.

Unsubstantiated Grounds

When it comes to terminations with or without notice, the most commonly cited ground is poor, unsatisfactory, or bad performance or misconduct.

Note that when the reason cited for the dismissal is bad performance or misconduct, the employer has the burden of proving that specific grounds for dismissal. If the employer is able to prove this, then the dismissal is considered wrongful.

When misconduct is alleged, the employer must also show that there was some form of due inquiry before the termination is exercised. This includes providing the employee with an opportunity to be heard.

If the employer gives any reason for dismissal with notice, yet the reason provided is proven to be false, then the dismissal is considered wrongful.

Involuntary Resignation

Involuntary resignation occurs when an employee has no other choice but to resign. It is often an example in a constructive dismissal case.

In most cases, employees claim that the company placed them under duress, and state that they were forced to resign or that they resigned involuntarily. As a consequence of such, these employees were deprived of specific employment benefits—such as retrenchment or even the full notice as indicated in their employment contracts.

Safely Terminating an Employment Relationship

The best way to terminate an employment relationship is with proper notice. Contractual terminations are not typically assumed to be wrongful, as both employee and employer have the contractual right to terminate employment according to the contract.

In these scenarios, an employer does not inform the employee of any reason for termination other than their relying on the contractual right to termination.

Even in this scenario, however, employers still need to be wary of two things:

  • That there are no incidents, situations, or facts that could suggest the intention of the employer to deprive the employee of entitlements and benefits, to terminate due to discrimination, and/or to punish an employee for exercising his or her employment right; and
  • That it is not a disguised retrenchment.

The MOM assumes that retrenchment in scenarios where over five employees are terminated within a period of six months. During the period of COVID-19, MOM also presumes that retrenchment occurred if the position is not filled up soon.

When there is a Wrongful or Unlawful Dismissal

What happens in cases of wrongful dismissal depends on where the matter is heard. For instance, an employee who has damages to claim because of the wrongful dismissal may take the employer to court.

On the other hand, an employee may opt to file a complaint with the TADM, and if not settled successfully, may escalate matters to the Employment Claims Tribunal (ECT). Both TADM and ECT have a S$20,000 maximum claim.

When determining monetary compensation to be awarded, both TADM and ECT refer to the Second Schedule of the Employment Claims Regulations 2017 and assess the following:

  • Income loss – This is capped at three months’ worth of the employee’s gross pay; and
  • Harm caused to the claimant – This is capped at two months’ worth of the employee’s gross pay.

They also consider any aggravating and mitigating factors to determine whether the award is to be adjusted upwards or downwards by up to 50 percent.

Examples of aggravating factors include the degrading or humiliating conduct towards the employee, false accusations by the employer against the employee, physical harm, and any other deliberate act on the part of the employer to negatively influence the employee’s changes of subsequent employment.

Examples of mitigating factors include the claimant’s poor performance or misconduct, as well as insubordination by the claimant.

Time Limit to Filing a Claim

Should you wish to file a claim with the court, you have up to six years after your dismissal to do so. To make a claim with the MOM or TADM, you must do so within a month’s time from your last day of employment. Women who are dismissed wrongfully during pregnancy are given an extension of two months from the date the child is born.

What to Do with an Unlawful, Unfair, or Wrongful Dismissal Claim

Most companies have internal measures in place when it comes to attempting to resolve grievances and complaints of unfair treatment or dismissals. It goes without saying that resolving issues internally should be one’s first option.

When matters cannot be resolved internally, however, then the employer or employee may file a claim in court, or a meditation claim with TADM. Should this be unresolved in TADM, the case will be heard in ECT.

Lawyers are not allowed to attend the TADM or ECT proceedings, though you may still acquire advice from a lawyer on the proper procedures and steps to follow in these scenarios.

If you are pursuing a case in court, obtaining advice prior to commencing the process is essential so that you will know whether you have a valid case, and so that you can be aware of the numerous documents that need to be drafted and filed to commence the action.