Navigating Employment Disputes: Essential Tips for Employers and Employees

Employment disputes are common in the workplace, often leading to tension and financial costs for both employers and employees. Whether it is a disagreement about salary, wrongful dismissal, or working conditions, understanding the legal framework in Singapore can help prevent and resolve these conflicts more effectively. Here is a comprehensive guide based on MOM’s WorkRight Guide on Employment Laws, tailored to help both employers and employees navigate employment disputes.

For Employers: Employers must be well-versed in Singapore’s Employment Act and relevant labor laws, including the Employment Claims Act. These laws outline clear obligations concerning employee entitlements, such as working hours, rest days, annual leave, and termination requirements. Employers should ensure they comply with these regulations to avoid legal disputes.

For example, in cases of dismissal, the Employment Act specifies the minimum notice period, which varies depending on the employee’s length of service. Failure to provide proper notice or adequate compensation instead of notice can lead to claims of wrongful dismissal. Having a thorough understanding of such regulations will protect employers from legal repercussions.

Employers must ensure compliance with the key provisions of the Employment Act, which applies to most employees under contracts of service, including those in managerial and executive positions who earn a basic salary of up to $4,500 per month.

Some key obligations include:

• Working Hours: Employees should not work more than 44 hours per week, and for employees working beyond their contractual hours, overtime pay must be given at 1.5 times their hourly basic rate.
• Rest Days: Employees are entitled to at least one rest day per week without pay. This is typically Sunday unless otherwise stated in the employment contract.

Employers must ensure that their employment practices comply with these provisions, as violations can lead to disputes and claims through legal channels.

For Employees: Employees should be familiar with their rights under their employment contract and Singapore labor laws. This includes understanding minimum wage entitlements, overtime payments, paid leave, and the conditions under which they can claim unfair dismissal. For instance, under Singapore’s Employment Claims Tribunals (ECT), employees earning up to $4,500 per month can seek help for salary-related disputes, even after leaving their employer.

Employees need to be aware of their entitlements. For example:

• Annual Leave: Employees are entitled to 7 days of paid annual leave after completing the first year of service. This increases with each additional year of service.
• Paid Public Holidays: Employees are entitled to 11 paid public holidays annually.
• Sick Leave: Employees who have worked for at least three months and are certified unfit for work by a registered doctor are entitled to paid sick leave. The amount of sick leave varies depending on the employee’s length of service, but can go up to 14 days of outpatient sick leave and 60 days of hospitalisation leave per year.

Being aware of these entitlements allows employees to raise concerns when they believe their rights are being violated. 

Dispute resolution does not always require going to court. In Singapore, there are multiple ways available to resolve employment conflicts without formal litigation or going to court.

Internal Grievance Procedures: Employers should have a well-defined grievance procedure in place, allowing employees to raise concerns without fear of retaliation. This may include HR involvement or forming internal committees that mediate between disputing parties. A proactive HR department plays a pivotal role in resolving disputes before they escalate.

Both employers and employees are encouraged to resolve conflicts amicably where possible. However, if internal discussions fail, there are several formal avenues available in Singapore for resolving disputes:

Tripartite Alliance for Dispute Management (TADM): The TADM provides mediation services for employment disputes related to salary and wrongful dismissal. Mediation is typically faster and less costly than going to court, and both employers and employees are encouraged to use TADM before escalating the matter.

Employment Claims Tribunals (ECT): If mediation at TADM fails, the dispute can be referred to the Employment Claims Tribunals (ECT), which has jurisdiction over salary-related claims up to $20,000 (or $30,000 for union members). The ECT is designed to offer a simplified and affordable process for resolving employment disputes without requiring formal legal representation.

Specific disputes that can be brought to TADM and ECT include:

• Unpaid or late salary payments
• Unpaid overtime pay
• Disputes related to annual or medical leave entitlements
• Wrongful dismissal claims

One of the most effective ways to prevent employment disputes is by having comprehensive and unambiguous employment contracts. Employers should work closely with legal professionals to draft contracts that clearly outline:

• Job Responsibilities and Expectations: This helps prevent conflicts over the scope of work or job performance.
• Salary and Benefits: Clear information on base pay, overtime pay, bonuses, and benefits to avoid misunderstandings.
• Termination Clauses: Stipulate the conditions under which termination can occur, including grounds for dismissal without notice.
• Dispute Resolution Clauses: Including a clause for dispute resolution, such as mediation or arbitration, helps ensure that both parties know the process should a disagreement arise.

Case Example: In a recent Singapore High Court case, Wong Foong Yin v Phua Kia Eng, the importance of a well-drafted employment contract was highlighted when the employer was held liable for wrongful dismissal due to ambiguous termination terms in the employee’s contract. This case underscores how clearly defined contracts can save businesses from costly legal outcomes.

The Employment Act requires employers to issue written Key Employment Terms (KETs) to employees within 14 days of starting work. According to the WorkRight Guide, these terms must include:

• Job title and description
• Salary details, including payment frequency and overtime rates
• Working hours and rest days
• Types of leave and the conditions under which they can be taken
• Terms of termination, including notice periods for both parties

Clear and legally compliant employment contracts reduce the risk of disputes, as they establish clear expectations for both employers and employees. Ambiguous contracts often lead to misunderstandings, which can escalate into legal conflicts. Employers should regularly review and update their employment contracts to ensure compliance with evolving labor laws.

Employment disputes often worsen if left unaddressed. Employers should be vigilant in identifying early warning signs of conflict, such as declining employee performance, verbal complaints, or escalating tension between colleagues. Promptly addressing concerns through open dialogue can prevent the situation from spiraling into a full-blown dispute.

Employees, too, should not wait to voice concerns. Raising issues early through internal channels or seeking legal advice can often lead to a quicker resolution without escalating to legal proceedings.

A proactive approach to managing disputes can prevent them from escalating. Employers should regularly review their HR policies, maintain open communication with employees, and address potential issues as soon as they arise. Clear policies on workplace grievances and dispute resolution should be communicated to all employees.

Record-Keeping Requirements: Employers are required by law to maintain detailed records of:

• Salary payments: Employers must keep records of payments made to employees, including regular salary, overtime pay, and bonuses.
• Work hours and overtime: Employers must accurately record the number of hours worked, including overtime, rest days, and public holidays.
• Leave entitlements: Employers must keep records of all leave taken by employees, such as annual leave, sick leave, and childcare leave.

These records must be kept for two years for current employees and one year for employees who have left the company. Proper documentation will serve as evidence if disputes arise and help ensure compliance with MOM regulations.

Seeking professional legal advice early can help resolve employment disputes efficiently, whether the issue is related to salary discrepancies, wrongful dismissal, or workplace harassment. Lawyers can offer guidance on navigating the legal processes available through TADM or the ECT, ensuring compliance with Singapore’s employment laws.

For employers, it is crucial to consult a lawyer when drafting employment contracts, terminating employees, or handling disciplinary actions to minimize the risk of disputes. Employees should consider legal counsel if they believe their employment rights have been violated, particularly in cases of wrongful dismissal or discrimination.

Prevention is better than cure. Employers should prioritize creating a positive and inclusive work culture that promotes open communication and respect. When employees feel heard and valued, they are more likely to raise concerns before they become major issues.

Employee Assistance Programs (EAPs): Offering confidential counseling services through EAPs can help employees address personal or work-related issues before they escalate into disputes. Employers should also provide regular training on workplace policies, such as anti-harassment and diversity initiatives, to reinforce a healthy work environment.

Employment disputes can be stressful and costly for both employers and employees, but they are often preventable with the right approach. Clear communication, a thorough understanding of legal rights and obligations, and adherence to MOM’s guidelines can help both parties resolve conflicts before they escalate into formal claims. By seeking early intervention and maintaining comprehensive records, employers and employees can foster a more harmonious workplace.

For any dispute that cannot be resolved internally, it is always advisable to seek professional legal advice or utilize Singapore’s structured dispute resolution mechanisms, such as TADM and the ECT, for a faster and more affordable resolution.

Facing employment disputes? DL Law Corporation’s experienced team of lawyers can guide both employers and employees through legal complexities, ensuring swift and effective resolutions. Visit DL Law Corporation to learn how we can help you navigate workplace conflicts and protect your rights.