Tuesday, 30 August 2016

Making a claim against an employer

I ran into a good friend from my NS days last weekend whom I have not caught up with in a while. I really should make more of an effort to keep in contact with friends especially when it's so easy to get sucked into your own life of wants and needs. We chatted briefly and will be meeting up for lunch or dinner next week.

However, what we discussed got stuck in my head over the weekend because I never imagined it would have happened to him. He had completed his undergraduate & postgraduate studies overseas and returned to Singapore to work in a small financial services firm around the same time as me.

I found out he had resigned from the firm recently because it failed to pay his salary for 1 month. On top of being jobless and applying for new roles, he has to try and claim back the 1 month of unpaid salary from the firm.

Since he lives at home with his parents, the financial consequences are not severe because his expenses are not high. However, it's hard enough trying to find a new job in this economy and still attempt to work things out with the previous firm about the 1 month of unpaid salary.

This got me thinking about what resources or avenues do a Professional, Manager and Executive (PMET) have to resolve salary-related claims and how should he even approach this. It's usually not something we consider until we are in the situation of having to make the claims i.e. got screwed by our employers. What would I do in his situation?
1. Making a claim against an employer on the Ministry of Manpower (MOM) website

First thing, I googled "salary claim employer MOM". This useful search result on making a claim against an employer comes up on the MOM website. I clicked on the link and one of the first things the webpage says is you need to be covered under the Employment Act to make a claim against your employer.

WTF is the Employment Act? Okay, I'm thinking I should be covered since I work as a PMET in a full-time job. I click on the link to the Employment Act and this catches my eye:

You are not covered if you are employed as a manager or executive with monthly basic salary of more than S$4,500.

OMG. So I'm not covered by the Employment Act. Quick check with my friend and he was earning S$4,800 monthly (slightly above S$4,500) so he's not covered too. Why in the world is there a threshold of S$4,500? Do these people never have to worry about making salary claims?

2. File claim with the civil courts

I'm stuck now. Can't seem to find any useful information on these MOM webpages about what happens if you are not covered by the Employment Act and can't make the claim via MOM. There is something about tripartite mediation for PMEs. Again, you have to be earning a monthly basic salary of up to S$4,500 to be eligible for this. Useless to me or my friend.

I go back to my Google search results and see something about the Employment Claims Tribunal (ECT). In the background provided, it says that the Labour Court currently provides adjudication services to resolve salary-related claims between employers and employees covered under the Employment Act. However, those who are not covered by the Employment Act would have to file their claims with the civil courts, which can be a lengthy and costly process.

WHAT? I have no idea how to file a claim with the civil courts and it sounds expensive. I keep reading the webpage and find out that MOM announced the plans to set up the ECT in 2014. It is to be established as a Tribunal under the State Courts, similar to the Small Claims Tribunal. Did you understand that? I didn't. Plus it's been 2 years and the ECT hasn't been set up yet. You would think this is a high priority item.

I try to find something on the Small Claims Tribunal and the webpage mentions how to file the claim and something about employing mediation extensively in their proceedings. They seem to really like this idea of mediation and I have seen it mentioned so many times. Does it even work?

Even just writing this post is getting me frustrated. Because I seem to be reaching the conclusion that my friend will have to spend quite a bit of time and money to force his ex-employer to do the right thing and pay him the 1 month of salary owed. This is if the mediation fails, which is likely even if he spends a lot of time in the negotiations with his ex-employer.

There is not much I can do other than to offer support, help and my limited knowledge on making a claim against an employer. This post is for you my friend and I hope everything works out.


  1. Hi TFS!

    It does seem that there are limited avenues for middle-income individuals to take against errant employers. Indeed, MOM does not seem to have any labour laws to protect middle-income PMETs.

  2. Ouch! That hurts. I feel sorry for your friend. Hope he is able to get back his 1 month pay, if possible.

  3. yeap, unfortunately, the labour laws here are not as "protectionism" as overseas, esp for the PMETS. if you are in the lower income level, you get a lot of govt and union help.

    if you get released by a singaporean firm, the coy is not obliged to pay you anything more than the current month salary (+ any balance of leave that you can encash , prorated). anything more than this, is out of goodwill or the relationship you have with your boss. i have been thru this before, and also know of others.

    the rule of 1month compensation for every 1 year worked, is just a fallacy.

    case in point ie. indonesia, if you are released by that coy, you get 11x mths compensation of your last drawn.

    btw, that one month owed is a strong point, since its owed wages, as per contract. im sure your friend will be able to retrieve it. just that could be a lengthy and painful process.

  4. Hi everyone,

    My wife actually read this post (one of the few times she comes on my blog to have a look) because she knew that friend of mine. She was surprised at the weak labour laws here too. Different from what the work environment is like in Australia!

    I agree that my friend has a strong case but as Foolish Chameleon said, it is likely to be a lengthy and painful process!