Rising Salary and Wrongful Dismissal Claims in Singapore Amid Increased Job Turnover and Business Closures in 2024

Salary Claims in Singapore Hit Five-Year High Amidst Economic Headwinds

Singapore – A significant increase in salary claims was recorded in 2024, marking the highest level since 2019. A total of 2.63 claims were filed per 1,000 employees, reflecting growing financial pressures and disputes within the nation’s workforce.

Rise in Disputes Across Key Sectors

The surge in claims is primarily attributed to mounting disputes in critical sectors, notably Information and Communications, Construction, and Administrative Support Services. These industries have faced unique economic challenges,contributing to salary-related issues for employees.

According to data released on August 26th, the Ministry of Manpower (MOM) and the Tripartite Alliance for Dispute Management (TADM) received 9,848 salary claims throughout the year. This represents a substantial portion of the 11,685 total employment claims and appeals lodged, an increase of nearly 2,000 cases compared to 2023.

Financial Recovery for Employees

Employees successfully recovered approximately $19 million in salary claims in 2024, a jump of over 35 percent from the $14 million recovered in the previous year.This marks the highest amount in recent years, signaling increased efforts to resolve wage disputes.

Sectoral Breakdown of Claims

the Information and Communications sector witnessed a notable rise in salary claims from local employees, moving from third place in 2023 to the top spot in 2024. This shift is linked to cash flow issues experienced by several companies within the sector. It accounted for 13 percent of all salary claims made by local employees.

Simultaneously occurring, the Construction sector continues to be a primary source of claims from foreign employees, representing 47 percent of all such claims. this is largely due to business failures, financial difficulties, and company liquidations within the construction industry. Manufacturing and Food & Beverage services each accounted for 9 percent of the claims from foreign employees.

Sector	Local Employee Claims (%)	Foreign Employee Claims (%)
Information and Communications	13	–
Administrative & Support Services	11	–
Food & Beverage Services	10	9
Construction	–	47
Manufacturing	–	9

Did You Know? The median claim duration for local employees remained steady at one month’s pay, while for foreign employees, it decreased from over three months in 2019 to around two months in 2024.

Local vs. Foreign Employee Claims

Local employees filed 46 percent of all claims, while foreign employees accounted for the remaining 54 percent. Salary claims by local employees increased from 1.32 per 1,000 in 2023 to 1.59 per 1,000 in 2024. The incidence of salary claims for foreign employees rose from 3.91 per 1,000 in 2023 to 4.64 per 1,000 in 2024.

Resolution Rates and Ongoing Challenges

nine in ten salary claims were resolved at TADM in 2024, a slight advancement from the 88 percent recorded in 2023. A total of 10 percent of cases were referred to the Employment Claims Tribunals (ECT). However, cases taking longer to settle at TADM increased, with 13 percent requiring two to six months for resolution, compared to 10 percent in 2023.

Approximately 94 percent of employees fully recovered their salaries through TADM and ECT, consistent with 2023 figures. Around 4 percent received partial recovery through settlement payments or financial assistance, while a small percentage of high-income earners did not recover any salaries.

Pro Tip: Employers who fail to repay salaries will be barred from applying for or renewing work passes for foreign employees.

Understanding Employment Standards in Singapore

Singapore maintains a robust framework for employment standards,emphasizing fair treatment and timely salary payments. The government,through MOM and TADM,actively promotes dispute resolution and provides resources for both employers and employees. Recent legislative changes,including protections for platform workers and flexible work arrangements,demonstrate a commitment to adapting to the evolving needs of the workforce. Learn more about singapore‘s employment laws here.

Frequently Asked Questions About Salary Claims

What are your thoughts on the rising number of salary claims in Singapore? Do you think more needs to be done to protect employee rights?

What are the key factors contributing to the surge in wrongful dismissal claims in Singapore during 2024?

The 2024 Employment Landscape in singapore: A Perfect Storm

2024 saw a significant shift in singapore’s employment market, characterized by heightened job turnover, a wave of business closures, and a corresponding surge in both salary expectations and wrongful dismissal claims. Several factors contributed to this, including post-pandemic economic restructuring, global economic uncertainties, and evolving employee priorities. This article delves into the specifics of these trends, offering insights for both employers and employees navigating this complex landscape. We’ll cover everything from understanding your rights regarding unfair dismissal to navigating salary disputes and the implications of retrenchment benefits in Singapore.

Increased Job Turnover: Why Employees Are Leaving

The “Great Resignation” trend, while originating elsewhere, undeniably impacted Singapore. Several key drivers fueled this increased employee turnover:

salary Inflation: Competition for talent drove salary increases across many sectors,prompting employees to seek better compensation packages. The demand for skilled workers in areas like technology and finance was particularly acute.

Remote Work Expectations: A desire for greater flexibility, particularly remote work options, led many to leave roles that didn’t accommodate these preferences.

Career Advancement: Employees actively sought opportunities for career growth and growth, often switching companies to accelerate their progression.

Work-Life Balance: A renewed focus on work-life balance prompted individuals to prioritize roles offering more manageable workloads and supportive company cultures.

This high turnover rate has created challenges for employers, increasing recruitment costs and potentially disrupting operations. It also means more employees are potentially vulnerable to termination and needing to understand their rights.

Business Closures and Retrenchment: A Growing Concern

2024 witnessed a noticeable increase in business closures, particularly among SMEs (Small and Medium Enterprises). This was largely attributed to:

Economic Slowdown: Global economic headwinds and rising inflation impacted business profitability.

Increased Operating costs: Rising rental costs, utility bills, and labor expenses squeezed margins.

Supply Chain Disruptions: Ongoing supply chain issues continued to affect businesses reliant on international trade.

Consequently, retrenchment became a harsh reality for many Singaporean workers. Understanding retrenchment rights is crucial. Employees are typically entitled to:

1. notice Period: As stipulated in their employment contract or as per the Employment Act.
2. Severance Pay: While not legally mandated in all cases, it’s common practice and often negotiated.
3. Accrued Leave Pay: Payment for any unused annual leave.

The Surge in Wrongful Dismissal Claims: What’s Driving It?

With increased job turnover and retrenchments, wrongful dismissal claims filed with the Ministry of Manpower (MOM) and the Industrial Arbitration Court (IAC) saw a significant rise in 2024. Common grounds for these claims include:

Breach of Employment Contract: Dismissal without proper notice or justification as outlined in the employment agreement.

Discriminatory Dismissal: Termination based on age, race, religion, gender, or other protected characteristics. This falls under Singapore’s employment discrimination laws.

Constructive Dismissal: Situations where the employer makes working conditions intolerable, forcing the employee to resign.

Unfair Dismissal: Dismissal without a valid reason or a fair process.

Navigating Salary Disputes in Singapore

Alongside wrongful dismissal, salary disputes also increased. These frequently enough stem from:

Unpaid Salaries: Employers failing to remit wages on time or in full.

Incorrect Salary Calculations: Errors in calculating overtime pay, bonuses, or allowances.

Unfulfilled Salary Promises: Employers reneging on agreed-upon salary increases or promotions.

Employees facing salary claims can pursue the following avenues:

Direct Negotiation: Attempting to resolve the issue directly with the employer.

MOM Mediation: Seeking assistance from the MOM’s Tripartite Alliance for Dispute Management (TADM).

Small Claims Tribunal: Filing a claim at the Small Claims Tribunal for amounts up to $20,000.

Civil Court: Pursuing legal action in the civil courts for larger claims.

Understanding Your Rights: A Speedy Guide

| Scenario | Employee Rights | Actionable Steps |

|—|—|—|

| Retrenchment | Notice period, accrued leave, potential severance | Review employment contract, seek advice from MOM |

| Wrongful Dismissal | Potential compensation for breach of contract | Document evidence, file claim with MOM/IAC |

| Salary Dispute | right to receive agreed-upon wages | Attempt negotiation, seek mediation, consider legal action |

| Constructive Dismissal | Treated as wrongful dismissal | Gather evidence of intolerable working conditions |

The Role of the Employment Act and Recent Amendments

Singapore’s Employment Act provides the foundational legal framework