Workers' rights gaining ground

New pro-employee Employment Claims Tribunal will handle disputes faster and make it easier for workers to file salary claims.

AT A results briefing last month, DBS Bank chief executive Piyush Gupta startled the roomful of reporters when he raised his voice to say "Don't say we cut!" to a question on the group's staffing level, which had fallen by about 300 from the previous year. Mr Gupta, who normally speaks fast, explained in some detail that the staff who left did so on their own accord, and were not "cut".

Indeed, employers need to be very careful these days in handling staff exits, says Jonathan Yuen, partner at law firm Rajah & Tann, who heads the firm's employment and benefits (disputes) practice. You do not want to be "excoriated in Parliament", he adds.

In early February, Temasek Holdings-owned and award winning company Surbana Jurong was castigated in Parliament for the way it sacked 54 employees just before Chinese New Year, rubbing salt into their wounds in calling the axed staff "poor performers".

While such instances "keep us employed", Mr Yuen quips, referring to employers who fail to understand their responsibilities towards workers, it should be apparent that the government is getting tough on errant bosses.

Business friendly

Singapore may be business friendly - consistently coming in among the top for ease of doing business in yearly World Bank rankings - but that national strategy does not mean workers get short changed, he says. In fact, worker protection rules have been increasing and the "Ministry of Manpower (MOM) is very powerful", he notes.

Mr Yuen relates how one client was investigated by MOM for alleged discrimination against local staff in promotion. MOM investigators seized company documents, questioned the directors and impounded their passports. In the meantime, there was also a moratorium on employment pass applications and renewals for its foreign staff.

"My strategy is to be upfront to MOM . . . in this case we were completely vindicated," he says. The client was able to explain why the particular person was promoted as he had the specific skills and experience required which the Singaporean employee did not.

The company also realised that it needed to put in place a skills building programme for local staff.

"We tell our clients which want to start operations in Singapore to hire locals across the board," Mr Yuen says, calling it a "legitimate" practice given the trade-offs the foreign firms enjoy from being here.

Another "scary" development is the new pro-employee Employment Claims Tribunal (ECT) slated to be launched this year, he says. The ECT - which replaces the Labour Court - will handle disputes faster and make it easier for workers to file their salary claims.

The ECT will take over the Labour Court's function of hearing salary-related disputes on employee entitlements under the Employment Act, Retirement & Re-employment Act and the Child Development Co-Savings Act. These include unpaid salary, overtime pay, salary in lieu of notice, employment assistance payment and maternity benefits.

The ECT will also hear claims from employers, but on only one specific type of claim - notice pay. The notice pay claim refers to an employee who has left without serving proper notice as required under the employment contract. For instance, the contract may require giving two months' notice but the employee walks out without serving the notice period and the employer goes to the ECT to get back two months' pay. If the employer wins, he still has to go to the Civil Court to try to recover the two months' pay from the staff.

"This reflects the pro-employee nature of the ECT," says Mr Yuen.

The ECT will be set up under the State Courts, so the rulings have the force of a court order, he says.

But there are still gaps, he adds, citing instances where the company declares bankruptcy.

"Even with a binding court order, it may be an illusory victory if the poor employee has to spend precious resources to try to enforce the court order or, in any event, the employer is impecunious or insolvent," he says.

There is also currently no legal impediment for directors of failed companies, who have skirted their responsibilities to pay staff, to register new companies and to start afresh with hardly any consequences, says Mr Yuen.

He suggests that perhaps some thought needs to be put into crafting a framework, and setting up a database of people who have been directors of failed companies (maybe for a limited period of, say, three to five years). This will let prospective employees do their own searches on the company and its directors for an organisation they are about to join, he said.

Nurturing risk-taking

This of course must be balanced with the need to ensure that the directors are not overly penalised for failing, especially if Singapore wants to nurture risk-taking and entrepreneurship, he says.

"If this is too general to be applied across the board, then limitations need to be put on specific types of industries, such as F&B, construction, etc - if a construction company folds (regardless of the reason) leaving behind a trail of unpaid workers . . . surely it cannot be the case that the owner can immediately restart his business under a different entity with hardly any consequences?" asks Mr Yuen.

There are also other areas that Singapore can look at in enhancing worker protection, he says.

In the United States, for instance, some states do not allow employers to ask for the gender, nor a photo nor age, of a job applicant, he says.

Generally multinationals in Singapore have stronger worker protection practices than existing laws.

He worries about the small and medium enterprises which get more employee complaints, and given that these firms account for the majority of jobs. The estimated 188,000 SMEs in Singapore are the backbone of the economy, providing two-thirds of jobs here.


Usually it's poor awareness or knowledge of the law that's behind many cases of employment disputes, and it's often SMEs that fall into these issues simply because they do not have the frameworks in place, he says.

"Unlike MNCs, who have established grievance processes, what usually happens is that maybe after a heated disagreement between a manager and staff in an SME company, the manager will just purport to terminate the employee by saying 'get out' or something like that."

This is especially so if the SME is a family company where the sense of ownership is a lot stronger and the management sees every infraction as a personal slight, he says.

"That's why we advise our clients in conducting training for their managers and human resource departments and for SME business owners to teach them about frameworks and due process, to allow parties to air their grievances before a neutral party, for instance," he says.

"And if in a disciplinary case where accusations have been levelled - then an opportunity for the employee to respond," he says.

Will increasing worker protection erode Singapore's competitiveness?

Singapore is such a safe place to do business, says Mr Yuen, who is confident companies won't exit as long as due process and safeguards are followed.

"Whatever laws we have pales as hurdles to the stable environment Singapore offers," he says.