Legal update

24 October 2016

Authors: Fiona Loughrey and Mohammed Reza


Legal update

Fiona Loughrey, head of the Asia employment practice at Simmons & Simmons, and Mohammed Reza, director of JWS Asia Law Corporation, give an overview of legislative changes that HR professionals need to know about

A new law passed in Singapore in August 2016 provides for the creation of an Employment Claims Tribunal (ECT), which is expected to begin hearing disputes in April 2017. This can be seen as a positive development, as it will provide all Singapore-based employees with a relatively speedy and low cost dispute resolution alternative to court proceedings (for claims up to the prescribed limits).
 
In particular, it expands the avenues for dispute resolution to professionals, managers and executives (PMEs). Roughly 30 per cent of Singapore's resident workforce are PMEs, who until the ECT begins to operate, are obliged to pursue proceedings in the Singapore courts; they fall outside the Ministry of Manpower's jurisdiction over salary-related disputes.
 
Employers with operations in Singapore will want to note the following specifics:
 
  • It appears that disputes which will fall within the ECT's jurisdiction are those which cover salary and salary-related issues. Other matters, including where a sum claimed exceeds the limit, or where the remedy sought is non-monetary in nature, must still be brought in the appropriate court or tribunal.
  • There will be a limit of S$20,000 (around US$14,700, using current rates), or S$30,000 (around US$22,000) if the parties undergo mediation at a new local centre being established.
  • Claims must be filed within one year from the date on which the claim arises (or six months from the time the employment relationship has ended).
  • No legal representation will be permitted, either at the mediation stage or in front of the ECT. There does not appear to be any provision which will preclude in-house counsel from representing the employer (or, more probably, ex-employer). Until detailed rules are introduced, it is not clear whether costs of in-house counsel will be claimable.
  • As in Hong Kong, hearings before the ECT are to be informal, and will adopt a "judge led" approach.
  • Appeals from the ECT to the Singapore High Court will be permitted only with leave of the District Court, and only in relation to questions of law or pertaining to the jurisdiction of the ECT.
It may be informative to contrast this system with Hong Kong, where a long-established labour tribunal system has both similarities and differences. The tribunal in Hong Kong has jurisdiction over many types of claims. These include disputes over money, such as outstanding pay, payments in lieu of notice or unlawful deductions, rights to statutory payments and claims for certain breaches of terms. Actions to enforce restrictive covenants must be brought in court, while discrimination claims must be heard by the District Court.
 
In Hong Kong, there is no limit on the monetary amounts of claims, but more complex claims - or those involving larger amounts - tend to be transferred to the court, which requires leave. The limitation period is (now) six years. External counsel representation is not permitted, and no orders for legal costs will be made.
 
Until the 1990s, lawyers were in fact usually discouraged or barred from attending: this was effectively up to the discretion of the presiding officer. Nowadays, external counsel are in practice often allowed to sit in, listen and observe, which can be to the benefit of parties who need relatively informal assistance .As in Singapore, parties dissatisfied with a tribunal determination have the right to appeal, but only on points of law.
 
While the introduction of the ECT in Singapore is welcome, due to its straightforward and cost-effective nature, it is expected to lead to an increase in claims from PMEs.