Breach of Employment Contract

In Singapore, employment is governed by the Employment Act of 1968 and common law. Seafarers, domestic workers, statutory board employees or civil servants do not fall under the Act; their employment contracts govern their terms and conditions. The Act protects most other employees under a contract of service.

However, Part IV of the Act only applies to workers who earn less than S$4,500 pcm and non-workmen whose basic monthly salaries do not exceed S$2,600 pcm. Part IV deals with working hours, rest days and other conditions. Managers and executives are generally not covered by Part IV.

Although the Act regulates certain aspects of employment, Singapore generally has a freedom of contract approach. As long as it is legal, the employee and employer can decide on the terms of the contract. Any conditions less favourable to the employee than those prescribed in the Act shall be illegal, null, and void.

In essence, the Employment Act sets out the minimum rights and responsibilities of employees and employers who fall under the Act.

This article will focus on the employer’s duties and what happens if the employer is in breach of the contract. It will also discuss the remedies available to employees under a contract of service.

Employer duties

Employment law in Singapore places specific responsibilities and duties on employers, including the following:

  • Sec 95A of the Act specifies that the employer must include specific key employment terms in the contract. Key terms include working hours, primary duties, responsibilities, working hours, salary, deductions, leave, etc. Notice periods to terminate the employment are usually set out in the contract.
  • Employers are responsible for providing a healthy and safe work environment under the Workplace Safety and Health Act.
  • Employers must abide by the Tripartite Guidelines on Fair Employment Practices, meaning that employees are protected against discrimination in the workplace.
  • Employers have a duty not to harass employees in the workplace. The Protection from Harassment Act prohibits employers from insulting, abusing or threatening employees.
  • Sec 14 provides that an employer may not dismiss employees without just cause or excuse.

General penalties for breach of contract

Sec 112 of the Act specifies that anyone guilty of any breach of contract under the Act will face penalties of a maximum fine of S$5000 or imprisonment not exceeding 6 months, or both unless the Act provides for a specific penalty.

Repeat offenders will face a fine of up to S$10,000 or imprisonment of up to 12 months or both.

Breach of contract by the employer

Most often, breach of contract from the employer’s side involves non-payment of salaries or unlawful dismissal.

Non-payment of salaries

Sec 13 of the Act stipulates that an employer is deemed to have broken the contract of service when the employer fails to pay the employee’s salary in accordance with Part 3 of the Act.

penalty for non-payment of salaries

Any employer found guilty of non-payment of salary can be fined between S$3,000 to S$15,000, or be liable to imprisonment up to 6 months, or both. For repeat offenders, the sentence is much higher.

Although your employer may be fined or sent to prison, section 13 does not provide any remedy for the employee.

Employees do, however, have other remedies.

Employee remedies

Employees can:

  • Leave without notice if the employer does not pay within 7 days of the date stipulated in the contract. It is always good practice to try and clarify the situation, and if you decide to leave, state your reasons in writing. State your reasons clearly and set out the facts, i.e., due date of payment, non-payment after seven days and the amount of your salary.

Of course, leaving is not always the best option for an employee. Instead of leaving, the employee can:

  • File a salary-related claim to the Tripartite Alliance for Dispute Management (TADM). This remedy is available for non-payment of salary or non-payment of bonuses or overtime pay. An employee can claim a maximum of S$20,000.
  • Approach the Employment Claims Tribunal to hear your claim. If the claim exceeds S$20,000, you will have to forego the excess.
  • Alternatively, the employee can forego the excess and enter into a settlement agreement under the Employment Claims Act.
  • Approach the TADM for mediation services. The process aims to resolve disputes amicably. For salary-related disputes, you can apply online, and a mediation date will be scheduled. If you go through the Tripartite Mediation Framework or are assisted by a recognised trade union, you can claim up to S$30,000.

Wrongful Dismissal

If an employee is dismissed without just cause and excuse, the employer may be guilty of wrongful dismissal. Dismissal includes forcing you to resign unwillingly. Dismissal can be unlawful with or without notice.

Valid reasons for dismissal include:

  • Misconduct
  • Poor performance
  • Redundancy

An employee may be dismissed without notice for misconduct, but there must be a proper inquiry before dismissal. The same applies to other reasons for dismissal. There must be an inquiry, and the employer must provide a valid reason for the dismissal. Failing to give a reason or substantiate the dismissal may result in wrongful dismissal.

Other examples of unlawful or wrongful dismissal include:

  • Penalising an employee for exercising their rights as an employee. For example, dismissing an employee who filed a salary-related claim.
  • Discriminating against an employee because of their religion, age, or gender.
  • Forcing an employee to resign, for example, by refusing to give maternity leave.

Remedies available to the employee

  • Always first try to resolve the issue internally with your employer. Contact the HR department and ask for clarification regarding your dismissal. If the meeting does not result in the conclusion you were hoping for, you can take further steps.
  • Employees can file for mediation through the TADM. You must provide details of your claim, so the TADM can assess if your case substantiates a claim for wrongful dismissal. If substantiated, mediation will be arranged.
  • If your employer still owes you a salary, you must file a separate salary-related claim.
  • If you are a union member, you may ask the union to assist in filing your claim for mediation.
  • If your mediation is successful, the mediator will issue a settlement agreement which you can register as a binding agreement. The employer has two weeks to pay the agreed amount to you.
  • If you cannot resolve your dispute through mediation, you can approach the Employment Claims Tribunal (ECT) for a cost-effective resolution. If your claim exceeds S$20,000, you can proceed with the claim but will have to forego the excess.

The ECT can make one of three orders:

  1. dismiss your claim;
  2. order the employer to reinstate you and pay the salary due from the date of wrongful dismissal to the reinstatement date; or
  3. order the employer to compensate you for wrongful dismissal.
  • If you are not satisfied with the outcome at the tribunal, you may file a civil claim in the Magistrates’ Court. Although this is seen as a last resort, there may be circumstances where you wish to file a civil lawsuit.
  • Sec 23 of the Employment Claims Act 2016 provides for an appeal to the General Division of the High Court on any question of law or if the claim was outside the tribunal’s jurisdiction.
  • If you believe you were dismissed due to your age, you can appeal to the Minister of Manpower within one month of the dismissal.

Issues of safety, discrimination, and harassment

Although some issues do not constitute a specific breach of contract, employees are still protected when employers fail to comply with their duties as employers.

  • The Work Injury Compensation Act (WICA) allows employees to claim for work-related injuries without filing a civil lawsuit. The Ministry of Manpower oversee these claims.
  • If you wish to proceed in civil court for a work injury matter, you must withdraw your claim under the WICA.
  • Discrimination and Harassment claims are dealt with by the Tripartite Alliance for Fair & Progressive Employment Practices (TAFEP). Employees who experience discrimination or harassment can contact the TAFEP, which will investigate the matter and take the necessary steps to ensure fair employment practices.
  • Harassment may amount to an offence under the Protection from Harassment Act, and the employee may wish to seek a Protection Order against the employer.
  • Although seen as a last resort, an employee may take the matter to the civil courts and seek monetary compensation in the District Court.

There are many options to resolve employment disputes in Singapore. If you decide to file a civil lawsuit against your employer for breach of your employment contract, you should seek legal advice from an employment lawyer.

Lawsuits can become costly and lengthy, and it is often difficult to quantify losses or emotional stress. An employment lawyer will help you to understand all your options and advise on the best option for your case.


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