New guidelines on wrongful dismissal in Singapore
5 April 2019
On 1 April 2019, the Tripartite Guidelines on Wrongful Dismissal (the “Guidelines”) were released by the Ministry of Manpower (“MOM”), the National Trades Union Congress and the Singapore National Employers Federation (collectively known as the Tripartite Partners). Should a dispute arise, the Guidelines allow employers, employees, mediators and adjudicators in Singapore to refer to clear examples of what constitutes wrongful dismissal.
The Guidelines contain illustrations of wrongful dismissal, such as for reasons of discrimination, deprivation of benefits, a desire to punish an employee for exercising an employment right and for providing a false reason for dismissal. The Guidelines also include examples of dismissals that are not wrongful, such as dismissals on grounds of poor performance, misconduct, and redundancy. We summarise the Guidelines and discuss some key takeaways.
Misconduct and Poor Performance
The Guidelines clarify that misconduct is the only legitimate reason for dismissal without notice. Misconduct is defined as including (but not being limited to) theft, dishonest or disorderly conduct at work, insubordination, and bringing the organisation into disrepute.
The Guidelines state that the proper process to be followed is to conduct an inquiry to establish the fact of the misconduct and to then give the employee an opportunity to be heard and to (if possible) offer a legitimate explanation for falling short of the conduct expected of him. The Guidelines do not, however, provide guidance on the threshold for a “legitimate explanation” by the employee to avoid dismissal. This would suggest that the intention is still to offer the employer a degree of flexibility in this regard.
In the case of poor performance, the employer cannot dismiss an employee without notice. The Guidelines state that the employer must document the employee’s shortcomings and raise these matters with the employee in performance reviews. Only if the employee’s conduct does not improve can the employer terminate the employee. The fact that the company will need to substantiate the employee’s poor performance highlights the importance of accurate and detailed record keeping in an employee’s HR dossier maintained with the company.
The Guidelines do not change the current position which allows employers to terminate an employee with contractual notice without providing reasons. The employer is not obliged to provide reasons to the employee even if the employee requests for a reason for his termination. That said, employers should be mindful that if an employee can point to facts, incidents or situations which could suggest that the employer’s intention is anything other than termination in accordance with the contract, this could allow an employee to mount a wrongful dismissal claim.
A summary of the circumstances where dismissal with notice will be deemed wrongful is set out below.
Dismissing an employee because of discrimination: This would include discrimination relating to the employee’s age, race, gender, religion, marital status, family responsibilities or disability. For example, if the employer makes numerous discriminatory remarks about an employee’s race and this is confirmed by other employees, even if the employer purports to terminate the employee with notice, this would be deemed wrongful.
Dismissing an employee to deprive the employee of benefits/entitlements the employee would otherwise have earned: An example of this would be dismissing an employee who is entitled to maternity benefits after the employee informs her employer of her pregnancy. Indicators of wrongful dismissal would be: (1) dismissing an employee shortly after being informed of the pregnancy; (2) not being able to provide a legitimate reason for the termination; (3) not paying the employee her maternity benefits.
Dismissing an employee to punish the employee for exercising an employment right: Examples include: (1) dismissing an employee to punish him for requesting mediation with the employer for non-payment of the employee’s salary; (2) dismissing an employee to punish him for exercising his statutory right to decline overtime work to take care of his infant child.
Providing a false reason for dismissal: Where for example an employee is told that he is being dismissed because the company was restructuring and his role no longer exists but the employee later finds out that the vacancy for the same job still exists and the employer had recruited someone else to fill the role.
The Guidelines are a positive step that will undoubtedly aid both employers and employees in properly understanding their employment rights and obligations.
The Guidelines reiterate the importance of proper documentation and record keeping with respect to employees. It also highlights the care that should be taken in providing an employee with substantiated reasons for termination.
Following the Employment Act changes on 1 April 2019, adjudications and/or mediations on wrongful dismissal claims are now heard before the Employment Claims Tribunals (ECT) and the Tripartite Alliance for Dispute Management (TADM) instead of by MOM.
Employers and HR practitioners should be mindful of the illustrations in the Guidelines as these are matters which will directly impact on the determinations made by a mediator / adjudicator in the event a dispute arises.