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Proposed new employment dispute mechanism for executive employees in SingaporeIn brief

The Singapore Ministry of Manpower (MOM) has announced a proposal for a new employment dispute resolution mechanism that will apply to executive employees and their employers, providing an alternative to civil litigation for certain executives. Under the proposal, executives earning up to S$4,500 per month will be able to make salary claims in the Labour Court and executives who are union members working in non-unionised companies will be able to access a new tripartite mediation process in resolving other disputes. It is anticipated that the new mechanism will be implemented in 2011.

The Singapore Ministry of Manpower (MOM) has announced a proposal for a new tripartite employment dispute resolution mechanism that will apply to executive employees and their employers, providing an alternative to civil litigation for certain executives.Background

Currently, professional, managerial and executive employees (PMEs) can only access government conciliation and arbitration mechanisms for resolving non-salary related disputes with their employers if they are union members working in unionised workplaces. All other PMEs can only initiate voluntary mediation (which requires the consent of the employer) and must bring any claims in the civil courts.In relation to salary claims, only junior PMEs earning S$2,500 per month or less can apply for adjudication of salary claims by the Labour Court.The proposal

The key features of the MOMs proposal are: PMEs earning up to S$4,500 per month will be able to apply for adjudication of salary claims by the Labour Court. There will be a new cap of S$20,000 on the amount which the Labour Court may order for successful salary claims made by PMEs. PMEs who are union members working in non-unionised companies will be able to access a new tripartite mediation process in resolving non-salary related disputes. The mediation process will be led by a MOM Conciliation Officer. Attendance by the PME and the employer will be compulsory and both parties will be assisted by tripartite mediation advisors. If the mediation is unsuccessful these PMEs will still be able to litigate the matter in the civil courts. PMEs who are not union members and do not work in a unionised workplace will continue to have access to voluntary mediation.

Implementation

MOM has announced that it expects the new mechanism to be implemented in 2011, assuming that the necessary legislative changes are passed by the Singapore Parliament this year. It is proposed that PMEs will be able to access the new mechanism in relation to any disputes, even if they commenced occurring before the passing of the relevant legislative changes.Implications for employersThe most significant change for employers in Singapore arises out of the proposal that PMEs who are union members will have the ability to force their non-unionised employer to attend compulsory tripartite mediation to resolve non-salary related disputes.While union membership levels are typically low amongst PMEs, access to this mechanism may create an incentive for PMEs to take up such membership.However, while attending compulsory mediation is likely to cost management time and effort for employers, ultimately if the mediation is unsuccessful, the PME only has recourse to the civil courts in which to seek a binding outcome.Whether the mechanism will be useful for employers and employees remains to be seen. If the compulsory process is regarded as effective, it may even lead in due course to more disputes being referred to mediation voluntarily, as a low-cost alternative to commencing a civil court process in order to force a settlement