What do you do if your salary is held ransom?

 

Once in a while, employer/employee relations sour and the employer feels that he shouldn’t be paying for a disgruntled staff. However, withholding a worker’s salary is not legal, and although the boss has a right to terminate a contract, there are rules to follow when it comes to the staff’s pay

In a soured relationship, employers will almost always claim that a staff has “breached a contract”, whatever it is – salary due, is due and must be paid. Generally speaking, salary cannot be held ransom.

Here’s a guide about when your pay should be due:

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Now read about my unfortunate friend here:

Mr. Tan was an accounts executive with a media agency for 3 months. Upon his resignation, he realised he did not receive salary for the 3rd month. Now, although Tan did not work for all of the third month, he feels a right to pro-rated salary. Worse, Tan realises that he did not sign an employment contract with the company and is not sure of his rights to payment.

Contracts, legally speaking, allows for exit of either parties by giving either advanced notice or payment. Tan is now in a bad position because the ex-employer now claims that he was on contract and not a full time staff.

Tan should understand a few things:

  • A contract does not need to be a written agreement. Verbal contracts are also contracts.
  • There does not necessarily need to be offer/acceptance by means of a signed contract.
  • All he needs to do is to prove an employer/employee relationship

 

What Tan needs to prove now, is to prove he was paid regular salaries. CPF contributions for the past few months are the clearest proof. With this proof, even if the employer does not want to pay, he has a case in Labour Court. Just file a case for $3 with the Ministry of Manpower and everything else will be taken care of.

It is for this reason that the Labour Movement is trying to get employers to produce written agreements for their employees, whatever the pay-scale and whatever the job scope. Usually it is the lower salaried workers (thanks to casual arrangements) whom are unable to prove themselves in the case of non-payment.

I believe it is necessary for employment contracts to be enforced. With enforcement, the defence of “miscommunication” cannot be made by negligent employers.

Here are a few other cases:

In January 2010, a teaching assistant of Etonhouse Pre-School Pte Ltd was given a “release letter” stating she was “released” from employment and she was not required to serve the one month’s notice stated in her employment contract. The employee filed claim for salary in lieu of notice. The Labour Court ruled that by “releasing” the worker, the school was in effect terminating her employment and the party to terminate the employment relationship had the obligation to give notice to the other party. As there was no consent from the employee to waive the notice she was entitled to receive, the company was ordered to pay the employee one month’s notice of $1, 520.

A spa consultant hired by Aromatic House Pte Ltd resigned from employment, and his last day of work was 11 April 2010. The company did not pay him his last month salary and commission earned over three months. At the Labour Court hearing, the employer explained that payments were withheld because the employee failed to serve out the full notice period.

The worker explained that he had 5 days of annual leave, and so he stopped work on 5 April 2010. The Labour Court informed the worker that leave was subject to the company’s approval at all times and since he had absent himself from work without permission, his 5 days of annual leave would be used to offset his notice pay. The Labour Court found no other reasons for the company to withhold pay and ordered the company to pay the remaining salaries and commission amounting to $2, 588.40

Another case found on the internet revealed the story of one Alphabet Media, whom was taken to Labour Court by a former Sales Employee over unpaid salary. In defence, Alphabet claimed the sales executive had breached her contract and had withheld confidential client information. This defence was rejected by by the Labour Court.

There are a few lessons to be learnt here:

a.) Keep relationships good. Then all these problems wouldn’t start in the first place.

b.) Request for an employment contract and be clear what your boundaries are.

c.) If you feel injustice has been done to you, don’t worry about costly civil suits first – file a claim with the Labour Court, it costs only a few dollars for administration.

d.) But of course, if you really have been terminated for good reason – then perhaps it is best to listen to your conscience and move on.

 

 

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About the author

Tay Leong Tan

Tay Leong Tan is a collective of 3 writers. Tay, Leong and Tan. (Who were you expecting?!) We are enthusiastic about labour issues, economics and current affairs in particular.

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