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Non-payment of salary: Through good times and bad

Fulfilling an employer’s obligations despite business difficulties.

27 Feb 2018
Salary claim
Learning insights
    • Poor employee or business performance are not reasonable justifications for employers to withhold employees’ salaries.
    • Employees should contact TADM early for assistance, before the situation deteriorates and the amounts owed to them accumulate.
    • It is essential to maintain proper employment records. These will help to resolve employment disputes during mediation.

Background

It had been five months since Lathika’s employer last paid her salary.

Her employer, Bikram, used to be her friend. It was partly a desire to help Bikram out that convinced Lathika to take on this job. She had not expected her good intentions would lead to her witnessing Bikram turning from friend to adversary within a space of five months.

“This job was supposed to be the start of the next phase of my career. Instead, it became an extremely frustrating and disappointing experience. Not only did I suffer financially, but also emotionally as I witnessed a friend showing a side of himself that I have never seen,” said Lathika.

Lathika finally decided to seek help from the Tripartite Alliance for Dispute Management (TADM). It was her last resort, and she had decided that if this did not work out, she would cut her losses and return home.

How TADM helped

At TADM, Lathika’s assigned mediation officer, Samantha, listened attentively as Lathika recounted her situation. Other than her husband, Lathika had not told anyone else what had happened.

“Lathika was greatly affected by her situation. Although emotional about not having received payment for her salary, she kept to the facts provided relevant information and evidence regarding her claim. This helped me to understand the case clearly, and plan ahead to help both parties resolve the situation amicably,” said Samantha, a Mediation Officer from TADM.

Fortunately, Lathika was able to provide Samantha with documents such as her employment contract, and correspondence with Bikram. These documents helped Samantha to verify the facts of the case and were useful references in her subsequent mediation sessions with Bikram.

Initially, Bikram was adamant that he was entitled to withhold Lathika’s salary. According to Bikram, Lathika performed poorly, but when asked for more details, was unable to provide any evidence. Bikram added that his company was doing poorly and was experiencing difficulties with cash flow.

While Samantha was able to empathise with Bikram’s situation, she explained that neither poor performance nor cash flow difficulties were reasonable justifications for withholding employees’ salaries. Samantha reminded Bikram that all employers had an obligation to pay their employees, in accordance with the terms in their employment contracts.

Bikram slowly began to realise the impact of his actions on Lathika. Bikram eventually realised that he had been too focused on his own troubles and neglected to fulfil his obligations as an employer.

“TADM helped me to better understand my obligations to my employees. I have learnt much from this incident, and will try harder to be a better employer in the future,” said Bikram.

Outcome

With Samantha’s help, Bikram and Lathika reached an amicable settlement. Bikram would repay all five months of Lathika’s salary, and Lathika agreed to his proposal to repay her salary by instalments. Samantha helped both parties to draft and commit to a written settlement agreement, which was also registered at the State Courts so that it could be enforced legally.

TADM officers continued to monitor the repayment of each instalment, and eventually helped Lathika to successfully recover the full amount due to her.

“TADM has been instrumental in helping me to get my salary back. I cannot imagine how difficult it would have been if I did not have the help of TADM’s officers,” said Lathika.

More case studies

Getting ready for re-employment: Banking on experience

20 Apr 2018
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Engaging employees early to discuss re-employment issues.

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Beyond dispute resolution: Cooking up a new career

20 Apr 2018
Salary claim, Financial assistance

Supporting employees to rebuild careers and meet personal obligations.

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