In brief
The first published decision of the Employment Claims Tribunals (ECT) (JGP v JGQ [2026] SGECT 1) introduces a new framework for misconduct dismissals. Employers now not only must prove that the alleged misconduct is true on a balance of probabilities, but must also show that the alleged misconduct (if proven) is sufficient to warrant termination on the grounds of misconduct.
The rationale behind the decision is that dismissing an employee for misconduct affixes a "lasting stigma" that speaks to the employee's trust, character, and future employability. A misconduct dismissal must therefore follow a proper due inquiry, and must be proportionate to the alleged misconduct.
In this Client Alert, we take a closer look at what this decision means in practice for employers dealing with misconduct in the workplace.
Key takeaways
The ECT's first published decision sets out the principles for dismissal "without just cause or excuse" under Section 14(2) of the Employment Act 1968 (EA). Employers should note the following:
- The decision to dismiss should be proportionate to the wrongdoing. If an internal due inquiry reveals wrongdoing, the employer should consider whether dismissal is proportionate in the circumstances. Mere breach of company policy does not necessarily warrant a misconduct dismissal.
- Avoid overstating the alleged wrongdoing in the termination letter. The stated reason for dismissal must be proven. If the termination letter alleges dishonesty, wilfulness or intent, the employer must prove that mental element. The employer should therefore make sure that the termination letter only states wrongdoing that was proven through due inquiry.
- Paying notice does not avoid due inquiry. Misconduct must be proven, even if notice or salary in lieu is provided. A due inquiry remains necessary to confirm the allegations against the employee.
- Treat like cases alike. Where many employees engage in similar conduct, dismissing some while warning others must rest on principled distinctions. Unexplained disparity calls into question whether the termination of one employee for misconduct is proportionate when his or her peers merely received a warning.
- Paying notice does not cap your exposure. Salary in lieu of notice does not offset an award for "loss of income" for the period of unemployment following the notice period (assuming the employee can show that the unemployment period was caused by the fact and manner of the wrongful dismissal). The ECT can also make a separate award for "harm" caused by the wrongful dismissal, taking into account the aggravating and mitigating factors of the case.
In more detail
The facts of the case
In late 2023, the respondent employer launched a review of medical-benefit reimbursement claims charged to a single clinic (Clinic X). Employees were banded into Groups A to E largely by the number and value of their claims.
Higher-tier employees were referred to a disciplinary inquiry (DI) before a three-member disciplinary committee (DC). Around 40 employees were dismissed. The ECT heard six claims filed pursuant to Section 14(2) of the EA, for dismissals "without just cause or excuse". All six cases were decided against the employer. Full grounds of decision were issued for one representative claimant, Ms C.
Ms C had submitted 62 claims totalling about SGD 9,990 for items such as vitamins, supplements, skincare, chicken essence, and an electric toothbrush, some bought for her child but claimed under "Self". Placed in Group D, she attended a DI. The DC considered the evidence before it, and found that:
- Ms C had made repeated claims for items plainly non-medical in nature, and these could not reasonably have been regarded as claimable under the medical claims policy.
- The pattern of Ms C's purchases (62 transactions over a seven-month period, many on consecutive days, and just below the SGD 200 limit that avoided itemisation of the claims) demonstrated a sustained and deliberate disregard for the policy's requirements.
The DC initially recommended a warning and a full reduction of Ms C's 2023 bonus, citing her junior position, clean record, full repayment of the sums claimed, and "simple-minded" reliance on what colleagues and clinic staff had told her. After the Global Head of HR queried that leniency, and asked the DC to reconsider, the DC (by a 2:1 majority) revised its recommendation to dismissal.
Ms C was terminated on three months' notice, later commuted to salary in lieu. Her request for an internal appeal was not convened. Her termination notice stated, among other things, that the DC found "intentional misconduct involving dishonesty committed wilfully by [Ms C], namely to obtain claims for which [Ms C was] not entitled".
ECT decision
The ECT held that Ms C had been dismissed without "just cause or excuse". Although Ms C's conduct was censurable, the ECT was not satisfied that the employer had discharged its burden of proving the alleged dishonesty on a balance of probabilities. In particular, the ECT held that the patterns of behaviour that the DC had chiefly relied on did not, on its own, prove the state of mind that the employer alleged.
The employer was ordered to pay Ms C SGD 18,402 in total. This comprised of compensation for her lost income, a further sum for the harm the dismissal caused, and costs.
Crucially, the ECT rejected the employer's argument that all it needed to do was to show that the reason it had given for dismissing Ms C was true. Instead, the ECT introduced a two-step framework for assessing whether a misconduct dismissal is "without just cause or excuse":
a. Step 1: Are the material particulars of the stated reason for the dismissal proved on a balance of probabilities?
b. Step 2: If proved, do those facts, viewed in their proper context, amount to "just cause or excuse" to dismiss, as opposed to warranting a lesser industrial penalty?
What amounts to misconduct?
The ECT's decision makes clear that employers do not have a free hand in deciding what counts as misconduct. The ECT can review the sufficiency of the reason for dismissal.
This raises the question of what amounts to misconduct that would warrant dismissal? The Tripartite Guidelines on Wrongful Dismissal (which the ECT must have regard to when deciding cases involving a wrongful dismissal dispute) provides the following non-exhaustive list of examples: theft, dishonest and disorderly conduct at work, insubordination, and bringing the organisation into disrepute.
In Ms C's case, the ECT was not satisfied that the evidence showed dishonesty. Instead, the evidence supported a lesser wrong, namely, "negligently making impermissible claims by relying on practice rather than the formal policy". But the ECT did not consider this lesser wrong a sufficient reason for dismissal in the circumstances. In particular, the ECT pointed to the following factors:
- A widespread practice had taken root around non-itemised receipts and the S$200 threshold, which may explain Ms C's negligence.
- Ms C was junior, with a clean record. The DC had also initially considered these mitigating factors enough to warrant non-dismissal.
- Other employees with comparable patterns of behaviour were warned or had bonuses reduced, rather than being dismissed.
Ultimately, it boils down to a question of proportionality: whether in all the circumstances of the case, dismissal was warranted.
What standard of due inquiry is required?
Before dismissing an employee for misconduct, an employer must carry out a "due inquiry". This is to ensure that the allegations of misconduct are, on a balance of probabilities, true. It also ensures a fair process.
A fair process does not mean a courtroom-style trial. It comes down to three things: telling the employee clearly what he or she is accused of (including the evidence gathered against the employee), giving the employee a real chance to respond, and genuinely considering the employee's explanation with an open mind before deciding. There is no legal right to an internal appeal, so not offering one does not, by itself, make a dismissal unfair.
Further, having a detailed internal disciplinary policy does not raise the basic legal standard. But running a fair, even-handed process will strengthen the employer's position if the dismissal is later challenged, while a rushed or one-sided process will weaken it.
What is the maximum exposure for employers faced with wrongful dismissal claims?
The ECT can make an award for lost income (i.e., the pay the employee lost because of the dismissal), which is capped at three months' salary. A separate amount can also be awarded for the harm the dismissal itself caused, which typically starts at two months' salary and is then adjusted based on the aggravating and mitigating factors in each case.
Money already paid as salary in lieu of notice does not reduce the lost-income award. In other words, paying an employee out does not cap the employer's exposure. For instance, Ms C was paid three months' salary in lieu of notice, but was nevertheless awarded a further three months of lost income as she was able to show that the fact and manner of her dismissal caused her difficulty in securing new employment.
However, there is an overall ceiling on what the ECT can order when hearing claims for wrongful dismissal: SGD 20,000 per claim, rising to SGD 30,000 where the employee is assisted by a union. Claims above the ECT's jurisdictional limit would have to be filed in the Singapore courts.
Can employers dismiss without reasons?
The ECT also commented on contractual terminations where no reason is stated. In those cases, the legal burden falls on the employee who brings a claim for dismissal "without just cause or excuse". Interestingly, the ECT was of the view that all the employee had to show was that "no legitimate cause likely existed", and this may be done by "reference to objective materials which show that the employee would not have been dismissed by an ordinary and reasonable employer". The evidential burden would then shift to the employer to show that there was just cause or excuse for the dismissal. The employer can choose to remain silent, but at the risk of having no materials to answer the case against it.
The ECT's commentary raises questions of whether employers can still terminate an employee without reasons, or whether reasons must be provided once a contractual termination is challenged.
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Angela Chai, Senior Associate, has contributed to this legal update.
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