Withheld her salary over a training bond? Tribunal says that's unlawful
Tribunal Magistrate Joel Tan ruled on 25 August 2026 that an employer could not withhold a departing teacher's salary to enforce a training bond.
The dispute, decided before Singapore's Employment Claims Tribunals, centred on an employee sponsored by her employer to complete a Professional Diploma in Early Childhood Care and Education through the National Institute of Early Childhood Development, under Workforce Singapore's Career Conversion Programme. She accepted the training bond terms on 12 December 2023, agreeing that leaving before 31 December 2027 would make her liable to compensate the company with one month's gross salary, the full course fee, and other expenses, though the letter never fixed the precise amount.
She resigned on 11 January 2026, citing a relocation after her marriage that made her daily commute unworkable, and served her full three months' notice. In her resignation letter she said she was "willing to… pay the bond compensation" as agreed, but a dispute over the amount followed. She estimated around $5,000 based on published course fees; the employer first demanded $22,227.90, then revised the figure to $20,745.20, then later offered a discount to $10,372.60, which it called "goodwill." Despite repeated requests, including a pre-hearing tribunal direction, the employer did not produce invoices or receipts until the hearing itself, when it admitted paying the institute only $1,925.92.
The employer withheld the employee's salary for February, March and the first ten days of April, asserting a right to deduct or set off the bond compensation it believed it was owed. Its director told the tribunal the company could not "put every life scenario into a contract" because "[t]he contract is there to deal with civilised people," and described the employee as "a person without integrity."
Tribunal Magistrate Tan found no lawful basis for the withholding under the Employment Act 1968. Section 26 bars deductions from salary unless authorised by the Act, a court order or another specified authority. Any consent the employee had given through the training bond letter had been withdrawn when she wrote, "For the avoidance of doubt, I do not consent to any deduction from my salary or final payments without lawful basis and proper substantiation." The tribunal also found the training sponsorship was not an "unearned employment benefit," since she had earned it as consideration for accepting the bond obligations in the first place. Equitable set-off was incompatible with the Act's protections, the tribunal said, and legal set-off did not apply because the tribunal, under the Employment Claims Act 2016, has no jurisdiction over training bond compensation cross-claims, which fall outside the categories listed in its First Schedule.
The employer's claim for training bond compensation was not decided on its merits and remains open for pursuit in the civil courts. The tribunal ordered $300 in costs and $40 in disbursements alongside the wage award of $5,877.91.
Tribunal Magistrate Tan wrote, "If the respondent's director believed that a "civilised" employee with integrity would honour her training bond obligations, it might be worth pausing to reflect on what a "civilised" employer, by his same standards, would have done." The answer, he said, would have been to honour its own legal obligations and pay what was owed.
The tribunal said an employer's duty to pay earned salary is not suspended by dissatisfaction with an employee, or by a cross-claim however genuine or substantial, unless a deduction is expressly authorised under the Act. Absent such a basis, it said, the employer must pay first and pursue its cross-claim through the proper legal channels afterward.
