Changes in foreign worker law: who benefits? Part 2


In Part 1, I gave an overview of the proposed amendments to the Employment of Foreign Manpower Act (EFMA). I am of the view that the changes do more to make sure employers and workers do not trifle with the Ministry of Manpower (MOM) than ensure that employers treat low-wage foreign workers fairly.

The two chief ways by which employers exploit and abuse workers are by (a) underpaying or not paying their salaries and (b) by abandoning them after they have been injured.

Here in Part 2, I am going to discuss in greater detail the salary-related issues and point out how the proposed changes do almost nothing to address this problem. 

As mentioned in Part 1, at Transient Workers Count Too, a charity I volunteer with, we see many cases of workers complaining that they have not been paid for months. Or that they have been short-paid. In the latter case, the short-payment could be in the form of

  • under-calculation of overtime
  • all manner of deductions, e.g. $60 a month for utilities, $200 a month for a bunk bed, $75 for a new helmet
  • deductions in the form of “repayment” of fictitious loans, or “savings scheme” – usually euphemisms for a tax on the employee levied by the employer for giving him a job

Non-payment and wrongful calculation of wages is currently an offence under the Employment Act. Yet the fact that such complaints are widespread only goes to show how patchy enforcement is. Creating new laws, as proposed, will do nothing when there is no will to enforce.

Spurious deductions and disguised tax schemes will benefit from changes to EFMA, because these were not anticipated by the Employment Act. But one still has to ask: Where is the will to enforce?

Lack of evidence

Part of the difficulty is the absence or ambiguity of evidence. To illustrate what I mean, here is a brief story about one worker, whom we shall call Sharif.

In early 2011, Sharif, a Work Permit holder, lodged a complaint with MOM that he had not been paid his correct salary. The employer, however, said they had paid him in full. MOM could not immediately decide which side to believe.

At mediation sessions, the employer raised the offered settlement amount several times, eventually more than doubling the initial offer. However, the sum did not quite meet the amount claimed by Sharif. Sharif pointed out to MOM that by offering higher and higher amounts for settlement, the company was in effect admitting guilt — but it was not an argument that persuaded the officials to see it differently. Then, on a different day (I’m not sure whether this was before or after the mediation session), the employer presented various payment vouchers showing that Sharif had been paid in full. Sharif immediately pointed out that these were forged; the signatures on them were not his. He made a police report.

Nearly twelve months later, the police finally informed Sharif that forensic tests prove that the signatures were not his. However, they could not establish who was the person who put those signatures there.

To Sharif, the case should be open and shut. The company had tendered those pieces of paper and made representations to MOM that they were his signature. Whichever clerk might have forged the signature, the employer should be responsible for the actions of the clerk.

Yet, as things stand, it does not look as if MOM is going to prosecute the employer. Nor is it going to insist that Sharif’s employer pay up.

Forgery is an existing offence. Failure to pay correct salaries is an existing offence. Yet no prosecution is likely to result, and Sharif may never see his money despite waiting a year.

A common problem underlies such cases. Wages are paid in cash and employers sometimes do not provide detailed computations. When a dispute arises, there is very little by way of proof. Given such difficulty, cases drag on for months and months, the ministry feels snowed under as a result (efficiency and productivity, anyone?), and the law remains theory. One is hardly surprised that employers have acquired a sense of impunity.

Transient Workers Count Too had proposed to MOM two simple rule changes that should make a big difference:

  • Make it mandatory for employers to provide workers a detailed pay slip each month showing basic pay, overtime, allowances, and each deduction;
  • Make if mandatory to pay all salaries into a bank account that the worker has exclusive control over, not in cash.

By providing an evidential trail, it will be much easier to resolve complaints like Sharif’s and will deter employers from underpaying.

Not in the consultation paper

Alas, there is no hint at all in the consultation paper that these ideas are being adopted. The closest is when it says “the failure to pay S Pass holders via GIRO would be classified as a regulatory breach”. But why S-Pass only? Why not Work Permit holders?

One can guess why. The ministry wants an evidential trail to prove that employers are over-declaring and underpaying S-Pass holders – a tactic for getting around the lack of a Work Permit quota. That’s well and fine, but why not want an evidential trail too to prove that employers are underpaying Work Permit holders too?

It seems to me that, as things stand, the ministry cares more about employers cocking a snoot at their administrative rules than not paying low-wage workers.

What is needed then is for the new offence (to be created under the proposed changes to EFMA) of “breaching of Work Pass conditions involving harm or abuse to the foreign worker” to be expanded in scope. Two new Work Pass conditions should be laid down, with respect to Work Permit holders: (a) to provide a detailed salary computation every month no later than the day the salary is paid (which, under the Employment Act should be within 7 or 15 days of the end of the month), and (b) to pay salaries by Giro into a bank account that the worker has exclusive control over. Any employer who breaches these requirements will have committed an offence.

Consideration for providing a job

Even when there’s a will to enforce the law (still doubtful), enforcement can only begin when a worker complains. The reality however, is that workers are very reluctant to complain until they are desperate. This is because nearly all low-wage workers have paid thousands of dollars for their jobs, an upfront payment that will take up to two years to recover. The moment they lodge a complaint with MOM, the company is almost certain to terminate their employment. Then they will be left jobless and in a net-deficit position.

The ministry wants employees to blow the whistle on errant employers, as indicated in a recent Straits Times article on a slightly different topic – that of substandard accommodation:

Roadshows will be held, and they will be given printed publicity material in their native languages, urging them to blow the whistle on employers who short-change them in this department.

— Straits Times, 10 May 2012, Drive to ensure foreign workers get proper housing, by Amelia Tan

Hoping for whistleblowers to come forward is totally unrealistic unless the ministry is prepared to protect them. It’s the same with salary complaints. So long as workers fear losing their jobs, so long as losing their jobs means being left in a net-deficit position, they are not likely to complain if they are short-paid.

The crux of the problem is that workers should not be paying so much upfront for the jobs. It puts them at a severe disadvantage, which bad employers would not hesitate to exploit. MOM appears to be addressing this by making “receipt of payment in consideration of employment” a new offence. But how this will be enforced is a mystery to me, because in a typical case of a new hire, the money flow is well hidden. The worker pays his recruiter in his home country the thousands of dollars in recruitment fee. This recruiter almost surely gives to cut to one or more middlemen, some of whom will be in Singapore. Then finally, a middleman pays the employer his cut.

How is anyone going to prove the offence? The worker doesn’t pay the employer directly. It’s so easy for the middlemen to disguise the payment as consideration for some other service rendered.

So if this problem of getting payment from the worker for giving him his job cannot be tackled, it means the worker will remain fearful of losing his job. Then what hope of workers whistleblowing on employer who short-pay salaries?

I don’t see an easy solution. But I would say, at least do the do-able: Make detailed salary slips mandatory. Make Giro payments mandatory. That way at least, when workers finally find the courage to complain, they have the evidence at hand, and it’s easy for MOM to discern the facts.

10 Responses to “Changes in foreign worker law: who benefits? Part 2”

  1. 1 ape@kinjioleaf 19 May 2012 at 14:58

    Detailed salary slip is good. As for bank account, my guess is that there may be those on Work Permit who are too illiterate or salary too low to open an account making it not worth the cost to maintain their account.
    Even if an account is opened, crooked employers can still withhold their account book or ATM cards. If they can hold the workers’ passports, what is bank book?

    • 2 Poker Player 21 May 2012 at 11:17

      It’s also what “average” Singaporeans do to maids.

    • 3 chazza boags 21 May 2012 at 13:19

      i don’t agree with your assessment. many a times, i have seen cases where shortfalls in salaries are proven to MOM when the bank records of workers are compared with time-cards provided by employers. while almost every MW i’ve met has had their passports withheld by the employer, most MWs still hold on to their work permits (as a form of identification) and their passbooks and/or ATM cards. an employer holding on to MWs ATM cards will face an open revolt from his workers, even if he is paying their wages properly (dun believe, go and try).

      also, don’t assume that all workers are illiterate. most have gone through about 7 to 10 years of schooling and newbies would take about 3-6 months to pick up our Singaporean English. And most can read – esp. when it comes to salary slips and bank balances.

      i think Alex’s suggestions are good and the compulsory GIRO sounds more do-able for the ministry. After all, levy payments are all done through GIRO, so making it compulsory for MWs salaries to be paid through GIRO DOES sound workable. It’s whether the ministry wants to implement it or not. Let’s not forget that despite their keenness to punish “errant employers”, the ministry openly holds a pro-business position.

  2. 4 19 May 2012 at 16:12

    As far as I know, safety equipment & apparel such as helmets, boots, etc. are always issued free to any construction worker. To charge any worker for a fee for the issuance of a safety equipment is tantamount to committing an offence under the Safety Rules of any construction company.

    The Labour Ministry who allowed all these cases of transgression to go unpunished should have resulted in the Labour Minister being sacked for both complacency & incompetency. Otherwise why do we need a Labour Minister for ?

    Remember the MOM is taking a cut of the foreign worker’s salary under the guise of a foreign worker’s levy in the region of millions of dollars annually and in return for this revenue, they should do something to protect the workers’ entitlement to fair wages & basic welfare.

    Our Govt recently talked about the importance of improving productivity in the construction industry. But if the poor workers are often left to their own fate and their basic rights can even be assured, isn’t it hypocritical for them to even start talking about setting standards for the very industry that they can’t even manage ?

  3. 5 no point 19 May 2012 at 20:33

    The only way to get things done is to vote PAP out. No point giving suggestions. Let the workers suffer, let them go on strikes, let them be suppressed by the police. Once enough people realise that we have a lousy government, things will start to change. PAP has to go. Enough said.

  4. 6 desiree 21 May 2012 at 11:43

    Alex, I am pretty ignorant about the details of current labour law in Singapore. Thanks for the overview of recent changes wrt low-paid foreign workers.

    This hasn’t got much to do with what you posted, and I’m aware that the basic intangible institutional changes you are calling for (political will) is necessary for any sort of progress at all, but I was wondering what you think of a no-fault statutory compensation scheme as an ultimate goal in respect of workplace physical injuries. This could go through MOM tribunals (which would need to be much more on the ball than the various anecdotes you’ve given suggest they now are) rather than requiring the ministry to work up the enormous effort they apparently need for the arduous task of prosecution in court.

    I haven’t thought through how it might work more broadly, but it might be possible to extend it to other contractual/tortious injuries: for example, once Sharif has the police evidence of forgery on his ‘payment slips’, he could demand compensation rather than having to push the forgery offence into a tribunal/court (and even if it’s successful, get nothing directly, only have his employer fined, presumably). This ideal would of course be best achievable only with the paper trail you described.

    There are of course many advantages to such schemes (see NZ, Aus); but a point which stood out to me was that under such laws MOM could assume oversight of workers’ ‘contributions’ and ‘savings schemes’ (uniform-ise, centralise and regulate them for purposes of the compensation fund), so there would be less scope for employers to dress exploitation up as such.

    The idea behind such schemes is to ease the burden of proof on complainants and the litigiousness of the procedure (at the price of far lower compensation for workers than is theoretically available under tort/contract damages, but given the practical impossibility of getting those, that’s no disadvantage). But as you say it needs a fundamental mindset change of what the rules’ aim is, from ‘we must punish the errant employers’ to ‘we must ensure the workers are treated fairly’. In short, changing fines into compensation.

  5. 7 The Pariah 21 May 2012 at 13:23

    For a country much vaunted for her “Rule of Law”, isn’t it classic irony that the laws will work only if there are whistle-blowers? Be it for Employment of Foreign Manpower Act, the Income Tax Act, the Land Titles Strata Act, etc, etc.

    Whee, whee … wee, wee to the Pee And Poo (PAP). Quite frankly, Pee And Poo make me Puke.

  6. 8 Pauls 21 May 2012 at 23:07

    Your suggestions seem like common sense, so it really boggles the mind (yet again) that our govt hadn’t already adopted the like. Ordinarily when someone (appears) to overlook something that is both obvious and sensible one would conclude that they’re either stupid or lazy or harboring dishonorable, possibly venal, motives. But of course our govt not only has the best people it is incorruptible.

  7. 9 Chanel 22 May 2012 at 10:39

    I sense that the government is far more interested in appearing good to the public than in actually doing good. Thsi is especially so since the last general election (“GE”).

    We now have a new Minister of State for Manpower, Tan Chuan-Jin. He comes across as very savvy not only with the new media (i.e. online), but also in projecting a positive image to the public. This explains the enactment of new laws or modification of existing laws dealing with Work Permit holders. These look good on paper and are widely reported by the local media (newspapers and TV), but as we all know, the proof of the pudding is in the eating. We can have the best laws in the world, but if enforcement is lacking or, worse, the government does not want to enforce, it is as good as not having the laws. A prime example is cycling on pedestrian pavements. The police kept saying that it is against the law to do so, but we have never seen any action taken against cyclists.

  8. 10 Rajiv Chaudhry 22 May 2012 at 16:49

    “The two chief ways by which employers exploit and abuse workers are by (a) underpaying or not paying their salaries and (b) by abandoning them after they have been injured”.

    This might be true in the organized sector such as construction or ship-building. In the informal sector, however, for instance in the restaurant and coffee-shop industry or small retail outlets a third issue is the virtually unlimited working hours that some workers have to put up with. You have hinted at this when talking about unpaid overtime but the issue goes far beyond just overtime. Some workers I know in Little India work from eight in the morning until well past 11 pm, often ending after midnight. And this is 24 x 7, for 365 days a year, with a respite only at the end of their contracts. Many people are not aware that such Dickensian conditions, amounting to nothing short of slave-labour, exists in modern Singapore.

    In the meantime, of course, highly qualified civil servants with double-degrees at the MOM (“scholars”) sit in their ivory towers, designing academic solutions to very real problems affecting the health and welfare of countless thousands of workers.

    They say to get things done, you need to kick butt. Unfortunately, there seems to be no one around to do the kicking.

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