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.