To solve salary non-payments, underlying factors must be addressed too

Posted by on May 13, 2015 in News, Our Stand, Press Releases
A typical day in TWC2's office. Foreground: six workers owed 4 months' pay, calculating their owed amounts including overtime. Rear: five workers from a different company waiting to consult with TWC2's social worker. They had come to Singapore with MOM's approval for a job, only to be told by employer that there's no work for them and are being sent home. Each  had paid about $4,000 to secure his job.

A typical day in TWC2’s office. Foreground: six workers owed 4 months’ pay, calculating their owed amounts including overtime. Rear: five workers from a different company waiting to consult with TWC2’s social worker. They had come to Singapore with MOM’s approval for a job, only to be told by the boss that there’s no work for them and will be sent home. Each had paid about $4,000 to obtain his (phantom) job.

Transient Workers Count Too is glad to hear that the Ministry of Manpower has stepped up enforcement of the Employment Act with respect to delayed or non-payment of salaries. Mr Lim Swee Say, Minister for Manpower told Parliament in an oral answer, 11 May 2015, that the ministry “now investigates every salary-related claim for employees covered under the Employment Act. ”

We also note the figures he provided: “Last year, MOM took action against 645 employers for salary-related offences. 49 employers were prosecuted for severe breaches. This is four times more than the number in 2013.”

For years, TWC2 has seen a steady number of migrant workers who approach us for assistance over salaries. Just last week, a group of 18 construction workers came telling us that they were owed four months’ salaries. Their case is ongoing. They are the tip of the iceberg: We understand there are about 100 employees in this company, all in a similar predicament but, according to the 18, are too afraid to ask for help.

This illustrates an inadequacy in MOM’s approach. While a new stance of investigating all complaints is, in abstract, the right direction to take, the more important question is what percentage of complaints results in penalties or prosecution — which we cannot see from the minister’s statement. If employers feel that the chance of being caught is low, the practice of delaying salary payments will not be stamped out.

Certain realities on the ground which MOM has not addressed will surely complicate and neuter the ministry’s efforts:

1.1 The ministry has not yet made it mandatory for employers to issue detailed salary slips to employees, without which employees cannot be sure that the amounts are correctly calculated. Employers can therefore run around MOM’s new policy by paying on time, but less than what the workers are due.

1.2 Nor has the ministry made it mandatory for employers to pay salaries through bank giro or other electronic channels that maintain audit trails. Without this requirement, employers are free to pay in cash. The worker’s position is weakened, because he cannot produce documentary proof that he has not been paid. MOM’s investigation is stymied or needlessly prolonged when the complaint is reduced to a case of the employee’s word against the employer’s.

1.3 From the 240 cases of salary problems (non-domestic workers) that our social workers dealt with last year (i.e. excluding another few hundred salary cases that only ate with our free meal programme, whose cases we did not follow closely), none resulted in full settlement. More typically, the outcome is at best a settlement comprising no more than a quarter or a third of what they are owed. Some cases end with workers getting nothing. The injustice should pain us all.

(Our website documents a number of these cases. See footnote)

1.4 It is also important to review the conditions that hold workers back from lodging complaints in the first place. The fact is, workers who have not received their correct salaries on time are highly conscious that complaining imposes a heavy penalty on them even when they are the wronged party. This is because MOM’s current framework for migrant worker management allows employers to terminate workers at will, and on termination, requires employers to repatriate their workers (but see points 1.6 and 1.7 below). Lodging a complaint at MOM effectively means that workers will lose their jobs with the near-certainty of being sent home, either immediately or at the end of whatever process MOM institutes, and which, as pointed out in 1.3 above, seldom results in a just and satisfactory conclusion for the worker.

1.5 It is completely understandable therefore that workers would rather cling on to hope and continue working for either partial or no salary rather than burn their bridges with their employer and be out of a job and out of Singapore. Employers will take advantage of this to delay salaries, confident that employees will not complain for at least some months.

1.6 MOM has in certain cases allowed workers who have lodged complaints to stay on in Singapore to look for new jobs — a concession known as “Change of Employer”. Generally however, MOM gives workers only two weeks to find a new job. This is an unrealistically short period of time. While a further extension of two weeks is possible when TWC2 appeals on workers’ behalf, even so, four weeks is too little.

1.7 Moreover, the recruitment system that has developed over the years is one that is largely reliant on recruiters in source countries. From TWC2’s experience and research, huge profits are made by intermediaries, including by Singapore-based supervisors, managers and even bosses, in the form of profit-sharing by recruiters or kickbacks demanded from workers. Naturally there is no incentive to hire workers from outside these lucrative channels. This explains what TWC2 has observed: Despite MOM granting some workers the opportunity to look for alternative jobs locally, the vast majority do not succeed and are sent home when their two or four weeks are up.

1.8 Once sent home, they have to pay thousands of dollars all over again to secure new jobs through the above-mentioned recruitment channels, which puts them into the debt cycle all over again. Their vulnerability persists, and employers can exploit it as described in point 1.5 above.

Mr Lim’s call to “urge workers who have not been paid their salaries or feel that their wages have been wrongfully withheld to come forward early to MOM or their unions for assistance” will be less effective than hoped unless these other recommendations by TWC2 are also implemented:

2.1 Make it mandatory for employers to issue detailed salary slips each month, and pay salaries of foreign workers through bank giro.

2.2 Change the basis of work permits from one tied to an employer to one based on the worker himself or herself. The work permit should have a set duration of, say, five years and renewable, thus giving the worker the freedom to resign at any time and take up a new job with another employer without having to be repatriated. Of course, MOM can still regulate which employers are permitted to employ foreign workers, and the ratio to local employees.

2.3 Deprioritise hiring directly from source countries; incentivise employers to hire from among those workers who are already in Singapore. With a good prospect of getting an alternative job, workers will be more willing to raise non-payment issues. Changing the hiring landscape can either be done through adjusting the levy — higher levy for hiring directly from abroad, lower for hiring locally — or better yet, set up a central hiring platform with transparent processes in order to eliminate extortionate costs. The latter can come with a much tighter quota for fresh hires, so that employers will be more open to hiring workers who are already in Singapore.

Recommendations 2.2 and 2.3 will substantially reduce the vulnerability of workers and enhance their bargaining power. It is better to use the dynamics of a fair labour market to reduce the incidence of non-payment of salaries than to have to deploy large numbers of officials to investigate a never-ending stream of complaints.

Our website documents a number of cases we dealt with in 2013 and 2014. See these articles:

Genius Engineering

PCG Wiley

JS Metal

Harri Construction


TWC2 is an organization that is dedicated to assisting low-wage migrant workers when they are in difficulty. We are motivated by a sense of fairness and humanity, though our caseload often exceeds our

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