MOM’s Labour Court skirted with enforcing an illegal ‘contract’

Posted by on December 26, 2016 in Articles, News, Our Stand, Stories

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Volunteers at TWC2 were alarmed to hear from Sohel Rana, in mid July 2016, that the Assistant Commissioner of Labour presiding over his Labour Court case might be planning to rule in a manner contrary to written law. It would seriously undermine his claim and set an extremely bad precedent.

Md Sohel Rana’s case had many of the features typical of workers’ salary cases: substituted (possibly forged) contracts, lack of documents, and a Labour Court process characterised more by arbitrariness than due process.

While it is in theory possible to appeal to the High Court against a Labour Court judgement, in practice it is very costly to the worker.  Unless he can find a pro-bono lawyer to take up the case, it will cost him many times what he is owed in salary, just to pay his legal and court filing fees. Moreover, while he would want to stay in Singapore to fight his case, it is entirely up to the Ministry of Manpower (against which the High Court case would be filed!) to extend his right to stay on. A worker might wonder: As an interested party, will the ministry refrain from acting in a way prejudicial to me?

And then, to top it all, how will the appellant (the worker) be able to bear the cost of staying on in Singapore even if he is allowed to? By a widely-circulated measure, this is the most expensive city in the world. It goes without saying that MOM will not allow him to take up employment even if he is allowed to stay on.

TWC2 felt it was important to try our utmost to stop the Labour Court from formalising a sloppy judgement rather than wait to appeal the ruling.

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Chronology

On 3 March 2015, Sohel Rana started work with Jin Fu Construction Pte Ltd. He had joined the company with a letter in hand, called the In-Principle Approval for a Work Permit, and issued by MOM. This letter (called ‘IPA’) stated a Basic Salary of $1,100 per month. MOM would have obtained this figure based on the employer’s work permit application.

The In-Principle Approval for a Work Permit (IPA)

The In-Principle Approval for a Work Permit (IPA)

At Jin Fu, there was a lot of work to be done, and he had so much overtime that on the months where we had the clearest documents, it was about double the legal maximum of 72 hours a month. The exact number of overtime hours varied slightly month to month.

Yet he was paid a flat rate of $1,000 in March and April 2015 as his monthly salary, and $1,200 per month between May and November 2015. For some reason, the figure varied again starting December 2015, between $1,150 and $1,250 a month for reasons unknown.

Unhappy that he was not correctly paid for his overtime hours, and for working on some Sundays and public holidays, Sohel Rana lodged a complaint at MOM in March 2016, almost exactly a year after he commenced working for Jin Fu. About eight other workers likewise lodged complaints on similar grounds.

Sohel Rana came to TWC2 in April 2016, at a point when nothing much was happening in his case, which meant that  our caseworkers and volunteers at first didn’t pay a lot of attention to him. We put him on our meals programme as he was out of a job with no income. He would stay on the programme for six jobless months, till September 2016 — that’s how long it can take to resolve a salary case.

The usual process at MOM is that case officers there try to mediate between employer and employee(s) to arrive at a mutually satisfactory solution. Though our records do not contain much detail about this period, this attempt clearly failed, as can be read from the fact that his case was kicked up to the Labour Court. When mediation fails, this is the second step; at the Labour Court, an Assistant Commissioner of Labour (ACL) would make a determination of the facts and issue a ruling.

Sohel Rana is an intelligent, articulate guy, and he seemed able to understand what was going on in the preliminary Labour Court meetings. Then the employer presented a document to the court that he did not expect in the least — an employment contract dated 9 March 2015 that he had never seen before, yet bearing a signature that the employer said was Sohel Rana’s.

The 'contract' that Sohel Rana had never before seen, or signed

The ‘contract’ that Sohel Rana had never before seen, or signed

This so-called contract had a sentence saying his “gross salary” would be “$1,100 for the first 2 months. Subsequent salary $1,200/mth.”

Against the word “Overtime”, it also said, “$3 per hour including Saturday, Sunday and Public Holiday (if need to work)”.

Sohel Rana also reported to TWC2 that the ACL mentioned that she would consider this so-called employment contract valid and binding. This was worrying. If she would rule this way in her final decision, Sohel Rana would get nothing, since the actual pay Sohel Rana had received from the employer corresponded with the “gross salary”  stated on that piece of paper.

Moreover, it would be outrageous if such an MOM officer, charged with implementing the terms of the Employment Act, were to so blatantly flout it.

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Points of law

In order to understand what is wrong about this so-called contract — beside the fact that Sohel Rana had never seen it before, let alone signed it — it is necessary to explain here the provisions of the Employment Act. This law itself says that when a private contract stipulates employment terms that are more disadvantageous to the employee than the minimum standard prescribed by the Act, then the contract terms shall be invalid and the minimum standard from the Act shall apply.

Specifically, the Employment Act provides that overtime work shall be paid at 1.5 times the basic rate of pay. Sohel Rana’s basic rate is clearly stated in the IPA: $1,100 a month. It is not stated in that so-called contract. This works out (based on a formula MOM applies; the formula is not an issue) to be $5.77 per hour. Therefore, overtime work should be paid at $8.65 per hour, a far cry from the “$3 per hour” in the so-called contract.

In other words, even if the Labour Court were to accept the contract as valid, it cannot accept the specific terms in there with respect to the overtime rate. That the ACL would say to parties that she was going to consider the so-called contract valid and applicable demonstrated a flagrant disregard of law.

It became important to head off such a ruling before it was officially announced. TWC2 wrote a letter to the Divisional Director of MOM’s Legal Services Division and the Commissioner of Labour on 18 July 2016, saying, inter alia,

In his recent meeting at MOM Bendemeer, Mr Sohel believes that the ACL ruled that the overtime rate of $3.00 per hour is lawful and binding.

[snip] Should the Employment Act be used to guide Mr Sohel’s overtime pay rate or does the contract submitted by his employer supersede the law?

TWC2 did not receive any reply. We were not surprised.

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No time cards for several of the months in question

It would take another six weeks for the Labour Court process to conclude. In the meantime, Sohel Rana attended a few more hearings — more frustration as his witnesses who had taken time off work were not called by the court to testify. TWC2 volunteers, interns and social workers helped him work out his numbers and coached him on how to frame his arguments. This was no easy task: how does one teach within a few hours a construction worker to argue points of law?

Moreover, he had had bad experiences with the ACL. There was at least one occasion when he referred to the Employment Act to argue his right to the correct rate of overtime pay; the response he got from the ACL was a little testy. According to Sohel Rana, she told him that she knew the law and didn’t need to be educated in it. Yet, that was also the point at which she was expressing the view that the ‘contract’ was valid and binding!

Another major problem Sohel Rana had was the absence of time cards for several months. Like many other construction workers, he had to surrender his time cards each month to the company office for pay computation. Fortunately, he had made and kept copies of five time cards: March 2015, and the period from December 2015 to March 2016. These allowed us to see the total number of hours he worked in those months.

What about the other months? The usual practice seen in other salary cases would be either

(a) for the MOM to demand that the employer produce the times cards for those months (which by law the employer should produce upon demand). It is the legislative intent of the Employment Act that the MOM, and its Labour Court, should have access on demand to such documents in order to enquire into salary payment disputes.

(b) to use an average of the overtime hours per month, obtained from the documented months, and apply that average to the ‘missing’  months.

The latter is not a formally documented rule and no worker should rely on it for case resolution. When we see it in operation, it appears to be a work-around in situations where the employer has failed to provide documents (though TWC2 has never heard of any employer being prosecuted even though it is a clear requirement of law that he produce the necessary documents).

It should be noted here that the fact that Sohel Rana had no documents for those other months was not his fault. MOM could have asked the employer to produce them and then provided copies to Sohel Rana. This is what happens in other Labour Court cases. Why MOM didn’t act on its powers in this instance is unknown. That there is so much discretionary variation in process at the Labour Court once again indicates how flawed the system is, and perhaps how cavalier the attitude is.

Perhaps the ministry did ask, but the employer failed to produce them (though Sohel Rana didn’t have any reason to think that such a request was even made). But if so, then the employer should be charged in court for failing to retain and produce required documents, as set out by law. There is no indication that the ministry would impose any penalty at all on this employer.

TWC2 has also advocated (on separate occasions) that when an employer fails to present documents that he is obliged by law to provide, then an adverse inference should be drawn against the employer. Such would be analogous to the warning given to persons under investigation: “You have a right to remain silent, but your silence may be used against you.” Unsurprisingly, MOM has not reacted to our proposal.

Whatever the reason for the lack of serious action on the ministry’s part, the failure to obtain the needed documents was undermining Sohel Rana’s case.

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Thousands of dollars at stake

sohel_rana_841jWhat were the numbers like? By our calculation, and using method (b) above for the eight months without time cards, Sohel Rana ought to have been paid about $30,000 for the twelve months he worked at Jin Fu.

In actual fact he was paid only about $14,000. The owed difference was about $16,000. This was no small matter.

On 2 September 2016, the ACL issued her formal order. The employer was ordered to pay Sohel Rana $5,613.96. Readers will notice that it is much less than what Sohel Rana said he was owed. This was because the ACL would only take into account those hours for which he had time cards. She ignored all the other months, and apparently had no problem with the employer not producing time cards for those months, if at all she requested them.

What could be considered heartening was that, at least for those months she would take into account, she applied the overtime rate that corresponded to the law and the IPA’s basic salary. She did not, in the end, do as she was reported to have indicated earlier: to accept the so-called contract and its $3 per hour rate as valid and binding.

The writer asked one of the volunteers handling this case if he thought that at least in this regard, it was a good outcome. “That’s only because we [TWC2] wrote to MOM,”  he said, a little acerbically.

Sohel Rana was not happy with the final amount. TWC2’s view is that he had every reason to be unhappy. The matter was not conducted with diligence.

However, the economics of lodging an appeal at the High Court were daunting. It would cost far more than the missing $10,000. After receiving from the employer the amount in backpay ordered by the Labour Court, Sohel Rana flew home in September 2016. Once more, Singapore’s reputation for ‘rule of law’ does not come out of scrutiny well.

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
means.

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