When court orders are worthless: the Zach Engineering case

Posted by on June 17, 2018 in Articles, Our Stand, Stories

Longform by Gautam Joseph with contribution by Choo Wai Hong

 Timeline

Dec 2014 Two workers at Zach Engineering summarily dismissed after employer has disagreement with Ministry of Manpower (MOM).
Mar – Jun 2015 Two workers rehired by Zach Engineering, three other Bangladeshi workers join.
Oct 2015 Fifteen workers paid only food allowance. Indian workers fight with employer and get paid before being sent back.
Dec 2015 Five Bangladeshi workers report to MOM with unpaid salary claim amounting to $96,000. Start of mediation and Labour Court Case.
Jul 2016 Two modified, backdated salary contracts presented by employer in Labour Court. Start of Police investigation into alleged forgery which till now yields no result.
Oct 2016 Labour Court Order for $50,400 made to five workers. Employer appeals to High Court, has to be arm-twisted by MOM into buying mandatory return flight tickets for workers.
Jan 2017 Employer fails to turn up at State Court appeal he initiated. Employer asked to pay additional $6,500 in costs to pro-bono lawyers. Court-mandated costs remain unpaid.
Jan 2017 Start of enforcement proceedings to recover Labour Court Order of $50,400. Writ of Siezure & Sale explored – unsuccessful due to virtual office space and insufficient assets.
Feb 2017 Garnishee Order considered by getting details on Zach Engineering accounts from main contractor – unsuccessful due to lack of access to documents for workers.
Mar – Jul 2017 Examintation of Judgment Debtor carried out to locate funds – employer does not turn up for the hearing.
Aug 2017 – Feb 2018 Commital Proceedings to arrest employer undertaken – unsuccessful as court clarifies at first hearing that it will not arrest employer for a civil debt.
Jun 2018 Not a dollar of the $50,400 recovered of the Labour Court Order; Zach Engineering still registered with ACRA.

 Part I – Journey to getting a Labour Court order (first 18 months)

I meet Rabiul at City Square Mall the week he returns to Singapore. It’s April 2018. I do not expect his return after a year and a half. Yet in the 18 months Rabiul has been away, he has become a husband and father. He shows me photos of his toddler, Mina, his brother’s kids gathered around the daughter in their yard, the family at his send-off at Dhaka airport. I wish I have better news to share in turn about his case, but there’s only been trouble with Zach Engineering since Rabiul started work there three and a half years ago. I ask him about the wig he got before he left Singapore the last time – having grown bald in those two years –  and he laughs avoiding my eyes.

Rabiul

Rabiul’s case is one of roughly 4,500 salary cases1 lodged by migrant workers each year. And it is one of roughly 250 salary cases2 by migrant workers that made it to Ministry of Manpower’s (MOM) Labour Court in 2016. When mediation by MOM officers fails, workers can press their claim through the Labour Court. Yet from the Zach Engineering case, it becomes clear that where an employer wishes not to pay up, there is no means for the court or ministry to ensure workers receive any part of their salary.

Rabiul’s story reveals the key enforcement gaps and its personal costs.

When Rabiul reaches MOM in December 2015, it is the second time he has come with an issue involving Anthony Wong Yoon Fatt of Zach Engineering Services Pte Ltd in less than a year.  This time it is with four other workers, and over a combined $96,000 in unpaid salary. What follows for the five workers is a year of mediation and hearings at MOM’s Labour Court resulting in a judgment on 25 October 2016 for $50,400 – about half the original claim. Yet as of June 2018, none of the workers has received any of their court-ordered salary.

Didn’t look good from the start

The first time Rabiul visited MOM in December 2014, it was with a colleague, Tarikul. Rabiul and Tarikul had worked for less than a month before Anthony Wong ran afoul of MOM officers for not submitting necessary documentation in time. Tarikul recounts that Wong sent the two of them back to Bangladesh instead of paying MOM’s fine. Tarikul feels being sent back the first time by Wong was a warning he should have heeded. Yet returning to his wife and five-year-old girl in Bangladesh, with more than $2,500 in unpaid agent-fee debt, Tarikul was happy when Wong contacted him two months later – about a job. Anthony Wong wanted to hire more workers, and MOM rightly insisted he hire back the workers he had summarily dismissed.

The five workers who would later launch the Zach Engineering case joined (or rejoined, in the case of Rabiul and Tarikul) the company over a four month period between March and June 2015. Zach Engineering had two worksites in 2015, one in Orchard, and another in Upper Thompson, the latter a condominium project.

At one point, Wong, who is the sole director and sole shareholder of Zach Engineering Services Pte Ltd (as at August 2017), has almost 15 workers, from India, China, and Bangladesh. He dispenses small sums to enable the men to buy food, and promises the rest of their salary as soon as the main contractor has paid. There are several text messages from Wong indicating salary delays and payments of small amounts instead, messages that are later presented to the Labour Court by Kaium Khan, the supervisor. Because the workers are already in debt from agent fees paid to get their jobs, and because Zach Engineering’s projects involve a well-known builder, they wait patiently despite the shortfall in salary.

Workers lose patience

According to the five workers, what triggered panic was an incident in late September 2015. The Indian workers in their company stormed the boss’s office demanding their wages. The boss called the police, and two officers came down thrice that day. Wong was bleeding and there was talk of a police investigation, but the boss’s friend intervened and no case ensued. In mid-October, the Bangladeshi workers noticed that the Indian workers suddenly had money to buy cigarettes, and soon after, they all left Singapore.

Wong promises the Bangladeshi men he will pay in November.

Another month passes. On 12 December 2015 Rabiul and his four colleagues approach MOM to lodge formal complaints. Wong tries to persuade the workers into withdrawing their claim, then gets angry. During one of these carrot-and-stick episodes in late December, the boss offers to pay a partial sum, provided they sign a modified contract. Three of the workers do, including Tarikul. Rabiul and another don’t. At the subsequent Labour Court hearing on 18 January, three modified employment contracts are presented to MOM with reduced salaries and illegal overtime terms, backdated to July 2015. Though Wong insists that full salaries had been paid all along, he has no bank documents showing funds or payslips to provide to the court. The three employees say no payment has been made.

The law requires that salary reductions involving foreign workers cannot take effect until the ministry has been notified. Though the contracts are dated to July 2015, Wong admits at Labour Court he did not inform MOM protocol at the time.

Nevertheless, the Labour Court proceeds to use these modified salaries in its final judgment3 for the three affected workers.

The case at MOM is adjourned multiple times mostly because of delaying tactics by the employer

“Not my signature!”

In July 2016, two never-before-seen contracts are submitted by the company to the Labour Court, contracts purportedly between Zach Engineering and Rabiul and Kaium Khan respectively. It’s now six months into the case. By this time, Wong has been regularly missing hearings, sending instead a company representative that none of the workers have seen before. The signatures on two new contracts are so different from Rabiul’s and Kaium Khan’s, it is unbelievable. Yet this evidence of criminal misconduct goes unpunished due to a mismatch between the police timeline for forgery investigation, and the Labour Court’s for salary dispute resolution. The Labour Court takes a break, demanding a report from the police within a month. It’s an impossible timeline for the police; forensic investigation usually takes at least six months.

In the meantime, Rabiul and his four colleagues share a small room close to Paya Lebar station. Their Work Permits having been cancelled, they’ve been put on Special Passes, but this type of pass does not allow them to work. They rely mostly on money borrowed from relatives and old colleagues for rent and food. The commute to the TWC2 meal programme is expensive, so on most days they buy groceries and take turns cooking. They find themselves having to go from MOM to TWC2 to Bedok Police HQ each week, often waiting for hours at each place before they can speak to the right person. They are still trusting – pinning their hopes on the generosity of strangers and a wealthy well-run state. But the Labour Court process is highly technical, and the results and timeline unpredictable. The five are repeatedly surprised as the case lengthens with each of Wong’s curve balls. Stuck in this limbo, they struggle to reassure their families worried about unpaid loans.

For some of the most deserving cases, TWC2’s Quasi-legal Clinic tries to bridge the gap between Police and MOM investigations by arranging for handwriting analysis by an expert who has testified in State Courts. TWC2 has commissioned four such analyses in the last 18 months. The handwriting expert concludes that “there is very strong support for the proposition” that the signatures on the never-before-seen contracts were not Rabiul’s and Kaium Khan’s. Yet the Labour Court Commissioner4 refuses to admit the handwriting analysis report on the ground that it is not independent in the same way as a police investigation.

Extract from the conclusions of the handwriting expert

In any case, as of this article’s publication date, almost twenty-two months after the start of the police investigation, there is still no progress on the police forgery investigation. Apparently, the police are unable to reach Anthony Wong.

Many salary cases do not proceed far because another employee on a Work Permit (who can easily be persuaded by the boss to testify in his favour or else face loss of job and repatriation) gives evidence against the claimant. Not the Zach Engineering case. This one comes to a successful conclusion for the workers (albeit for only half the original claim amount) because the five of them can corroborate each other’s testimony, and Kaium, the supervisor, has a strong grasp of English. He is not fazed by the questions. In fact, Kaium has a university degree, and used to be a science teacher in Dhaka before coming to Singapore to work.

(The Labour Court orders can be seen by clicking the thumbnails at right.)

Going home, though case still not over

I meet Rabiul in early-November 2016, at a food stall in Little India, hours before his three colleagues fly back to Bangladesh. Wong has appealed the Labour Court judgment to the High Court as soon as it is issued. Once the Labour Court process is concluded, even if appealed to the High Court, MOM requires the workers to leave Singapore. TWC2 steps in to arrange pro-bono representation to contest the appeal.

When we meet that last time, the workers are still hopeful of winning the appeal and recovering the court-ordered sum. Much of the chatter is about Rabiul’s new wig. The others give Rabiul winks throughout the short interview I am doing, teasing him about his new “film star” hair. Later he shows me his  identity card, with a photo taken when he turned thirty. He has a full crop of hair there. That was before Zach Engineering. Rabiul says he has to get married this time, but I wonder how – going back broke and balding.

Following the five of them around over four months, I am often bystander to the arguments among them as stress takes a toll. They worsen with the passing months. Tarikul has visibly shrunk – losing weight. Sometimes I can’t help feeling I am seeing people turned into caged animals fending for scraps.

 Part II – Journey to oblivion (next 18 months)

Winning the appeal at the High Court turns out to be easy. Wong seems to have failed to give instructions to his counsels at Sanders Law LLC. The High Court orders Zach Engineering to pay $6,800 in costs. Yet the appeal process may have bought Anthony Wong enough time to finish his projects – one in Woodlands and another near Bugis using workers supplied by other companies. And at no additional expense too – since Wong has not paid the new court-ordered costs either.

The Labour Court orders stand, but Zach Engineering is not paying up. TWC2 decides to pursue further enforcement options with a pro bono lawyer at Hoh Law to recover the $50,374 owed to the five workers.

Under the Rules of Court, there are several recovery procedures theoretically available to a person holding a Labour Court judgement (equivalent to a district court judgement). They are:

  • Garnishee Proceedings;
  • Writ of Seizure and Sale;
  • Examination of Judgement Debtor; and
  • Committal Proceedings.

What we find from the Zach Engineering case is that all of these procedures are expensive, time-consuming, and too demanding of required information about the debtor (in this case the employer) – information that is almost always unavailable to a worker. Each of these procedures also requires legal representation which makes the situation harder.

 

The ridiculously frustrating

CRUX OF THE MATTER

and how all four legal means to enforce the Labour Court orders came to nought

The pro bono from Hoh Law first considered going on a writ of seizure and sale route. But being manual workers, the five men had little access to the company premises and papers that could reveal if there were worthwhile assets to be seized and sold for cash proceeds to pay off the Labour Court orders. When one of TWC2’s volunteers went to Zach Engineering’s registered office address at International Plaza, he found a virtual-office service where hundreds of companies were listed under the same space. It didn’t look hopeful.

Furthermore, small construction companies tend to rent their vehicles, and if they do have an actual office, there is often little more than tables, chairs, and a computer, which together upon sale yield less than a thousand dollars. The writ of seizure and sale option was dropped early.

Next the lawyer considered garnishee proceedings, and there was initial hope that this was a good route, as the workers knew that Zach Engineering had a long running business relationship with a big developer. However what was needed to satisfy the court for garnishing the assets of Zach Engineering were onerous. First there needed to be evidence of a contract between developer and Zach Engineering, and second, evidence of the amounts and dates the contractual payments were due to be paid by developer to Zach Engineering, before the court could order a garnish on Zach’s cash assets coming from the developer. Kaium who had by then returned on a new job, tried to obtain the proof through site supervisors who worked for the developer but could not produce the necessary. And so the idea of garnishee proceedings against Zach Engineering was dropped.

Third among options was the procedure of the examination of a judgement debtor. The debtor is to show up in court for discovery as to the sources of his income and assets. In March 2017, the pro bono lawyer started making the application and serving the proceedings on Zach Engineering. Between May and July 2017, Zach’s representative thrice failed to turn up in court to be examined, thus frustrating the objective of gaining information on the whereabouts of Zach’s assets.

The last resort available was to apply for committal proceedings against the judgement debtor (Zach Engineering), for failing to comply with the court procedure of examination of a judgement debtor. Theoretically, a court can order a person to be committed to prison if it can be shown that the person failed to do an act which was ordered by a court judgement. In the Zach case, the lawyer commenced committal proceedings against Zach Engineering on the ground that it failed to appear before the court when it was ordered by the court to be examined as a judgement debtor.

At the first hearing of the application for committal against Zach, the presiding judge reminded parties that the court could not issue an arrest “warrant” to force the judgement creditor to attend the committal proceedings. The court could only issue an arrest “order”, which allows the bailiff to “accompany” the judgement creditor to attend the court proceedings, but the bailiff has no power under the arrest order to “arrest” the judgement creditor and force him to attend court.

Also, it is generally understood that under committal proceedings, a court is usually reluctant to make an order to imprison a person whose wrong is in the nature of non-payment of a civil debt. An example of a civil debt is an employer like Anthony Wong owing his employees salary and overtime pay ordered by a Labour Court. This means that it would be near impossible to obtain a committal order against a recalcitrant employer who fails to pay his employees, even if the amount has been determined by MOM’s Labour Court to be contractually owed under an employment contract. Committal orders would more readily be granted in more serious cases, for example a violent husband who continues to beat his wife even after a restraining order had been issued against him.

The pro bono lawyer thereupon dropped the application for committal proceedings in February 2018. And with that, all options were exhausted.

Recommendations

For each of these procedures, whether it be Garnishee Proceedings, Writ of Seizure and Sale, Examination of Judgement Debtor, or Committal Proceedings, the court fees required are in the region of $250-$300 and lawyers’ fees are generally in the range of $5,000-$6,000, no small sum for a worker trying to recover his judgement debt.  Each procedure is time-consuming, requiring months to unfold. And so, 16 months after the five workers obtained their Labour Court orders against Zach Engineering in October 2016, all the theoretical remedies have proven futile. The five workers have not been able to recover a single cent from Zach Engineering.

The Sunday Times carried a brief story on 17 June 2018 on the futility of enforcing the law in the same Zach case. Link to the newspaper’s story (behind paywall).

When enforcement issues were highlighted previously, authorities have responded by invoking the Writ of Seizure and Sale as the magic bullet. The Zach Engineering case shows that neither this nor the other three legal pathways gets the workers their unpaid salary. There is a pressing need to reconsider the options available to workers upon receiving their Labour Court orders.

(For salary cases, the Labour Court has since been superseded by the Employment Claims Tribunal, but the problems of enforcement or tribunal orders remain the same.)

TWC2 suggests two solutions.

First, deterrence by vigorously pursuing and shaming errant company directors who default on Labour Court Orders. This can include making public a new process that will both prompt winding-up proceedings for the companies registered, barring him or her from being directors of any other companies, and cross-linking the new process with existing private-sector credit-worthiness evaluation processes. It should also mean a high likelihood of prosecution under the Employment Act for failing to pay salaries on time. Directors should be held personally accountable even if the employer of record is an incorporated company. Section 113A of the same Act provides for piercing the corporate veil.

Second, we suggest MOM set up a “Backstop Fund”. TWC2 has long suggested this. The concept is one where the Fund pays out on court orders to the affected workers; at the same time the Fund assumes the right to the monies from successful enforcement of the court orders. This way, workers are not kept waiting for money to live on. There is a decent case for such a Fund, representing the social responsibility of the State towards the vulnerable in our population.

Conclusion

For the workers, life continues.

Kaium was the first to return for a new job in December 2016, but he left Singapore in February 2017 and has not come back after that.

Alam

Alam returned in April 2017. He who, with his heft and long hair, might fit on a poster of the working class hero works on in Singapore for his eighteenth year. He has three kids and a wife back home, whom he sees every two years.

Rubaiyat returned in September 2017, got seven stitches on his left arm after a work accident in December 2017, and now has an additional three months salary owed by his second boss, yet was lucky to get a job transfer through MOM without having to return to Bangladesh.

Rabiul, who came back in Singapore for a new job only a month ago, learnt his dad passed away just last week; he cannot afford a visit to Bangladesh to pay his respects anytime soon.

Tarikul, whose wife divorced him just before he joined Zach Engineering the second time in March 2015, has yet to come back to Singapore.

The five workers have yet to receive any compensation on their salary claims as of June 2018. Short of public donations, or significant action by the police or ministry, the workers will not receive their salary, and have no means of legally pursuing their claim further. Zach Engineering continues to be a registered company, and no winding-up or bankruptcy proceedings have been started. MOM’s online list5 of employers who have been convicted of infringing the Employment Act in the last three years does not mention Zach Engineering. MOM has banned Wong from hiring more workers, but this does little to punish or rectify the harm he comfortably perpetrated. The last time Anthony Wong was spotted by the workers more than a year back, he still drove his Mercedes.

 

  1. Minister for Manpower Lim Swee Say in response to Lee Bee Wah/ 16-08-2016/ Notice Paper No. 225 Of 2016 for the Third Available Sitting / Question No. 347 for Oral Answer
  2. This is the lower figure, taken from 2 ministerial statements. (1) states 10% of cases reach Labour Court, which should mean a figure of 450 cases. A separate MOM statement in response to 20 February 2017 article says 700 cases in 3 years at Labour Court – a figure of about 250 cases a year.
  3. One of the key improvements since November 2017 is the way in which modifications to the initial salary document (IPA) has been treated. The threshold for accepting claims by bosses of uninformed changes to worker’s salaries is currently higher thanks to a High Court judgment. This intutive insight was not applied to the Zach Engineering case – it would have resulted in a larger sum awarded to three workers.
  4. The new Employment Claims Tribunal (ECT) system that replaced MOM’s Labour Court for salary cases, bringing the later stages of claim resolution under direct administration of the State Courts, has been consistent in accepting pro-bono handwriting analysis.
  5. Information accurate as of 7 May 2018. www.mom.gov.sg/employment-practices/employers-convicted-under-employment-act#/

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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