In-Principle Approval: uses and abuses 2011 – 2018, part 5

Posted by on December 15, 2018 in Articles, Facts, research, analysis, Stories

Part 5: the Section 6A requirement

The long name for this rule is “Employment of Foreign Manpower (Work Passes) Regulations 2012, Fourth Schedule, Part IV, Section 6A”. The clause in the subsidiary legislation says:

6A. (1)  The employer shall not —

(a) Reduce the foreign employee’s basic monthly salary or fixed monthly allowances to an amount less than that declared as such in the work pass application submitted to the Controller in relation to the foreign employee; or
(b) Increase the amount of fixed monthly deductions to more than that declared as such in the work pass application submitted to the Controller in relation to the foreign employee,

Except with the foreign employee’s prior written agreement.

(2) Before implementing such reduction or increase, as the case may be, the employer shall inform the Controller in writing of the proposed reduction or increase, as the case may be.

For many years, one of the most frustrating aspects in assisting assist migrant workers with their salary claims has been that officials in the Ministry of Manpower (“MOM”) and the Labour Court [footnote 1] largely ignored this provision. Sometimes there was the superficial acknowledgement that the provision mattered, but officials would then also be highly indulgent, allowing all manner of arguments why the conditions imposed by this rule had been satisfied.

For example, as mentioned in Part 2, MOM officers were known to take the position that if a worker had accepted several months of salary at a lower pay rate by signing payment vouchers, then it signalled that he had agreed to the lower rate and satisfied the “prior written agreement” requirement of Section 6A. As we pointed out in Part 2, this completely ignored the power imbalance between employers and foreign employees. The very legislative intent of Section 6A was to offer protection to migrant workers in the light of such imbalance; to admit such an easy way of satisfying Section 6A was appalling.

As for the second limb of Section 6A – the requirement to inform MOM before implementing a downward revision in pay – it was ignored completely through the years, going by TWC2’s casework experience.

New form: “Your employer reduced your salary”

With the Employment Claims Tribunal (“ECT”) coming onto the scene in April 2017, such bad habits could no longer be sustained. We don’t actually know if this was the impetus, but a new form (click thumbnail at left) issued by MOM appeared in early 2108. Titled “Your employer has reduced your salary”, which we will called “Salary Reduction Notice” for short, it basically informs a worker that his employer had notified MOM of a salary reduction, though no date is evident on the form, neither of the form itself or of the proposed effective date of salary change.

It’s one of those well-meaning things that was amateurishly executed.

As soon as we saw the form, a thousand questions raced through our minds. What was a worker supposed to do after being notified? How would MOM treat non-response on his part? Would it be assumed that the worker accepts the reduction or the opposite: that he has not agreed to it? Would he be protected from retribution by the employer if he objected?

We put our many questions to MOM. We did not get any meaningful reply. Our educated guess was that the ministry didn’t know the answers to those questions either, even though they were ones who created the form. It seemed to us that the issues had not been thought through.

Compounding the problem, we saw inconsistency in case handling by MOM and TADM [footnote 2] officials, based on the cases where workers had been given such a form. Some officials took the view that silence on the worker’s part meant consent; others the opposite. The absence of a date on the form also meant potentially huge confusion as to the implementation date, though in practice this didn’t arise because no worker we saw ever concurred with such a salary reduction in the first place.

The example we imaged above was also a fortuitous one. The worker in question, Rahman Safiur (sometimes spelt Rahman Safiar), had gone to MOM to be thumb-printed to get a new Work Permit. The MOM officer thus had the opportunity to personally hand him the Salary Reduction Notice. We wrote about this worker’s case earlier in Re attempts at salary reduction, MOM ties itself in knots, so there’s no need to recount the details here.

But what if the scenario were different? What if, unlike Rahman’s case where the employer attempted a salary reduction even before he was issued his Work Permit, the employer notified MOM a few months after the worker had taken up the job? How would MOM pass this Salary Reduction Notice to the worker who would not normally have any reason to be at the ministry’s premises?

The normal way for MOM to communicate with workers while still under employment would be through their employers. Letters and documents for workers are sent to the company office for re-direction. Should MOM send this Salary Reduction Notice to a company office with a request to pass it on to the worker, would the company office do so? Wouldn’t the company’s self-interest in wanting the salary reduction to go through without resistance mould its actions?

Is MOM designing a form and making policy on the fly without forethought?

The notification to the worker notwithstanding, it was all ‘not allowed’ anyway

To get clarification on whether lowering a salary even before the man had started work could even be allowed, Member of Parliament Louis Ng put a question to MOM in the House on 6 August 2018. Minister of State for Manpower Zaqy Mohamad said in reply,

any reduction in salary before the work permit issuance will constitute an offence. Technically, there is no need for them to submit any documentation because reduction in salary before work permit issuance is not allowed.

It’s apparent that when pressed to explain themselves, MOM arrived at a better policy position. We hope never to see the Salary Reduction form again.

Major policy change: no more reduction from IPA salary

In any case, by then, MOM had probably realised that giving leeway to employers to reduce salary was not something that was practicable to police. Section 6A required conditions to be fulfilled, but it was not possible to assess in each case whether the conditions were really fulfilled. The employer-migrant worker relationship is one with such a wide power differential that the assumption behind Section 6A — i.e. that one could discern if a worker’s consent was freely given — is just unrealistic.

TWC2 was glad that Manpower Minister Josephine Teo told parliament on 9 July 2018 that

MOM is considering the possibility of disallowing downward salary revisions altogether.

Since her statement was in response to a parliamentary question by MP Louis Ng that hinged on the salary stated in the In-Principle Approval for a Worker Permit (“IPA”) [footnote 3], the minister’s reply about disallowing downward revisions should be read to mean revision from the figure in the IPA.

This was a good move and TWC2 applauded it. See our article  TWC2 supports disallowing reduction of salary from IPA.

Five weeks later, civil officials from the ministry verbally confirmed to TWC2 that downward revision of salary would not be permitted on issuance of the Work Permit. However, we didn’t think the civil servants’ statement dovetailed enough with the minister’s, so TWC2 put in an email request for clarification. We asked:

We believe MOM said no changes will be allowed to the IPA details before the Work Permit is issued. Which of the below sentences would then apply?

(a) salary details are frozen and cannot be amended after the employer/agent has submitted the Work Permit application, or
(b) salary details can be amended until MOM has given in-principle approval, then frozen and cannot be amended after the IPA has been printed out, or
(c) salary details can be amended after the IPA has been printed out, but frozen when the Work Permit is issued, or
(d) some other cut-off.

As our footnote 3 describes, there is a multi-step process for the IPA and Work Permit. At which point exactly in this process does the freezing of salary take place? To be fair to the worker, it should (a) or (b), but not (c).

MOM’s reply came five weeks later. It basically told us to shut up. It claimed that all these details had been “discussed extensively” at a recent consultation (which we recall was more of a monologue) and that they would “not be replying to further queries”. Yet, the very fact that we were left wondering about the details of implementation would contradict that claim and suggest that in fact we were left unclear. In any case, even if these details were covered, what’s so difficult about setting the clarification out in an email again? Why the need to brusquely guillotine discussion of the subject?

Part 6 will provide a brief summation of the journey so far. It will also discuss how the fixes applied to problems that have been identified through the years in turn complicate some other issues. There’s more work to be done.

[1] The “Labour Court” is a colloquial term to mean a hearing before the Commissioner of Assistant Commissioner for Labour. It is an administrative tribunal under the aegis of the Ministry of Manpower.

[2] TADM stands for Tripartitie Alliance for Dispute Mediation, a body that conducts mediation between employee and employer when there are disputes, including salary disputes. If mediation is not successful, the case is sent to the Employment Claims Tribunal for adjudication.

[3] The IPA process is almost entirely online. When an employer wishes to employ a foreign worker, he or his licensed employment agent logs into MOM’s system to make an application for a work permit for this worker. A host of details, including salary details, has to be provided.
If MOM approves the application, the employer or his agent can then print two versions of the IPA in paper form. One version is for the employer and the other is for the employee. The key details including those items listed above are the same, but there are some details that only show up in the employer’s copy, such as the amount in monthly levy, but not in the employee’s copy. And vice versa.
The employer or his licensed agent is supposed to send the employee’s copy to the prospective worker, so that he has it in hand when arriving at Changi airport. He needs to show it to immigration.

Introduction

Part 1

  • Language and late passing
  • A very contingent market solution

Part 2

  • Salary terms
  • Regulatory confusion
  • Adding to the mess: opacity, forgery and witnesses with conflicts of interests
  • Widening purpose of the IPA and refusal to provide reprint
  • High Court ruling changed everything

Part 3

  • Getting around IPAs in salary disputes
  • Brazenly disavowing the salary figure in the IPA
  • Forged payment vouchers and contracts
  • Doctored IPAs
  • System defect?
  • Changes coming

Part 4

  • MOM begins at last to respond to changing circumstances
  • The Employment Claims Tribunal
  • Missteps on the way to unearthing the original IPA salary

Part 5

  • Section 6A requirement
  • New form: “Your employer reduced your salary”
  • Notification to the worker notwithstanding, it was all ‘not allowed’ anyway
  • Major policy change: no more reduction from IPA salary

Part 6

  • Where we are now
  • Transfer workers
  • Renewed work permits

 

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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