On 6 March 2019, Nominated Member of Parliament Anthea Ong asked the Minister of Manpower to supply figures for 2017 and 2018 respectively regarding
… (a) how many salary claims were filed by (i) local employees and (ii) foreign workers at the Employment Claims Tribunal; (b) how many court orders were issued to errant employers to settle salary claims by (i) local employees and (ii) foreign workers respectively; and (c) how many orders remained unpaid one month after the orders were issued.
Minister Josephine Teo replied thus:
85% of the claims filed under the Employment Claims Act (ECA) were resolved at the Tripartite Alliance for Dispute Management (TADM). The remaining 15% of the claimants were referred to the Employment Claims Tribunals (ECT), and of which 5% were withdrawn while 10% filed for adjudication. Two-thirds of the adjudicated claims resulted in money orders issued to employers to settle the salary claims; this proportion is similar for both local and foreign employees.
Of the ECT orders issued, about half of the claimants received full payment from their employers. Another 16% reported partial payment, while 36% reported no payment. Cases that resulted in partial or no payment usually involved employers in financial difficulty, or large accumulated salary arrears before the employee reported to TADM. In 12 cases (1% of ECT orders), the employer wilfully refused to pay despite having the means to do so. MOM is investigating and prosecuting these employers. 129 low income claimants who did not fully recover their salaries received additional financial assistance through the Short Term Relief Fund or Migrant Workers’ Assistance Fund.
We encourage workers to approach TADM immediately when they have salary arrears. This improves the chances of full recovery, and prevents more workers from encountering the same problem.
It is unfortunate that the minister only provided absolute figures for the number of claims filed at the Employment Claims Tribunal (ECT), giving percentages in reply to the other parts of the question. Also, the percentages made no distinction between local and foreign workers other than saying that “Two-thirds of the adjudicated claims resulted in money orders issued to employers to settle the salary claims; this proportion is similar for both local and foreign employees.”
Deriving fuller numbers from her percentages
Nonetheless, her percentage figures allow us to derive an estimate of the absolute numbers:
Below, we make our observations about the data presented.
(A) Total number of salary claims
The total number of salary claims seems to be around 5,200 a year in 2017 and 2018. But in a parliamentary reply to a question on 9 January 2017, then-minister for manpower Lim Swee Say said that “About 6,000 salary non-payment and short payment cases were lodged by employees each year in 2015 and 2016.” See this earlier article: One quarter of Labour Court salary orders unpaid.
This is not to say that Lim’s figure can be relied on, for a month later, on 6 February 2017, he said
“MOM received about 9,000 salary-related claims involving some 4,500 employers in 2016. So, 9,000 claims; 4,500 employers.”
He even repeated his figures for emphasis. See our article 9,000 salary complaints, 16,000 injured workers in 2016. The minister’s statement can also be found in the Hansard.
With the latest estimates drawn from figures by Josephine Teo, there appears to have been a substantial reduction in salary cases. This calls for deeper investigation as to the significance of this apparent trend.
(B) Widely swinging local & foreign numbers
The second interesting thing is how foreign workers’ claims reaching the ECT declined by 27% between 2017 and 2018, while local workers’ claims reaching the ECT increased by 37%. This begs explanation, but the minister did not provide any.
(C) Far fewer ECT cases compared to previous Labour Court cases
In a parliamentary reply on 9 January 2017, then minister for manpower Lim Swee Say provided a table which showed that in each year about 3,000 salary claims go to the Labour Court, and of these, about 1,400 conclude with formal orders in favour of employees. See: One quarter of Labour Court salary orders unpaid. While the Labour Court is not exactly the predecessor of the Employment Claims Tribunal, it served a similar function. It is therefore interesting to note that under Lim Swee Say’s watch, 1,400 orders were issued to employees annually, while under Josephine Teo’s watch, only 141 ECT orders were issued in favour of employees in 2018.
(D) 52% of court orders partially or completely ignored
The fourth interesting thing is that 52% of court orders are partially or completely ignored. Only 48% of workers with ECT orders in their favour are fully paid. The number who are not paid at all is about 252 persons through 2017 and 2018. This is an area which is far from satisfactory. Workers, especially low-wage ones, should not be left in the lurch, and better provision should be made to replace their lost earnings. That having been said, MOM has instituted the Short Term Relief Fund and the Migrant Workers’ Assistance Fund. Yet, only 129 “received additional financial assistance,” according to the minister in her reply. Why only half of those who were not paid despite court orders?
It’s also interesting when we compare the numbers provided by Lim Swee Say for 2015 and 2016 with the latest figures. Under Lim’s watch, about 25% of Labour Court orders went unpaid. See: One quarter of Labour Court salary orders unpaid. Teo’s figures for 2017 and 2018 showed that 36% of ECT orders went unpaid. Has the situation deteriorated?
(E) Twelve employers refusing to pay despite ability to do so
It’s a small thing but when the minister said 12 employers willfully refused to pay even though they had the means to do so, she also said this figure was one percent of ECT orders. Strangely, her figures don’t show that. Since her own figures indicated that about 700 ECT orders were issued in favour of workers (our estimate based on her percentages), 12 employers would translate to a figure closer to 2% than 1%. We cannot understand why she said 1%.
We note that “MOM is investigating and prosecuting these employers” — referring to employers wilfully refusing to pay. This is good to know but it also suggests that so long as an employer convincingly pleads lack of cash, he is allowed to break the law (Employment Act, Section 34) at will. At most, MOM imposes administrative penalties, as indicated by then-minister for manpower Lim Swee Say. On 6 Feb 2017 in Parliament, he said
“All these companies have been debarred from hiring foreign workers until they comply with the Labour Court orders. The debarment also applies to culpable directors even if they were to start new companies.”
Further down in that debate (6 Feb 2017) he added:
“the debarment we impose on the companies also applies to culpable directors. What is meant by ‘culpable directors’? This refers to directors who deserve blame for not paying salary regardless of whether it is due to negligence, intentional or otherwise. In other words, if you are a director of a company, and you have contributed to the non-payment of salary, the debarment applies to this director as well. So, this director can go on to open and start a new company, the debarment will follow him to the new company until he pays up the outstanding salary to the ex-employees.”
Yet, in a few instances, workers have reported to us that despite not settling unpaid salaries, companies have either continued in operation or the boss has set up a new company with foreign workers. We have not verified those claims however, since it is not TWC2’s main mission, but we wonder if MOM has discontinued Lim Swee Say’s policy of administrative penalties.
(F) 85% “resolved” at TADM
Although it wasn’t part of the question posed by Ong, the minster mentioned that only about 15% of salary claims went to the ECT. 85% did not have to because they were “resolved” at the TADM or mediation stage. TWC2 is always concerned about the language used. In our experience, most workers settled for much less than they were owed at TADM. “Resolved” in the minister’s usage surely cannot always mean that they got the full amount of unpaid salaries back.