Who prospers in this salary saga?

Our recent article about workers from Woolim Plant Engineering & Construction Company explained how the Bangladeshi employees were underpaid for over a year before deciding to raise the issue, and how Transient Workers Count Too (TWC2) assisted them in calculating their salaries and lodging a complaint with the Ministry of Manpower (MOM).

This is far from an isolated case. Workers from many companies approach TWC2 with similar complaints. In nearly all cases they endured underpayments and unanticipated deductions for an extended period before seeking help. They continued working encouraged by the employer’s promise that salaries will improve or due to threats of early termination and repatriation.

A recent case of Prosper Environmental & Engineering Pte Ltd employees illustrates the salary challenges faced by migrant workers on their overseas work assignments. The men involved in this case had prepared for their jobs at One Training Centre in Dhaka, Bangladesh. The centre offers training and arranges job placement for its students. Prosper Environmental & Engineering sources for workers from this centre and a Bangladeshi supervisor and two Singaporean supervisors travel there regularly. The Prosper supervisors promised to pay $24/day ($570/month) for general (unskilled) workers and $28 to $32/day ($665 to $760/month) for skilled workers. The stated deduction for housing was $90/month. Since the men had all completed skills training at the centre, they expected the higher wages, but no papers were signed at the time.

Before workers come to Singapore, companies must provide their names and particulars to MOM, together with figures for their salary, deductions and allowances. MOM then issues an In-Principle Approval (IPA), a letter that is sent to the training centre and distributed to the prospective employees. Prosper’s new recruits received IPA documents showing a basic salary of $650 and a housing deduction of $90/month. When the men saw the salary, they registered their dissatisfaction. But, as they explained to TWC2, after paying recruitment fees of $6,000 apiece, they were not in a position to negotiate because they were convinced that they would not be accepted for the job if they insisted on a salary higher than that indicated on the IPA. The staff at the training centre told them that salaries could be readjusted once they started working.

Most of the men in this case arrived in Singapore between June and December 2012. Once they started work in Singapore, they were paid at daily rates equivalent to $429 and $570 per month (instead of $650 as stated on the IPA), and had $200 (instead of $90) deducted for accommodation. As soon as they received their first month’s pay, the new employees began talking among themselves about the reduced salaries and the increased housing costs. Their supervisor, who had spoken to them in Bangladesh, responded to their gripes with “later, later.” Having not yet begun to pay back their recruitment debts, they continued working rather than risk losing their jobs by complaining.

Patience runs out

By July 2013, some of the men had had enough. Three workers lodged a salary complaint with the Bangladesh High Commission on 22 July 2013. The High Commission wrote a letter to MOM’s Labour Relations Division explaining the salary shortfall and indicating that the men were owed from $5,500 to $6,000 each. (The letter doesn’t indicate how the salary calculations were made.) The letter also conveyed the workers’ fear of repatriation: “Now they are afraid that their (sic) would be repatriated to Bangladesh soon without paying their due salary.” The High Commission advised the men to resign from the company, perhaps to avoid being accused of refusing to work.

Eight more men approached both the Bangladesh High Commission and TWC2 with the same issues the following day. The High Commission’s letter to MOM on 23 July lists the amounts these eight men expected to be paid, an average of $8,000 each, and ends with: 

In view of the above, you are kindly requested to look into the matter sympathetically so that the workers can get the outstanding dues from the employer. The workers are…skilled workers and they have spent a lot of money to come to Singapore. Therefore, your good office is also requested to arrange alternative job for them so that they can recoup part of his migration cost.

TWC2’s email on 24 July to MOM listed the same eight men and noted their salary issues, the IPA indicating a basic salary of $650, the final two months of unpaid salary, and the employer’s attempts to repatriate the men on the evening of 23 July. After visiting MOM, the men reported to TWC2 that the MOM officer, refusing to give his name, rejected their claims of unpaid and underpaid salary.

A few days later another group of nine workers with similar complaints from the same company appealed to TWC2 for assistance. TWC2 sent these men’s names and complaints to MOM on 2 August.

Settlement and repatriation for first group, then…

On 13 August the first group of eight men listed in the Bangladesh High Commission’s letter of 23 July were repatriated with a total of $38,472  (an average of $4,808 each, the lowest being $3,039 and the highest $6,486). Remember that these workers had claimed an average of $8,000 each. While the settlement wasn’t as much as they had requested, it was more than half of what they claimed. They felt they had no choice but to accept the money and return home. MOM did not explain how the amounts were calculated.

The number of men with salary shortfalls grew further after employees saw that the claims of the previous group had been met more than halfway. On 20 August thirty-two more men from Prosper Environmental & Engineering visited MOM to voice their salary complaints. The MOM officer, refusing to disclose her name, told them they should have raised this issue earlier, and explained that they would have to attend the Labour Court. If the Labour Court awarded any money to them and the employer refused to pay, they would have to apply to the High Court, which would involve hiring a lawyer and paying for legal assistance. This information was neither helpful nor reassuring to the men, especially since their situation was treated so differently from that of the earlier group of eight whose complaints were dealt with through mediation rather than by the Labour Court.

TWC2 asked MOM about the different responses given to the group of eight and the later groups. MOM explained that the claims for the first group of workers were settled at a conciliation meeting as the employer wanted to resolve the issue quickly. It was not meant as an acknowledgement of the legitimacy of the workers’ demands.

Prosper Environmental & Engineering was not willing to settle these later claims at the same rate as the earlier ones and maintained that all the employees had agreed to a salary of $18/day before they left Bangladesh and that they had signed an employment contract when they joined the company. The workers explained to TWC2 that the contract they signed some months after arriving in Singapore was not shown in full or explained to them. Some men say they were shown only the section for their signature; others allege that their signature was forged on this document.  The contents of this later employment contract were never made available to the workers.

Labour court

MOM asked that five of the men from the later groups refer their claims to the Labour Court for adjudication and that this judgment would be applied to the rest of the men with similar claims. The workers, however, were apprehensive about this approach because they feared that the five chosen would either be too unyielding in their claims or would capitulate under pressure. MOM then agreed that all the men would be issued special passes and would be permitted to lodge individual claims with the Labour Court and that the employer would continue to be responsible for their housing.

On 10 December the settlement was announced. MOM’s, Labour Relations & Workplaces Division ordered Prosper Environmental & Engineering to pay a total of $55,871.19 to twenty-nine men, an average of $1,926.60 each. This was far less than the earlier group received, and although many in this group hadn’t worked as long, the men felt that they were owed considerably more.

The calculations

The figures in Table 1 were calculated by TWC2 to show the main reason for the men’s dissatisfaction — they expected to be paid according to their IPA: $650/month or $3.38/hour, and $4.50/hour for overtime (OT). However, after starting work in Singapore, a reduced pay rate was used to calculate both basic and overtime hours. The difference in pay rates accounts for the largest part of the discrepancy between what the men received and what they expected. In addition, none of the men agreed to the $50/month forced ‘savings’ deductions or to the deductions or reasons for their fines.

For example, “H”, worked from November 2012 until June 2013. Based on the difference between his IPA salary and his actual salary, H claimed that he was owed an additional $3,655 in salary payments and that $1,515 had been unfairly deducted for forced savings, excess housing and fines. In total, he claimed that he was owed an additional $5,170.

MOM supplied the figures in Table 2 to explain their calculation of payments due to the men. It includes payments for the unpaid wages from June to August, return of saving money[i], payment for annual leave and public holidays, and reimbursement of ‘other deductions’ (it’s not known what ‘other deductions’ represents). MOM’s calculations did not address the excessive amount paid for housing or the difference in pay rates.

(An earlier version of this article came with a table that had typographical errors in the figures. These have been corrected in the table above.)

The most striking difference between the two tables is in the rate of pay — the chart prepared by TWC2 used the IPA rate while MOM used the rate the employer claims the men agreed to: $18/day for H and T, and $24/day for D and W. MOM also said that the housing deductions were done at cost and that the figure of $90 on the IPA was simply an estimate.[ii]

But did the new employees agree to that lower pay rate? Did they even know what was in the forms that they were asked to sign? They were hardly in a position to negotiate as they were certain they’d be terminated if they had refused to sign papers presented to them. Those men who did refuse to sign claim that their signatures were affixed to the documents by another hand.

In a letter published in the Straits Times, 12 February 2014, Alvin Lim, Divisional Director, Workplace Policy and Strategy Division at MOM, said:

“The Ministry of Manpower (MOM) protects foreign workers against employers who unilaterally reduce their salaries from what were declared in the In-Principle Approval letters without first obtaining the workers’ express written consent and notifying the ministry of the reduction.

“Such employers may be fined up to $10,000 per infringement under the Employment of Foreign Manpower Act. We similarly prohibit Singapore employment agencies from overcharging.”

The law may say all this, but much depends on interpretation. The example of the Prosper workers raises the question of what level of transparency is obligatory on employers when they make workers sign new documents. Would insisting that they sign on the spot, without bilingual versions of documents, knowing full well that for financial reasons, workers are in no position to refuse, constitute “express written consent”?

Access to justice — yet another problem

The Assistant Commissioner for Labour who reviewed this case was not convinced that both parties agreed to the $650 as stated in the IPA. So the settlements were substantially smaller, based only on savings, unconsumed annual leave and payment for holidays. These amounts are small compared to the difference in the basic wage.

The men were invited to make an appeal to the High Court if they were unhappy with the amount awarded by the Assistant Commissioner for Labour. The four men noted in the tables above were eager to do that, and TWC2 was also eager to have a High Court ruling challenging the order of the Labour Court. But the discussion with lawyers was discouraging — the chance of winning would be slim, and the cost of losing would be far more than the amount the men stood to gain if the court ruled in their favour. TWC2 had no choice but to advise the men to accept the ruling and the amounts offered.