Contract substitution made easier by ministry?

Over the years, Transient Workers Count Too has seen many cases where, after arriving in Singapore to start on their jobs, migrant workers are told by their bosses that the salary stated on the In-Principle Approval (IPA) letter will not be honoured. Instead they are given the choice of accepting a lower salary, or be sent home forthwith.

Having paid thousands of dollars upfront to secure the jobs — and there are frequent allegations that part of this “agent fee” went into the bosses’ pockets — the workers are not in a position to go back home. Money lenders will be waiting for them. In the ensuing confrontation, limbs may be broken; sisters demanded to be handed over and sold into servitude.

This practice has a name: “contract substitution” and it is considered an element of human trafficking. For example, a 2015 publication by the United Nations Office on Drugs and Crime, titled “The role of recruitment fees and abusive and fraudulent recruitment practices of recruitment agences in trafficking in persons“, notes on page 14 that “Workers can also be subject to contract substitution, where they sign contracts prior to their departure, but are later forced or lured into signing different contracts, often including worse conditions of work and pay.”

Sometimes, employers don’t even bother to tell their workers that salaries will be lower than what was stated in the IPA letters. They just pay a lower rate on payday and if any employee raises questions, the threat of instant dismissal and repatriation is waved at him. Submission is easily secured.

In-Principle Approval (IPA) letters are issued by Singapore’s Ministry of Manpower (MOM). Essentially, these documents record the details declared (to MOM) by employers with respect to the terms of employment of the jobs in question. Copies are provided to workers while they are still in their home countries. For each man, this document is pivotal to him being satisfied that there is a real job (and Work Permit) waiting for him here. Almost always, there are no other signed employment contracts, and therefore the IPA would stand uncontradicted as the basis for the job offer and the implied contract of employment.

Until recently, when workers surfaced complaints of salary mismatch and underpayment to MOM, case officers at MOM generally took the salary stated on the IPA as the proper basis for calculating what was owed by the employer. This way at least, the workers ultimately got justice. (Whether or not the employers pay up when so ordered by the authorities is another matter, however. On this site we have other stories where MOM lets employers get away with simply ignoring their orders.)

Using the IPA-stated salary rate as the basis for calculation would be in keeping with a clause in the subsidiary legislation of the Employment of Foreign Manpower Act. It states that the basic monthly salary as declared in the work pass application (subsequently reflected in the IPA) forms the floor, unless there is prior written consent from the employee for a reduction. Specifically, the Employment of Foreign Manpower (Work Passes) Regulations 2012, Fourth Schedule, Part IV, says this:

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.

Alternate reality?

What is very troubling is that in the last few months, TWC2 has seen cases that call into question how we live up to the last limb of the above law: “except with the foreign employee’s prior written agreement”. We have seen an increasing number of cases where workers tell us that MOM dismisses the IPAs they have in hand, telling them that the ministry’s records indicate lower salaries. Attempts to get documentary proof of those “records” have yet to be successful.

Take the case of Islam Azaharul (pictured at right), whom we interviewed for this article in May 2017. His complaint is about short payment of his salary over eleven months since starting at his job with Tian Hong Construction & Engineering Pte Ltd in March 2016.

According to his IPA letter, his salary should be $650 per month but he was only paid at a basic salary rate of $450 per month. He also took issue with certain deductions from his monthly wages. No properly itemised payslips were issued to him; he received his salary in cash, contained within second-hand envelopes.

The IPA letter he received before he accepted the job and while he was in Bangladesh is shown as C1 below. It states a basic monthly salary of $650.

“I began working with the company around 16 March 2016,” he tells your writer. “A few days later, the company driver took me [to MOM] for thumbprinting.” This was a normal step before the Work Permit was issued to him. “After that, the driver gave me this other paper,” he says, referring to C2 pictured below (at the time, C2 did not contain the handwritten words “Null and void”).

C2 is actually the same IPA as C1 (both indicating a salary of $650 a month) but formatted differently. MOM has different formatting for the IPA. C1 is the format for the worker’s copy while C2 is the format for the employer’s copy. Nothing unusual about that. The significant thing from his narrative is that even after being processed for his Work Permit, the company driver was giving him a copy of the IPA which also showed $650 a month. The details matched those in the copy Azaharul had received before coming to Singapore.

Moreover, when his salary for March 2016 came along, it amounted to a sum that looked commensurate with a basic salary of $650 per month. He had only worked half a month and earned $476.20 gross. That would roughly be what could be expected after adding in overtime pay.

What appeared irregular were the deductions. They weren’t shown on the typed piece of paper, but shown in handwriting on the secondhand envelope. The $100 deduction was not explained. The cash ($316.20) was stuffed in that envelope, which by undignified chance, bore MOM’s logo.

For April — wherein he worked a full month — the salary was mysteriously low. The total ($584.30)was less than even the basic salary of $650.  How could that be when he had worked a complete month, plus overtime hours?

It continued like that every month thereafter. He was not provided any detailed computation of his salary and overtime. This is in violation of Section 96 of the Employment Act. The penalty for a first offence is a fine of up to $5,000 or imprisonment of up to six months, or both.

Then the August slip came along and it contained new information. Now, it showed his basic salary to be $450.

Overtime pay was shown as a round figure of $150, which is not believable. Overtime pay has to be computed using a complex formula which, unless by huge coincidence, always yields numbers with decimal places. On the voucher is also an unexplained allowance of $288.30.  All in all, it appears that the employer is playing fast and loose with the numbers.

We won’t bore you with the other months; like what we’ve shown here, salary paid was poorly documented, leaving much begging for explanation.

But that’s not the main point of this story, troubling and criminal (violation of the payslips rule in the Employment Act) though it may be. It’s what happened next.

Null and void

When Azaharul finally lodged a complaint at the Ministry of Manpower, early 2017, he was shocked to be told that his basic salary was actually $450 a month. “MOM officer [himself] write this,” says Azaharul, pointing to the blue-inked words “Null and void” seen on C2 above.

If MOM says the $650 IPA is null and void, where then is the valid IPA?  TWC2 wrote to MOM, and MOM’s reply was to send him down to the ministry’s service centre to collect a copy. Azaharul went, but came back empty-handed.

After some back and forth, TWC2 heard from MOM that since Azaharul had gone past the stage of getting his Work Permit issued — which was way back in March 2016 — MOM is unable to “re-generate his IPA”. It is not clear why a copy canot be printed; maybe it is not an option from their computer menu. Perhaps the MOM official who asked us to send Azaharul over to collect his new version of the IPA didn’t know that?

Despite not being able to provide him any document to demonstrate the ministry’s assertion that his monthly basic salary was $450, Azaharul was supposed to take officials’ word for it. This, even if it does not accord with the papers Azaharul has in hand.

At this juncture, we need to discuss the possibility that the documents Azaharul had were counterfeits. TWC2 considers it most unlikely. Azaharul had in his possession both the worker’s format and the employer’s format of the same IPA. It would have been extremely difficult for anyone to generate counterfeit copies of both formats. Moreover, a close examination of the typefaces, ink intensity, alignments, etc, leave no doubt that the documents had not been tampered with. Thus, our conclusion was that both formats of this IPA were genuine. Yet it’s now null and void?

Employers can amend IPA

TWC2 spoke to an employment agent to better understand the process of applying for a Work Permit and generating an IPA letter. We learn from him that the whole process is done online. After inputting all the necessary details about the job and the selected worker, MOM will give its approval electronically (unless not approved) and then the IPA, in both formats, can be printed out at the employer’s or agent’s end. There isn’t any physical signed copy from MOM.

However, to allow for situations where there had been typographical errors, the employment agent we spoke to explained that MOM permits amendments to be made to the computer details even after a print copy of the IPA has been generated. We’re told that these amendments will stick within the computer file, but they will not be reflected in any future print copy. Printing again only prints out the pre-amendment details.

“Till when can an employer modify the details?” we ask him.

Until a work permit has been issued to the worker, the employment agent explains to us. At that point, the details are frozen.

If what we learned from the employment agent is correct, one can immediately see the scope for abuse. After generating an IPA with one salary stated, an employer can go into MOM’s computer system a second time to change the salary there. From that point on, the lower salary will show up in MOM’s screens.

What about the requirement for the employer to obtain “prior written agreement”  to any lower salary — a legal requirement as pointed out above? Well, it turns out that when amending online the details on an employee’s IPA, there is a checkbox, as can be seen from this fragment of a screen shot:

Alright then, so presumably it is an offence for the employer or his agent to check the box untruthfully. But,

(a)  does MOM verify the above declaration by asking to see the consent letter purportedly signed by the employee; and

(b)  does MOM interview the employee in private to ascertain that the so-called consent was not obtained by deceit or coercion?

If MOM does neither of the above and simply, as a matter of routine practice, takes the online submission of a revised salary at face value, that would open the floodgates to abuse. In the interest of preserving public confidence in MOM, it would be good for the ministry to convincingly demonstrate diligence in its work.