Transient Workers Count Too came across a very interesting statement by Mr Tan Khim Long, director of KBC Engineering Pte Ltd. The company was defending a salary claim by a former employee, a Bangladeshi named Showkat, for short-payment of salary. The case was heard by the Manpower Ministry’s Labour Court in late 2016 and early 2017, and the statement in question (imaged lower down) came from the official record of the proceedings.

Showkat (referred to as the “claimant” in the document) was arguing that his basic salary should have been $1,600 a month, in accordance with the In-Principle Approval for a Work Permit (“IPA”) that the company had given him prior to his taking up the job. The IPA summarises the terms of employment that the company declared to the ministry at the point when it was applying for a Work Permit for him.

Instead the company paid him at a rate of $32 a day, equivalent to only $762 a month.

Tan Khim Long declared in his evidence to the Labour Court that:

There was never any intention to pay the Claimant a monthly salary of $1600.

and that

The figure of $1600 was used in the application for the Claimant’s work permit at the Claimant’s suggestion as MOM is more likely to approve the application if a higher salary amount is stated in the application form.

It should be noted that Showkat denies ever making such a “suggestion” to the company. Nor has the company provided any evidence of such participation. In fact it beggars belief that a Bangladeshi man looking for a construction job from abroad would know more about how to manipulate the inner workings of MOM than a Singaporean director of a company that submits Work Permit applications for hundreds of employees over many years.

In effect, Tan Khim Long formally stated that he lied to the ministry in the Work Permit application. Section 177 of the Penal Code makes it a criminal offence to furnish false information to a public servant, with penalties of a fine of up to $5,000, or imprisonment of six months, or both.

Of course, Showkat contends that it was never false; that the company did promise him a salary of $1,600.

But on the company’s part, it cannot have it both ways. It cannot on the one hand claim that it was a false submission (asserting that the agreed salary was always the lower figure of $32 a day), and on the other hand expect having ministry officials to endorse the lower salary and let him get away with it.

In the end, Andy Wong, the Assistant Commissioner of Labour who was presiding over the case, appears to have done just that. He made the finding that $1,600 was not the agreed salary. He wrote:

I am satisfied that there exists a verbal agreement between the 2 parties that the Claimant’s salary would be $32 a day rather than the much higher figure of $1600 per month

and that the figure of $1600 was submitted

to influence, manipulate and defraud MOM into approving his work permit.

To be fair, he didn’t mince his words. But, as far as we know, there has been no follow-up by the enforcement branch of the Ministry of Manpower. Perhaps, after Andy Wong wrote his decision, he just left it at that without forwarding the matter to the appropriate department? It should be very much against public policy to allow an employer to get away with such an offence. Tan Khim Long and the company should face prosecution.

But there is a more profound question which was not addressed. It is a longstanding principle in law that no one should be allowed to use the processes of justice to legitimise ill-gotten gains obtained through a crime. Since it was found that the employer had submitted a false declaration, how could the Labour Court allow the employer to benefit from that act by paying the worker less?

Was Wong’s decision sound?

Not an isolated case

We first wrote about such scams in a June 2017 article titled The Everglory scam: productivity incentive shot to pieces. It explained why we think employers are so keen to make false declarations. Even when we wrote that article, there were already numerous cases centering on $1,600 basic salaries. Since then, we’ve had even more workers show up with similar complaints. See for example Straits Times’ report about SJH Trading in this post. Many of these workers with salary claims have reported that when their cases were heard at MOM, their employers similarly argued in front of MOM officials that the IPAs stating $1,600 basic salaries (sometimes more) were merely meant to make it easier to get Work Permits.

It is becoming evident that the inaction following Tan Khim Long’s self-incriminating statement was not an isolated case. Instead, many employers have cited similar reasoning for not paying IPA salaries without triggering any enforcement action by MOM.

Generally, these reports are verbal. But now we have yet another written example. Because this case is still open, we won’t identify the worker (yet). But here’s the statement by his employer given in the company’s defence:

The key sentence is this:

… the salary (S$1600.00 per month) stated in the MOM in-principle-approval letter was mainly for application only.

How more brazen can one get? Such scams are clearly rampant, yet as far as we can see, no action has been forthcoming from MOM. Is the system as dysfunctional as it looks?