In a media statement dated 13 April 2020 (links to short version and long version) we pointed out that an entire section of the Ministry of Manpower’s Advisory on salary and leave arrangements during Circuit Breaker was not only unclear, but seemed to bless salary reductions for foreign workers. “Circuit Breaker” is the term the government uses for Covid-19 lock-down.
TWC2 calls on MOM to rescind paragraph 18 of the 6 April 2020 Advisory and its sub-paragraphs, and to declare any salary reduction instituted so far under it to be null and void. Taking wages out of already-lowly paid employees to help bosses is indefensible.
We’ve lately learned that on 25 April, twelve days after we issued the media statement, the Advisory was amended. Regrettably, it is still far from clear though at least it no longer starkly suggests that employers should cut salaries by 25% as the earlier version did (it still does so softly).
Paragraphs 16 to 20 of the original version have been renumbered as paragraphs 17 to 22. The original paragraph 18 that we took issue with appears to be replaced by a new paragraph 20.
Original version (6 April 2020), paragraph 18:
18. In view of the support given to employers, employers should provide salary support, including payment for upkeep and well-being of their more vulnerable foreign employees during this period:
18.1 Foreign employees who continue to work full-time during Circuit Breaker must be paid their prevailing salaries.
18.2 For foreign employees who could not work during Circuit Breaker, employers must continue to be responsible for their maintenance and upkeep and work out mutually agreed salary and leave arrangements with the unions and employees, especially for the low-wage work permit holders who may need more support. For example, employers can ask their foreign employees to consume their leave entitlements.
18.2.1 Where leave entitlements are exhausted, employers should provide salary support for their foreign employees and may apply for FWS to time-bank part of the salaries to cover overtime work after Circuit Breaker.
18.2.2 Employers must treat their foreign employees fairly and responsibly taking into consideration the levy waiver and rebate provided by the Government. For example, for a low-wage work permit holder who is staying at a purpose built dormitory and drawing a basic pay of $600 per month, a responsible employer can pay the foreign employee $450 as salary and also for his food and accommodation during Circuit Breaker. However, the foreign employee would forego his work-related allowances, such as his transport and shift allowances of $400 per month.
Revised version (25 April 2020), paragraph 20:
20. In view of the support given to employers, employers should provide salary support, including payment for upkeep and well-being of their more vulnerable foreign employees in Singapore during the Circuit Breaker:
(a) Foreign employees who continue to work full-time must be paid their prevailing salaries.
(b) For foreign employees who could not work, employers must continue to be responsible for their maintenance and upkeep and work out mutually agreed salary and leave arrangements with the unions and employees, especially for the low-wage work permit holders who may need more support. For example, employers can ask their foreign employees to consume their leave entitlements. Where leave entitlements are exhausted, employers should provide salary support for their foreign employees and may apply for FWS to time-bank part of the salaries to cover overtime work after Circuit Breaker. The quantum of salary and upkeep (e.g. housing) support provided by employers to the work permit holders should not be less than the FWL rebates given by the Government.
(final sentence made bold by TWC2)
“FWS” stands for Flexible Work Schedule which, as anther part of the Advisory explains, allows “time banking” of additional salary payments to offset overtime payments in the future.
“FWL” stands for Foreign Worker Levy.
Paragraph 17 of the revised version informs us that
- the levy is waived for two months (March and April 2020); and
- there will be two levy rebates, each of $750.
However, revised paragraph 20(b) above only refers to the rebates, not waiver.
Except for a few workers in essential services who have to continue doing their jobs during the lockdown, the great majority of Work Permit holders are not able to go out to work. Many are in fact under quarantine, since they’re staying in dorms gazetted as isolation areas. Even construction workers staying outside dorms have been put on Stay-home Notices, so they are stuck indoors too.
Thus paragraph 20(b) is of key importance to them. But what does that paragraph mean?
Who pays for food, housing and medical care?
“… employers must continue to be responsible for their maintenance and upkeep…” seems clear enough even if the language is awfully inhuman. “Maintenance and upkeep” has a long usage at the Ministry of Manpower (MOM), and there is a general sense, even if no formal definition can be found, that it includes food, accommodation and necessary medical and dental care.
The trouble with the word “responsible” is that it doesn’t explicitly mean that the employer must bear the cost of such things, though it may imply so. Compare its usage here with the wording in the First Schedule of the Employment of Foreign Manpower (Work Passes) Regulations 2012. There, the very first Section 1 of Part I has a second limb that makes it clear about costs:
1. Except as the Controller specifies otherwise in writing, the employer is responsible for —
(a) the upkeep and maintenance of the foreign employee in Singapore, including the provision of adequate food and medical treatment; and
(b) bearing the costs of such upkeep and maintenance.
These exact words are repeated in Section 20A of Part 1, Section 11A of Part IV, and so on.
In Section 16 of Part III, the words are slightly different but equally clear:
Except as the Controller specifies otherwise in writing, the employer continues to be responsible for and must bear the costs of the upkeep (including the provision of food and medical treatment) and maintenance of the foreign employee in Singapore who is awaiting resolution and payment of any statutory claim…
So, in this revised Advisory of 25 April, when the employer is made responsible but is silent on who should bear the cost, it can be argued that the employer need only to make arrangements, but can either make the worker pay, or deduct costs from the worker’s salary. But then, would it be fair to make the worker pay for something that he had no choice or control over? What if the employer supplied Chinese food to Bangladeshi workers and expected the men to pay for it? This is a recipe for conflict.
MOM should not be issuing advisories without sufficient forethought.
What is ‘salary support’ and how is it different from salary?
Another sentence that is unclear is “Where leave entitlements are exhausted, employers should provide salary support for their foreign employees….”
What does “salary support” mean?
Worse, it seems to contradict written law. Section 4 of Part III of the Fourth Schedule of the Employment of Foreign Manpower (Work Passes) Regulations 2012 says,
4. Except where the foreign employee is on no-pay leave outside Singapore, the employer shall, regardless of whether there is actual work for the foreign employee but subject to any other written law, pay the foreign employee not less than —
(a) the amount declared as the fixed monthly salary in the work pass application submitted to the Controller in relation to the foreign employee;
And in case of doubt, “fixed monthly salary” is defined in Section 4A as the sum of basic monthly salary and fixed monthly allowances.
Thus, the law says the employer must continue to pay the fixed monthly salary even when there is no work. It’s as clear as day. The Advisory shouldn’t muddle it all up by speaking of “salary support”.
Then it gets worse. The final sentence of paragraph 20, which we made bold for easy reference above, says,
The quantum of salary and upkeep (e.g. housing) support provided by employers to the work permit holders should not be less than the FWL rebates given by the Government.
Do note that it doesn’t say “salary support”, but now says “salary and upkeep support”!
Since the rebates are being given out in two tranches of $750 each and are not exactly correlated with specific months, how does one operationalise the above-mentioned final sentence? The time frame of “salary and upkeep support”, which would be monthly, does not match the undefined time frame of the rebates.
Moreover the Advisory, from its very title, is only for the Circuit Breaker period. It’s clear enough when that started, but it may not be clear at all when it ends, because it will be lifted only gradually. Even if the Circuit Breaker were explicitly lifted on a named date, a particular company’s workers might remain in a quarantined dorm* and still not be able to resume work. Would the Advisory continue to apply or not? Given all these variables, how exactly is any employer going to calculate if he has met the requirement stipulated in the Advisory?
*Note: quarantining of dorms is quite separate from Circuit Breaker. The first dorm was gazetted as an isolation area on 30 March 2020, but the Circuit Breaker came into effect on 7 April 2020.
For example, does the above mean that if an employer can show that in a given month during the Circuit Breaker, he spent
- $350 on accommodation;
- $220 on food; and then passed
- $180 as “salary support” to the worker
it is good enough, since the total comes up to $750? Never mind if contractually, the agreed fixed monthly salary is, say, $1,300?
How does this square with written law — the Employment of Foreign Manpower Act?
How does this square with the Prime Minister saying in his video speech that “We’ve worked with employers to make sure they’ll be paid their salaries and can remit money home.”?
There’s still the suggestion that salaries can be reduced
Paragraph 23 of the revised Advisory (25 April 2020) continues to say:
Employers that implement cost-saving measures during the Circuit Breaker between 7 April and 1 June 2020 (inclusive) must notify MOM if the cost-saving measures result in more than 25% reduction in the monthly salaries of their employees and the employer has at least 10 employees.
This signals that MOM will have no objection to salary reduction for foreign workers — already among the lowest paid in Singapore. TWC2 strenuously objects to this.
Employment terms are quite variable
Terms of employment vary considerably from one company to another. Just look at the three In-Principle Approvals (IPAs) for Work Permits below, for three different workers:
Here’s a summary of the three examples for easy comparison:
As you can see, some of them have salary deductions for accommodation written into their employment terms. This may explain why MOM did not explicitly say that accommodation cost should be borne by employers, as discussed above. But then again, they didn’t specifically say “accommodation” either. MOM said “maintenance and upkeep”.
Even in normal times, it will be difficult to square the law with these IPAs. For example, the Employment of Foreign Manpower Act requires that Fixed Monthly Salary be paid even if there is no work. But can the deductions as stated on the IPAs be applied? Would applying them, thus reducing the amount paid, mean that the Fixed Monthly Salary is not fully paid and thus in violation of law?
Then there is Deduction for Others. What does that mean? As we discussed in the article What does “monthly deduction for others” actually mean?, this too may be in violation of the Employment Act.
Now along comes MOM with a Circuit Breaker Advisory introducing new terms like “salary support”, and suggesting that “salary and upkeep support” needs to be at least equal to the levy rebate (whatever that amount or time frame is) — and we have the makings of utter confusion.
A simpler, clearer advisory
MOM should not be sowing chaos. If, as we can more or less discern, the intention is that the levy rebate given to employers should be passed on to benefit workers, then it should simply say:
During the Circuit Breaker, and any additional period when a foreign worker is unable to be deployed due to quarantine or stay-home notices,
- All salary obligations as per the Employment Act and Employment of Foreign Manpower Act should be honoured;
- Employers shall be responsible for the provision of accommodation, meals and necessary medical and dental care;
- and shall bear the cost of these, except for such amounts as may be deducted from the employee’s salary in accordance with the prevailing terms of employment.
- and where the aggregate of (a) salary paid and (b) the cost of accommodation (less deductible from employee), meals and necessary medical care in any given month be less than $750, then the difference between $750 and the aggregate shall be paid to the employee as a special bonus by the seventh day of the following month.
This is the only clear way to live up to the Prime Minister’s promise to foreign workers and their families.