The Employment Claims Tribunal delivered a decision in the case of Ali Liakat v Safesure Engineering Pte Ltd in late 2019 which TWC2 felt was wrong on one point and on another point the court’s calculation of the quantum was also in error.  The client then sought leave to appeal this tribunal’s decision but the application for leave was turned down. The effect therefore was that the decision was allowed to stand.

Background to the case

Ali Liakat, 31, worked for Safesure Engineering Pte Ltd for two years from April 2017 to April 2019.

Since the law only allows claims for the 12 months preceding the date of lodging a claim, Liakat’s claim thus related only to the second of the two years he had been on the job. It had several parts:

  • Short-payment of agreed basic salary and fixed monthly allowances between May 2018 and February 2019;
  • Non-payment of agreed basic salary and fixed monthly allowances for March and April (23 days only) 2019;
  • Overtime wages from May 2018 to April 2019;
  • Rest day pay for 21 rest days on which he had worked between May 2018 and April 2019.

The total amount claimed was $10,662.28.

Prior to starting work, Liakat received an In-principle Approval (IPA) (see detailed explanation here) which showed:

  • “Basic monthly salary” $600
  • “Fixed monthly allowances” $480
  • “Monthly housing, amenities and services deductions” $0
  • “Monthly deductions for others” $0.

It thus showed a “Fixed monthly salary” of $1080. Furthermore, the IPA stated “Yes” in the box “Housing provided”.

Just for the record, a blurry, faded image of his IPA is shown below. We also include an annotated version of it to make it more reader-friendly.

Ali Liakat’s IPA

Ali Liakat’s IPA, annotated to make it clearer for readers

Below, we detail what the Tribunal decided in respect of each of these parts. Where we think the magistrate erred, we will explain why we think so.

Basic salary – we agree with the Tribunal’s decision.

Safesure Engineering argued before the tribunal that Ali Liakat’s basic salary was not $600 per month as stated in the IPA but $20 per day. Indeed, pay slips issued by Safesure over the months had used this figure, as can be seen in the image below of a typical month:

Pay slip for the month of 21 February to 20 March 2019. Notations in colour are by TWC2.

Moreover, on 3 January 2018 (about half a year after Liakat joined the company) Safesure made a declaration to the Ministry of Manpower (MOM) that Liakat’s salary had been adjusted from $600 to $520, with the latter figure calculated on the basis of $20 per day multiplied by 26 working days a month. The company told the tribunal that MOM’s system only allowed them to key in salaries on the basis of a monthly-rated employee and not on a daily-rated basis. The company claimed that the practice of using only 26 days per month as the multiplier was based on advice they had received from MOM.

The magistrate found that the company

“was not able to provide any evidence to prove that the reason why the IPA was entered as such was due to system limitations by MOM or any evidence to show that MOM had advised them to multiply the daily rated salary by 26.”

The magistrate also noted that the Employment of Foreign Manpower (Work Passes) Regulations 2012 sets up two conditions before a salary reduction can take effect. Firstly, the employee must give prior written consent and secondly, the Controller of Work Passes must be informed in writing. In this instance, Safesure Engineering did not obtain Ali Liakat’s prior written consent for a salary reduction to $520, said the magistrate.

He thus ruled that Ali Liakat’s basic salary was $600 a month. TWC2 agrees with this ruling.

Fixed monthly allowance – we are of the view the decision was wrong

The IPA states a “Fixed monthly allowances” of $480. Liakat said that this amount had not been paid to him.

Safesure Engineering argued that it did not need to be paid because at the time the IPA was submitted to MOM, it was intended that Liakat would have to get his own accommodation and pay for it himself. However, after Liakat arrived in Singapore, the employer ended up accommodating him at the company’s expense, and therefore there was no longer a need to pay this allowance, said the company.

The magistrate found the company’s argument persuasive. He noted that in MOM’s records (presumably based on the IPA application made by the employer, with no input by Ali Liakat), the $480 appeared as “Housing, amenities and services”. He then ruled that

“there was sufficient evidence to show that the IPA did not reflect the true position as far as the housing allowance of $480.00 was concerned. In actual fact, the Claimant was never entitled to this allowance since he never had to pay for his accommodation and to find otherwise would be to accord the Claimant with a windfall.”

TWC2’s view is that the magistrate’s decision was wrong.

To begin with, under Section 2(1) of the Employment Act, salary is defined as “all remuneration including allowances payable to a employee”. In the IPA given to Ali Liakat, $480 was stated as “Fixed monthly allowances”, making it clearly part of salary. The total “Fixed monthly salary” stated on the right side of the IPA was $1,080 (derived from basic salary $600 + fixed monthly allowances $480) — this buttresses the fact that $480 was part of salary.

Then, by paragraph 3 of Part III of the Fourth Schedule of the Employment of Foreign Manpower (Work Passes) Regulations 2012, (“Regulations”) the employer is required to pay the fixed monthly salary. The precise and unambiguous words of paragraph 3 are:

The employer shall pay not less than the fixed monthly salary due to the foreign employee not later than 7 days after the last day of the salary period.

Paragraph 4A of the Regulations then underlines the above by saying

“fixed monthly salary” means the sum of basic monthly salary and fixed monthly allowances.

TWC2 feels that the magistrate, in deciding that Ali Liakat is not entitled to the $480 stated as “Fixed monthly allowances” in his IPA, contradicted the intent of legislation. His ruling cannot be right.

Moreover, we would point out that the IPA clearly shows Ali Liakat to be entitled to both provision of housing and paid a fixed monthly allowance of $480. On the IPA, in the space under the label “Housing provided”, the employer stated “Yes”.

The employer’s assertion that it was originally intended that Ali Liakat should be looking for his own accommodation and paying for it is thus inconsistent with the statements on the IPA (which were also declared to MOM). This tribunal erred in accepting the employer’s assertion that one could be substituted for the other.

Another inconsistency was in the design of MOM’s system, and Ali Liakat should not be paying the price for its flaws. Apparently, in the online application for a Work Permit, in which the employer had declared salary, allowances, etc, the box filled in by the employer with the figure of $480 was named as “Housing, Amenities and Services”, but in the printout given to Ali Liakat, the same figure was re-named as “Fixed monthly allowances”.

Since Liakat had no access to MOM’s online system prior to taking up the job, and since there is no evidence that the employer ever told him about the intent of the allowances (intent as asserted at the tribunal by the employer and disputed by Liakat), how was Liakat ever to know that the $480 was meant for housing — if at all it was true and not a post-hoc rationalisation?

On the face of the IPA’s words, it was entirely reasonable for Liakat to expect that the fixed monthly allowance of $480 was quite separate from the provision of housing, and entirely reasonable that he accepted the job offer on that basis.

Nor is there any law that says a housing allowance does not have to be paid if a employer (on its own volition) changes its mind and provides housing to an employee. Liakat would not have had any realistic choice in the matter. There was no agreement between the parties that Liakat would forego the allowance in exchange for the dormitory bed provided by the company.

When a tribunal says that an employer can unilaterally exchange a promised allowance for a benefit in kind, it opens the door to other unscrupulous employers seeking to deny employees their due wages by unilaterally providing unasked-for benefits of questionable and uncertain value.

Even more, such exchanges, we’d argue, are illegal. Sections 54 and 56 of the Employment Act expressly provides that salaries of workmen should be paid in legal tender. Specifically, Section 56 says:

56. Except where otherwise expressly permitted by the provisions of this Act, the entire amount of the salary earned by, or payable to, any workman in respect of any work done by him shall be actually paid to him in legal tender, and every payment of, or on account of, any such salary made in any other form shall be illegal, null and void.

As explained above, the fixed monthly allowance is regarded by the law as part of salary. By claiming that the dormitory bed was provided to Liakat in lieu of the fixed monthly allowance portion of his salary, Section 56 makes such provision illegal, null and void. The $480 should thus have remained payable and the magistrate was wrong to rule otherwise.

We would also argue that in his ruling, the magistrate did not take into account controlling case law, viz. Liu Huaxi v Haniffa Pte Ltd[2017] SGHC 270 (see the written judgement here). Paragraphs 31 – 33 there lay down the principle that the court must take as factual the declarations made on the IPA. In Liakat’s case, a fixed monthly allowance of $480 is unequivocally stated — and it has to be paid in legal tender as described above — and quite separately, it was also stated that the employer would be providing accommodation.

Wages for working on rest days – we agree with the decision on this segment

Safesure Engineering argued that it had an agreement with its employees that work done on rest days (i.e. Sundays) would be paid at 1.5 times the basic rate of pay. The Employment Act doesn’t quite allow this. Instead, it says that if a worker asks to work on a rest day, he is entitled to the ordinary (basic) rate of pay but if it’s the employer who asked him to work, then he is entitled to twice the basic rate of pay.

The magistrate found that it would be more likely that all the work was done at the employer’s request, because Safesure’s main business

“involves renovation and subcontracting work. It was less likely that [Liakat] would be able to work on the rest day at his own request as arrangements needed to be made on site, coordination done with the owners, materials to be available etc, all of which are more likely to be within [Safesure’s] control than [Liakat’s] control. It is not as if [Liakat] can decide to work at his own request if all of these other arrangements were not made.”

The tribunal then awarded Liakat rest day pay at twice the basic rate for twenty Sundays. We have no issue with this ruling.

Overtime wages – the quantum was wrongly calculated

The employer did not provide Liakat with detailed records of his hours worked day by day, though the monthly pay slips did state the total number of overtime hours. Ali Liakat tried to keep his own diary of hours worked. Unfortunately, it contained many errors and corrections, and ultimately, the magistrate felt that Safesure Engineering’s record of overtime hours was more reliable. From Safesure’s record, a total of 900 hours of overtime was extracted and the magistrate awarded Liakat this amount in overtime wages:

900 hours x $4.72 per hour = $4,248.00

The magistrate seemed to have overlooked an inherent error in Safesure’s records. Throughout the employer’s timesheets, Ali Liakat’s normal (“basic pay”) working hours were set as 8 hours a day, Mondays to Saturdays, but doing so adds up to a 48-hour working week. This is in violation of the law. Sections 38(1) and 38(4) of the Employment Act state that employees should be compensated extra for hours worked beyond 44 hours a week, not 48.

38.—(1) Except as hereinafter provided, an employee shall not be required under his contract of service to work —
(a) more than 6 consecutive hours without a period of leisure;
(b) more than 8 hours in one day or more than 44 hours in one week

Section 38(4) then goes on to say that should an employee be required to work more than 44 hours in a week, he should be compensated at rate of not less than one and a half times his hourly basic rate of pay.

Without correcting Safesure’s computation for the undercount of 4 hours of overtime a week, the total of 900 hours that the magistrate relied on to arrive at overtime wages thus understated the overtime wages due to him.

To illustrate our point, a typical month’s timesheet is imaged below. Look at the Saturdays. Liakat’s “Basic” pay hours are stated as 9:00h to 18:00h, and overtime hours would be the hours beyond that. In order to keep within the statutory 44 hours a week, there should only be four basic hours on Saturdays, with overtime pay entitlement commencing (in Liakat’s case) from 13:00h onwards.

Time card for 21 October to 20 November 2018. Notations in colour are by TWC2.

As an aside, we also draw readers’ attention to the fact that in the above record, Liakat was shown to have worked a total of 120 overtime hours in the October-November period. However, 25 of those 120 hours actually arose from working on Sundays — which should be separately accounted for. That still leaves a total of 95 overtime hours for the month, which is in violation of Section 38(5) of the Employment Act. This section says:

38(5) An employee shall not be permitted to work overtime for more than 72 hours a month.

Of the twelve months under review (May 2018 – April 2019), overtime hours put in by Liakat exceeded the statutory maximum of 72 hours in seven of those months.

Overall, the Tribunal issued an Order awarding Liakat $2,739.38 — a fraction of his original claim of $10,662.28 — with the difference due mostly to the ruling on the $480 Fixed Monthly Allowance going against him.

Leave to appeal denied

Liakat, with the help of TWC2, sought leave to appeal. However, the path to a successful appeal is extremely narrow because the Employment Claims Act says that appeals are allowed only on questions of law or jurisdiction. Sections 23(1) and 23(2) of the Act says:

23.—(1) Any party to proceedings before a tribunal may appeal to the High Court against an order made by the tribunal under section 22(1) —
(a) on any ground involving a question of law; or
(b) on the ground that the claim was outside the jurisdiction of the tribunal.
(2) An appeal lies to the High Court under this section only if leave to appeal is given by a District Court.

In the end, leave to appeal was not granted, and Liakat was left with what we consider a very unsatisfactory Order of Tribunal.

Why was leave to appeal not granted? TWC2 believes, having the followed the arguments closely, that it hinged on a preceding ruling mentioned in Seino Merchants Singapore Pte Ltd v Porcupine Pte Ltd [1999] 3 SLR(R). In this case, the High Court was dealing with a case that originated from the Small Claims Tribunal. Justice G P Selvam quoted (in his paragraph 7) from the decision in Ahong Construction (S) Pte Ltd v United Boulevard Pte Ltd (OM 42/1992) thus:

If a point of law is settled and not something novel and it is contended that the arbitrator made an error in the application of the law there lies no appeal against that error for there is no question of law which calls for an opinion of the court.

What does this mean? It means that if the law is clear, there shall be no appeal, not even if the presiding magistrate in a court of tribunal applied the law wrongly!

It strikes the layman as totally crazy. On a more technical point however, there remains too the question of whether precedents springing from the Small Claims Tribunal apply to the Employment Claims Tribunal.

In early June 2020, about six months after the court order, Liakat had still not received the ordered amount of $2,739.38 from his employer. Instead, the employer put $2,000 into his Singapore bank account — Liakat was in Bangladesh then — and it is not clear when the balance will be paid. His TADM officer was in contact with him, and hopefully this will be followed up.