The State Courts’ Annual Report for 2019 states on page 82 that the Employment Claims Tribunal heard 1,301 cases in 2019, compared to 915 in 2018. No breakdown is given of type of cases though by TWC2’s observation, the vast majority would probably be salary claims.
Nor is there a subtotal for foreign workers within those 1,301 cases.
Assoc Prof Walter Theseira asked the Minister for Manpower since the establishment of the Tripartite Alliance for Dispute Management in April 2017 (a) what is the number of mediation requests that do not result in a mediation session; (b) what types of cases typically result in amicable resolution and which do not; and (c) what are the outcomes of cases that cannot be resolved through mediation, broken down by type of case and outcome.
Mrs Josephine Teo: Between April 2017 and December 2019, there were 26,000 mediation requests lodged with the Tripartite Alliance for Dispute Management (TADM), of which more than 70% went to mediation. Of the remaining cases, most claimants withdrew their claims before mediation took place.
Of the claims that went through mediation, more than 80% were resolved amicably by TADM. These tend to be cases where the facts were clear or salary arrears had not been accumulated over a long period. Claims that could not be resolved through mediation would be referred to the Employment Claims Tribunals (ECT) for adjudication. About 40% of cases that were referred to the ECT resulted in money orders issued to employers to settle the claims. The remaining claims were dismissed by the ECT or withdrawn by the claimant.
For more details, the Member may wish to refer to the Employment Standards Report published by MOM in October 2019.
While she was referring to a time period wider than just 2019, if we assume that the 40% rate for the ECT issuing money orders more or less applied to the 1,301 ECT cases of that year, then roughly 520 ECT cases resulted in the tribunal ordering employers to pay up.
Of these nine persons from 2019, only two directors were sentenced to imprisonment. One was sentenced to 14 weeks’ imprisonment (no fine added) for 17 charges, while another was given 15 weeks (and $8,000 fine) for 16 charges.
At the other end of the sale, two company directors, each facing only one charge, had relatively light fines of $3,500 each.
There is no information on MOM’s table whether the employers eventually made restitution to the affected workers. We hope its omission does not suggest this aspect of wage theft case handling to be a mere afterthought.
It should be noted that the nine company directors sentenced in 2019 can spring from ECT cases (or not) from earlier years. Nonetheless, the number convicted and sentenced is way smaller than the typical number of cases that reach the ECT annually.
TWC2 would like to see more active prosecution of delinquent company officers. When the percentage facing prosecution is so low, a sense of impunity develops. Directors may choose to pay other creditors first rather than salaries, leaving employees high and dry when cash runs out — this is easily the case because
(a) migrant workers are more vulnerable to bullying and obstructionism than suppliers;
(b) bosses want to maintain a relationship with suppliers for the future, whereas unhappy migrant workers are easily replaced.
Whilst it is completely within directors’ discretion to choose whom they pay first when running their company, for the government to turn a blind eye to their not prioritising wages would be at odds with the public interest, as can be adduced from Section 352(1) of the Insolvency, Restructuring and Dissolution Act 2018. In this section, wages and salaries are given priority over other debts (save costs of insolvency administration). Therefore, should directors run their companies to the ground and leave a trail of unpaid salaries, public interest should warrant prosecution. Taking directors to court should not be the exception but more or less the general rule.
The relevant provision of the Employment Act that lifts the corporate veil is Section 113A. It makes any director, partner, member of the committee of management, chief executive, manager, secretary or other similar officer of the body corporate (and includes any person purporting to act in any such capacity) personally liable for the offence of non-payment of salary.