We’re putting here these two parliamentary replies by the then-Minister for Manpower Jospehine Teo for easy reference in future. The words below are taken from the official parliamentary reports.

The bottom line seems to be that the ministry will try to protect migrant workers who refuse to give their consent to salary reduction. Any employer who implements a salary reduction without the worker’s consent will face a fine of $10,000 per worker. Any worker who is subsequently fired for refusing to give consent to salary reduction will get an opportunity to transfer to another job.

26 February 2020

Mr Louis Ng Kok Kwang asked the Minister for Manpower whether she can provide an update on the Ministry’s consideration on the possibility of disallowing downward revisions from the salary indicated in the In-Principle Approval letter (IPA) of a foreign worker.

Mrs Josephine Teo: The Ministry has reviewed the possibility of disallowing employers from making downward salary revision entirely, and consulted relevant stakeholders, including Singapore National Employers Federation (SNEF), Association of Small & Medium Enterprises (ASME) and the Migrant Workers’ Centre (MWC).

Through our consultations, tripartite partners recognise that there is a need to retain the flexibility to renegotiate employment terms, including making salary revisions to reflect the demonstrated performance of the worker. Disallowing downward revisions of salary entirely will leave the employer with no other option except to terminate the employment of a non-performing worker. Furthermore, tripartite partners have an understanding that in certain situations such as an economic downturn, businesses will reach an agreement with their workers on wage flexibility instead of retrenching the workers. Such approaches that cut costs to save jobs would no longer be possible if the Member’s suggestion is adopted.

Given the feedback from tripartite partners, the Ministry has decided to retain the flexibility for employers to revise the salaries of their foreign workers. We will continue to focus on protecting the interests of foreign workers by strongly enforcing against employers who reduce their workers’ salaries without their agreement. When there are disputes involving salary reduction, the onus is on the employers to declare and substantiate their reasons for the salary reduction. The Ministry of Manpower’s (MOM) actions against errant employers include requiring them to make good any salary shortfall to the workers and imposing a fine of up to $10,000 per worker. In 2019, we imposed a total of $488,000 in administrative financial penalties on 68 employers. MOM also allows such workers to be transferred to a new employer.

2 March 2020

Mr Louis Ng Kok Kwang asked the Minister for Manpower whether the Ministry will consider requiring employers to declare the reasons for the salary reduction from the amount stated in the In-Principle Approval letter of a foreign worker when they notify the Ministry and the foreign worker of the reduction.

Mrs Josephine Teo: When there is a dispute involving salary reduction from the amount stated in the In-Principle Approval letter, the onus is on the employer to show that he obtained the work permit holder’s (WPH) written agreement and notified the Ministry of Manpower (MOM) beforehand. If the employer fails to prove either of the two requirements, the original declared salary holds and the employer will be required to make good any salary shortfall, regardless of reason for the salary reduction. In addition, MOM will also impose a fine of up to $10,000 per worker on the employer.

The requirement for employers to obtain their workers’ written agreement ensures that the WPH can refuse to give his consent. WPHs whose contracts are terminated by their employer for refusing to provide consent should seek help from MOM. MOM allows such WPHs to find a new employer and we work with the Migrant Workers’ Centre to facilitate the process.

The suggestion by the Member to make employers declare the reason for the salary reduction when notifying MOM is redundant. Even if the employer did so, he would still need to obtain the written agreement of the WPH. In addition, it could have potentially unintended consequences, such as causing the worker to believe that the mere fact of notifying MOM regularises the salary reduction, even if the worker did not give his consent.