TWC2 volunteer Peter helps a worker calculate his owed salary

You may win something, but a moment later, lose big.

On paper, Singapore’s salary dispute system may look fair. In practice, it disadvantages the migrant worker because we fail to take into account the structurally lower bargaining power of migrant workers, and the pro-employer and anti-worker biases in other regulations.

Their lower bargaining power springs from the fact (among others) that employers can cancel a Work Permit at any time (an example of pro-employer, anti-worker regulation), and refuse to give consent to a worker moving to another job through transfer, thus requiring the worker to go home. The reality is that once an employee has demonstrated the gumption to file a salary claim, his employer will, almost always, cancel the Work Permit. Given the strained relations between the two, the chances of the employer consenting to transfer is also going to be very low. Employers are almost always going to insist on repatriation instead of giving consent. Once sent home, the worker is likely to have to endure several months of unemployment and to have to pay another recruiter thousands of dollars to get a new job. 

Migrant workers suffering wage theft thus face two bad choices: file a claim at the risk of losing their job and being sent home, or tolerate the wage theft for months more and hope that the employer consents to transfer at the end of the contract. Already we see how what looks “fair” on paper is not a level playing field in practice.

To compensate for the tendency of employers to exact revenge on the workers who file salary claims (cancelling the Work permit and refusing consent for transfer), the Ministry of Manpower (MOM) and the Tripartite Alliance for Dispute Management (TADM) devised a ‘solution’: when a migrant worker has a valid salary claim, he will not need employer consent for transfer. TADM will be the party giving him consent. The term MOM and TADM uses to refer to the consent they give is “Change of Employer” (COE).

Our article How ‘lip service’ sends business to illegal recruiters (June 2023) discusses MOM’s assurances regarding COE, including statements made to Parliament. That article also points out that, in practice, the period given to workers to look for new jobs is so short – only two weeks, with extension on a reluctant “case-by-case” basis – many workers are still unable to find new jobs. It can therefore be argued that the administrative practice substantially clouds the fine words in ministers’ statements to Parliament.

In this article, we describe another instance where the COE policy based on ministers’ words to Parliament proved to be of no help to a worker. Once again, we see administrative practice disadvantaging workers.

The issue here revolves around the word “valid”. One can see this word in the minister’s statement quoted by the Straits Times:

‘“All foreign workers with valid salary claims are also allowed to change employers. In the first six months of 2017, about 600 of such foreign workers indicated that they wished to change employers and of these, about half found new jobs in Singapore,” he [then Manpower Minister Lim Swee Say] added,’

– Straits Times, 27 Nov 2017, Mandatory settling-in programme for foreign workers to start in second half of 2018 (Link; paywall).

Alom’s story

In mid-2023, Bangladeshi construction worker Alom (not his real name) became fed up with being short-paid for a long time and filed a salary claim against his employer. The amount involved was not large, but was not insignificant either since a construction worker’s salary is very low in the first place and anyway there’s principle at stake. Whilst TADM set a date for mediation, Alom and the employer were also encouraged by TADM to reach a private settlement in the meantime.

As the mediation appointment neared, the employer conceded to pay the claim amount in full ($600). For Alom, this meant that his claim was settled before mediation.

Alom requested consent from TADM for ‘Change of Employer’ (COE). The request was denied.

Alom was repatriated to Bangladesh the next day.

We enquired with MOM why Alom was not eligible for COE. MOM gave us a response but we are not allowed to state publicly what their response was. Arising from this example of gagging is the issue of public accountability by a public body, but we will leave this question for another essay. In the meantime, we will however state that we did not find that response satisfactory.

In any case, Alom’s was not the first case we noticed where TADM denied a COE to a foreign worker claimant who reached a settlement with their employer before mediation. The observed pattern indicate that TADM does not give COE if the employer concedes and pays up a full claim or the parties settle at a mutually agreed amount before mediation. Perhaps this explains why the then-minister in 2017 chose his words carefully when he said “All foreign workers with valid salary claims are also allowed to change employers.“

The distinction between valid and invalid salary claims may be necessary to fend off foreign workers from bringing unsubstantiated claims in the hope of getting COE. However, it appears that this distinction – valid versus not valid – is operationalised in a perverse way. TADM appears to treat salary claims that meet with resistance by employers, thus leading to mediation sessions, as valid, whereas salary claims that are settled quickly and privately (thus saving much work at TADM) are labelled invalid. In the latter case, workers are denied COE. Put it another way: workers who reduce the workload at TADM are penalised by TADM through denial of COE.

In our view, this test of validity (pre-mediation versus post-mediation) is not only a mere technicality but a poor one at that because it does not fit the facts. An employer settling a salary claim after a claim is filed but before the mediation has taken place does not change the fact that the worker was owed salary. That the employer paid up is nothing but proof that the claim was legitimate and real.

Yet another way to look at it is this: When an employer realises that he has no defence to the salary claim, he can pay up quickly and still exact revenge on the worker – and this, with the blessing of MOM and TADM.

Thus, what sounded like a sensible assurance by ministers in statements to Parliament is, in reality, a risky gamble for a worker who has been owed salary and is contemplating filing a claim.

TADM’s contradictory stances

This gets worse, even perhaps comical if it weren’t for the injury inflicted on workers, when one considers TADM’s “advice” to workers to file claims early, and not let salary arrears snowball.

It’s like this: When the owed amount is small, it is much easier for an employer to simply pay up without contest than if the owed amount had grown over months and months. But should the employer do so, and settle the arrears before mediation, TADM will tell the worker that in TADM’s eyes, the claim is not classed as a valid claim, and the worker will be ineligible for COE. He will have to go home.

In other words, if workers took TADM’s advice and filed claims early, they disadvantage themselves. Even if they are genuinely owed salary, going to TADM is like going to a casino.

What should be done?

The most straightforward solution to migrant workers’ reluctance to file a salary claim is to allow migrant workers to transfer without the employer’s consent. Remove employers’ power to “punish” their workers.

A more limited solution is also at hand: extend COE eligibility to all migrant worker claimants whose claims are settled with payouts before the mediation. The validity of their claim can be recognised by TADM when evidence of payment is presented.

It would also be good to put in more resources towards prevention and detection of wage theft. For example,

  • Treating as suspicious all employers’ claims that they had paid in cash (they are anyway supposed to pay all dormitory-resident employees through bank accounts);
  • Unannounced checks on companies’ payroll records;
  • Enquiring with all other employees of a company regarding their salary situation whenever one employee has filed a salary claim.