In just two weeks of April alone, we came across three unusual cases. They’re not our run-of-the mill salary or injury cases, serious though these may be. These three unusual cases violate the rules or the ethics of employment, but they also show up the inadequacies of the system and regulatory processes, in that it is very hard to see how the Ministry of Manpower can deliver just resolution for these workers under their current operating protocols.
This is the second of three cases:
Jimmy (name changed) started work at the end of November 2023 with a hotpot restaurant. About fifteen months later, he was told to go. He filed a salary claim at MOM and came to TWC2 for help.
At the start of employment, Jimmy had in hand an In-principle Approval for a Work Permit (IPA) issued by the Ministry of Manpower (MOM) which stated a basic salary of $1,000 per month, plus a fixed monthly allowance of $1,000 on top of that. There would be no fixed deductions, the IPA said.
Jimmy paid the equivalent of $4,700 in Myanmar currency to an agent in his home country for the job. He also paid for his own flight ticket to come to Singapore; it cost about $300. Having worked in Malaysia for about ten years previously, he was quite confident in English, so it was easy to get his story.
Jimmy’s grouse was that despite his IPA stating that he would get at least $1,000 + $1,000 in salary each month, he was only paid $1,800, i.e. $200 less than the fixed amounts in his IPA. $1,600 was deposited into his bank account with a further $200 paid in cash. Moreover, since his working hours were 9:00am to about 9:30pm (often even beyond 10:00pm) six days a week, he expected to be paid for his overtime hours. He was also given just two rest days a month, and made to work on the other two or three rest days. These too were not compensated.
After he filed his case with TADM, the unit in MOM that handles salary claims, the employer responded by saying that Jimmy’s claims were ill-founded. The employer produced an employment contract dated 30 November 2023 which contained different numbers. In the contract, his salary (not stated as such but under the law can be presumed to mean his basic salary) would be $3,200 a month. However, every month there was a deduction of $1,400 for meals. The employer thus justified paying Jimmy a nett total of $1,800 a month.
What jumped at us was the figure of $1,400 per month for meals. But, “every day, I eat chicken rice,” says Jimmy.
Excessive deduction for meals
In Singapore, chicken rice at a food court might cost around $7.00. Multiply that by 2 meals a day x 30 days, and the value of the meals provided to him would be around $420 a month.
To deduct $1,400 a month violates Section 30(2) of the Employment Act which states that
Any deduction under section 27(1)(d) or (e) must not exceed an amount equivalent to the value of the house accommodation, amenity or service supplied,
For clarity, Section 27(1)(d) refers to salary deductions for house accommodation supplied by the employer, while (e) refers to amenities and services supplied by the employer. Food comes under (e).
Section 27(1) also requires written consent by the employee for these deductions, and it is not clear that Jimmy ever gave written consent.
A TWC2 volunteer (left) types out a witness statement by Jimmy (right).
Jimmy was surprised to learn that there was an employment contract that superseded the IPA. He recalled that he had been asked to sign something about three or four months after starting work, but he was only shown the last page with a space for his signature, and not the other pages containing the clauses. He was not given a copy either. He signed, thinking it was innocuously routine, for government reporting purposes.
“Definitely, it was not in November 2023,” he asserts. “It was three or four months later. My boss, I think he backdated it to the day I started work.”
With the claim unresolved at mediation, Jimmy’s case is headed to the Employment Claims Tribunal. However, the point of this story isn’t so much about the merits of his claim, but the act of contract substitution.
Contract substitution
As described in a 2009 speech by Roger Plant. Head, Special Action Programme to Combat Forced Labour at the International Labour Office:
Yet most forms of exploitation on today’s labour markets, which can involve some degree of coercion, are very subtle…. A common practice is “contract substitution”, where they sign one contract in their home country, but are later compelled to sign a totally different one in the place of destination.
— Trafficking for Labour Exploitation – Conceptual Issues, and Challenges for Law Enforcement, by Roger Plant, Kiev, April 2009. Presentation to Fifth International Law Enforcement Conference, Kiev, 31 March- 2 April 2009
Contract substitution is internationally recognised as falling within the prohibitions of the Palermo Protocol on Trafficking in Persons. Singapore has acceded to this Protocol and has domesticised its provisions through our Prevention of Human Trafficking Act 2014. Contract substitution has the characteristics of fraud and deception, abuse of power, and abuse of the position of vulnerability of the victim, clearly outlined in Sections 3(1) (c), (d) and (e) of this Act.
Jimmy was a vulnerable worker at the point in time when the paper (he didn’t know it was a new contract) was presented to him demanding his signature. He had paid $4,700 to get this job and with such a large investment (relative to his salary) losing the job by refusing to sign would be a financial disaster. So, as Roger Plant described, there was coercion, even if it was not physical but a lot more subtle.
At TWC2, we see contract substitution quite regularly. In this case though, the substituted contract did not substantially lower Jimmy’s salary, and so Jimmy decided to re-calculate his claim amount based on the contract salary.
However, he was just lucky. At TWC2, we have seen other cases where workers had faced substituted contracts with salaries drastically lower than the figures stated in the IPA. They had been led to believe, at the point of recruitment, that they’d be paid a certain salary, only to be coerced into accepting a new contract after arrival that stated much lower salaries.
Bylaws under Singapore’s Employment of Foreign Manpower Act provides that no employer can degrade a Work Permit holder’s salary terms without the employee’s written consent.
6A.—(1) The employer shall not —
(a) reduce the foreign employee’s basic monthly salary, fixed monthly allowances, rate for overtime payment or daily basic rate of pay to an amount less than that declared as such in the work pass application submitted to the Controller in relation to the foreign employee; or
(b) increase the amount of fixed monthly deductions to more than that declared as such in the work pass application submitted to the Controller in relation to the foreign employee,
except with the foreign employee’s prior written agreement.– Employment of Foreign Manpower (Work Passes) Regulations 2012 > Fourth Schedule > Part IV > Section 6A.
The problem with this provision in law is that it presumes that Work Permit holders have the ability to withstand unfair requests by employers to sign new contracts or provide other forms of written consent. They do not. When workers like Jimmy have paid thousands of dollars to recruiters to get their jobs it is hardly difficult for employers to coerce them into signing stuff. Workers are also acutely aware that besides having to write off what they had paid as recruitment costs should they lose the job by refusing to sign, they would still need the goodwill of the employer to agree to them transferring to another job in Singapore – goodwill which one cannot expect when one refuses to sign the substituted contract. It gets worse when employers hide away the other pages of the substituted contract or refuse to let them have a copy.
In this regard, Singapore law is not quite fit for purpose. Hinging the clause on the formality of obtaining written consent is to be blind to a reality rife with disempowerment. TWC2 has long argued that varying IPA salaries downwards should not be allowed at all for the duration of the permit.
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