SINGAPORE — The perennial problem of companies here cheating foreign workers by paying them lower salaries than promised is undermining a new rule by the Government to raise the productivity and quality of the construction workforce.
Since Jan 1, construction firms are required to have at least 10 per cent of their work-permit holders belonging to the higher-skilled R1 category. But just months after the rule kicked in, shades of how firms could game the system have emerged.
Migrant workers advocacy group Transient Workers Count Too (TWC2) recently highlighted a case involving five Bangladeshi workers of what it called the “R1 scam”, under which employers would over-declare the salaries of their higher-skilled workers and pay lower foreign-worker levies for these employees: S$300 monthly instead of S$650 for lower-skilled workers (increased to S$700 on July 1).
In the case of the Bangladeshi workers, they were unable to get the money owed to them in salary arrears despite successfully obtaining a Labour Court order.
TWC2 called on the Ministry of Manpower (MOM) to follow the letter of the law and not allow employers to reduce salaries below than what were declared in the foreign workers’ in-principle approval (IPA) document, which contains employment details given by the MOM before a migrant labourer arrives in Singapore.
In addition, the Labour Court “should not legitimise arbitrarily-reduced salaries” by taking the employer’s word that the lower salary had been agreed to by workers, even verbally, said a TWC2 spokesperson.
In response to TODAY’s queries, the MOM said it is conducting further investigations into “possible offences in relation to the salary claims and false declaration of salaries in the work-pass applications”.
The five workers involved in the case highlighted by TWC2 returned home in March and April because they were unable to find another employer here, said the MOM.
They received “ex gratia financial assistance” from the labour movement-backed Migrant Workers’ Centre, the MOM added, although it did not provide the sums received by the workers.
The ministry urged workers with salary claims to bring the cases to its attention “as early as possible”, to “greatly improve” the chances of successfully resolving claims before the employers reach dire financial straits.
The MOM did not respond on whether such cases could negate the Government’s efforts to raise productivity in the construction sector.
The five workers in the case — Mr Mazibar Md Jongsher Ali, 45, Mr Bikas, 38, Mr Anu, 43, Mr Mohammad Ripon Mohammad Shajahan, 48, and Mr Mohammed Sirajul Islam Late Mohammed, 37 — all had at least six years’ experience.
According to TWC2, they started work with Everglory Construction between May and October 2015, and were supposed to be paid about S$1,600 monthly — the minimum salary under one of the pathways for a construction worker to be considered higher-skilled, or belonging to the R1 category.
They were paid less than their correct salaries from early on, and after two months of not being paid at all, the workers lodged complaints at the MOM.
They approached TWC2 in September and December last year.
Each worker’s claim ranged from S$14,000 to S$21,000, but the Labour Court awarded between S$3,000 and S$4,000 each, said the TWC2 spokesperson.
According to TWC2, they were made to sign statements declaring their employer no longer owed them any money, before their passports were returned to them.
CONSTRUCTION FIRM’S DIRECTOR CANNOT BE CONTACTED
Checks by TODAY showed that Everglory Construction was incorporated in July 2014.
Its director and secretary are listed as Huang Guixiang and Li Xiao Ping respectively, based on Accounting and Corporate Regulatory Authority (Acra) records.
The company’s registered address is a unit at Paya Lebar Square, but this turned out to be the address of its accounting and secretarial firm Excellent Accounting & Management Services.
Mr Yang Bin, the accounting firm’s director, told TODAY that Ms Huang owes it S$200 for listing its Paya Lebar premises as Everglory’s registered address, and about S$100 in stamp duty.
When TODAY visited the Jurong West Street 93 unit which is listed as Ms Huang’s address on Acra records, an occupant Ms Hu Huijie, 32, said Ms Huang did not live there and she was her schoolmate from Nanyang Technological University.
Both of them are from China originally, and she had agreed for Ms Huang to state the unit as her address. They last met at Christmas last year but Ms Hu has been unsuccessful in contacting her friend since.
Aware of Everglory’s difficulties, Ms Hu said the MOM officers had turned up at the flat once last month, but Ms Huang was not there.
‘FIVE TO EIGHT CASES A MONTH’
TWC2 said the Everglory case was not the only “R1 scam” case it has come across. Such cases were either non-existent or very rare before late last year, and seemed to have emerged only after the 10-per-cent rule came into force.
TWC2 classifies them under the broader category of salary cases, and does not have exact numbers for them. “But anecdotally, we have been seeing about five to eight cases a month since the beginning of 2017,” said the spokesperson.
As for other NGOs, HealthServe said it has not come across similar cases, while the Humanitarian Organisation for Migration Economics (Home), said it does not have figures for such cases.
“The bigger issue here is the common practice of employers over-declaring salaries in the IPAs,” said Home.
”Workers have little choice, but to accept the lower amount (of salary actually paid), as they have paid high recruitment fees in their countries and would suffer severe economic loss if they choose not to accept the new contracts.”
It added that Labour Court commissioners “regularly accept the (workers’) lower salaries once contracts are produced”. Nearly one-third of the workers (109 out of 365) it has helped this year experienced such deception in their salaries.
The MOM said its rules require employers to obtain workers’ consent and inform the Controller for Work Passes in writing before reducing salaries of their work-permit holders.
Those who fail to do so could be fined up to S$10,000 per infringement. It fined 12 employers in 2015 and 11 employers last year.
“Employers who deliberately provide false declaration of work-pass salaries face a more severe penalty,” an MOM spokesperson said.
They can be fined up to S$20,000 and/or jailed up to two years per charge.
These employers will also be barred from hiring foreign workers and renewing the work permits of their existing foreign workers. Since 2014, 88 employers have been taken to task for false salary declaration offences, said the MOM.