Debated in Parliament on 11 May 2015.
Mr Hri Kumar Nair asked the Minister for Manpower whether the Ministry will consider stronger sanctions against employers who fail to pay, or wrongfully withhold, wages, whether to local or foreign employees.
The Employment Act (EA) protects both local and foreign workers against salary non-payment. Under the law, employers are required to pay their employees within seven days after the end of the salary period. Failure to do so is an offence and employers are liable, upon conviction, to a fine or imprisonment, or both.
Besides prosecution, the Ministry of Manpower (MOM) can take a range of enforcement actions, including issuing warning and imposing fines. These employers will also have their privilege to hire foreign workers suspended.
In the most recent amendments to the Employment Act (2014), we raised the penalties for failure to pay salaries. We introduced mandatory minimum fines of $3,000 for first-time offenders and $6,000 for repeat offenders. We also introduced higher maximum fines for both first-timers, from $5,000 to $15,000, and for repeat offenders, from $10,000 to $30,000. At the same time, we enhanced MOM's enforcement and investigatory powers, granting employment inspectors the power to arrest any person believed to be guilty of failing to pay salary, as well as the power to enter workplaces to conduct inspections.
MOM has stepped up its enforcement efforts since 2014. MOM now investigates every salary-related claim for employees covered under the Employment Act. We take a particularly serious view of employers who wilfully refuse to pay. Last year, MOM took action against 645 employers for salary-related offences. Forty-nine employers were prosecuted
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for severe breaches. This is four times more than the number in 2013.
We therefore, urge workers who have not been paid their salaries or feel that their wages have been wrongfully withheld to come forward early to MOM or their unions for assistance.
Mr Hri Kumar Nair.
I thank the Minister for the answer. I have two supplementary questions. Could the Minister let us know what is the number of pending cases with MOM on unpaid salaries?
Second, are there any mechanisms to help employees in salary dispute cases where there is a dispute as to whether payments are made, for example, requiring the employer to pay the monies into MOM for safeguarding funds so that, at the end of the dispute, the employee can be assured that there will be monies there for him to receive payment?
Mdm Speaker, of the 645 cases prosecuted last year, most of them were issued advisories or warning orders, and 49 employers, as I mentioned earlier, were prosecuted in Court. This is the action taken against employers. At the same time, employers were also taken to the Labour Court to settle the payment to the workers. For that, last year, we cleared about 1,630 cases. And of these cases, two-thirds of the workers were able to receive full payment on the orders of the Labour Court. However, one-third of them, due to financial difficulties faced by the companies, received either partial payment or, in some cases, no payment.
We investigated further into those employers who were not able to make full payment and we discovered that 80% of the employers were able to make full payment but 20% of them, were unable to pay due to financial difficulties and, in some cases, even business closures. As a result, there was no recourse for the workers and for the Labour Court to recover the payment.
We take this seriously. Our sympathies are with the workers because they work hard for the money. MOM is doing two things: firstly, those workers who are not covered under the Employment Act, today, when they face a problem of salary non-payment, they have to take civil action, which can be protracted and costly. By the end of this year, we will be setting up the Employment Claims Tribunals so that workers, including managers, executives, even CEOs, who are earning more than $4,500 and not covered under the Employment Act, will be able to have access to the Employment Claims Tribunals. At the same time, in order to reduce and minimise the number of cases where the employers are not able to make any
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payment due to financial difficulties, MOM, together with the tripartite partners, is looking into how we can enhance the protection for workers in a more holistic manner.
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