Review unfair contracts, says Ministry of Manpower

Manpower Ministry reminds construction firms not to exploit their foreign workers

By Candice Neo , Radha Basu, The Straits Times, 10 Jun 2012

The Ministry of Manpower (MOM) has stepped up efforts to ensure that construction companies with foreign workers do not subject them to one-sided, unfair contracts that violate Singapore's employment laws.

It has written to all such companies asking them to 'take immediate steps to rectify practices' that are not in line with Singapore law.

The circular was issued to educate and warn employers about common violations such as illegal salary deductions and other penalties imposed arbitrarily on workers.

The ministry reminded them that it is unlawful to cut a worker's salary if he is absent from work or breaches work safety rules, or to cover his medical fees or repatriation costs, or as a penalty for terminating his contract early. Employers also cannot retain workers' salaries to ensure good behaviour or to enforce personal savings.

The ministry told them: 'Companies with such employment terms should review and remove them.'

MOM announced in May this year that it will be stepping up on  Ministry of Manpower on employers over the next five years, with up to 5,000 checks a year.

The employers of foreign construction workers range from small contractors with 200 workers to large employers with as many as 10,000 workers.

There are 264,000 foreign work permit holders in the construction industry here.

Employment-related claims filed by foreign workers to MOM have come down from 4,450 - during the peak of the recession in 2009 - to 3,000 last year.

Despite the decline, the ministry has increased its efforts at targeting employers who continue violating the law.

Last year, 26 employers were convicted of Employment Act offences, and 22 of them were for salary-related offences.

These employers were fined between $1,000 and $31,500. Three of them went to jail when they did not pay the fine.

The ministry said that more than 85 per cent of employment claims were resolved through mediation within six weeks of the complaint being made.

In some cases, the employer needed only to pay employees their dues or provide better working conditions.

The ministry wrote to employers in March, advising them to have clear agreements with workers on agreed basic pay, as this would be used to determine other benefits, such as overtime payments.

Without a written agreement stating basic pay, the salary declared in the work permit application would be taken as the monthly basic salary for a 44-hour work week, the ministry said.

It also reminded employers that work permit holders are entitled to benefits such as annual leave, sick leave and overtime pay under the Employment Act.

Any contract that denies them such benefits violates the Act.

A ministry spokesman told The Sunday Times: 'When we find that the worker is owed salary and the employer is not paying, we will not hesitate to take stern action against the employer.'

Those who violate the Employment Act for the first time can be fined up to $5,000. Repeat offenders face penalties of up to $10,000.

The Ministry has also stepped up measures to inform prospective workers of Singapore's labour laws and practices before they leave their home countries.

Since June last year, the 'in-principle approval' letters that all workers receive from the ministry are written in the workers' native languages and sent directly to them in their home countries. These letters state the basic salary a worker should get.

Previously, the letters were written in English only.

Complaints of vague clauses and illegal penalties
By Candice Neo , Radha Basu, The Straits Times, 10 Jun 2012

When Chinese construction worker Ju De Gui, 44, set eyes on his work contract for a job in Singapore, his first impulse was not to sign it.

The contract was riddled with what appeared to be unfair clauses that he had not been earlier informed of.

He needed to pay a $2,000 security deposit. There would be heavy penalties if he ended his contract prematurely. And there was also an ambiguous clause stating that if he 'did not complete his work on time', he would not be eligible for any overtime pay.

But he had already paid a $4,000 fee to the agent who got him the job, and he would have lost the money if he backed out.

So he signed on the dotted line and came over to Singapore.

Fifteen months after arriving, he complained to migrant workers group Humanitarian Organisation for Migration Economics (Home) that he has not been paid at least $3,700 he is owed.

Hoh Law Corporation, which deals with cases involving work permit holders, has seen more than 1,000 China workers so far this year who say they are being underpaid because of ambiguous or unfair terms in their contracts.

At least half of the 50 or so Chinese construction workers who go to Home every month also complain about unfair contracts.

Home executive director Jolovan Wham showed The Sunday Times contracts he has collected from more than 20 companies with illegal or apparently unfair clauses.

While migrant worker protection laws have been beefed up in recent years, some of the problems have not gone away.

Mr Wham said Chinese workers appear to be complaining more because other foreign workers, such as Bangladeshis and Indians, often do not have contracts.

Unexplained salary deductions are the most common complaint.

Mr Ju, for instance, claimed that his monthly pay would be only $160 to $700 after unexplained deductions - far less than the $1,500 per month he had been promised. The deductions were not reflected in his payslips.

The father of two, who earned around $800 per month as a carpenter in Shanghai, says he used to work up to 13 hours a day on the Marina Bay MRT tracks.

He said he did not mind the hard work, and did not want to quit before the end of his two-year contract.

But after a bad fall at work which left his wrists fractured, he turned to Home, which referred him to the Ministry of Manpower.

He is claiming work injury compensation and also hopes to getback his outstanding salary.

The Sunday Times spoke to five other workers with similar stories.

Three claimed that they wanted to return to China because of the unfair terms and deductions, but could not because their employers were holding on to their passports.

Hoh Law managing director Hoh Chin Cha, who has been seeing Chinese migrant workers for more than 20 years, said many workers are unaware that the security deposits, penalties and fines theyare subjected to are illegal.

Other apparently unfair or vague clauses in contracts seen by The Sunday Times include:

- A worker can be fined if he lodges a complaint with any Government agency without permission from the company.

- A worker who misses work for three days without a 'valid reason' can be dismissed.

- If a worker terminates the contract prematurely to return to China, he must pay for his own air fare home. He will also be penalised for breach of contract.

- A company will pay medical costs for worker only if he gets a work-related injury.

Local construction firms told The Sunday Times that despite what the contracts say, they in fact do not impose penalties on the workers.

Representatives of most of the 15 companies with contractual terms that flout Singapore labour laws said the terms were included to 'facilitate the management of the workers'.

One company's spokesman explained: 'The penalties were written in the contract as precautionary measures to ensure that the workers don't create too much trouble.'

Mr Wham feels this is merely an excuse.

'If they don't impose them, why did they put in these penalties in the first place?'