ASSISTANCE TO FOREIGN WORKERS (Claims for unpaid wages)

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ASSISTANCE TO FOREIGN WORKERS:

(Claims for unpaid wages): 10.

Mr Yeo Guat Kwang asked the Acting Minister for Manpower (a) how does his Ministry assist workers, local or migrant, in their claims for unpaid wages, and resolve salary disputes with their respective employers; (b) whether the current arrangements are effective; and (c) whether his Ministry will introduce new measures to ensure workers' interests are better protected or to enhance penalties against errant employers.

11.

Dr Amy Khor Lean Suan asked the Acting Minister for Manpower (a) if he will give an update on the assistance that has been rendered to the foreign workers who

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were not paid salaries by their employer, Wan Soon Construction; (b) what measures his Ministry is looking at to prevent the problem of firms defaulting on their foreign workers' pay; and (c) whether measures can be put in place to give his Ministry early warning that foreign workers have not been paid their wages and to take prompt action to help them.

12.

Mdm Halimah Yacob asked the Acting Minister for Manpower (a) what measures will be put in place to better secure and protect wages of foreign workers when businesses fail; (b) will the Ministry consider making it mandatory for companies employing foreign workers in sectors where problems of non-payment of wages are more recurrent to set aside some funds to offset the workers' claims; (c) will the Ministry consider putting in place an expedited system for processing claims of foreign workers; and (d) what more can be done to educate foreign workers on their rights and to seek help early before the situation worsens.

The Acting Minister for Manpower (Dr Ng Eng Hen): Sir, can I take Question Nos. 10 to 12 together, as they are related?

Mr Deputy Speaker: Yes.

Dr Ng Eng Hen: My Ministry provides free services to workers on a range of employment matters, including salary disputes. This service is available to both local and foreign workers.

Workers can lodge claims for unpaid wages and disputes over other statutory benefits with the Ministry. Within two weeks of the lodgment, a conciliation meeting between the worker and the employer will be arranged by a case officer to investigate the claim.

From our past records, about 85% of local and foreign workers' claims are settled through conciliation. Unsuccessful

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claims may be further referred to the Labour Court for adjudication by the Commissioner for Labour. If the employer is liable, he is required to pay the amount due to the worker within 14 days. The Order of the Commissioner for Labour is enforceable in the civil courts. If the claimant chooses to enforce the Court Order, the Ministry will help prepare the enforcement documents for the claimant to take out Writ of Seizure and Sale proceedings against the company. The success of any enforcement proceedings depends on whether the company has sufficient funds or assets which can be realised. In cases involving foreign workers who have returned to their home countries, we will work with the embassies concerned to remit to them any arrears subsequently recovered.

Last year, 86% of claims of foreign workers were settled within six weeks, while some 80% of claims of local workers were settled within the same time. The remaining cases took a longer time to settle as the issues were more complex or, in some cases, the employers were facing financial hardship. Claims that were referred to the Labour Court for adjudication also took a longer time to resolve. The Ministry successfully recovered a total of $7.1 million in salary arrears last year.

As the results show, up to fairly recently, the current measures have proved to be generally effective. However, of late, the construction sector has been going through a bad patch. The industry is suffering a downturn aggravated by increasing prices in raw materials, particularly steel and cement. Two recent cases involving local construction companies have highlighted the problems that can be caused when salaries are not paid. Not only do the workers face substantial hardship, but our

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harmonious industrial relations climate is also affected, as well as Singapore's good international image. However, despite the downturn in the construction sector, the proportion of errant employers remains small. In 2002 and 2003, 657 and 546 companies respectively were involved in the salary claims lodged by foreign workers. These constituted some 7% and 6% of the total companies employing foreign workers respectively.

While the Government cannot ensure the success of any business venture, I agree with Members that what we can do is to help workers recover as much of their unpaid wages as possible and as quickly as possible. But in cases where companies are insolvent, workers may not be able to recover their salary arrears in full or even a substantial portion, at least not immediately. They may have to accept whatever is available at that time, and then allow the legal processes to run their course, which is why my Ministry advises foreign workers to inform us early to reduce the amounts owed to them.

As for the foreign workers who were owed salaries by Wan Soon Construction Pte Ltd, Dr Amy Khor has asked for some updates. While we are likely to secure from the various parties some funds to pay the workers, the amount will not be sufficient to meet their claims in full. We have urged the workers to be realistic and accept a partial payment with the remaining sum to be remitted to them in their home country, if the company has funds for distribution for such payment subsequently. In this regard, the workers have, upon the Ministry's advice, filed their claims with MOM for adjudication by the Commissioner for Labour. While the workers wait for their claims to be resolved, they will be provided with accommodation and meals by Wan Soon. Workers who wish to continue working in Singapore will be allowed to do so if they can find new employers to engage them.

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In view of the recent episodes of companies failing to pay their workers on time, I agree with Members that our framework needs to be tightened. My Ministry will therefore tighten existing measures and review new areas to ensure prompt payment of salaries and restitution of arrears. First, we will improve our current system so that late or non-payment of salaries will be detected earlier. Concurrently, we will step up efforts to increase employees' awareness of their rights. These measures will reduce the amounts owed to workers.

Second, we will step up our enforcement procedures to ensure that irresponsible employers are punished to the full extent permissible by law. Employers must realise that non-payment of salaries should not be viewed as normal business debts from which they can be shielded by the cloak of limited liability. Errant employers will be made to bear the total economic and social cost of non-payment of salaries, as well as the cost of resolving disputes.

Mdm Halimah has asked whether the Ministry will consider making it mandatory for companies employing foreign workers in problematic sectors to set aside some funds to offset workers' claims. This is also being considered with various options and their details currently studied, as well as in other areas to promote the overall framework of payment and restitution of arrears.

My Ministry shares the concerns of hon. Members who have affected workers. And I would take this opportunity to remind employers of their statutory obligations, particularly to pay salaries on time. MOM will not hesitate to take action against them. If indeed they find their companies are having business problems, they should cancel their work permits and approach MOM. We will try to help these workers find alternative job arrangements, failing which

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we can repatriate them. We would also like to encourage workers who have not been paid their salaries to raise salary arrears to MOM as soon as possible, to improve their own chances of recovering their salaries.

Mdm Halimah Yacob (Jurong): Sir, I have three supplementary questions for the Acting Minister. My first question is this. We have seen an increase in the number of cases where employers have been in arrears of wages, and over a number of years as well. I would like to ask the Acting Minister whether the Ministry would be considering increasing the penalties for employers who failed to pay wages to their workers because the current penalties in the law, obviously, are not a sufficient deterrent.

My second question is: how many employers have been prosecuted over the years for non-payment of wages and salaries?

The Acting Minister has described the procedure that workers could make use of in order to claim the arrears of wages, particularly after the Labour Court has made an order. If that is not paid, the worker could then apply for a Writ of Seizure and Sale in order to enforce the Labour Court's award. My third question is that usually in order to apply for a Writ of Seizure and Sale, the worker has to incur additional costs and he does not have the money to do that because, if he does not even have the money to purchase food for himself, he does not have the money to pay in order to apply for a Writ of Seizure and Sale. Would the Ministry be prepared to work with other agencies to see whether it is possible to have a waiver of these fees for a worker to apply for a Writ of Seizure and Sale when it comes to arrears in salary?

Dr Ng Eng Hen: Sir, Mdm Halimah asked whether we would consider enhancement of penalties. The answer is, yes. This is being considered. She asked

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how many employers were prosecuted. Let me go through some figures. In 2003, some 670 employers were warned for technical infringements. I do not have the exact figure of how many were prosecuted subsequently. I can give it to her if a written question is filed.

She asked whether we would help workers after the adjudication in the Labour Court to enforce the Writ of Seizure and Sale. The answer is, yes. We have done so, and will continue to do so.

Mr Yeo Guat Kwang (Aljunied): I would like to ask the Acting Minister whether the Ministry would consider the suggestion that some union leaders have raised in today's New Paper that a separate unit be set up to handle the salary claims of foreign workers, particularly those who are not unionised because, as mentioned by the hon. Member, Mdm Halimah, the process today is a bit too long and expensive for the workers. It would be much easier for all if there is a Government agency to look into it.

The second question is: would the Ministry consider reviewing the law so as to make at least partial payment of the salary arrears to be higher in priority in the creditors' claim when the companies go bankrupt?

Dr Ng Eng Hen: Sir, from our experience, the inability to seek restitution of arrears is not so much procedural; in other words, the process is not difficult or expensive. But in most episodes, the company goes insolvent. That is the first point. So, as I have said, what we try to do in our current measures under review is to tighten up so that the amounts owed to workers are reduced. And that we can do by putting in systems to detect the amount of arrears owed to workers so

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that we are alerted earlier and we can take measures.

Secondly, we are seriously considering, as has been proposed by Members, for some mechanism where a particular fund or insurance is being set up so that some restitution compensation can be paid too. I think those are the critical measures and not so much the procedural aspects.

Mdm Halimah and Mr Yeo had also asked what else can be done for employers. I think for most employers, the greatest penalty is not to have these workers, because basically for many of them, that means the business folds. And it is a clear message from the Ministry that indeed you should take salaries of your workers seriously because if we find out that their salaries are in arrears, we will cancel their work permits.

Mr Low Thia Khiang: How does the Ministry of Manpower monitor the non-payment of salaries by employers? How fast can the Ministry detect non-payment of salaries after the tightening of framework, as mentioned by the Minister?

Dr Ng Eng Hen: I have to thank the Member for his question because it allows me to explain. We have over 500,000 foreign workers. The first point is that we do not have in place, as such, an electronic system where we could monitor all salary payments. We monitor the levies, as a proxy for salary payments. In other words, we assume that if he does not pay the levies, then he may not be paying the salaries and we flag this up. We are also dependent on the foreign workers telling us, and which is why we give them advisories at the point of employment that they should come to MOM, provide them the hotline, the numbers in their various languages, for them to understand and to inform us. We also have a particular team that checks in terms of salaries that are given. But, as

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you could understand, there are many companies and many workers, and sometimes that is not a foolproof system. But we are looking into options to consider electronic aspects to tie the system up so that we could be alerted earlier.

Ms Braema Mathiaparanam (Nominated Member): Sir, I have three supplementary questions. Firstly, I am glad that the Ministry is tightening the framework further. The first question is that for the workers who have gone home, could the Ministry enlighten us as to how many cases have received some form of wages after they have been sent home? Secondly, - I am glad that the Ministry is thinking of an electronic scheme - would a GIRO scheme be possible, please? My third question is this. The Minister mentioned instances of tediosity where the Labour Court process is concerned, because it is a convoluted process perhaps in its own way. Could there be some form of discussion or dialogue to streamline this process, because while the workers are not being paid, waiting for a legal outcome, we could have a short cut through that whole process?

Dr Ng Eng Hen: Sir, as I have mentioned in my reply, I do not want to give the impression that from past records this is a large problem. As I said, this is 6-7% of companies that are in arrears and, in terms of settlement, 99% of foreign workers' claims were settled through conciliation. So we should not get away with the impression that this is a tedious process. In fact, the process is working. But, as I have said, the number of episodes recently has caused us to look at the system and see whether we could see ways in which we could improve and strengthen it. The Member has asked if we could consider e-schemes. Yes, we are doing that. She also asked how many of the claims were settled when the workers went back. I do not have the figure but the overall number is that, as I

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have said, 99% of foreign workers' claims were settled through conciliation. So those that could not get their claims settled are in the minority.

Mr Yeo Guat Kwang: Sir, I think one of the factors that we are not able to detect such instances earlier is that the workers may not even know their rights and the channels where they can seek assistance. Would the Ministry think of doing more in this area? Would there be a possibility for us to get the embassies of the sending countries, for example, involved in such a collaboration?

Dr Ng Eng Hen: Sir, we are presently working with the embassies, as well as stepping up our efforts to both increase awareness of the employers as well as the employees.