50 cases of 'disguised executives' reported in 2017: MOM

SINGAPORE — Addressing an issue raised by the labour movement last week that firms here were giving employees inflated titles to avoid overtime payments, the Manpower Ministry (MOM) stressed on Tuesday (June 26) that it takes a "serious view" of firms' attempts to misclassify their employees to avoid obligations.

Responding to TODAY's queries, MOM said there were about 50 cases last year involving workers who felt they were unlawfully denied entitlements on account of being wrongly deemed managers or executives.

About nine out of 10 of these claims were found to be substantiated, said MOM. The ministry's spokesperson added that the application of the existing law has been effective as a remedy for affected workers.

These cases, which were received by the Tripartite Alliance for Dispute Management (TADM), also made up less than 1 per cent of the cases handled by the body, and were "consistently low in relation to other complaints", the spokesperson added.

'DISGUISED EXECUTIVES'

In a blog post last week, National Trades Union Congress (NTUC) assistant secretary-general Patrick Tay said inflated titles are the reason why some workers are not compensated for working beyond their official work hours, even though they are not in substantive positions of authority.

This includes the authority to hire and fire, being in charge of business units and functions, or managing and running a business directly.

Describing these workers as "disguised PMEs (professionals, managers and executives)", he estimated that there may be more than 30,000 PMEs here who earn less than S$2,500 monthly.

Under the Employment Act, workmen performing manual labour drawing a basic salary of up to S$4,500, as well as employees earning a basic wage of up to S$2,500 a month, are entitled to payments for extra work rendered. The provision excludes managers and executives.

Mr Tay called for workers to be assessed on their job scopes rather than job titles, and said the MOM's definition of a manager or executive on its website may have to be tweaked to exclude "professionals with tertiary education and specialised knowledge". Alternatively, the Employment Act's provisions covering rest days, hours of work and other conditions of service should be adjusted to cover all workers earning S$2,500 or less, Mr Tay said.

JOB TITLE NOT RELEVANT

In handling such complaints, the MOM spokesperson said the ministry and TADM are guided by the law as interpreted by the courts.

An employee's job title is not a relevant factor, said the spokesperson, as "each case is assessed individually based on the specific scope of the job, such as the level of authority and decision-making powers in the management of business functions, recruitment, discipline, termination of employment, and staff performance and reward".

Where relevant, the MOM and TADM would apply the guidance arising from a recent High Court judgement involving a Bangladeshi site supervisor and a China-headquartered firm, said the ministry.

The High Court noted then that the "executive position" was not defined in the Employment Act. Justice George Wei said a supervisory role does not, in itself, make someone an executive or remove his status as a "workman".

The judge ruled that the site supervisor was entitled to overtime pay under the Employment Act as his tasks did not go beyond on-site routine administrative work. He also did not have the direct authority to hire, fire, promote or discipline other workers.

To allow for proper assessment, the MOM advised employees classified improperly as a manager or executive to approach TADM.

In March, the ministry announced it would later this year amend the Employment Act — which provides for basic terms and working conditions — to cover all employees, except for public servants, foreign domestic workers and seafarers, who are protected under industry-specific legislation.

The Employment Act, which currently covers workers earning S$4,500 or below, will cover about 430,000 more white-collar workers who are not protected under the law.

However, the tripartite partners comprising the Government, unions, and employers concurred that managers and executives would remain excluded from provisions covering rest days, hours of work and other conditions of service.

"This is because a manager and executive's work still tends to be outcome-based, and time-based provisions such as overtime pay may not be applied uniformly in all situations," said the MOM spokesperson.

"It was also agreed that this issue would be further studied in future reviews of the Employment Act."