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MOM may ban employers from lowering wages of work permit holders

SINGAPORE — Following cases of foreign workers being short-changed by employers who cut their wages without mutual consent, the Manpower Ministry is considering scrapping the option of downward salary revisions.

SINGAPORE — Following cases of foreign workers being short-changed by employers who cut their wages without mutual consent, the Manpower Ministry is considering scrapping the option of downward salary revisions.

Currently, the law allows an employer to reduce a worker's basic monthly salary to an amount lower than that stated in his in-principle approval (IPA) letter — a document stating salary terms and agreed upon by both sides before the worker arrives in Singapore — provided there is written consent from the worker.

In a written reply to Nee Soon Member of Parliament Louis Ng’s parliamentary question on Monday (July 9), Manpower Minister Josephine Teo said her ministry has imposed fines amounting to some S$105,000 on 17 errant employers in the first half of this year for reducing the salaries of work-permit holders without their written consent or informing the ministry.

Since 2011, employers applying for work permits have been required to declare key salary terms offered to their prospective employees in IPA letters. They must then send the letters to the workers’ home countries, in their native languages, before the workers depart for Singapore. This ensures that the worker is fully aware and accepts the terms of conditions before coming here.

From February this year, the Tripartite Alliance for Dispute Management no longer accepts arguments that "the worker had provided tacit or verbal consent" when mediating salary disputes, Mrs Teo said in her reply.

Despite these safeguards and enforcement action, the proportion of salary disputes over the reduction in salaries stated on workers’ IPA letters have risen. Eleven per cent of claims involving work-permit holders in the second half of last year were of this nature, up from 7 per cent over the last three years, the minister revealed.

In a Facebook post later on Monday, Minister of State for Manpower Zaqy Mohamad said the ministry must consider the trade-offs of banning downward revisions of wages.

The current option was “originally intended to give foreign workers an opportunity to continue employment in instances where their performance does not meet what is expected”, said Mr Zaqy, who acknowledged that it has been abused.

But if salaries cannot be reduced even with mutual consent, then foreign workers who do not fully meet the skills required for the job may then be sent back to their home countries. Currently, some foreign workers may “prefer to take a lower salary to commensurate with his skill level” instead of being repatriated, he said.

“We must therefore carefully consider the trade-off with (revising the) approach,” Mr Zaqy wrote.

In a landmark judgement last year, the High Court ruled that in the absence of any other written agreement, the IPA letters are the documents to follow in determining how much a worker is to be paid.

In his ruling last December, Justice Lee Seiu Kin said: “I would go so far as to state that even if there was a written contract of employment which provides for a monthly basic salary of less than the sum stated in the IPA, the burden would lie on the employer to show why the IPA figure does not reflect the true salary.”

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