Wednesday, 26 November 2008

OPQ 21 October 2008: Employment of Foreign Workers Without Jobs

A while back, there were some media reports about foreign workers being brought into Singapore without sufficient work being present for them. They would have incurred a mountain of debt to get here, yet once they get here, they don't get paid what they were promised, because there's just not enough work for them. In a nutshell, the workers are being cheated by unscrupulous local companies.

I'm told by NGO activists in this area that this is how the gravy train works. The worker pays a large upfront sum (up to USD10k) to an agent in his home country. The agent keeps some of that as his cut, and sends the balance to Singapore, either to another agent here or to the would-be employer. If there is an agent here, the local agent takes his own cut, and the balance of the upfront sum goes to the employer.

The worker is comes to Singapore. The employer puts up the worker at the employer's cost, which is what the regulations require. However, the employer does not really have work for the worker. The worker works a couple of days a week. Instead of being paid the monthly salary he should be getting, the worker only gets paid on a daily basis, for those days he works. He goes without work, and pay, for the other days.

The employer funds all this, out of the balance of the upfront sum received from the worker's agent. After a couple of months, the employer tells the worker that there is no more work. The worker either goes home, or files a complaint with MOM. If you follow the money, it seems that the employer is funding all this, not with a proper project, but with the upfront payment from the worker. And of course, the agent(s) always makes money.

In the meantime, the cycle starts again with another unsuspecting victim.

The rules are meant to prevent this sort of abuse, by requiring employers who want to bring in foreign workers to certify that they have a project and require workers for that project. However, the grapevine suggests that this system is being manipulated, and somehow employers who do not really have projects -- normally, entities who pass themselves off as sub-contractors -- are able to bring in workers. This is something that Baey Yam Keng alludes to in his question. When they are complained against, some simply close shop and then the people behind them set up new companies. And then the gravy train resumes.

I don't know how true the above is. But it sickened me when the activists explained it to me. It disgusted me that there are actually people amongst us who would do this sort of thing, exploit their fellow human beings, vulnerable persons like migrant workers at that. Once again, this is the free market at work.

So when this subject came up in Parliament, I chimed in with a few questions. I was gratified to see my fellow MPs filing these questions and speaking up, which is why I am posting the exchanges in full. They are good people. I'd also like to take this opportunity to give a shout-out to all of you who had helped me out on this issue -- you know who you are. Kudos and keep up the good work.

(Enforcement action against errant employers)

3. Mdm Halimah Yacob asked the Acting Minister for Manpower (a) why are manpower agencies allowed to bring in foreign workers when there are no proper jobs for them to do; (b) what safeguards are in place to prevent the exploitation and abuse of foreign workers who come to Singapore; (c) whether there is a need to tighten the rules for bringing in foreign workers to ensure that jobs are available before they are brought in; (d) how many employers have been prosecuted for offences relating to the employment of foreign workers over the past one year; and (e) what were the penalties imposed and how much was recovered for these foreign workers.

4. Ms Irene Ng Phek Hoong asked the Acting Minister for Manpower (a) how many complaints have been received from foreign workers on work permits that they had no or little work or no pay each year, over the last five years; (b) what protection do foreign workers have, given the companies' ability to terminate their work permits if foreign workers complain to MOM; and (c) whether there are loopholes in the system that companies are exploiting to bring in desperate foreign workers.

5. Mr Baey Yam Keng asked the Acting Minister for Manpower (a) how pervasive is the reported practice of foreign workers brought to Singapore on work permits but without ready or regular work; (b) since 2005, how many complaints per year has the Ministry received from work permit holders about lack of regular work; and (c) how can the Ministry ensure that work permit applications are approved to address real manpower demands for the purpose of supplementing the local workforce.

6. Ms Irene Ng Phek Hoong asked the Acting Minister for Manpower (a) how many companies have been penalised for exploiting foreign workers by not giving them work or pay over the last five years; (b) what were the penalties imposed on these companies; and (c) whether the penalties should be reviewed and increased.

Mr Gan Kim Yong: Mr Speaker, Sir, may I have your permission to take Question Nos. 3 to 6 together as they are related.

Mr Speaker: Yes.

Mr Gan Kim Yong: Mr Speaker, Sir, first, let me put things into perspective. The vast majority of foreign workers who come to Singapore have work and are being paid their salaries. The number of foreign workers that came to MOM each year to seek assistance for salary arrears has remained low at less than 0.2% of foreign workers on average. We do not capture specific data on foreign workers who have come to Singapore without work as such complaints comprise a very small number. As an indicator, the incidence of illegal deployment of foreign workers last year constituted less than 0.05% of foreign workers. This suggests that most workers do have work when they come here.

Nevertheless, the Ministry takes a serious view of employers who do not give their foreign workers work and those who do not pay their salaries. Under the Employment Act, employers who fail to pay salaries can be fined up to $1,000 per charge for first time offenders or face a jail term not exceeding six months or both. For repeat offenders, the fine is up to $2,000 per charge, or a jail term not exceeding one year or both. Up to September this year, we have prosecuted and fined nine employers for non-payment of salaries, out of which two cases involved foreign workers. Members may recall that earlier in 2007, this House passed changes to the Employment of Foreign Manpower Act to increase the penalties for offences under the Act. The Employment (Amendment) Bill tabled for First Reading yesterday will also increase the penalty for non-payment of salaries.

MOM has put in place measures in the work pass approval process to minimise the possibility of workers being brought in without jobs. For example, construction and marine companies need to show documentary proof that they have on-going projects before work permits are issued to them. For subcontractors, an endorsement of work is also required from their principal contractor. We will take action against errant employers but we should be mindful that we are dealing with a minority of errant employers. It is unwise to impose disproportionate restrictions in the work pass system to deal with the errant minority and as a result create unnecessary rigidity and inconvenience for the majority of responsible employers and their employees.

Ms Irene Ng raised the concern that employers may terminate the work permits of foreign workers and repatriate them if they complain to MOM. In such instances, MOM may allow these workers to change employers and continue to work here on a case-by-case basis if MOM determines that they have not committed any offence. Foreign workers who are needed as prosecution witnesses would be issued special passes which will allow them to continue to stay in Singapore. They are also allowed to be employed by another employer under the Temporary Job Scheme (TJS). In some cases, it may be in the best interest of the workers to return to their home countries, especially when there is no suitable work for them.

With regard to the media reports early this month about foreign workers of three marine companies not being provided with work and were not paid their salaries, my Ministry started investigations into the complaints earlier in September when the workers approached us. Preliminary findings show that these workers have work and were paid for the work done. Nonetheless, there are some irregularities detected in the payment of salaries and we have told the companies to rectify them. As investigation is still on-going, I would prefer not to discuss specific details of these cases at this point in time.

However, I would like to take this opportunity to remind employers that they should ensure foreign workers they bring in are gainfully and productively employed. When the services of the workers are no longer required, the employers should terminate the contracts and facilitate the workers to return to their home countries.

Mr Baey Yam Keng (Tanjong Pagar): Sir, I heard of a practice of employers who use their foreign worker quota as entitlement to bring in foreign workers. How does the Ministry prevent them from subsequently becoming foreign worker agents who sublet these extra workers and giving other employers the ease and flexibility of interim and immediate foreign labour? Such a practice still gives the foreign workers work but at the same time offers the second group of employers the ease and also convenience of foreign labour. I would like to ask the Minister how does the Ministry prevent such a practice, so that Singaporean workers are not discriminated because they are usually more expensive, and especially the low-income and contract workers in our population.

Mr Gan Kim Yong: Mr Speaker, we have different practices for different sectors of the industry because of the nature of the industry. In the construction sector, for example, projects tend to be lumpy and they vary from time to time, so there will be periods in between projects that contractors may not have jobs. And it is important for us to facilitate these contractors who have workers with them, whether local or foreign, to be able to provide subcontract work for the main contractors. There will be some flexibility that we will have to allow but we regulate that by ensuring that these contractors, before they employ the foreign workers, do have sufficient work. So we look at their job orders, the contracts that they have in hand, to ensure that they have sufficient work. But, again, as I said, these jobs will fluctuate from time to time, and when they are in between jobs, we need to ensure that there is certain flexibility. But in other sectors, manufacturing and services, for example, the employers have to employ their foreign workers in the job that they have specified in the work permit, so it is quite clear and specific. If the foreign workers want to change employer, they actually have to terminate the work permit and apply for a new work permit with the new employer.

Mr Siew Kum Hong (Nominated Member): Sir, I have four supplementary questions for the Acting Minister, but they are all related. The first question: the Acting Minister has referred to special passes for workers who are required to stay to be prosecution witnesses. I would like to ask the Acting Minister at any given time, approximately how many workers will be on such passes, and of these workers, how many of them actually do manage to make use of the temporary work pass to find alternative employment.

My second question is this: of these workers who are asked to stay behind to be prosecution witnesses, are there any special provisions to assist them with housing? Because there will be a period of time where they are looking for alternative employment, and so they will not have accommodation, and what assistance will we be giving to them, given that we are asking them to stay in Singapore?

The third question relates to the workers who are not required to stay as prosecution witnesses. My understanding is that they are then repatriated back to their home country. Is there any allowance to help them look for alternative employment because, as I understand it, all these workers want to stay in Singapore to work to pay off their debts incurred when they come here.

And that leads me to my final question, Sir. Does the Ministry intend to relook the industry structure because all of these workers are vulnerable because of the debts that they incurred when they come to Singapore, which is why they want to stay? Does the Ministry intend to investigate this and look into how the industry can be better structured, so that the workers are not saddled with very high debts before they start work?

Mr Gan Kim Yong: Mr Speaker, Sir, I think the total number of special passes at any time in Singapore is very small. I do not have the specific numbers with me but usually they are given special passes because they are assisting the Ministry in investigation.

For those that are stranded or those foreign workers who are given special passes or temporary job permits, when they find employment, the new employer will be responsible for their housing. While they are waiting for new employment, if they are still holding the work permit issued by the former employer, the former current employer will be responsible for their housing. And if they are in between, ie, their work permit has been terminated and they are in the meantime looking for employment, the Ministry on a case-by-case basis does help them, together with the various organisations, to provide housing for them. So it is in the Ministry's interest to ensure that their welfare are looked after. In certain circumstances, we also work with the foreign embassies who are here to provide for them to ensure that their well-being is being taken care of.

The third question Mr Siew asked is whether the Ministry helps them with alternative job employment in Singapore. It is really not the core purpose or the core mission of the Ministry to help these foreign workers to find jobs. But the Ministry does, on a case-by-case basis, as I mentioned earlier, help these employees find jobs. Recently, for example, we helped a group of foreign workers who have lost their jobs partly because the company has run into trouble. We helped them find alternative employers within a short period of time. But, as I said, eventually, if there is really no job, we really have to find ways to repatriate them, and the employers are responsible for repatriating them.

The last question is about the debt that they incurred. Very often, we find that some of these debts were incurred in their home countries, and these were amounts of monies that were paid to the agents in their home countries. And because they are outside Singapore's jurisdiction, what we can do is to work with the foreign missions/embassies here to share with them our information, so that they can in turn put in place structure and regulation in their home countries to prevent manipulation and exploitation of their own workers. But when they come to Singapore, our employment agencies are regulated. I think, a few months ago, I mentioned in this Parliament that we are also tightening the regulation on employers receiving rebates from employment agents. So these are being put in place and we are working with the employment agents to see how we can further improve the framework and structure here.


Chee Wai Lee said...

As far as I know, in the US, it is the companies who pays for relocation and visa/permit applications on behalf of workers they wish to hire.

I would like to know why a foreign worker must pay in order to secure a job in Singapore in the construction industry (I assume).

If the government is willing to forbid this practice (for any worker - including domestic help), then employers would be required by necessity to ensure there is productive work to be done in order to justify the costs in bringing a worker over. It would seem to be a way to remove the chance of such scams happening.

I am once again disappointed by the high-level government response that it is "only" 0.05% of workers affected. Almost feels as if they do not care to ensure that people are being cheated or treated unfairly because of possible loopholes in the system.

studentat said...

this is a similar issue to the article discussed by Mr. Siew.

to get a bigger/better picture,

Chee Wai Lee said...


Thanks. I've been following that series of posts as well. I'm very glad Alex and a small volunteer organization is following the issue closely and trying to get it publicized by the mainstream media.

I think it is time our labor policies included provisions that considers all foreign labor *individuals*:

1) They keep their passports (freedom to travel).

2) They sign a legal relocation package (either at their or employer's expense).

3) They possess the freedom to associate (no restrictions on love and marriage).

4) They live as any other resident would, choosing to take employer accommodations (most will) or rent available housing (as is "standard" practice for foreign workers in most other countries).

The way I see it, we have a de-facto "slavery" system where some people are simply second-class or even third-class residents.

Donaldson Tan said...

The practise of keeping passports belonging to the foreign workers should be outlawed.

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