RHTLaw Taylor Wessing Partner Vernon Voon was featured in The Straits Times article titled “Give Labour Court more power to protect workers”.
The article was first published in The Straits Times dated 26 January 2017.
Give Labour Court more power to protect workers
With the Labour Court expanding to become the Employment Claims Tribunals covering more workers, it’s time to equip it with more power to enforce its own orders
Source: The Straits Times © Singapore Press Holdings Ltd.
Date: 26 January 2017
Author: Toh Yong Chuan
Two separate labour cases against employers. Both involving Bangladeshi construction workers.
Both workers won, yet they cannot get the payment orders enforced.
In the first Catch-22, Mr Islam Rafiqul was owed $7,363 in unpaid salary and the Labour Court last month ordered his employer, Geosray Engineering and Services, to pay up. The employer ignored the order.
The Ministry of Manpower (MOM), which runs the Labour Court, told Mr Islam to go to the State Courts to take action to seize the employer’s assets to get the money back. This would involve him having to pay, out of his own pocket, legal fees as well as those for a bailiff and auctioneer, which he cannot afford.
In the other case, the Labour Court last September ordered local company Ridgeway Marine and Construction to compensate Mr Sujan Ahmed $11,625.
The company, which did not cover the worker with compulsory workplace insurance, made a small partial payment and stopped. To get the remainder, he has to take the employer to the State Courts.
These two cases highlight a gap in the law meant to protect foreign workers. And while these cases involve foreign low-wage construction workers, the limitations of the system affect all workers, since the Labour Court covers local ones as well.
The cases raise the question: Why can’t the Labour Court enforce its own orders?
LABOUR COURT’S ROLE AND GOOD INTENTIONS
The Labour Court, despite its name, functions less like a court of law and more like an administrative tribunal.
Its “courthouse” is within MOM’s premises and its powers are mostly drawn from the Employment Act, Singapore’s main labour law that sets out the basic terms and conditions for workers. It hears employment-related complaints on issues such as disputes over salary, dismissal and leave.
The hearings are held behind closed doors and lawyers are not allowed to represent workers or employers. By cutting down on the legal paperwork and not involving lawyers, the fees for taking complaints to the Labour Court are very low: Employers pay $20 and workers pay $3. This makes the system accessible to all.
The mediation process also makes the dispute less combative, which is in line with the longstanding desire by the Government, unions and employers to keep industrial relations harmonious.
Other countries use a tribunal system to resolve labour disputes too. Hong Kong has its Labour Tribunal, offering “a quick, informal and inexpensive way of settling monetary disputes between employees and employers”, says its website.
Here, Labour Court sessions are run by the Commissioner for Labour and his deputies, who are senior officials in MOM. Its primary goal is to settle disputes through mediation, not make rulings and enforce the decisions.
Mr Martin Gabriel, founder of human resources consultancy firm HRMatters21, says: “Employers see those chairing Labour Court sessions more as referees settling disputes rather than judges presiding over cases.”
Mr Gabriel, a former MOM officer, has advised about 10 employers and represented five in Labour Court sessions over the past 15 years.
The court does not publish its decisions or an annual report, so little is known about the types of cases it handles.
Still, the MOM received about 6,000 complaints of salary disputes each year in 2015 and 2016. Half were resolved without the cases going to the Labour Court.
And of the 3,000 cases that went before the latter, 1,000 were resolved through mediation.
Manpower Minister Lim Swee Say said in a written reply to Parliament this month that in about 1,400 cases each year, the Labour Court had ordered employers to pay their workers.
However, the employers in about 350 cases ignored the Labour Court’s orders. Workers in such situations have one recourse, laid out in 2013 by then Manpower Minister Tan Chuan-Jin in a reply to a parliamentary question: “(They) may enforce the orders by way of writ of seizure and sale through the Subordinate Courts.”
This applies to payment orders across the different courts. Indeed, besides the Labour Court, the Small Claims Tribunals – which handle commercial and civil disputes of up to $10,000, or up to $20,000 if the parties consent to the higher limit – also follow the same process.
The limitations of the Labour Court in enforcing its orders has not escaped labour lawyers.
Having workers take their disputes to the Labour Court instead of civil courts only solves “half the problem”, says Mr Vernon Voon, employment and labour relations partner at law firm RHTLaw Taylor Wessing. This is because the worker still has to go to the civil courts to enforce the order if the employer does not pay up.
“This requires time and financial cost, which an employee who is deprived of his salary can ill afford,” says Mr Voon.
BEEFING UP THE LABOUR COURT
The Labour Court needs to do more to protect foreign low-wage workers as they are the most vulnerable to exploitation, says Mr Alex Au, an advocate for foreign workers’ rights at Transient Workers Count Too (TWC2).
Indeed, the Government already recognises that some workers need more protection than others.
For example, the Employment Act covers all workers earning $2,500 and below a month, and manual workers on $4,500 and below.
And when the Employment of Foreign Manpower Act was amended in 2012, it gave more powers to the MOM to protect foreign workers. For example, the MOM can appoint Commissioners for Foreign Manpower who can impose fines on companies that breach rules in hiring foreign workers.
Boosting the powers of the Labour Court is a logical next step in protecting these vulnerable low-wage workers.
The Labour Court is due to be expanded in April when it becomes the Employment Claims Tribunals (ECT). The ECT will cover workers at all salary levels.
It will benefit professionals, managers and executives earning over $4,500 a month in particular, as they would otherwise have to file claims with the civil courts. The current Labour Court does not cover them. But one can imagine their disappointment if they were to obtain a court order and, in the event the employers refuse to pay, they are told they have to enforce the orders themselves.
Given the expansion of the Labour Court in April, it is timely to review whether it can give workers more help.
THREE WAYS TO GIVE IT TEETH
First, make it easier for the worker to seek legal recourse against employers which do not pay. They should not have to take the step of seizing the employers’ assets, with all the jumping through legal hoops that it involves.
In Britain, a worker awarded payment by its Employment Tribunal can get help with enforcement. He can ask the court to force the respondent to pay by filling in a “penalty enforcement form”. Respondents will be fined if they do not pay up within 28 days.
There is no need for the British worker to seize the employer’s assets and sell them.
Second, punish employers which ignore the Labour Court orders.
Mr Voon notes: “Failure to pay compensation awarded by the Labour Court under the Work Injury Compensation Act is a criminal offence, and there is no strong policy reason why non-compliance with an order of the Labour Court issued under the Employment Act shouldn’t be on the same footing.”
The MOM already has the powers to charge employers in court for not paying salaries or injury compensation. The next logical step is to also punish the employers which ignore the court payment orders. This will reduce the non-compliance rate.
Third, for workers whose employers cannot pay up, the Labour Court can direct the workers to get financial aid.
In Hong Kong, there is a government-run Protection of Wages on Insolvency Fund that can pay workers if employers are bankrupt. Mr Au suggests another variation: a backstop fund which pays out the Labour Court orders first and claims from the employers later.
For foreign workers, there is already a little-known relief fund here. The Migrant Workers’ Centre – which is backed by MOM, the National Trades Union Congress and the Singapore National Employers Federation – runs the Migrant Workers’ Assistance Fund that has $457,706 as at March last year. It gave out $64,782 in assistance to workers in 2015.
Whatever the source and mandate of the relief funds, the idea is that it need not be solely a government effort. Non-governmental organisations can chip in too. In the longer run, the scope and powers of the Labour Court, and the ECT from April, cannot remain static.
Any move to review how the Labour Court can be enhanced to protect workers from the apparent injustice of not receiving their ordered payment or compensation cannot come too soon.