Oral Answer by Mr Lim Swee Say, Minister for Manpower, to Parliamentary Question on Workplace Injury Compensation and Unpaid Wages

Notice Paper No. 516 Of 2017 For The Sitting On 6 Feb 2017

Question No. 897 For Oral Answer

MP: Ms Denise Phua Lay Peng

To ask the Minister for Manpower how the Ministry can improve the process by which workers, including foreign workers, can be protected against errant employers who do not insure them or compensate them for injuries and/or owe them their salaries.

Question No. 945 For Oral Answer

MP: Ms Kuik Shiao-Yin

To ask the Minister for Manpower (a) from 2012-2017, how many employers have been prosecuted in the Labour Court for respectively failing to compensate injured workers or insure them adequately; (b) what is being done to reduce the incidence of errant employers who ignore Labour Court orders and default on compensation for injured workers; and (c) how does the Ministry assist low-wage local and migrant workers who cannot afford further legal action to recover their unpaid wages.

Answer

1. Madam Speaker, may I take questions 1 and 2 together, please.
2. MOM received about 9,000 salary-related claims involving some 4,500 employers in 2016. Through mediation by MOM and adjudication by the Labour Court, we have been able to resolve more than 95% of salary claims.
3. The remaining 5% of the salary-related claims were unresolved because one has appealed the Labour Court order and the case is with the High Court, eight are still in business but have yet to comply with their orders, while a vast majority (199 out of 208 employers) had either ceased operation, or faced impending business closure due to financial difficulties.
4. All these companies have been debarred from hiring foreign workers until they comply with the Labour Court orders.
5. The debarment also applies to culpable directors even if they were to start new companies. 
6. We are also investigating those employers who are still in business because non-payment of salary is an offence under the Employment Act. 
7. While it is not our intention to criminalise every non-payment of salary, especially if it is the result of a business failure, we do prosecute serious or repeated cases, for deterrence.
8. In the last three years, 158 employers have been prosecuted and convicted for salary-related offences. Such offences carry a fine of between $3,000 and $15,000 per charge, or to imprisonment for a term not exceeding six months, or both. 
9. Let me now turn to work injury cases. In 2016, over 99.9% of the approximately 16,000 injured workers had their cases successfully resolved. However, five (out of about 16,000 cases) did not because their employers had failed to purchase work injury compensation (WIC) insurance and were unable to pay due to financial difficulties.
10. MOM takes such offences seriously and prosecutes such employers under the Work Injury Compensation Act and debars the companies and individual directors from hiring foreign workers, until they compensate their workers.
11. Such offences carry a maximum penalty of $10,000, or imprisonment of up to 12 months, or both. In the last five years, 14 employers have been prosecuted for non-insurance and non-compensation of work injury.  
12. Madam, in most of the unresolved cases of unpaid salary or work injury compensation, the chance of workers recovering payments from their employers is slim.
13. This is not because the employers could just ignore and refuse to pay up, but because they are mostly in deep financial difficulties as I have explained earlier.
14. For cases where there is still some hope of enforcing the orders for unpaid salary or work-injury compensation, the workers are required to apply for the Writ of Seizure and Sale through the State Courts. This is the same process that applies to all unpaid Civil Court orders including those made by the State Courts.
15. For those who need help, MOM assists the workers by advising them on the process and preparing the necessary documents. Eligible low wage local workers may seek legal assistance from the Legal Aid Bureau, whereas foreign workers may approach the Migrant Workers’ Centre.
16. Workers can also apply to the State Courts Registrar to waive or defer the costs of enforcing the order, or to recover these costs from the sale proceeds.  Meanwhile, foreign workers with valid salary claims are also allowed to change employers. More than 2,200 of such requests were granted in the past three years.
17. Madam Speaker, while we are relieved that the vast majority of unpaid salary (95%) and Work Injury cases (99.9%) are successfully resolved, we are however concerned with workers who are unable to recover their claims because their employers no longer have the financial means to pay. We will continue to strengthen our support for them.
18. Currently, foreign workers can already receive financial relief from the Migrant Workers’ Centre. Likewise for local low-wage workers, as announced in this house in August last year, those with unresolved salary claims will be able to receive short-term relief from the Tripartite Alliance for Dispute Management (TADM) when it comes into operation in April this year.
19. As for workers with more serious injury, if they fail to receive their work injury compensation and are in financial difficulties, we will continue to assist them through the Workers’ Fund managed by MOM.
20. On the part of the workers, I urge them to bring their cases to MOM as early as possible. This will greatly improve the chances of successfully resolving their claims before the employers reach dire financial straits.