Not viable for MOM to advance money to unpaid workers, should tap on relief funds instead: Edwin Tong

It would distort the market should MOM do so, he said.

Guan Zhen Tan | March 02, 2021, 09:02 PM

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Pioneer SMC Member of Parliament (MP) Patrick Tay asked during the Committee of Supply Debates on Mar. 2 if the Ministry of Manpower (MOM) can advance money to an affected, unpaid employee of an insolvent company.

Suggestion to facilitate workers recovery of unpaid wages

Tay, who is also the assistant secretary-general of NTUC, stated that the Employment Claims Tribunal now has jurisdiction to adjudicate both salary-related disputes as well as wrongful dismissal claims.

This makes it convenient for parties to resolve employment disputes in a single forum.

However, an Employment Claims Tribunal judgement that is not satisfied will still need to be enforced in the same manner as an order made by a district court.

Could MOM advance money to workers who are owed them?

In other words, an affected employee would be subjected to a protracted enforcement process, which would then involve detailed processes and court fees before they receive any recourse.

This would be difficult for workers unfamiliar with the workings of Singapore's court system. Tay said that there's a need to simplify and possibly expedite the recovery of money owed to such workers.

He suggested that in the context of an insolvent company, the MOM could possibly advance money and pay part of the workers' unpaid wages.

In this way, MOM would then stand in the place of the worker as a preferred creditor to recover the advanced monies upon distribution of the insolvent company's assets.

MOM advancing money would "distort the market"

In response, Second Minister for Law Edwin Tong said that MOM has looked at this proposal before, and recognises that it may provide relief to a worker in the immediate short term.

However, he warned that this may distort the market, and lead to a "larger problem" of a viable company defaulting or owing the salaries, knowing that workers can obtain payments using government funds.

Tong added that workers who are unable to recover unpaid salaries may also tap on the Short-Term Relief Fund (STRF) and the Migrant Workers’ Assistance Fund (MWAF).

Since Apr. 1, 2020, MOM has enhanced the STRF to provide financial help to workers whose employers are unable to pay them wages due to financial difficulties or business failure.

The STRF payouts have been increased to up to two months’ salary, capped at S$4,600, depending on the worker’s income.

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Top image via MCI's Youtube video, MOM's Facebook page