fcs

By Andrew Loh – 

The High Court has reserved judgement in the case involving the Singapore Insurance Employees’ Union (SIEU), and 3 of its former members, who were also NTUC Income financial consultants (FCs).

The SIEU is an affiliate union under the National Trade Union Congress (NTUC).

Supported by some 60 of their colleagues who turned up at the court house on Monday, the 3 FCs – Lim Paw Seng Philip, Ng Kee Wah, Tan Huan – are asking the court to direct the SIEU to refer the case to the Industrial Arbitration Court (IAC).

The dispute stems from the change in the employment status, made in 2012, of NTUC Income’s 660 FCs. NTUC Income had “reclassified” them as “agents”, changing the relationship between NTUC Income and the FCs to one of principal-agent, rather than employer-employee. This also means that effectively, NTUC Income had terminated the FCs’ employment and made them self-employed individuals.

The change was to bring it “in line with industry practice”, NTUC Income explained earlier. Its move was apparently prompted by its discovery during one of its internal audits that Income had failed to report part of the FCs’ earnings as income to the Inland Revenue Authority of Singapore (IRAS).

This resulted in Income under-reporting the FCs’ earnings to the tax authorities – for 20 years. In April, Income was fined $3 million in “back-taxes and fines” for this.

Also, the FCs are accusing Income of not returning to them the employee’s portion of the CPF which Income had over-deducted upfront from their basic remuneration over 20 years.

“[This] was retained by our employer but was not deposited into our CPF accounts as was the original intent and purpose,” the FCs said.

Instead, Income returned only 2 years’ worth of CPF deductions to them, and said this was a “gesture of goodwill.”

More than 100 of the FCs have filed a complaint with the CPF Board over the matter. (See here.)

At the heart of the current dispute is the change in their employment status to that of agents, which ostensibly was made to resolve the tax and CPF issues with the authorities.

“If the FCs are designated as agents there will be no CPF issue to resolve,” Tan Suee Chieh, the then CEO of Income, was reported to have said in 2012. This was a view also held by Jonathan Chai, Senior Vice President and Head, Finance Division, NTUC Income, who said that it was the “management’s proposal” that the FCs be designated as agents.

This change in status has resulted in loss of benefits for the FCs which they have always enjoyed, including retirement benefits. It also means they will no longer be represented by the union (SIEU) since they are no longer employees of NTUC Income.

Nonetheless, if the FCs are to continue to work as agents for Income, they are to adhere to higher sales targets, to attend – and pass – various upgrading courses, failing which their practising licences would be withdrawn, and to give two years’ notice of retirement.

The FCs said they were pressured and compelled to agree to sign the new contracts last year before the deadline set by NTUC Income, otherwise they would be unemployed, and lose everything that they have worked for the last 2 or 3 decades.

The FCs said they had written the caveat – “Without prejudice to SIEU representation on outstanding issues” – besides their signatures when they signed the contracts but the management told them this was unacceptable and removed this.

Matthias Yao, Deputy Chairman of NTUC Income Board of Directors, who chaired the meeting on 5 January 2012 between the management and the union, had “instructed the union representatives that management’s proposal was not for negotiation.”

“It was a high-handed method,” one of the FCs, Mrs Lee, said.

“We were pressured to sign, under duress. It’s as simple as that,” says Mr Chee, one of the affected FCs. “The threat was [made] to us: ‘If you don’t sign, you will be terminated. And you will lose your client base.’ You may have a couple of thousands [of clients], all gone overnight! All gone, evaporated into thin air.”

“The manager came to us to tell us there’s a deadline to sign,” Mr Leong, another FC, said.

Mrs Lee, who has been with the company for more than 10 years, recalled, “We had messages coming from our general manager: if you don’t sign, you’re not going to get your cheque, and you’re going to be out of a job. Most of us signed because we had to answer to our customers, we have customers to serve, we have to be loyal to the customers, we have their interests at heart. That’s why we didn’t have a choice, our hands were tied.”

The FCs said they have tried ways and means to resolve the matter amicably the past one year – all to no avail. As they told TR Emeritus, they:

–       appealed to MOM but since this was a union matter, they were referred back to the union.

–       wrote to Lim Boon Heng, Chairman of NTUC Enterprise.

–       wrote to Diana Chia, President of NTUC under Lim Swee Say.

–       appealed to CPF Board.

–       wrote to PM Lee.

In their affidavit, lodged with the courts through their lawyer, M Ravi, the FCs said:

“This case raises profound disquiet, as the workers found their interests and [their] rights under the law trampled by their own Union in its negotiations that far better served the institution that was terminating the employment contracts rather than the Union members themselves.”

“As a result of the Union’s failure to provide fair representation of the Income FCs, these workers were indiscriminately laid on a Procrustean bed, to have their basic rights chopped away.”

It added:

“This case raises a question as to whether an employee of an NTUC Enterprise can receive fair representation from an NTUC-member Union. The lack of sincere advocacy on the part of the SIEU and their refusal to report the matter to NTUC for assistance even though SIEU was contractually bound to do so in the event that a grievance went unresolved, is a cause for concern.”

Judgement is expected by the end of the month.

Update – The case was dismissed by Justice Choo Han Teck, though he said the judgment should not prejudice any future legal action against Income or SIEU. He also ordered them to pay costs.

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