LTA contract awardee charged for breach of Employment Act

By Howard Lee
Last month, the Ministry of Manpower issued a media release to identify five companies in the construction sector that have been charged under the Employment Act (EA), one of which has been awarded a S$368 million contract by the Land Transport Authority.
The announcement by MOM, issued on 5 May 2014, indicated that:

“These cases came to light when MOM conducted proactive checks at construction work sites and feedback surfaced through workers and third-parties. Construction workers from three of the companies were found to have excessive working hours. Under the EA, working more than 72 hours of overtime a month is prohibited, except in certain exempted circumstances. Four of the companies had also failed to pay their workers on time, or had withheld their workers’ salaries or made unauthorised deductions from them.”

Of these five companies, Shanghai Tunnel Engineering Co. Ltd was found to have the most contraventions, with 47 charges laid against them. These include:

  • 19 counts under the EA for making deductions other than deductions authorised under the provisions of the Employment Act.
  • 12 counts under EA for not granting paid annual leave to employees who worked beyond 3 months of service.
  • 8 counts under EA for making employees work overtime beyond 72 hours a month without exemption.
  • 8 counts under EA for failure to provide paid holiday at gross rate of pay, where the employees were not working on that public holiday.

MOM indicated that the case against Shanghai Tunnel Engineering Co., Ltd is expected to be heard on 19 June 2014.
However, Shanghai Tunnel Engineering Co. Ltd earlier appeared in the news, when the LTA issued a media release on 27 May 2014, indicating that:

“The construction of Shenton Way station (T225) and its associated tunnels has been awarded to Shanghai Tunnel Engineering Co., Ltd at a contract sum of approximately S$368 million… They are currently involved in a number of LTA’s projects including the design and construction of Newton station and associated tunnels for Downtown Line 2, the construction of tunnels between Tampines East station and Upper Changi station for Downtown Line 3 and the construction of Gul Circle station and viaducts for Tuas West Extension.”

The two announcements were separated by a little more than a week – nine days, or seven working days to be exact.
If found guilty, Shanghai Tunnel Engineering Co., Ltd might face stiff penalties. Singapore’s Employment Act states that employers guilty of breaching the Act for pay matters, for instance, “shall be liable on conviction to a fine not exceeding $5,000, and for a second or subsequent offence to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 12 months or to both.”
Given the proximity of the two offence and the likely high penalties that Shanghai Tunnel Engineering Co., Ltd could face, TOC sent a few queries to LTA, asking:

  • If LTA aware that Shanghai Tunnel Engineering Co., Ltd was being investigated for the charged offences.
  • If LTA has a position on contractors who have been found guilty of flouting employment regulations, and if so what that position might be.
  • If LTA has a contingency plan in place to ensure that works continue on schedule, should the company be found guilty of these offences and have to face significant penalties.

At time of publishing, LTA has not replied. We will include the agency’s reply once we receive them.

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