High Court: Migrant worker should be paid basic salary as stated in In-Principle Approval (IPA) letter

A High Court judge has ruled that a migrant worker should be paid the basic salary stated in the in-principle approval (IPA) letter he got before coming to Singapore and that without any other written agreement by both employer and employee, the letter was the document to follow.

Justice Lee Seiu Kin made the point in written grounds for his decision against department store company Haniffa, which was ordered to pay $6,500 in owed salary and payment in-lieu of notice to China national Liu Huaixi, 43.

Mr Liu worked as a warehouse assistant and supermarket storekeeper at Haniffa from April 2014 to March 2016.

The order was given by judge to Haniffa in February 2017, while the written grounds for the decision was released on the Supreme Court website on 1 November.

Ministry of Manpower (MOM) hands the IPA letter to the companies after their work permit application is approved and they must send it to the foreign worker before he departs for Singapore.

According to the letter received by Mr Liu, he would receive a basic monthly salary of $1,000, however, he was given a basic salary of $680.

He then lodged a claim to the Commissioner for Labour in 2016, however, his appeal was dismissed, which he then lodged another claim to the High Court.

Head of litigation and dispute resolution at TSMP Law Corporation, Mr Melvin Chan, which represented Mr Liu pro bono, stated that the decision is important as it shows that without a written contract agreed on by both parties, the amount in the IPA letter is what the worker should get.

“It establishes a certain enforcible right for the worker,” he added.

An employer can reduce a worker’s basic monthly salary to a sum lower than that stated in the letter only with the written consent of the worker by law and then has to inform MOM’s Controller of Work Passes in writing.

According to The Straits Times, Mr Liu, who is now a driver at cement company Holcim, had received the $6,500 from Haniffa and is satisfied with the decision.

Haniffa’s lawyer Mirza Mohamed Namazie said that during an online interview, the two parties had reached an oral contract in which Mr Liu would be paid $1,300 a month, comprising of $680 in basic pay, $200 in housing allowance and the rest as overtime pay.

He also presented a payslip of a Chinese worker in a similar role which showed his basic monthly salary was $680.

However, as there was no documented version of the contract, Justice Lee said that the only objective evidence available was the IPA letter.

He then said that referring to its purpose, as set out in parliamentary debates, it is to ensure foreign workers are informed of their salary components in clear terms and to place a greater part of the responsibility of hiring foreign workers on employers, reducing the reliance on middlemen.

Justice Lee then said that the court would take the declaration of the basic monthly salary in the IPA letter as factual based on those consideration.

He said, “I would go so far as to state that even if there was a written contract of employment which provides for a monthly basic salary of less than the sum stated in the IPA, the burden would lie on the employer to show why the IPA figure does not reflect the true salary.”

Non-Governmental Organisations (NGO)s who focus on helping migrant workers were delightful for the decision. Head of research at Transient Workers Count Too, Mr John Gee, said, “The IPA letter should be the new standard when there is no written contract.”

Jolovan Wham, a migrant rights activist, wrote on his Facebook account, “The court has ruled that employers cannot so easily lower a worker’s salary after it has been declared to MOM. Migrant rights groups have been advocating this for some time already. Congrats to the lawyers at TSMP and Luke Tan, Jevon Ng and Desiree Leong of HOME: Humanitarian Organisation for Migration Economics for helping set this important precedent.”