Mustafa Centre further downsizes operations by repatriating migrant staff after expiry of work passes, slashing ‘sustenance allowance’ for certain local employees

Once hailed as a popular shopping destination among tourists and migrant workers in Singapore, Mustafa Centre now seeks to further downsize its operations in the wake of the COVID-19 pandemic’s impact on the economy.

Human Resources Director reported on Wednesday (2 September) that — in a memo seen by the website — Mustafa Centre will not be able to renew the work passes of its migrant staff members.

Mustaq Ahmad, managing director at Mustafa Singapore, indicated in the memo that the company will be paying its migrant staff one month’s basic salary and for their return ticket.

Local employees who have not been able to return to work since June — when the COVID-19 circuit breaker measures ended — will no longer be receiving their S$300 monthly ‘sustenance allowance’ starting next month, according to the memo.

Those who resign will not be subject to notice periods before doing so and will receive one month’s basic salary “as a token”.

He added that Mustafa Centre is working with the Singapore Manual and Mercantile Workers Union, the Employment and Employability Institute (e2i) and NTUC to help its staff search for and secure new employment.

Mustafa Centre’s plans to downsize in the memo were earlier reported by The Straits Times last Sunday (30 August).

Noting that the shopping centre is already abiding by strict safe distancing guidelines and operating hours, Mr Mustaq said that due to Singapore’s international borders still being shut, business may not “return to the pre-Covid days”.

ST reported, however, that the centre intends to resume its trademark 24-hour operations at some point.

Mustafa Centre was previously identified as one of the originating points of COVID-19 infections among migrant workers staying in dormitories, as the ones who had visited the shopping mall had likely passed on the virus to their dorm mates and co-workers.

Mustafa Centre investigated for alleged violation of Employment of Foreign Manpower Act in 2018

Two years ago, TOC reported on allegations of “cashback” practices made by former employees against Mustafa Centre.

Several former foreign workers spoke to TOC regarding the issue after their employment contracts were not renewed and their service was terminated due to their decision to file complaints to the Ministry of Manpower (MOM).

Mr Abdul Haq Siddique, a former Senior Sales Executive at the jewellery department at Mustafa Centre, said that he had observed the “cashback” practice taking place from the moment he received “the very first salary”.

He expressed shock and disbelief over Mr Ghouse, the Human Resources (HR) Manager’s instruction to return part of their salaries as a form of “cashback” without good reason.

This led him to make a query to Mr Mustaq Ahmad, a shareholder and director of Mohamed Mustafa & Samsuddin Company Pte Ltd (MMSCPL) that owns Mustafa Centre. Mr Mustaq allegedly responded by saying “What he [Mr Ghouse] asks [you to do], you follow”.

“Every month, when I got my salary (as declared in MOM application) in my bank account, Mr Ghouse and sometimes Ms Nafisah [the HR Assistant] asked me to bring the cashback amount to him.”

“I used to bring the cashback amount by withdrawing [money] using my OCBC ATM card and giving to Mr Ghouse, or to Ms Nafisah in the absence of Mr Ghouse.”

“The cashback amount was S$600 to S$1000 every month, depending on if I worked on my off day,” said Mr Abdul.

Mr Abdul said that he was not the only one who had to pay the “cash back”.

He added: “I had been paying the cashback until October 2017 when the HR department stopped taking cashback due to the Mustafa families’ legal dispute.”

It was alleged that only the salaries of the family members of Mr Mustafa and that of Mr Samsuddin working for the company were exempt from the “cash back” practice.

In a civil suit against Mr Mustaq and his family, the late Mr Mustafa’s second family, led by Mr Ayaz Ahmed, who is one of Mr Mustaq’s three half-brothers, made the allegation of Mr Mustaq’s involvement in the false declaration of Mustafa Centre’s migrant workers’ salaries as a part of their pleadings:

Over the years, the 1st Defendant [Mr Mustaq] caused MMSCPL to overstate the salaries of its employees in its applications for their work passes. They plead that the difference between the “declared salaries” and the actual salaries of the workers was collected from the workers each month and passed to the 1st Defendant, who kept them for his own benefit.

The civil suit claims that Mr Mustaq had “diluted the interests” of his step-family as the “beneficiaries of the Mustafa estate” through “two share allotments” that have increased Mr Mustaq’s stake in the company.

All of the former workers TOC spoke to suggested that the alleged “cash back” practice was the reason why the practice of “cash back” collection was ceased.

However, the joy of not having to pass the excess cash back to the company was shortlived, as S-Pass employees were informed via a piece of orange-coloured A4 sized notice letter put up in the office that there will be no more renewals of S-Passes for workers holding the pass.

Mr Abdul said: “On 28 May this year [2018], the S-Pass holders working for the Mustafa company were told that their passes will not be renewed, as their manpower costs for S-Pass holders have increased due to the cessation of cashback collections.”

He added: “After that, I wrote an email to the top management, as well as to Mr Mustaq, regarding the non-renewal of [our] S-Passes.”

“To date, they did not reply to the email I sent,” he said.

Another former employee of Mustafa, Mr Gopal, also confirmed Mr Abdul’s experience in seeking clarification regarding the non-renewal notice on their S-Passes:

We went to our General Manager and asked him [for] his advice, and we came to the point of sending our request through email to the top management, which includes all the board of directors and bosses, informing them about how we got trapped for the cash back scam and about the ongoing problems related to the non-renewal of S-pass holder.

I sent my email on 30 May 2018, expecting a reply from them or assurance from them about renewal of S pass. Instead, we (a colleague and I) got terminated without any reason.

When asked if he had heard anything from food and beverage staff regarding the renewal of the S-Passes of workers who supported the company in giving false testimonies to MOM, Mr Abdul said: “They are giving lollipops . . . [It is as though they are telling the workers that] If you do not speak the truth, I will give you [S-Pass] renewals.”

He hopes to achieve “justice” from his predicament, and appeals to his “friends [who are currently still] working in Mustafa” to “please come and speak the truth”.

 “Don’t be afraid of these people . . . They have been suppressing us for so many years,” he said as a message to his former colleagues.

He also urged “the people of Singapore to stand for justice too”, adding that he believes that MOM will conduct a fair inquiry on the matter.

“This [the cashback practice] is a matter of fraud … by a large company in Singapore … [There is also the] violation of income tax department [by the alleged tax evasion] … Illegally collecting money, laundering money … No one knows where the money goes to,” he lamented.

According to Mr Abdul at the time, there were about 100 S-Pass employees at Mustafa Centre who were facing the same situation.

When asked who will replace the employees if their S-Passes are not renewed, the former employees shared that there were plans to hire Malaysians to replace those whose employment has been terminated.

As the S-Pass status of Mr Abdul and other former employees have either expired or been terminated, they were issued with Special Passes issued by MOM to assist in the investigation at the time.

While they were allowed to seek alternative employment during the investigation, which would take months if not years, MOM informed them that they can only take jobs in the construction industry, as they are Indian nationals.

When queried by TOC on the claims made by former employees of Mustafa Centre, MOM replied: “MOM has received complaints that Mohammed Mustafa & Samsuddin Co. Pte Ltd may have infringed the Employment of Foreign Manpower Act. Investigations are on-going.”

TOC understands from those involved that MOM has not gone down to Mustafa to look for any documentation evidence at the time the report on 3 August 2018 was published.

According to the Employment of Foreign Manpower Act, employers who are found guilty of making a false statement or providing false information in any application or renewal of a work pass will face a fine of up to S$20,000, or imprisonment for up to 2 years, or both.

TOC has sought a response from MOM regarding the ongoing investigations and will post an update when the Ministry responds.

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