MOM clarifies Mustafa Centre’s cost-cutting measures are fairly implemented, but silent on the allegations of “cashback practices” made against the company

The Ministry of Manpower (MOM) on Wednesday (9 Sept) said that Mustafa Centre’s cost-cutting measures, including the downsizing of its migrant staff members, are fairly implemented.

The mall was previously closed on 2 April after it was identified as one of the originating points of COVID-19 infections among migrant workers staying in dormitories. It reopened partially in May while reducing its operating hours and implement safe distancing measures.

On 2 September, it was reported that the shopping landmark sought to reduce its operations due to the impact of COVID-19 pandemic on the economy.

In a memo, Mustafa Centre stated that it was unable to renew the work passes of its migrant staff members. The managing director, Mustaq Ahmad, said the business may not “return to the pre-COVID days” as Singapore’s international borders are still closed.

He noted that the company will pay one month’s basic salary to its migrant staff members and for their return ticket, adding that it will discontinue the S$300 monthly ‘sustenance allowance” for its local staff to reduce payroll costs.

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

Following that, MOM on Wednesday said that Mustafa Centre’s cost-cutting measures, including the downsizing of its migrant staff members, are fairly conducted.

The Straits Times (ST) reported that the Ministry is in touch with the company as well as the Singapore Manual and Mercantile Workers’ Union on the measures, which include the returning of its migrant staff members – whose work permits have expired – to their country.

“We note that the company obtained its union’s support on the cost-saving measures in view of the poor business situation,” MOM’s spokesman told ST.

The spokesman noted that MOM was informed of the company’s cost-cutting measures in March, and that Mustafa Centre had also declared to the Ministry that all of its Government support has been given to its staff members.

No update from MOM on the allegations of “cashback” practices made against Mustafa Centre since 2018

Though MOM has promptly clarified that Mustafa Centre’s cost-cutting measures are fairly implemented, it has yet to provide any update on the allegations of “cashback practices” made against the company in 2018.

Two years ago, TOC reported on the allegations of “cashback” practices made by former employees against Mustafa Centre. Several former migrant staff members came forward to reveal the issue after their employment contracts expired and their service was terminated due to their decision to file complaints to MOM.

Abdul Haq Siddique, who is a former Senior Sales Executive at the jewellery department at Mustafa Centre, said he had observed the “cashback” practice taking place since he received his “very first salary”.

Disbelief with Mr Ghouse’s – the firm’s Human Resources manager – unreasonable instruction to return part of their salaries as a form of “cashback”, Mr Abdul asked the director of Mohamed Mustafa & Samsuddin Company Pte Ltd (MMSCPL), Mr Mustaq Ahmad, on the matter.

But Mr Mustaq allegedly responded, “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,” said Mr Abdul.

The cashback amount was S$600 to S$1,000 every month, depending on whether he worked during his off day. Mr Abdul claimed that he was not the only one who had to pay the “cashback”.

“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 exempted from the “cashback” 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 “cashback” practice was the reason why the practice of “cashback” collection was ceased. However, 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.”

“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.”

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”.

“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.

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 [or 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.”

Two years have gone by now since the response from MOM, and only earlier this year that it went to seize documents from Mustafa Centre. As of today, the Ministry has yet to provide any update on the progress of its investigation.

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