Manager also received kickbacks from foreign workers in exchange for employment
A Singapore Magistrate's Court recently dealt with a case involving a management member who was charged with making false declarations about employees' salaries in work pass applications and receiving kickbacks from foreign employees in exchange for employment.
The accused, who worked as a human resource manager for a logistics company, faced 12 charges under the Employment of Foreign Manpower Act (EFMA) for knowingly making false declarations about the salaries of employees in Special Pass (S Pass) applications submitted to the Controller of Work Passes between May 2014 and March 2017.
The logistics company, which primarily focused on the deployment of motorcycle couriers for work with financial companies, employed a significant number of foreign workers as dispatch riders.
Background of the case
According to records, in addition to the false declaration charges, the HR maanger pleaded guilty to three charges of receiving money from foreign employees as a condition for their employment, which is an offence under the EFMA.
She admitted to collecting sums of money from foreign applicants through an ex-employee who had returned to Vietnam. The ex-employee would communicate with interested applicants and collect the money on the HR manager’s behalf before transferring it to her bank account. Seventeen other charges were taken into consideration for sentencing purposes.
The prosecution alleged that the HR manager was aware that variable components of salary, such as overtime payments, should not be included when calculating an employee's fixed salary.
They argued that the HR manager had intentionally inflated the declared salaries to ensure that the S Pass applications would meet the Ministry of Manpower's (MOM) minimum salary thresholds and be approved.
The prosecution highlighted that she faced substantial pressure from the company's management to hire more workers to generate more profit.
On the other hand, the defence maintained that the employees' salaries were accurately declared, claiming that the declared salaries included basic salary, fixed allowances, and payments for "McDonald's runs" and "credit card runs."
The HR manager asserted that these additional duties were part of the employees' salary packages and were fixed in nature. The HR manager claimed that she had continued the practices of her predecessors and had sought clarification from MOM regarding the inclusion of overtime payments in the declared salaries.
False declarations in S Pass applications
During the trial, the prosecution called several witnesses, including the investigation officer, the HR manager's superiors, and the affected foreign employees.
The investigation officer testified about the discrepancies between the declared salaries and the actual salaries received by the employees, as evidenced by their payslips and employment contracts.
The payslips indicated that the salaries received by the employees in the months following the S Pass applications were lower than the declared salaries unless variable components like overtime and "McDonald's runs" were included.
The HR manager’s superiors provided insight into the company's practices and the former’s role in the hiring process. The general manager testified that he was unaware of the specific S Pass threshold salary at any point in time and left the applications and the amount of fixed salary to be declared to the HR manager.
He acknowledged that there was a shortfall between the salaries stated in the letters of employment and the declared S Pass salaries and that the company offered extra work like McDonald's deliveries to increase the employees' salaries to match the S Pass minimums.
The foreign employees who were called as witnesses corroborated the prosecution's case, stating that their received salaries were lower than the declared amounts unless variable components like overtime and "McDonald's runs" were included.
They testified that they were aware of their fixed monthly salaries at the time of signing their employment contracts, which were lower than the salaries declared in the S Pass applications.
The HR manager, testifying in her own defence, claimed that she had continued the practices of her predecessors and had sought clarification from MOM regarding the inclusion of overtime payments in the declared salaries.
She maintained that the declared salaries were accurate and that any shortfall was due to the employees not completing the required hours of "McDonald's runs." The HR manager argued that the "McDonald's runs" were part of the employees' salary packages and not considered overtime work.
Court’s findings against the HR manager
After considering the evidence presented, the court found that the prosecution had proven beyond a reasonable doubt that the HR manager had made false declarations about the employees' salaries.
The court rejected her defence, stating that:
"I am unable to accept the defence that the accused had thought that McDonald's deliveries constituted an additional fixed component of the salary that was unstated in the letters of employment or payslips issued to the relevant employees, since payment depended on the number of hours worked."
The court also found that she was aware of the difference between fixed and variable salary components, as evidenced by the deductions made from employees' salaries when they failed to complete the required hours of "McDonald's runs."
The court agreed with the prosecution that there was exploitation of the employees, stating:
"I agreed that there was exploitation of the relevant employees insofar as [they] were told that they were required to put in significantly longer hours to make up the salary declared, through variable compensation for additional work such as for McDonald's deliveries."
Ultimately, the court convicted the HR manager of the false declaration charges, emphasising the materiality of the false declarations and her deliberate actions:
"What was material was that the accused had made a deliberate decision to over-declare the salaries of the employees. The accused was also acutely aware that the fixed salary quantum was a material consideration to the MOM Work Pass Division's grant of applications for S Passes to foreigners intending to work in Singapore." Consequently, the court declared periods of imprisonment and penalties against the manager in its decision.
The court highlighted the severe consequences that employers may face for making false declarations in work pass applications and exploiting foreign workers. The HR manager’s actions not only violated employment laws but also undermined the integrity of the work pass framework.
As the court noted, "It is intrinsic to the entire legislative scheme which penalises certain conduct relating to work pass applications for foreign employees that the declarations relate to foreign workers. Thus, the fact that the declarations concerned foreign workers cannot be considered as an aggravating factor."
