In-principle approval letters can be evidence of foreign workers' rightful pay: Judge

SINGAPORE - 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 received before coming to Singapore.

Justice Lee Seiu Kin said that without any other written agreement by both employer and employee, the letter was the document to follow.

He made the point in the written grounds for the decision he made against department store company Haniffa, who was ordered to pay $6,500 in owed salary and payment in-lieu of notice to China national Liu Huaixi.

Mr Liu, 43, had worked as a warehouse assistant and supermarket storekeeper at Haniffa from April 2014 to March last year.

The judge had given his order to Haniffa in February and last Wednesday (Nov 1), the written grounds for his decision was released on the Supreme Court website.

Companies receive an IPA letter from the Ministry of Manpower (MOM) after their work permit application is approved. They must send it to the foreign worker before he departs for Singapore.

Mr Liu's letter had stated he would receive a basic monthly salary of $1,100. Instead, he was given a basic salary of $680.

He appealed to the High Court after the claim he lodged with the Commissioner for Labour last year was dismissed.

Mr Melvin Chan, head of litigation and dispute resolution at TSMP Law Corporation - the firm which represented Mr Liu pro bono - said 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 receive.

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

By law, an employer can reduce a worker's basic monthly salary to an amount lower than that stated in the letter only with the written consent of the worker.

The employer then has to inform MOM's Controller of Work Passes in writing.

Mr Liu, who is now working as a driver at cement company Holcim, told The Straits Times on Thursday (Nov 9) he had received the $6,500 from Haniffa and is feeling satisfied that he won the case.

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

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

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

Referring to its purpose as set out in parliamentary debates, he said 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 rather than on the middlemen.

Based on this, Justice Lee said the court would take the declaration of the basic monthly salary in the IPA letter as factual.

"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," he said.

For example, an employer could show the IPA letter states a different sum from that submitted in the work permit application, or admit he had made a false declaration in the application, he added.

The decision was cheered by non-governmental organisations helping migrant workers. They often come across similar cases of a large discrepancy between what a worker is promised before he migrates and what he is paid later, they said.

Said Mr John Gee, head of research at Transient Workers Count Too: "The IPA letter should be the new standard when there is no written contract."

Migrant Workers' Centre chairman Yeo Guat Kwang foresees fewer such cases because since last year, the law requires key employment terms to be given in writing.

Humanitarian Organisation for Migration Economics (Home) said it has seen more than 100 cases this year in which workers' salaries were less than the amount declared in their IPA letters.