Pastry chain Twelve Cupcakes pleads guilty to underpaying foreign employees for nearly two years

Twelve Cupcakes pleaded guilty to 15 charges of underpaying the employees in 2017 and 2018. ST PHOTO: TIMOTHY DAVID

SINGAPORE - For nearly two years, home-grown cupcake chain Twelve Cupcakes underpaid seven of its foreign employees, even short-changing one worker by about half the wages at times.

On Thursday (Dec 10), the company pleaded guilty to 15 charges of underpaying the employees in 2017 and 2018, an offence under the Employment of Foreign Manpower Act.

Fourteen other similar charges will be taken into consideration by District Judge Adam Nakhoda during sentencing, which is expected to take place on Jan 7 next year.

Twelve Cupcakes was founded by radio DJ Daniel Ong and former model Jaime Teo in 2011 and acquired for $2.5 million by Kolkata-based Dhunseri Group in 2016.

Court documents state that all seven employees were S-Pass holders at the time of the offences. It is not stated if they are still working for the company.

While their fixed monthly salaries ranged from $2,200 to $2,600, they were instead paid about $1,400 to $2,050 by the company.

The court heard that Twelve Cupcakes underpaid six of the employees - who were in customer service and sales roles - their December 2016 to September 2018 wages.

One of these six workers was also underpaid the October and November 2018 wages.

The company also paid less than the fixed monthly salary for January 2017 to September 2018 due to the remaining employee, a pastry chef.

Court documents state that Twelve Cupcakes had initially credited the reduced salaries to the employees' bank accounts.

But they later changed tactics, paying the workers their full salary from May 2018 onwards but then telling the employees they had to return a portion to the company in cash.

Twelve Cupcakes had done so to conceal a paper trail of its offences, said Ministry of Manpower prosecutor Maximilian Chew in urging the court to impose a fine of $127,000.

He said that Twelve Cupcakes would have continued underpaying the employees if the offences had not been discovered.

The prosecutor also said that Singapore is heavily reliant on foreign employees in many sectors, including the food and beverage industry.

There was therefore "enormous public interest" in holding companies accountable for their welfare, including paying their salaries fully and promptly, he added.

Defence lawyer Selvarajan Balamurugan said in mitigation that his client had made full restitution to the employees even before court proceedings started.

For each offence involving underpaying its foreign employees, a company may be fined up to $10,000.

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