New bond for hiring Indonesian maids unnecessary, says MOM

Maids being trained at an employment agency here. The new performance bond of $6,000 imposed by the Indonesian Embassy on employers here who hire maids from Indonesia took effect last month.
Maids being trained at an employment agency here. The new performance bond of $6,000 imposed by the Indonesian Embassy on employers here who hire maids from Indonesia took effect last month.ST FILE PHOTO

S'pore already has regulations to protect all foreign domestic workers, Jakarta told

The Indonesian Embassy's move to impose a new performance bond of $6,000 on employers who hire Indonesian maids here is unnecessary, Singapore regulators said yesterday.

The Ministry of Manpower (MOM) said in a statement that it has made clear to the Indonesian Embassy and the Indonesian Ministry of Manpower that Singapore already has a comprehensive set of regulations to protect all foreign domestic workers.

The statement comes after the Indonesian Embassy notified maid agencies here of the new performance bond, which took effect last month.

Since then, employers hiring a new Indonesian maid have been asked to purchase a performance bond guarantee from one of two insurers approved by the embassy and sign a standard employment contract. This entails a one-off $70 payment.

Employers will have to pay the full $6,000 only if they breach the terms of the employment contract issued by the embassy.

Employers who are renewing the passports of their current Indonesian maids or processing documents at the Indonesian Embassy may also be asked to purchase this guarantee and sign a new employment contract.

  • What employers should do

  • Q Who is affected by the new Indonesian Embassy performance bond requirement?

    A You are affected if:

    • You are hiring a new Indonesian maid; or

    • You are processing documents at the Indonesian Embassy for your Indonesian maid and you are asked by the embassy to purchase the performance bond guarantee.

    The Ministry of Manpower (MOM) said in its statement yesterday that the new performance bond for employers of Indonesian maids is not a requirement of the Singapore Government.

    It is also separate from the $5,000 security bond which MOM requires all employers to purchase for every maid hired, regardless of which country they are from.

    Q Where can I purchase the performance bond guarantee and what should I look out for?

    A According to the Indonesian Embassy's website, there are currently two approved insurers that provide the bond guarantee - AIG Asia Pacific Insurance and Liberty Insurance.

    The current terms in the bond contracts of AIG and Liberty enable the embassy to demand a sum of up to $6,000 from the insurer, without requiring proof that any breach of the embassy's standard employment contract for domestic helpers has occurred.

    Once the sum of up to $6,000 is paid by the approved insurers to the embassy, employers will have to repay the sum to the insurers upon demand. If employers fail to do so, the insurer can take legal action against the employer.

    Under the bond contracts of AIG and Liberty, employers cannot challenge the decision by insurers to pay the sum of up to $6,000 to the embassy.

    Q When will I get the letter from MOM? Where can I get a copy?

    A The letters will be sent by e-mail to employers by today. The hard-copy letters will take longer to reach all employers.

    If you wish to have the letter earlier, you can write in to MOM's e-feedback channel (https://services.mom.gov.sg/efeedback) and MOM will e-mail you a copy.

    Q If my performance bond is forfeited, can I refuse to pay?

    A In purchasing the bond guarantee from the insurer, you would have signed on and agreed to a set of terms and conditions. These require you to pay the sum of up to $6,000 back to the insurer if the embassy demands it.

    If you fail to repay the insurer, the insurer could take legal action against you.

The Philippine Embassy here has a similar bond that has been in place for more than two decades. Employers pay about $40 to an insurer if they go through a maid agency, in lieu of a $2,000 bond.

Ms K. Jayaprema, president of the Association of Employment Agencies (Singapore), said that as far as she is aware, the Philippines Embassy has not had to resort to bond forfeiture so far.

"MOM has a welfare system for foreign domestic workers which is well regulated. There are avenues for workers to complain, and action is taken against employers for abuse," she said.

"I believe that the Philippines Embassy sees value in the existing system and so they haven't had to exercise the bond forfeiture."

MOM said in its statement that the specific conditions under which the Indonesian Embassy may exercise the performance bond forfeiture are not clear. "There also appears to be a lack of mediation and dispute resolution process available to employers before the performance bond is forfeited," it said.

Mr Yeo Guat Kwang, chairman of the Centre for Domestic Employees (CDE), said that the centre has received feedback from employers who are anxious about the lack of clarity on these specific conditions.

"CDE would like to urge the Indonesian Embassy to make clear the conditions for forfeiting the bond, and more importantly, spell out the process for mediation and dispute resolution before the performance bond is forfeited," he said in a statement yesterday.

He also called for more clarity on how this new bond would bene-fit the maids, "as we are worried that this cost may be transferred to them unnecessarily".

MOM now requires employment agencies to explain the new bond to people who are looking to hire an Indonesian maid, and obtain written acknowledgement from them, indicating that they understand the implications before purchasing the bond guarantee or signing the Indonesian Embassy's standard employment contract.

MOM will also be issuing letters to all existing employers of Indonesian maids to urge them to read and understand the terms and conditions before purchasing the bond guarantee or signing the contract.

The letter notes, for example, that the Indonesian Embassy "does not need to show that you have done anything wrong to forfeit your bond".

It also says that if the employer does not accept the terms of the employment contract or the bond guarantee, they can consider alternatives, such as hiring a maid from another country or employing part-time help.

A version of this article appeared in the print edition of The Straits Times on May 09, 2018, with the headline 'New bond for hiring Indonesian maids unnecessary, says MOM'. Print Edition | Subscribe