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SINGAPORE: A representative of the confectionery company Twelve Cupcakes pleaded guilty on Thursday (December 10) to underpaying seven employees of around S $ 114,000 in total over two years.
For 15 charges under the Foreign Labor Employment Act, with 14 other similar charges taken into consideration, the prosecution is seeking a fine of S $ 127,000.
As mitigation, the defense said that the new owners, India-based Dhunseri Group, had reimbursed foreign employees the full sum owed to them.
He alleged that the new owners had continued the practice that was installed by the previous management: celebrities Daniel Ong and Jaime Teo.
Twelve Cupcakes was founded in 2011 by former DJ Daniel Ong and his then-wife, actress Jaime Teo. Dhunseri Group acquired 16 outlets from the couple in December 2016 and increased the outlets to 35 in Singapore today.
The court heard that the Ministry of Manpower (MOM) had conducted investigations in December 2018 against the firm after receiving information about violations of labor laws.
Investigations found that seven employees, ranging from sales executives, customer service executives and a pastry chef, had received S-Passes to work for the company.
According to the Foreign Labor Employment (Job Passes) Regulations 2012, employers must pay no less than the fixed monthly salary owed to the foreign employee during the month, and payment must be made no later than seven days after the end of the salary period.
The investigation found multiple violations of the law: Twelve Cupcakes had underpaid the seven foreign employees for approximately two years between December 2016 and November 2018.
They were promised fixed salaries of between S $ 2,200 and S $ 2,600, but they were given between S $ 200 and S $ 1,200 less than that.
OFFENSES HARD TO DETECT: MOM TAX
MOM Prosecutor Maximilian Chew requested a fine of S $ 127,000, noting that the crimes were difficult to detect and carried out over a considerable period of almost two years.
In addition, the company took further steps to hide the last part of its violation by crediting the agreed wages to employee accounts and then asking them to return the difference to avoid a document trail.
Had MOM not received the information, the company likely would have continued with the crimes, Chew said.
He added that the crimes were motivated by profits, noting a cost savings of around S $ 114,000 from underpayments the company made during the period.
The company “never intended” to make the agreed-upon payments, and such a “flagrant violation of the law should not be tolerated,” with a deterrent message sent to like-minded employers, he said.
Chew added that Singapore relies heavily on foreign employees in many sectors and that there is a “huge public interest” in holding employers accountable for their well-being, including prompt and full payment of wages.
INHERITED BUT NOT ACCEPTABLE PRACTICE: DEFENSE
Defense attorney S Balamurugan of K&L Gates Straits Law said his client agrees that such actions are not acceptable.
While it was the practice under the previous administration for foreign employees to receive less than their fixed wages, his client “agrees” that the firm should have discontinued the practice immediately when it acquired the business, the attorney alleged.
“In any case, he accepts his guilt,” he added.
He also emphasized that full restitution was made, although this was after the investigations began, as stated by the prosecution.
The restitution was made before it was imputed to the firm, showing that the company “has not shied away from taking responsibility at an early stage,” the defense said.
Since the incidents, there have been no salary issues for local and foreign employees despite difficult times, he added.
The judge postponed the sentence until January.
CNA has reached out to Daniel Ong and Jaime Teo.
