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reclaiming unpaid salary + expenses?

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Thrandos
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reclaiming unpaid salary + expenses?

Postby Thrandos » Mon, 03 Jun 2013 7:59 am

I've come to these forums because i find the people here very knowledgeable and the replies well thought out.

The company I work for has not paid my cpf for about a year and my salary has been unpaid for about 4 months. I would like to know my avenues of redress and hopefully see some of my money.

I have approached CPF and MOM and await their reply, however it is my understanding that their ability to reclaim what is owed to me is very limited given the current financial status of the pte ltd company. It barely has any assets and the bank account is in the red. It is unlikely that they will even recover 5% of what I am owed. I have been reading up and it seems that there are certain cases in which the law will disregard the concept of "seperate legal entity". Such as in the case of "trading while insolvent" or "fraudulent/wrongful trading".
What criteria must be met before such action can be taken?
I would assume withholding of CPF and salary is a starting point to prove that the company has been insolvent for a while yet the director has continued to "trade"?
Further more if I can prove that said director lied to cpf to avoid paying cpf, would that constitue fraudulent trading?

Does it look like I will have a legal case against this company? or will the worst thing that happens be the company closes down and i never see a cent?

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Postby sundaymorningstaple » Mon, 03 Jun 2013 8:26 am

You will probably never see all of it, but eventually, you might see some of it. The company will have to be wound up (either voluntarily or instigated). Salaries and CPF contributions will be paid out of any proceeds in the liquidation of the company and collection of any outstanding receivables. After these things are paid (Salaries first then CPF) if there is anything left then remaining creditors (who put their hands up in the beginning of the receivership) will be remitted xx cents on the dollar of any remaining funds. Unfortunately, physical assets are worth next to nothing and it doesn't sound like there are any other type of assets either.

In Singapore, I believe, the directors can be held liable if they were instrumental in any illegal/improper dealings, but this may well have to be dealt with in a civil court. I'm not a lawyer so don't really know, although I was instrumental in winding up my first employer in Singapore while on an EP. The Australian owner/director hired me as GM and went to Australia (never to return as she was afraid they would impound her passport). While down there she asked me to become a director (a week after hiring me), to which I said no. Afterwards, I started delving into the financial status of the company and had a major shock. No assets and half a million in debt, Income taxes not paid for several years and other major problems with arrears CPF although salaries had been paid. Unfortunately, try as I might, I was not able to turn it around as she had run it far to deep in the red. I was not required to handle the winding up of the company as I was not an officer but with a letter of indemnity from the owner, I acted on her behalf to assist the court receivers. It took some 3 or 4 years and one day I had a massive posting in my CPF account of all my arrears CPF that had not been paid. It took a while but eventually, enough of the receivables had been recovered to cover 100% of the CPF arrears, albeit I lost any interest that would have been earned on it had it been timely credited to my CPF account.

So, my best advice to you is if you are not the only "victim" is to gather all together and see a lawyer who can give you direction. I also understand that if the Director has deliberately broken the law that the local law will disregard to concept of "seperate legal entity" as well. If you are talking about a year's CPF & 4 months wages, I'd not wait until the director has left the country as that is what will probably happen (as in my case).

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Postby PNGMK » Mon, 03 Jun 2013 11:40 am

sundaymorningstaple wrote:You will probably never see all of it, but eventually, you might see some of it. The company will have to be wound up (either voluntarily or instigated). Salaries and CPF contributions will be paid out of any proceeds in the liquidation of the company and collection of any outstanding receivables. After these things are paid (Salaries first then CPF) if there is anything left then remaining creditors (who put their hands up in the beginning of the receivership) will be remitted xx cents on the dollar of any remaining funds. Unfortunately, physical assets are worth next to nothing and it doesn't sound like there are any other type of assets either.

In Singapore, I believe, the directors can be held liable if they were instrumental in any illegal/improper dealings, but this may well have to be dealt with in a civil court. I'm not a lawyer so don't really know, although I was instrumental in winding up my first employer in Singapore while on an EP. The Australian owner/director hired me as GM and went to Australia (never to return as she was afraid they would impound her passport). While down there she asked me to become a director (a week after hiring me), to which I said no. Afterwards, I started delving into the financial status of the company and had a major shock. No assets and half a million in debt, Income taxes not paid for several years and other major problems with arrears CPF although salaries had been paid. Unfortunately, try as I might, I was not able to turn it around as she had run it far to deep in the red. I was not required to handle the winding up of the company as I was not an officer but with a letter of indemnity from the owner, I acted on her behalf to assist the court receivers. It took some 3 or 4 years and one day I had a massive posting in my CPF account of all my arrears CPF that had not been paid. It took a while but eventually, enough of the receivables had been recovered to cover 100% of the CPF arrears, albeit I lost any interest that would have been earned on it had it been timely credited to my CPF account.

So, my best advice to you is if you are not the only "victim" is to gather all together and see a lawyer who can give you direction. I also understand that if the Director has deliberately broken the law that the local law will disregard to concept of "seperate legal entity" as well. If you are talking about a year's CPF & 4 months wages, I'd not wait until the director has left the country as that is what will probably happen (as in my case).


Excellent post SMS - and more backing as to why I turned down the offer to open an entity for my employer in Singapore.

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Postby Thrandos » Mon, 03 Jun 2013 5:45 pm

Well this is my first full-time job and I'm pretty disgusted with how this turned out and I want to make sure I get as much of my money back as possible considering how hard I worked.

This being my first job also means I can't really afford legal counsel so I'm considering my options with CPF and MOM first and seeking free legal aid. Althought as I said given the current status of the company means that their normal avenues of reclaiming my money will be mostly inadequate. I dont think there are many receivables (if any) that the company can collect.

I do have a few issues though.
1. I failed to keep a copy of the signed employment contract when I left the company.
2. Naive enough not to know about pay-slips and have never been issued one by the company.
I may have shot myself in the foot with the above but I'm hoping I kept enough evidence to prove my employment and salary.
I do have an unsigned copy of my employment contract, record of payments made to cpf during the eariler part of my employment and an email that acknowledges my last day of work with the company. I also have copies of the company's bank statements and accounts submitted to acra that show salary was paid to me. Will that suffice as evidence of employment? I hoping I have enough that my boss cannot claim plausible deniability or whatever the term is.

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Update: Good News

Postby Thrandos » Fri, 13 Dec 2013 5:49 pm

Thanks sundaymorning for the help.

This is all finally coming to a good close(for me anyways).

The summary is a follows,

Back in July I filed a complaint with CPF stating that I had been owed a year's worth of CPF and that my ex company refused to pay my CPF.

Their investigations took a while and my ex-boss even had to balls to claim to them that I was not employed with the company for the period stated.
(He had previously written in to CPF to claim that there were no employees in the company. I was informed of this, but I was assured that he would contribute everything back into my CPF once the company had more money. The company still continued to deduct my employee's contribution from my salary through-out the time I was working with them and my salary was written into the accounts as consultant fees.)
Fortunately for me, before I left the company I made copies of all the records of the bank statements and financial statements. With the evidence provided, CPF was able to determine that there was an employer-employee relationship and that my "consultant fees" were considered a salary and therefore contributions had to be made into my CPF.

With this part of the investigation complete CPF then confronted my ex-boss and it was only then he finally gave in and admitted that I was actually working for the company. Although he would still try to claim that that my employee contribution was not deducted from my salary. Fortunately, once again I had enough evidence on my side to prove otherwise.

With the results of the investigation by CPF, I went to MOM to claim my unpaid salary. I still had a draft copy of my employment contract, that combined with CPF's investigation proved that I was employed by the company and was owed salary, as such they arranged a date for me in labour court.

A week before labour court, I get a call from someone working for him, asking if I would like to settle this amicably, without going to labour court. I was then offered a monthly repayment that would take 30 months before saw my salary paid in full! Obviously, no one in their sane mind would wait 30 months to get repaid a few months worth of salary.

Come labour court day, I presented my case to the Assistant Commissioner of Labour in the absence of my ex-boss. They had sent him 3 letters to attend court so I can only assume he chickened out. The court ruled in my favour and order my ex company to pay the salary owed to me.

Only after threat of legal action of freezing the company's accounts and rounding up the company did my ex-boss finally pay my salary in full.

I received my worth of salary back in October
CPF had to chase him for months and only after a letter to attend court was sent, did they finally receive a cheque for my CPF contributions.



Some Lessons we can take away are:
1. Always keep your signed copy of the employment contract.
2. Keep all details of your transactions with the company on file. You never know when you'll need it, hopefully you never will...
3. Doesn't matter how close you are with your boss. Even if he is your friend Don't take their word for it. Always have things down in writing. Consider it a form of good communication, have agreements written down so that both parties have a good understanding of what exactly is being agreed upon. Also if he's intent on keeping his word, then he will have no problem agreeing to it in writing.
4. Try not to work for a scumbag boss. I worked my ass off to give my ex-company its only competitive advantages to date and when financial trouble hit, I allowed him to put my salary on hold so that company could continue. When things got really bad, I was dropped off like I didn't mean a thing. Worse still, I was still owed months of salary when I left...
If something about your boss doesn't feel right at the start, take heed of what your intuition is telling you.

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Postby sundaymorningstaple » Fri, 13 Dec 2013 6:16 pm

Thrandos,

Thank you very much for the detailed blow by blow. This is interesting and also noteworthy for any new employee to understand. Black & White, with signatures affixed are essential unless there is enough of an electronic trail (which you were able to piece together admirably). Once CPF got involved, it would be a foregone conclusion that MOM would also see it as the employee-employer relationship. Fortunately, there were actually enough assets to cover. Which, it sounds to me, like he was just trying to screw you, thinking you were just off the boat as it were. I'm glad some of what you picked up here may have been of some benefit. It's nice to see someone actually win against local employers.

Your three points are the end are essential reading for all. There importance cannot be stressed enough. It's one lesson you wont forget!

Congratulations, and thank you for coming back and letting us all know.

Cheers
sms

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Postby JR8 » Fri, 13 Dec 2013 6:21 pm

^+1, fascinating reading, and wonderful result! :)


p.s. It reminds me again how, rather than hiring a lawyer for $$$, trying to get a statutory/govt agency to assist you or indeed pursue your case on your behalf (in an ideal world), is so much simpler. [Similarly try and avoid direct disputes with any nuisance condo neighbours, get the Management Office to prosecute action on your behalf].

I..e. if you'd have hired a lawyer I expect you'd have been to and fro for months, incurring lawyer's bills all the way. But with CPF/MoM on the case... perfect!


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