Keppel Shipyard explains why workers were not paid

[UPDATE on Friday, 14 February at 1:20pm: Adding details from MOM, Keppel]

Local conglomerate Keppel Shipyard has explained why 120 workers who nearly went on strike last month were not paid their salaries for as long as three and a half months.

The Migrant Workers’ Centre reportedly said it stepped in to convince the 100 Bangladeshi and 20 Indian shipyard workers not to go on strike in January, after they said their employer, Akash Engineering and Technology, had not paid them.

Singapore's Ministry of Manpower (MOM) is also investigating Keppel as it may have infringed its responsibilities as a sponsoring shipyard to Akash, which works solely for Keppel. Akash is also being probed for possible breaches of the Employment Act.

Responding to queries from Yahoo Singapore, a spokesperson for Keppel said they first discovered that Akash's workers were not getting paid in the third week of November last year, during a routine salary audit.

"When we realised that Akash was facing some cashflow issues, we took immediate steps to expedite the setllement and payment of bills to Akash to enable them to make the salary payments to their workers," she said.

"Unfortunately, the first settlement amount did not reach the workers. When we discovered this situation in the following month, we immediately expedited the settlement and payment of a second set of bills to Akash," she added.

Asked why Akash, which has been working as Keppel Shipyard's steel work subcontractor for more than five years now, was not paying its workers, the spokesperson said its cashflow issues stemmed from a change in the company's ownership.

"Due to the change, Akash had to wait for new external funds for their operations," she said. "The moment we discovered their cashflow issue, we helped by expediting the settlement and payment of their bills, with the understanding that the money will go toward payment of the workers' salaries."

After MOM informed them on 15 January that Akash's workers were still not paid despite the payments they had given to Akash, Keppel made two direct salary payments to them -- the first between 15 and 16 January and the second on 7 February.

"The welfare of our employees and workers, whether direct or indirect, is our top priority, hence we deeply regret this matter involving one of our resident subcontractors," she said.

Spokespersons for the ministry said they first discovered the case of unpaid salaries on 15 January. That day, they visited the affected workers, telling them they were looking into it.

A spokesperson for Keppel said after they were notified of the continuing nonpayment, they "immediately stepped in" to pay the workers directly. This was confirmed by the MOM officers who returned the next day.

MOM said Keppel is expected to extend the same level of care for Akash’s employees as it would for its direct staff, even though Akash's workers were not directly hired by them.

This, in turn, means that Keppel has an obligation to ensure that Akash complies with prevailing laws and regulations, even if it calls for them to step in to pay the salaries of the latter’s employees, added the ministry.

In ST’s previous report on the impending shipyard workers’ strike, a representative for Akash was quoted as saying that “only some payment was outstanding”, and that he did not see any issues because “everything (had) been sorted out”.

He also reportedly claimed that the company was not in any financial trouble.

The last strike that took place was in late November 2012, when more than 170 SMRT bus drivers from China stayed in their dormitories and would not report for work, in protest against unequal pay and poor living conditions. Five of the drivers were charged, jailed and deported, with a further 29 being deported and another 150 issued police warnings for their involvement.

The last legal strike that occurred in Singapore was in January 1986, when then-President Ong Teng Cheong officially sanctioned for a group of shipyard workers because he felt that their management was taking advantage of them.