First firm to claim trial for CPF default fined

First firm to claim trial for CPF default fined
When most companies are hauled to court for failing to pay their employees' Central Provident Fund (CPF) contributions, they plead guilty and pay the composition fines.
PHOTO: The Straits Times

When most companies are hauled to court for failing to pay their employees' Central Provident Fund (CPF) contributions, they plead guilty and pay the composition fines.

Not Alife Air Automobile, the only automobile manufacturer here. The company, represented by entrepreneur Devan Nair, 56, decided to fight charges that it failed to pay the October 2015 CPF contributions of three workers.

District Judge Shawn Ho, in decision grounds issued earlier this month, noted: "According to the prosecution, this is the first criminal trial in Singapore against a CPF company for not paying CPF contributions to its employees."

Home-grown Alife launched a scooter in 2015 that retailed for about $4,900.

Mr Nair, who represented Alife at the trial, argued the company was unable to pay the CPF contributions for October 2015 as it could not ascertain their exact salaries.

He claimed that files and attendance records had been retained by the landlord.

Before paying the employees' CPF, Mr Nair said the company needed to determine if they had taken unpaid leave in October 2015.

However, the judge was not convinced, saying the company did pay the salaries of the three workers for October 2015, but not the CPF component.

He pointed out that the company had paid the employees' CPF contributions for November and December 2015.

"Even assuming that the company's files had been retained by the landlord, it is undisputed evidence that the office was locked up only in December 2015, whereas the CPF contributions for October 2015 were already due in mid-November 2015, before the office was locked up," he added.

Deputy Public Prosecutor Selene Yap sought a $1,500 fine per charge while Mr Nair in mitigation urged the court to consider the company's difficult financial circumstances.

District Judge Ho underscored the seriousness of the charges, citing then Manpower Minister Tan Chuan-Jin's remarks in Parliament in 2012 that there are employers who wilfully flout the law to reduce business costs.

The judge convicted and fined the company $1,500 per charge, the total being $4,500, and ordered arrears of CPF contributions and interest amounting to $42,320 to be paid.

"The Central Provident Fund is the cornerstone of Singapore's social security structure. Employees employ the CPF for home ownership, healthcare and retirement needs. Accordingly, the CPF plays an integral part in their lives," he wrote.

vijayan@sph.com.sg


This article was first published on Feb 28, 2017.
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