Changi Airport's newest ground handler, Aircraft Service International Group (Asig), is being investigated by the Ministry of Manpower (MOM), The Straits Times has learnt.
Asig's former employees have alleged they did not receive overtime pay and were made to work long hours without enough breaks in between.
A spokesman for the ministry said: "MOM received feedback on this case and is looking into the matter."
Asig, which is already troubled by a shortage of workers, did not respond to queries from the paper. The US-based firm started servicing its first airline customer, Jetstar, a few weeks ago, but a lack of workers has led to major operational glitches.
About two weeks ago, more than a thousand Jetstar Asia customers were affected by major flight delays and cancellations, as well as baggage issues, because Asig did not have enough workers to handle passenger check-in and other ground-handling duties.
Rival Sats, which used to service Jetstar Asia flights until Oct 13, stepped in on Oct 16 to assist at the request of the airline. It is not known how long this interim arrangement will last.
Meanwhile, Sats has refuted a Straits Times report that it had offered Asig workers a "better deal", leading to staff leaving and disrupting operations in the process.
A spokesman for Sats, which had declined to comment when first asked, said last Saturday: "We have offered employment to only one Asig staff member who responded to our newspaper recruitment advertisement and will be joining us shortly... We have also rehired one former employee who returned on his own accord.
"We did not and cannot offer these staff special terms since Sats' remuneration for ground staff is based upon the collective agreement with our union."
As Asig struggles to boost its capabilities, it may face penalties including warnings, fines and prosecution in court if the current probe by MOM reveals it had breached the Employment Act.
If convicted of failure to pay overtime salary, an employer faces a maximum penalty of a fine of up to $15,000 and six months' jail, the ministry said.
This article was first published on November 3, 2014.
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