New S$6,000 performance bond for Indonesian domestic helpers is 'unnecessary', says MOM

New S$6,000 performance bond for Indonesian domestic helpers is 'unnecessary', says MOM

The Indonesian Embassy here has introduced a S$6,000 performance bond requirement on employers hiring foreign domestic workers (FDW) from their country, in a move Singapore believes is unnecessary, the Ministry of Manpower (MOM) said on Tuesday (May 8).

SINGAPORE: The Indonesian Embassy here has introduced a S$6,000 performance bond requirement on employers hiring foreign domestic workers (FDW) from their country, in a move Singapore believes is unnecessary, the Ministry of Manpower (MOM) said on Tuesday (May 8).

In an advisory to employers, MOM said that the new bond "is not a requirement of the Singapore Government", and is separate from the S$5,000 security bond that MOM requires all employers to purchase.

"MOM has made it clear to the Indonesian Embassy and the Indonesian Ministry of Manpower that the performance bond requirement is unnecessary given Singapore’s comprehensive regulatory framework to protect all FDWs," it added.

In its advisory, MOM said that the specific conditions under which the Indonesian Embassy may forfeit the performance bond are not clear.

"There also appears to be a lack of mediation and dispute resolution process available to employers before the performance bond is forfeited," MOM said. 

Indonesia is the second country to impose a performance bond requirement on their FDWs in Singapore. Employers of Filipino helpers have had to furnisheither a S$2,000 or S$7,000 bond to the Philippines Embassy in Singapore since 1996. The amount is dependent on whether the helper was a direct-hire or employed through an agency.

Director of employment agency Inter Great Chloe Khaw said the terms of the contract for the Philippines embassy bond is much clearer than Indonesia's.

"The Philippines embassy has made it very clear, the fine print is very clear. For Indonesia, if you read the insurer's terms and conditions, it's not very clear under what sort of conditions they will be forfeited," Mdm Khaw said.

"For the Indonesian embassy, only two insurers are underwriting it. But for the Philippines, it's open to more insurers. More than 10 for sure," she added. 

WHO'S AFFECTED?

According to the Indonesian Embassy’s circular sent to employment agencies, the performance bond requirement was supposed to take effect from February 2018, MOM said in an FAQ on its website. 

The new requirement will affect employers who are hiring new Indonesian FDWs, but only if they are asked by the employment agency to purchase the bond.

Existing employers of Indonesian FDWs who are processing documents - for example for renewal of passports - for their helpers at the embassy may also be asked to purchase the bond.

In its advisory, the MOM said that employment agencies here are obliged to explain to employers of Indonesian foreign domestic workers (FDWs) the implications of purchasing the new performance bond guarantee, and signing the Indonesian Embassy's standard employment contract.

Agencies are also obliged to obtain written acknowledgement from those employers.

"We will also be sending an advisory to all existing employers of Indonesian FDWs to urge them to read and understand the terms and conditions, before purchasing the performance bond guarantee or signing the standard employment contract.  If they have questions, they should seek clarification directly from the Indonesian Embassy," MOM said.

Employer Mahmud Ideh said that he may not renew his Indonesian maid's contract when it expires in six months if he has to buy the security bond guarantee. 

"I don't agree with paying extra because there are already policies and laws in place that protect the employer and maid. Is there any guarantee that if you pay this extra bond that the situation will be better? I don't think so," said Mr Mahmud. 

On the other side, another employer Lucy Seah said: "I do not mind paying the extra fee as I'm more comfortable with an Indonesian helper."

WHERE CAN EMPLOYERS BUY THE BOND?

The bond can be purchased from two approved insurers, AIG and Liberty Insurance, for a one-time fee of S$70.

MOM said that the current terms of the bond contract allow the embassy to demand up to S$6,000 from the insurer, without requiring proof that any breach of the embassy's employment contract has occurred. 

In such instances, the employers will then have to repay the insurers.

Under the terms of the bond contract, employers cannot appeal to or challenge the insurers for paying the sum to the embassy, MOM added. 

"Therefore, employers purchasing the Indonesian Embassy performance bond guarantee must ensure that they have the means to repay a sum of up to S$6,000 to the insurer," MOM wrote. 

"If you are not comfortable with the terms of the Indonesian Embassy performance bond guarantee, you can reconsider your hiring decision and employ an FDW from other countries," it added. 

Channel NewsAsia has reached out to the Indonesian Embassy for a comment.

Source: CNA/fs

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