SINGAPORE: Co-founder of homegrown bakery chain Twelve Cupcakes Jaime Teo pleaded guilty on Thursday (Feb 4) to underpaying foreign workers a total of almost S$100,000 when she helmed the company with her then-husband Daniel Ong.
Teo, a local celebrity and former Miss Universe Singapore, admitted to 10 charges under the Employment of Foreign Manpower Act, with another 14 charges taken into consideration for sentencing.
As a director of the firm, she allowed Twelve Cupcakes to underpay almost S$100,000 in salaries of seven foreign employees who had worked at the bakery over about three years.
To date, about S$98,900 in salaries is still owed to the employees and no restitution has been made.
Teo set up the cupcake business in 2011 with former radio DJ Ong, whom she married in 2007. They divorced in 2016 and sold the company a few months later to India-based Dhunseri Group, which grew the brand to 35 outlets in Singapore today.
The court heard that Teo was one of the main decision makers in the company, controlling the company's expenses and in charge of the employees' salaries, as both of them were signatories to the company's account.
Sometime in 2012, Teo and Ong decided to employ foreign workers to expand the business and agreed on the salary range for the workers. They hired foreigners to fill positions for a pastry chef, sales executives and customer service executives.
However, the company contravened the Employment of Foreign Manpower (Work Passes) Regulations 2012 by paying less than the fixed monthly salaries due to seven employees.
The workers were owed salaries of between S$2,000 and S$2,600, but were given between S$350 and S$1,400 less between September 2013 and November 2016.
Teo failed to prevent the company from underpaying the workers, and did not take any steps to ensure that they received their fixed monthly salaries.
The offences were uncovered two years after Teo ceased her directorship, when the company was sold off. A tip-off about the new owners' underpaying practices led to the discovery of Teo's offences.
Twelve Cupcakes, under its new ownership, was fined S$119,500 last month for underpaying seven employees of about S$114,000 over two years.
A CONTINOUS LAPSE: PROSECUTOR
Ministry of Manpower prosecutor Maximilian Chew asked for a fine of S$80,000 for Teo, saying that the offences had resulted in "substantial financial gains" in the illegal cost savings of salaries. Her conduct was not a one-off incident but "a continuous lapse".
He said there were serious consequences arising from the crimes, with the employees receiving lower salaries throughout, and that the offence must be deterred.
"The offences were discovered only two years after she ceased directorship, as the practice continued under new management. If not for the same, the accused would have likely got off scot-free," said Mr Chew.
"Employers are in a position of considerable authority over their foreign employees, but such authority carries with it serious responsibilities that have to be scrupulously observed."
He added that Teo's "cavalier failure to appreciate these responsibilities have profoundly unpleasant consequences" on the employees.
HER ROLE WAS IN MARKETING, PRODUCT DEVELOPMENT: DEFENCE
Defence lawyer Sunil Sudheesan asked for a S$20,000 fine instead, but was rapped by the judge for not preparing a written mitigation plea.
He said Teo's role in the firm was in marketing and product development, and that she was a 33 per cent shareholder of the company, with the share diluted to 30 per cent in 2015.
"This was a family-owned business. A small company to start, which happily grew larger. With that size came its own difficulties," he said.
"There was a third-party employment agency hired by the HR director. Naturally, the accused was asked about it and she just agreed, because she left issues to others."
He added that Teo was not involved in discussions about employment details. While she did agree on the salary ranges, she did not have "any sort of substantial contact with the third-party agency", he said.
Teo will return to court at a later date for sentencing. For contravening work pass conditions, Teo could be jailed for up to a year, fined up to S$10,000, or both per charge.
Ong’s case is pending. He is set to return to court on Feb 16.