Disguised PMEs – Exposing the Truth Behind Fake Executive Titles

This is a post by National Trades Union Congress (NTUC) Assistant Secretary-General Patrick Tay. Any extracts should be attributed back to the author. 

I recently had a conversation with a relative of mine who started work after completing her Higher NITEC Certificate and for many years worked in the F&B industry. She now works as a restaurant manager and earns about $2,300 a month. She has been in this job for almost eight years now and she shared with me that she has often been recalled back during public holidays as well as having to stay back after work to look into receiving supplies to the restaurant and when repairs to the air-conditioning had to be carried out.

I casually asked her if she was being paid overtime and she answered in the negative. She shared that as recent as 2014, her boss amended her employment contract when they promoted her to a restaurant manager and included terms (power to hire and fire, supervisory and managerial responsibilities etc) which suggested that she was a PME (Professional, Manager and Executive). As such, they said she was outside the scope of Part IV of the Employment Act (which excludes coverage of managers and executives). This meant that she was not entitled to overtime payments for her work in excess of the normal working hours.

Is this really a case of a proper classification of a PME? By and large, her job is no different from any of the sales and F&B staff serving customers, save for the responsibilities to ensure the till is correct and the supplies and shop are in order. She may not have a senior management decision-making role at the restaurant as the onus still resides with the restaurant owner.

This is an example of a ‘disguised PME’ scenario (also known as bogus PME or inflated titles) in that the worker is a de facto PME. While it is a personal anecdotal example, I am afraid this may just be the tip of the iceberg. Considering we have more than 770,000 individuals in our resident workforce who are PMEs and 1,220,000 who are PMETs (Professionals, Managers, Executives and Technicians) based on Ministry of Manpower (MOM) figures as at 2017, it is estimated that there are more than 30,000 who are classified as PMEs earning less than $2,500 per month.

We have also seen PMEs in similar situations coming to NTUC for workplace advisory. Although we have not monitored the actual numbers, the most recent case was in May this year, involving a union member who works as a site engineer in an IT firm. He earns $2,000 a month and has been asked to work overtime based on operational needs but not paid overtime pay in accordance to Part IV of the Employment Act. Instead, his contract stipulates an allowance for work after office hours. We are still in the midst of assisting him in his claim against his employer and we hope to help him get the compensation he deserves.

Recent High Court Decision – Who is an ‘Executive’?

As recent as a fortnight ago, there was a High Court case in point that was reported. In that case, Hasan Shofiqul v China Civil (Singapore) Pte Ltd [2018] SGHC 128, Justice George Wei noted that “executive position” was not defined in the Employment Act. Black’s Law Dictionary defined “executive” as “[a] corporate officer at the upper levels of management”.

The judge also examined statements made by MOM in Parliament during the recent amendments to the Employment Act to extend coverage to junior managers and executives. In arriving at his decision for this case, he took into account Parliament’s view that managers and executives were persons who were in a better bargaining position, whereas Part IV was meant to protect the more vulnerable employees who were engaged in manual labour or paid lower wages.

Justice Wei pointed out the fact that a worker in a supervisory role does not in itself make him an executive. Such a worker may even be a “workman”. Much would depend on the nature and level of the supervisory powers he is given, alongside other circumstances.

In this case, the claimant was in charge of a team and made decisions daily, such as conducting toolbox meetings and confirming whether safety requirements were met before work could begin. The tasks done by him did not go beyond regular on-site routine administrative work. In the same vein, even though he had influence over the workers’ appraisals, the judge found that the claimant could provide feedback on his team members’ performance but he did not have direct authority to hire, fire, promote, transfer, reward or discipline the workers.

The judge made it clear that an employee is not a manager or executive merely because he can give feedback and thereby “influence” his superior’s assessment of a team member. In view of all these factors, it was decided that the claimant was not employed in an executive position, was covered under Part IV of the Employment Act and was entitled to overtime payments in accordance with Part IV.

Impact on Unions and PME Representation

While I’m glad that we’ve made good progress in extending the scope of representation of PMEs across our unionised companies, more can be done to further protect our workers.

Although this recent case touched on who is an ‘executive’, it also positively impacts how our unions are better able to represent PMEs. The Industrial Relations Act was amended in April 2015 to give all unions the ability to collectively bargain and represent PMEs across all companies.

We have made good progress in extending the scope of representation of PMEs across our unionised companies. However, with this recent case, it is a stark reminder to all employers and human resource leaders to use the terms ‘managers and executives’ with care and due diligence. This is particularly so as some have been known to wrongly classify their workers to avoid them being represented by unions on the basis that they are in a conflicted position with their ‘managerial and executive’ powers.

More importantly, all workers in any company or business must be aware that they can become union members. All workers can be represented (whether collectively or individually) by unions, save for senior management and selected conflicted roles.

Remedies and Recommendations

The proportion of PMEs have increased and will continue to increase. The proportion of workforce with specialised qualifications has also increased over time. Qualifications do not guarantee bargaining power as many low-earning employees with specialised qualifications are not deployed to jobs with managerial duties or decision-making powers.

I urge all workers whose employers classify them as PMEs, especially those whose monthly salary is lower (below $2,500), to re-examine their employment contract, job role, scope and powers as they may fall within Part IV of the Employment Act and be entitled to overtime payments. If unsure, union members can approach their unions, and all workers can seek assistance from the Tripartite Alliance for Dispute Management (TADM) or MOM.

In view of the recent case, tripartite partners can help to better articulate the case law position of who is a PME. Existing web content on MOM’s website on who is a manager and executive may also need to be revised to remove mentions of professionals with tertiary education and specialised knowledge as well as provide clear examples of ‘real’ managers and executives who earn less than $2,500 in basic salary.

Assessment must be based on the job scope instead of the job title. For manager and executive jobs, they should be in substantive positions of authority, including possessing an authority to hire and fire, being in charge of business units and functions, or directly managing and running the business.

Another way around this would be for Part IV of the Employment Act to cover all who earn $2,500 and below, regardless of whether they are a rank-and-file office worker or a PME. This was something we have floated with our tripartite partners for consideration in the latest round of review of the Employment Act.

With the exponential growth in PME numbers, I look forward to the day when we will eventually remove this dichotomy between the rank-and-file and PME workers. In the meantime, I hope through this blogpost that greater awareness is created amongst workers and employers so that workers are treated fairly and wrongful classification of workers as managers and executives is eradicated.

Related Topics:
Share this story: