IMAGINE you are a condominium owner, and your property’s management corporation (MCST) has been engaging the services of two administrators, two technicians and some cleaners for the estate.
You cheered when the government announced the Jobs Credit scheme earlier this year, thinking the savings will go to your MCST.
Well, think again. Like the MCST of Bayshore Park, a condominium on the East Coast, you may well find that the payout from the Jobs Credit scheme has gone – not to your MCST – but to the managing agent hired by your MCST to manage the payroll of condo employees.
At Bayshore Park, its MCST is now embroiled in a dispute with its former managing agent, CKH Strata Management, over a Jobs Credit payout worth $10,000 to $15,000 for the qualifying period from last October to June this year.
Some companies that engage payroll agents also face similar problems.
Under the scheme – introduced in this year’s Budget to encourage businesses to preserve jobs amid the downturn – employers receive a wage subsidy for employees on the Central Provident Fund (CPF) payroll, equivalent to a 9-percentage-point cut in CPF contributions.
The Inland Revenue Authority of Singapore (Iras), which administers the scheme, told Today it has received enquires regarding who the payout should go to in cases where third party recruiters are involved. Iras has clarified it goes to employers registered with CPF Board and who have paid CPF contributions for their employees.
“In the case … where the managing agent is the person who employs the staff and gets paid by the MCST for providing the manpower service to run the condominium, the Jobs Credit would be paid to the managing agent as it is registered with the CPF Board as the employer of the staff,” said an Iras spokeswoman.
Bayshore Park’s MCST is unhappy the payout was channelled to and kept by its former managing agent, CKH Strata Management. Mr Augustine Cheah, who sits on Bayshore Park’s management council, said the MCST should be getting the Jobs Credit since it is paying the salaries – including the CPF contributions – of the condo employees.
He explained that the contract with CKH worked on a “back-to-back” basis, whereby the MCST will do a direct reimbursement of whatever CKH had paid to those employees.
“If the Government were to one day increase CPF (contributions for employees), it is the MCST that is paying (for the increase). The managing agent is just a facilitator,” he said.
Meanwhile, Bayshore Park’s newly-appointed managing agent, Hilandas Property and Facilities Management, has agreed that future Jobs Credit payout should go to the MCST.
Now, Bayshore Park’s MCST is considering legal action to recover the payout from CKH – its former MA managing agent – and has appointed a lawyer for the matter.
“The Government’s position doesn’t make a difference and, in fact, all the more we want to go to court because it clearly shows that the Government’s laws have got a loophole,” said Mr Cheah.
When contacted, Mr Chan Kok Heng, CKH’s managing director, said although staff salaries are paid out of the MCST’s fund, his company is the legal employer of the condo’s employees.
“If (the Jobs Credit) is due to them, the Government would be coming after me,” he said.
Mr Chan disclosed that after Bayshore Park’s MCST terminated its contract, the condo’s staff – there were at least seven of them – became his liabilities. Three were retrenched.
“Now that the contract is terminated with Bayshore Park, the staff are still with me. Who pays for their salaries?” he asked. “That’s what the Government said the Jobs Credit scheme is for: ‘This is for you to keep your staff when they are retrenched’.”
To Arthur Ngiam, president of Association of Management Corporations in Singapore, it would be a “fairer and a (more) transparent gesture” for managing agents to transfer the Jobs Credit to their clients “if the managing agent’s staff is employed only to serve that MCST”.
The issue of recruitment agencies getting the Jobs Credit payout is not new either to the Singapore National Employers Federation, which has over 1,800 members.
Mr Koh Juan Kiat, its executive director, said: “Some companies have surfaced it to us, so we tell them, ‘it’s something you have to work out with the recruitment agencies, because this is your business model’.”
He likens the situation to the 40 per cent property tax rebate introduced in the Budget.
The Government had urged landlords to pass on the savings to their tenants, but some tenants have said this is not happening.
Source : Today – 18 Aug 2009