Worker wins nearly $4,500 as Singapore court rejects company’s bid to pay overtime with allowance

His employer, however, argued that overtime pay was covered by the fixed SGD300 monthly allowance, regardless of the number of hours worked, meaning he would receive the same amount whether he worked 20 or 40 hours of overtime.

The tribunal magistrate accepted that Gena had performed overtime work and was entitled to compensation based on the additional hours worked. However, the magistrate permitted the employer to offset the payments against the SGD300 allowance.

This means the magistrate ruled that in months where Gena’s overtime pay was less than SGD300, he would receive the fixed sum. In months where overtime pay exceeded SGD300, he would be entitled only to the amount above the allowance.

As a result, Gena’s claim was reduced from $5,711.11 to $3,254.84.

Dissatisfied with the outcome, Gena appealed. “The appeal raised a simple but important point of law,” said High Court Justice Philip Jeyaretnam. He added that the matter revolved around whether overtime pay could be offset against a fixed monthly allowance under the Employment Act and related regulations.

At the appeal, the employer maintained that the “others” allowance could lawfully serve as a fixed payment for overtime work, regardless of the actual hours worked, according to AsiaOne.

Justice Jeyaretnam rejected this argument. “An employer cannot introduce a cap on or fixed sum for overtime payment,” he said, affirming that workers must be paid based on the actual overtime hours worked.

Under regulations, “fixed monthly allowances must not include any form of overtime payment”, he added.

The High Court reinstated the full claim of SGD5,711.11, calculated based on hours worked, and awarded SGD9,000 in costs against the employer.

TWC2, an organization representing workers, said on its website that Gena’s victory affirms that that the salary terms approved by the Ministry of Manpower have weight and should not be unilaterally re-interpreted. It helps ensure that workers are free from predatory “surprises” after starting work.