'Following the practice under previous owners': Twelve Cupcakes pleads guilty to underpaying foreign employees

With over 30 outlets across Singapore, Twelve Cupcakes is well-known for selling pastries, cakes and of course, cupcakes.

But today (Dec 10), the company pleaded guilty to 15 charges of underpaying its employees – an offence under the Employment of Foreign Manpower Act — in 2017 and 2018, reported The Straits Times.

According to court documents, seven of its foreign employees were S-Pass holders at the time of the offences.

Six of them were in customer service and sales positions and were paid about $1,400 to $2,050 instead of their fixed monthly salaries ranging from $2,200 to $2,600 between Dec 2016 and Sept 2018.

The remaining employee, a pastry chef, was also paid less than the fixed monthly salary from Jan 2017 to Sept 2018.

The cupcake chain had initially transferred the reduced salaries to the workers' bank accounts, stated court documents.

However, starting May 2018, Twelve Cupcakes paid the correct sum via bank transfer, then told the employees to return a portion of their pay to them in hard cash.

Ministry of Manpower prosecutor Maximilian Chew urged the court to impose a fine of $127,000 citing three aggravating factors – the firm had taken "active steps" to cover up their misdeed, would have "continued with their offending conduct" if it hadn't been discovered and it was "clearly motivated by profits", reported Today.

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In mitigation, the lawyer representing Twelve Cupcakes, S Balamurugan, told the court that the matter of underpayment was a practice put in place by its previous owners and the Dhunseri Group had simply followed suit.

He added: "While it was the practice under the previous owners' management that the salary payments were less than the fixed salaries, the foreign employees agreed and accepted their actual salaries. (My client) accepts that he should have discontinued the practice when they acquired the business."

The firm has since paid the overdue salaries of $114,150 to the involved employees after investigations commenced in 2018.

Sentencing will take place on Jan 7 next year, and fourteen other similar charges will be taken into account by District Judge Adam Nakhoda.

The company may be fined up to $10,000 for each offence regarding underpaid foreign employees.

Twelve Cupcakes was established in 2011 by radio DJ Daniel Ong and former model Jaime Teo. It was later bought over by Kolkata-based Dhunseri Group in 2016 for $2.5 million.

trining@asiaone.com