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Posts: 14
Discussion questions : please contribute and do not hesitate to add any question of your interest
Started by HOME 6 years ago

Contract substitution, in some contexts referred to as “reprocessing,” is a common illegal practice in migrant labour recruitment globally. It occurs through a range of modalities, but essentially entails a worker signing one contract in the country of origin and being forced to sign a new contract in the country of destination, often with conditions much worse than in the original contract. In some cases, migrant workers have signed contracts in their countries of origin for jobs that do not exist, and are placed with an employer on arrival or are forced into a situation of unemployment or informal employment. Due to the great investment migrant workers make to migrate for work, sometimes going into debt, they are often compelled to accept the substituted contract.

The Open Working Group on Labour Migration & Recruitment set Zero Tolerance for Contract Substitution as one of its campaign priorities. In this discussion, we aim to explore the different modalities of contract substitution, mechanisms available for complaints and redress, and recommendations for governments on how to address this serious concern.

Posts: 14
HOME replied 6 years ago...

In your country context, is contract substitution a common problem? In what way(s) does contract substitution occur? Who are the main actors involved?

Posts: 14
HOME replied 6 years ago...

When a worker has experienced contract substitution, what mechanisms for redress are available, either in the country of origin or destination? How effective are these redress mechanisms?

Posts: 14
HOME replied 6 years ago...

How should governments address contract substitution in their policies, regulations on labour migration?

Posts: 14
HOME replied 6 years ago...

If your government has signed MOUs or BLAs to govern labour migration, in your view has this helped to reduce cases of contract substitution?

Posts: 14
HOME replied 6 years ago...

Thanks in advance for contributing to our discussion.
Greetings from Singapore!
Céline from HOME (Humanitarian Organization for Migration Economics)

Posts: 14
HOME replied 6 years ago...

Dear Friends,
Greetings from Singapore.
Please find below HOME's contribution to the discussion.


1. In your country context, is contract substitution a common problem? In what way(s) does contract substitution occur? Who are the main actors involved?

In Singapore, contract substitution is a recurrent problem for Filipino Foreign Domestic Worker (FDWs). In the Philippines, FDWs signed a “standard employment contract for Filipino household service workers” which contains clauses such as minimum salary, weekly day off and no salary deduction. Once they arrived in Singapore, they are requested to sign a new employment contract with no such favorable clauses. They usually have salary deduction up to 8 months to repay agency fees and are asked to sign a private loan. The main actors involved in this process are the employment agencies, as well as the employers.

Furthermore, migrant workers coming to Singapore receive, in their countries of origin an “IPA (In Principle Approval”) issued by the Ministry of Manpower. This document sets minimum conditions for employment such as occupation and basic monthly salary. However, the IPA legal status has not been firmly established in case law. It appears to be non-binding and is not a contract; it therefore does not replace or supersede a new contract presented to a worker on arrival to Singapore. Migrants might be coerced to sign a contract that is highly skewed in favor of their employer. Many workers sign such unfavorable contracts because they have to continue working to cover the high costs that they often pay to come to Singapore.

2. When a worker has experienced contract substitution, what mechanisms for redress are available, either in the country of origin or destination? How effective are these redress mechanisms?

For Filipino Foreign Domestic Workers (FDWs), there is no effective redress available as it is considered that the new contract signed render the Filipino contract void.

The only reasonable mechanism for redress available is the POEA mechanism in the Philippines or at the Philippines Embassy in Singapore. In the Philippines, SOHO, HOME’s partner, has assisted FDWs to file claims at the POEA office. However, the redress mechanism is lengthy and there is an unbalance of the power as recruitment agencies might be more familiar with the process.

In Singapore, HOME has assisted 60 FDWs to file complaints at the Embassy in May 2014. However, at the date of 17 April 2015, only 10 cases were settled.

For migrant workers covered by the Employment Act such as construction or services sectors, there are ways to inquire disputes over reprocessed contracts to the Labour Court. Unfortunately, the limitation period for such an inquiry is one year. Starting a civil law suit for economic duress is a possible, but rocky road. The costs are significant and the fact that the worker might wish to go back to his country is another barrier to exercise his rights.

3. How should governments address contract substitution in their policies, regulations on labour migration?

Agreement (bilateral / multilateral agreement, memorandum of understanding, part of trade agreement) between Singapore and the countries of origin might be a way to solve the problem of contract substitution (see question 4).

Governments should also start partnerships with civil society on programs to educate migrant workers on their rights, understanding of contracts and consequences of signing documents.

Moreover, employment agencies play a crucial role in the process. Government need to effectively monitor recruitment agencies and make effective mechanisms for redress available.

4. If your government has signed MOUs or BLAs to govern labour migration, in your view has this helped to reduce cases of contract substitution?

Singapore has not signed any MOU or BLA with countries of origin regarding migrant workers. Unfortunately up to now, the Singaporean government doesn’t subscribe the need to sign such an agreement.

Posts: 2
John Gee replied 6 years ago...

I've lost two attempts to contribute to this discussion now, so I'm just going to try copying and pasting an article on contract substitution I wrote a couple of years ago and that was published on The Trafficking Research Project website. It might be useful.

Best regards,

John Gee
Abuse of Contract and Contract Substitution

There’s an arms race in the management of migrant labour. Whenever measures are brought in by states to counter the abuse and exploitation of migrant workers, some of those who benefit from the status quo find new ways to subvert those measures. Contract substitution is one means by which they do so.

Countries of origin and many countries of destination see contracts that include protection for the rights and interests of employers and workers as effective means for regulating the relationship between the two and ensuring fairness. In some countries, there are standard contracts in different sectors of the economy – Singapore has one for domestic workers (though it was agreed by the agency accrediting bodies, rather than instituted under state law, with consequences for enforceability).

A contract must, at a minimum, be compliant with the laws of the country in which it is to be applied, which normally means the one where a worker will be employed: they cannot override domestic law and make legal something that is illegal. Thus, the ceiling on hours to be worked in Singapore’s Employment Act ought to prevent the workers it covers from working in excess of that level, regardless of any document a worker may sign, at any time, agreeing to work for longer.

A contract should set out clearly, in a language that is understood by both the contracting parties, the terms of a worker’s employment, including hours, pay, duties to be performed, holiday entitlement and other terms. This should mean that the worker has the option of deciding whether or not to accept employment on the stipulated terms. If it is presented early enough in the recruitment process, the worker should be able to refuse without having already incurred significant expenses that would make it hard to do so in practice. This therefore empowers a worker to make an informed decision on employment.
Once in employment, the contract should serve as a reference point for employer and worker and a fall back for recourse to mediation or legal action should one or the other believe that the terms first agreed upon are being infringed by the other party.

When a contract is drawn up under the jurisdiction of the country within which its provisions are to be applied, its legal status and the legality of its terms may be easily determined and tested, although enforcement may be quite another issue, depending upon the zeal of state authorities to uphold the law (in the case of contracts drafted under state law) or the ability of the parties concerned to secure legal advice and representation (in the case of private contracts).

It’s a different story when a contract is drawn up under the jurisdiction of the state of origin of a worker who will be employed elsewhere. This may be intended to thwart the intentions behind the laws in the country of destination, or simply have that effect.

There are two main circumstances in which this occurs in the Singapore context, in one of which prevailing legal usage operates to the advantage of migrant workers, and in the other, to their disadvantage.

In 2008, Transient Workers Count Too (TWC2) and the Humanitarian Organisation for Migration Economics (HOME) encountered several cases of Chinese workers who were in dispute with their employers – Chinese construction companies that were engaged in projects in Singapore. One of the main bones of contention was the insistence of certain companies on paying workers three months in arrears. The explanation offered was that it took some time to work out exactly how much the workers should be paid, but this did not seem credible, since the vast majority of enterprises worldwide (including within China) manage to pay workers their due every week or month, without delay.

The real explanation seemed to be that deferred payment was primarily a way of controlling the workers. They would not seek a job elsewhere or otherwise leave the companies’ employ while they had salary payments outstanding. The companies argued in their defence that the workers had signed contracts in which they agreed to accept deferred payment.

The workers themselves said that they had been given no choice. The original terms of their employment in Singapore had looked appealing, and on that basis, they had signed up to work here. Then, as they were about to board the ‘plane that brought them over, they were presented with a contract that they were told they had to sign or otherwise have no job. Contract terms varied between companies, but a couple included deferred payment, as well as other curious terms. One contract we saw said that:

'whilst in Singapore, the worker cannot make any public commentary that hurts the interests of the employer. He must not create trouble and tarnish the reputation of the employer by complaining to various departments and ministries of the Singapore government, failing which, the employer reserves the right to demand the worker to pay for any fees incurred by the employer, such as transportation fees (SGD$100 per trip) or for the attendance of meetings (SGD$300 per meeting) to address these complains.'

This is capable of very broad interpretation and can be used to frustrate the reporting by workers of illegal actions by the company or the making of legitimate complaints.

Another contract provided that workers had to surrender their passports and work permits to the company for the duration of their employment in Singapore. This is another familiar means of exerting control over workers, and violates Singapore law: Article 13-(1) of the Employment of Foreign Manpower Act provides that, ‘A work pass holder shall not allow any other person to have possession of his work pass’; the Passport Act of 2007, Section 47, Subsection 5, stipulates penalties for those who hold ‘foreign travel document(s)’ other than their own.

It was TWC2’s case that contract provisions that violate Singapore’s laws could not be upheld, and that such provisions should be deemed invalid and inoperative. In accordance with the Employment Act, workers must be paid within a week of the relevant employment period (essentially, at the end of each month); they must be able to take complaints to the competent authorities without fear of punishment, and they must be able to retain their work permits and passports.

Evidently, the prevailing legal view was in support of the precedence of Singapore law, and the workers were subsequently paid their basic salary at the end of each month.

The other case of a foreign contract being inconsistent with Singapore law is that of the standard contract that the Philippines government seeks to have implemented for its citizens working overseas. This contains provisions for weekly rest days and for a minimum salary of US$400 or local equivalent (about S$600). The Philippines government wants employers to sign this standard contract when taking on a Filipino national as an employee, and its official position is that, unless this happens, the employer cannot hire the worker.

In practice, this is difficult to enforce. Again, the sovereignty argument comes into play, but this time, to the disadvantage of migrant workers. Singapore does not have a minimum wage. In March, it was announced that, as of January 1st 2013, newly hired domestic workers or those renewing their contracts would be entitled to a weekly day off (though they might agree to surrender it in return for compensation), but in the past (and until that date) there was no mandatory day off. Therefore, the terms of the Philippines’ standard contract were not required to be enforced by the government of Singapore, nor would a private legal action be expected to result in such contract provisions being upheld as applicable in Singapore.

The Philippines has attempted to secure compliance with its standard contract through its embassies which, when they process documents for workers renewing passports or contracts, ask to see the existing contract and evidence of compliance with it, without which they will not cooperate with the worker or employer.

This has frequently resulted in contract substitution. An employer or agent will produce a duly signed Philippines standard contract, but this is only for show. The real contract will most likely be compliant with Singapore law, but not contain the more advantageous protections and entitlements of the Philippines document. It is this contract that will, in reality, set the terms of employment.

Workers are well aware that the Philippines standard contract provides better terms for them, but are willing to collude with agents and employers in presenting false documentation because they fear that the alternative is to lose their opportunity to be employed in Singapore.

The immediate consequence is that workers gain or maintain employment at the expense of accepting a lower level of protections and payment at local market rates (perhaps S$100 less than the Philippines’ contract calls for) and employers gain more favourable terms for themselves. Neither party may give much thought to the fact that they have been dishonest and have attempted to frustrate the implementation of legal measures instituted by the Philippines government.

The Philippines government favours a bilateral agreement with Singapore that would set out terms of employment for Philippines nationals consistent with its standard contract, but the Singapore government is resistant to the idea. It may see it as one that would introduce heavier costs and obligations for Singapore in order to meet the priorities of another state, with no obvious countervailing advantage for Singapore and its citizens.

There is therefore an impasse over the standard contracts.
The problem may persist until Singapore’s own terms of employment, whether contained in its standard contract, other measures or resulting from the operation of ‘market forces’ (such as demand for workers exceeding supply so much that it drives up salaries above S$600 and encourages the negotiation of improved terms for workers) change markedly.

Do these cases have anything to do with trafficking?

The abuse of contracts to exercise control over workers in the case of the Chinese contacts clearly involves an attempt to exercise a degree of coercive control over workers in order to make them work in disadvantageous conditions, and some might argue that it fits the bill. Elements in the two cases locate them in that murky area of dishonesty and illegality where trafficking is also to be found. The topic might be debated at length.

Yet it might be more fruitful to consider the experience of labour migration as a continuum that extends from the well-remunerated professionals welcomed to many states on favourable terms all the way through to hapless people transported into virtual slavery. Somewhere on that continuum, the features that can be indicators of trafficking start popping up with greater frequency, and that should be enough to set anyone thinking, “This shouldn’t happen.”

Posts: 14
HOME replied 6 years ago...

Dear John,
Thank you for sharing the article. The detailed information is indeed quite useful.

Dear all,
Looking forward to your participation.


Posts: 2
vani replied 6 years ago...

1. In recent discussions with Philippines embassy in Doha, Qatar, we were told that they have a post arrival orientation for MDWs. This is a great way of identifying contract substitution and finding out what the worker was promised, and what contract she would be entering once in Qatar.
2. There has been a lot of discussion in the past on electronic contracts. A system whereby the contract presented in the system in country of origin is what is referred to in destination. This of course requires bilateral cooperation, and setting up the system.
3. During recent visit to training centres in Indonesia, we found that those going to Asia Pacific the contract mentions a certain amount as monthly salary, but there is separate agreement on deduction for the contract period, that goes to agent. Am not sure if it's substitution per se, but definitely something that is contrary to agreements.

Vani Saraswathi
Journalist/Strategic Adviser

Posts: 2
vani replied 6 years ago...

I want to raise the issue of contracts for MDWs in the GCC. They are not covered by labour law, and there is no standard contract. One was proposed in the GCC but has fallen through.
The contracts MDWs sign in countries of origin really doesn't hold good in the GCC as there is no legal requirement to submit the contract to process work visa. The contract signed between employer and recruitment agent is vastly different from what the MDW receives from agent in her/his own country.
Neither of these contracts address the costs incurred by the employer and employee.
Except for the Philippines, no other country has a standard contract for its citizens. Which means the agent in country of employment can draft one of their choosing.
A few things we need to advocate/lobby for is countries of origin to have a common contract and they in turn try to enforce it in countries of employment in the GCC.
We need to address contract substitution for this particular category of migrants.

Posts: 14
HOME replied 6 years ago...

Dear Vani and all,
Thank you for your contribution and sharing more about the situation in the GCC.
It would be good to hear from our partners in other countries of destination how the standard contract from the Philippines is implemented.
For our partners in countries of origin, what is your opinion on standard contract?
Looking forward for your inputs!

Posts: 14
HOME replied 6 years ago...

Thanks Ellene and Sumitha for your contribution!

Please find below the replies from Kanlungan Centre Foundation Inc. (Philippines).

Kanlungan Centre Foundation Inc:

1.In your country context, is contract substitution a common problem? In what way(s) does contract substitution occur? Who are the main actors involved?

Contract substitution is very common in cases that we have handled in Kanlungan , besides from contract substitution the most common issue with regard to contract of employment is non compliance of the terms and conditions of the contract of employment.

The acts and omission are often committed during actual deployment . Mostly the recruitment agency is involved in the acts.

2. When a worker has experienced contract substitution, what mechanisms for redress are available, either in the country of origin or destination? How effective are these redress mechanisms?

Based on our law contract substitution is illegal . A case for recruitment violations may be filed before the Philippine Overseas Employment Administration (POEA) if the perpetrator is licensed recruitment agency. However if the perpetrator is non license holder or not duly authorized to recruit workers, a criminal case of Illegal recruitment may be filed against the perpetrator.

3. How should governments address contract substitution in their policies, regulations on labour migration?

Stricter implementation of existing laws on recruitment and access to legal assistance to migrant workers whose rights have been violated.

4. If your government has signed MOUs or BLAs to govern labour migration, in your view has this helped to reduce cases of contract substitution?

The MOUs or BLAs is indeed helpful , however the implementation of such agreements must be faithfully complied by each parties.

Would any of the members in the countries of destination who have signed a bilateral agreement or MOU with the Philippines have seen any improvement in terms of contract substitution with the implementation of such agreement?

Thanks all for your participation.


Posts: 1
tatcee replied 6 years ago...

Dear Friends,

I am writing to forward the inputs from our partners from the United Arab Emirates, the Middle East Centre for Training and Development. Please find below the inputs from Ahmed Al Hashemi:

Being a destination country, the issue of contract substitution is something that cannot be neglected. The birth of the issue starts from the origin country where there would be recruiters who present a false picture of what they would benefit over here so that they can rob the poor migrant workers of his earthly assets. The reality hits hard when the migrant worker reaches the destination country.

It a basic requirement as per the laws that in order to issue a visa, an employment contract has to be submitted or the wages that are being intended to be paid are entered in the visa application form for processing an employment visa. The contract substitution issue only affects the migrant workers that is in transit to the destination country. The issue of contract substitution does not affect the category of migrant workers who come to the UAE on a visit visa and then acquire a job with an employment visa. The issue would only arise if they have acquired the job through a recruitment agency in the UAE

The migrant worker would have to get in touch with the respective embassy to address the issue if the migrant worker has been recruited by a recruitment agency from the origin country. The destination country is responsible to address the other labour issues that arise during the period that the migrant worker is on employment in the destination country.

The Ministerial Order No (52) of 1989 is all about setting Out the Rules and Procedures to be followed by Employment Licensing Sections with respect to Import of non-Nationals for Employment in the UAE. The Ministerial order also sets out the penalties in case there is a violation of the rights of the migrant worker in case if he is recruited by a recruitment agency in the UAE

Having MoU’s and BLA’s would certainly help in curbing the amount of violations to the rights of the migrant workers. An arrangement between the government for the recruitment process for labour migration should have strict implementation and scrutinised to avoid any gaps or loop holes in which the recruitment agency or the other stakeholders could take advantage of.

All the Best

Posts: 14
HOME replied 6 years ago...

Please find below the inputs from Insan Association's; in Lebanon.

1. In your country context, is contract substitution a common problem? In what way(s) does contract substitution occur? Who are the main actors involved?
Contract substitution for MDWs is a common problem in Lebanon.
There are very few data in Lebanon related to contract substitution. However it is to believe that it’s a common problem, as in many other countries.
Previous studies on this issue estimate that 60% of the participants signed work contracts in Nepal or Bangladesh. Of those, another 60% said they however did not understand the terms of it.
When MDWs arrive in Lebanon, all of them sign another contract, written usually in Arabic, making the first one void. This second contract has less favourable conditions for MDWs than the one signed in the country of origin.
Involved actors are numerous: most MDWs come to Lebanon by way of Private Recruitment Agencies who usually collaborate with agents from the countries of origin. Deception often begins at the country of origin and ends at the destination country.
2. When a worker has experienced contract substitution, what mechanisms for redress are available, either in the country of origin or destination? How effective are these redress mechanisms?
Legal redress is often difficult when contract substitution occurs and this is for a variety of reasons. First, MDWs fall outside the scope of the Lebanese Labour Law.
The only document regulating their rights is the Standard Unified Contract that was drawn up in 2009. Furthermore, when a dispute occurs MDWs have difficulty navigating the court system. This is particularly true in the context of contract substitution because the Arabic contract is legally admissible.
3. How should governments address contract substitution in their policies, regulations on labour migration?
To address contract substitution governments can:
Regulate the operation of Private Recruitment in Lebanon and in the countries of origin. With the aim of increasing transparency and accountability in the entire process.
 To have the right to negotiate the terms of the contract from both sides and not have the contract fixed with no possibility of change.
 ensure that contracts are translated in the languages of countries of origin.
 Should ensure that contracts are read and signed before arrival and in the worker’s native language
 create more oversight over the operations of Recruitmnet Agencies, including harsh fines and closures for violators.
 enter into G2G agreements that detail the work conditions for migrant workers
4. If your government has signed MOUs or BLAs to govern labour migration, in your view has this helped to reduce cases of contract substitution?
A Memorandum of understanding on Labor Cooperation, has been signed between the Republic of Philippines and the Republic of Lebanon (February 2012), however it is very difficult to determine whether MoU has had any effect on the ground in reducing the occurrence of contract substitution

Posts: 14
HOME replied 6 years ago...

Dear all,
Please find below the contribution from Thomas Mathew Kadavil.

1. In your country context, is contract substitution a common problem? In what way(s) does contract substitution occur? Who are the main actors involved?
In Kuwait Contract substitution is practiced by most of the recruitment firms and the employers.
Domestic workers are the most venerable sections of migrant workers in this regard. Many a times the agents or the sponsors refuse to give contracts to the domestic workers. The domestic worker will even don’t have the slightest idea that there is Contract and it is a requirement. But for many countries embassies do attestation of the contract and it is a requirement for working as a Migrant Contract Worker (Eg. MOU with India) But the migrant domestic workers will never get a chance to sign his or her contract as Second Party of the Contract before going into the chamber of commerce and Embassy’s attestation. Domestic workers in Kuwait fall under the visa number 20 category. The Contract substitution is done by the local agent and country of origin agents and the Sponsors in Kuwait.
For the private (company / farm) employment, under visa 18, for the unskilled and semi skilled sections the Contract substitution is heavily practiced. These sections of workers only after reaching Kuwait will come to know about contract as such. As per the Kuwait New Private Employment law 2010 with the application of the residence permit the Employee and employers signed Contract is a statutory requirement. The contract and its clauses are very simple one 1) the position/post of the emigrant worker and 2) his salary and other job conditions. All other details should be as per the provisions of Kuwait labour law.
As per the rules and MOUs signed by certain countries Employers and companies have to sign contract for bringing a new employee and it should be attested in the chamber of commerce and the embassies concerned. Some Embassies (eg India) insist for attestation of the employment Contracts due to the MOU signed with Kuwait. But most of the employees never gets this contract before their departure instead a fake contract will be given to them (if at all given). Many employers make them sign new Contract upon their arrival as required by the above said law and its rules. That will be entirely different of what was promised and given to them back before their departure in the country of origin.
2. When a worker has experienced contract substitution, what mechanisms for redress are available, either in the country of origin or destination? How effective are these redress mechanisms?
In Kuwait redress mechanism is available i.e. the labour department under the Ministry of Labour. A novice worker reaching Kuwait their will be many barriers for them to reach to these redress mechanism / institutions. And in practice it seldom happens
3. How should governments address contract substitution in their policies, regulations on labour migration?
Suggestion : In the case of termination and cancellation of residence permit for 18 number private employment visa the workers consent and approval is taken in person in front of the competent labour department authorities in Kuwiat. In the same manner the newly arrived worker concerned should be taken to the labor department to get the workers consent in person for stamping the visa.That time the labour authorities can verify with the worker related to the contract given to him before departure was same as that he is asked to sign upon on his arrival. For new labor recruits who comes to Kuwait has to sign a statutory labour contract as mentioned above (for residency stamping) and it supersedes all the old ones.
4. If your government has signed MOUs or BLAs to govern labour migration, in your view has this helped to reduce cases of contract substitution?
India has entered into Memorandum of Understanding on employment of workers (MoU) with the major labour receiving Countries for ensuring protection and welfare of emigrants by incorporating better terms and conditions of employment. Such MoUs have been entered into with the five Gulf countries including Qatar, United Arab Emirates (UAE), Kuwait, Oman, Bahrain and an Agreement on Domestic Sector Workers has been signed with the Kingdom of Saudi Arabia. Under the above MoUs/ Agreement periodical Joint Working Groups (JWG) meetings are held to sort out the issues arising out of employment of Indian workers in Gulf countries.

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