Court raises payout to $5,711 after finding $300 allowance can't swallow hours worked
A Singapore employer that paid a foreign worker's overtime through a flat $300 monthly allowance has lost on appeal, in a High Court ruling delivered on April 7, 2026 by Justice Philip Jeyaretnam, clarifying that overtime cannot be bundled into fixed monthly allowances for work permit holders.
The involved Gena Hulash Ram, an Indian national who worked as a packer at Lim Joo Huat Enterprise Pte Ltd from December 17, 2022 to August 25, 2023. His In-Principle Approval Letter declared a basic monthly salary of $1,000, a $200 allowance for "Housing, Amenities and Services," a $300 "Others" allowance, and an overtime rate of $7.87 per hour. There was no separate written employment contract between the employee and the employer.
The employer treated the $300 "Others" allowance as a fixed sum covering all overtime, regardless of hours worked. If the worker did 20 hours of overtime, he received $300. If he did 40 hours of overtime, he still received $300. The employer's stated reason was administrative convenience, to avoid the cost of tracking and verifying actual overtime hours.
Justice Jeyaretnam acknowledged that "leaving aside the Regulations, such an administrative arrangement could sensibly be agreed between an employer and employee." But under the Employment of Foreign Manpower (Work Passes) Regulations 2012, the arrangement was unlawful.
Paragraph 6B of Part IV of the Fourth Schedule of the Regulations defines fixed monthly allowances as those that "do not vary from month to month on any basis," and excludes "any form of overtime payment." Justice Jeyaretnam held that the $300 "Others" allowance fell within this definition, which meant it could not cover or subsume overtime payments due to the employee for actual hours worked.
The judge also found the employer's conduct ran counter to Paragraph 6A(1) of the same schedule, which prohibits an employer from reducing the declared basic monthly salary, fixed monthly allowances, rate for overtime payment or daily basic rate of pay without the employee's written consent. By paying only the $300 allowance instead of the declared overtime rate of $7.87 per hour, the employer had effectively reduced the rate of overtime pay below what was set out in the In-Principle Approval Letter.
The Employment Claims Tribunal had partly sided with the worker, awarding $3,254.84, but had allowed the $300 allowance to offset overtime owed. The tribunal had based the offset on the fact that the employer's payslips labelled the $300 payment as "Overtime."
The High Court rejected this approach. Justice Jeyaretnam pointed to Section 38(4) of the Employment Act, which entitles a worker to be paid for the actual hours of extra work done. He held that "an employer cannot introduce a cap on or fixed sum for overtime payment."
The judge increased the award to $5,711.11, the full overtime claim calculated at the declared rate for the hours of overtime worked, as found by the tribunal.
The judgment treats the In-Principle Approval Letter as the binding statement of pay terms for foreign workers, citing Liu Huaixi v Haniffa Pte Ltd [2017] SGHC 270 for the principle that the letter "serves to inform foreign workers of their salary in clear terms."
Summing up the position, Justice Jeyaretnam ruled: "under the Regulations, the fixed monthly allowances payable to a worker shall not include any form of overtime payment. An employer cannot reduce or cap such amounts by including them in fixed allowances paid to the worker."
