Support Site for The Unemployed & Underemployed
Wednesday January 16th 2019

PMET played out by new company and has to cough out 3 months’ penalty to old company

Hi Guys,

Sorry to disturb. I don’t know how can I post here to get advice.

I am in deep trouble and I don’t know what should I do.

I have been working in my company A for around one year 3 months. Recently, I have found a job and have resigned and move on to company B.

But in order to resign, I have to pay 3 months’ compensation. Apart from this, I still have to serve 45 days’ notice. Initially my new hiring company B agree to wait for me for 45 days and pay for my 3 months’ penalty.

However, company A refused to look into my resignation especially the 45 days’ notice portion resulting in a delay of my resignation and as a result I could not serve the full 45 days as company B is unwilling to wait for me further. End up my last salary was deducted for more than 50% when I move on to company B.

This is not all. When I join company B, the 3 months’ penalty never come in and end up I have to pay company A myself. I have went around borrowing money from friends and even taking up bank loan. Till now, I have paid around 90% of the 3 months’ penalty. There is still a remaining 10% which is around $1.3k.

Company A refuses to negotiate and request me to pay up almost immediately. Not even willing to allow me to pay by instalments. I am running out of options as I already deeply into bank debt especially my baby is merely one year old. I still have my own reno loan to pay as well.

Right from the start, company A refuses any negotiation regardless of waiver of the amount or reducing of the 45-day notice (my manager initially agreed to allow me to serve 30 days’ notice but later stage HR changed). My last pay was eaten up totally also meaning I work free for the whole last month for company A.

May I check what can I do or what should I do? Will I get jailed for failing to pay up the remaining $1.3k? What will company A do to me? I dun dare to share it with my wife as she is pregnant with my second child. I am really lost and worried. As for company B, I questioned them why was there a change of plan. They merely amended my contract and told me if I not happy, I can leave. But I need a job. So its another bloody lie.


Editor’s note: its important to take note of the contractual terms when signing on the employment contract as some companies use the harsh penalty to retain unhappy employees in the company so they won’t need to frequently re-hire stuff. However, its difficult for a company to enforce the penalty as if they want to sue a ex-employee who fails to pay up the penalty they need to foot at least $10,000 legal cost to bring the person to court.

But the company can use legal letters to threaten you into paying which can be distressing for some.

Nevertheless, many companies could claw back the remaining final month of the salary as part of the penalty payment for the contract breach.

Its regrettable that you did not make the company B commit in writing when they say they want to pay the 3-month contractual penalty before you join them.

You can bring your case to MOM but I doubt that they can assist you.

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One Response to “PMET played out by new company and has to cough out 3 months’ penalty to old company”

  1. Jayme says:

    Hi Lex,

    You may want to seek help, if you felt that there was a unfair deduction of salary by your ex-employer or if any terms was agreed upon but was not fulfilled by your current employer, whether verbally or via any sms, email or whatsapp.

    You may seek help from Tripartite Alliance for Dispute Management (TADM) at
    80 Jurong East Street 21,
    Singapore 609607

    Pls note that you will need to file within this period:

    If you have left the company – within 6 months of the last day of work. If you are still employed by the company – within 1 year after the dispute arose.

    Thereafter, if you need free legal service:
    Law Society Pro Bono Services

    Please do consider carefully before you decide to take any further actions.

    All the best to you.

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