Social enterprise accused of failing to pay freelancers, others

A case of multiple fee delays by startup points to growing risk for gig workers here


A LOCAL startup calling itself a social enterprise stands accused of owing some S$20,000 for months to freelancers and a boutique public relations firm, bringing into focus the risks that gig workers and small firms face in chasing fees from fledging companies that have no clear business model.

BT understands that Imaginem, a so-billed social enterprise, allegedly owed payment to several media freelancers. A WhatsApp group had been formed among those saying they are owed payment from Imaginem.

The Ministry of Manpower (MOM) confirmed to The Business Times that it has received a complaint over "a non-payment of salary", and is following up with the company on the complaint. It is understood that a temporary staff from Imaginem has not been paid nearly S$2,000.

Affected parties who spoke to BT pointed to a pattern: Imaginem would highlight big names behind projects. They are unclear how Imaginem, a "social start-up for photography", makes money. And they said they face problems contacting the firm, which is based at co-working spaces, when chasing for payments.

The founder of Imaginem, Lu Jia Quan, did not respond to multiple requests by BT for comment.

One freelance photographer and designer, Zinkie Aw, took to Facebook this month to document the months of effort in trying to chase down payment from Imaginem for work on a mobile-photography workshop.

Ms Aw told BT that she was owed less than S$1,000 for a workshop conducted on May 19, and that she did not seek a deposit as it was a relatively small sum. But in the six months or so that followed, Imaginem did not make payment.

She then filed a claim through the Small Claims Tribunals, and the tribunal has ordered Imaginem to pay up the outstanding fees.

But Ms Aw's situation points to the disproportionate fees behind enforcing the judgement over small overdue fees owed to gig workers. Checks by BT showed that the potential expenses, from the bailiff's attendance fee to locksmith charges, can add up to hundreds of dollars.

Ms Aw further pointed out that Imaginem's registered address is a co-working space, which means there are limitations on property that can be seized.

TSMP Law's head of employment and labour practice Ian Lim pointed to the risks that gig workers and freelancers face in demanding payment.

"The unfortunate fact of the matter is that gig workers and freelancers all too often find it challenging to get paid for jobs. It is a true occupational hazard. Gig workers are forced to go to the Small Claims Tribunals and the court to enforce payment of what would essentially be salary for regular employees," he told BT.

"The problem is exacerbated when the companies that hire the gig workers are operating out of co-working spaces, making enforcement even harder. The gig workers are often forced to simply forgo payment in light of the time and expense involved with enforcement, especially where their claims are not overly large, as is commonly the case."

Gig workers can tap on mediation services through the Tripartite Alliance for Dispute Management. But it should be noted that in Ms Aw's case, the founder of Imaginem did not attend the tribunal hearings.

The risks for gig workers are compounded when it is unclear how startups make money, though to be clear, startups often pivot on business models.

Imaginem has called itself a social enterprise, and defines this as one with "a sustainable revenue model". It does not list investors on its website, but cites "collaborations" with prominent firms including Airbnb and Apple.

Its recent project was with The Salvation Army, where it worked on a photo campaign to highlight the plight of the poor in Singapore. The photos were taken by prominent street photographer Chia Aik Beng, who confirmed to BT he is waiting on payment of S$1,800 for the project from Imaginem.

The Salvation Army told BT it did not pay for the project, and that the fundraising campaign was initiated by Imaginem. A spokesman for the charity also said it would terminate the collaboration with Imaginem.

Right Hook Communications, a public relations firm, has sent a letter of demand to Imaginem over some S$10,000 due for work on the Salvation Army project. In the letter reviewed by BT, a first instalment of S$5,000 was due Nov 9, which has not been paid. The remainder of the funds was due last Friday.

Wesley Gunter, founder of Right Hook, said his lawyers are using e-mail acknowledgments and trails as evidence of work rendered. Right Hook has filed a claim at the Small Claims Tribunals, with the hearing set in January.

Mr Gunter said the lack of clarity behind the funding for startups can complicate issues.

"This is a grey area for many service providers as they generally cannot question where a client's money is coming from before a project is started," said Mr Gunter, adding that legal battles are expensive for SMEs.

TSMP's Mr Lim said one way to address such risks may be to streamline the Small Claims Tribunals enforcement mechanisms to help gig workers and freelancers.

Even as gig workers can already tap on mediation services, there could be a relook at having gig workers bring claims under the Employment Claims Tribunals (ECT), "bearing in mind the calls already being made to simplify ECT enforcement procedures", he said.

MOM pointed to the tripartite standards for contracting with self-employment persons, which state that the terms agreed upon should be documented in written key terms and provided to self-employed individuals before any services are delivered.

Nicholas Narayanan, a lawyer at Nicholas & Tan Partnership, told BT that gig economy or not, issues of non-payment of services remain common. "To avoid any misunderstanding or disagreements, the service providers should incorporate their terms of payment in their written contracts."

Freelance writer Justin Zhuang, who runs writing studio In Plain Words, told BT his firm typically asks for payment within 30 days of completing the work. "When I work with private companies, we ask for a deposit to ensure the client is committed to the job," he said. The deposit is 20-50 per cent, depending on the number of milestones.

An experienced band musician who declined to be named told BT that in recent times, the band is asking for a 50 per cent deposit upfront, and insists the remainder be paid on the day of the event itself. The agreement is also backed by a legally binding contract.

Ms Aw said: "I only hope that other freelancers become more aware of how to protect themselves, their ideas, their work and commitment, and be fairly compensated for their efforts."

Imaginem continued to put out Facebook posts till early December. Its Dec 1 post was a black-and-white photo of a near-vacant office space, with the hashtags #tinkering #startup #passion.