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Flash Coffee Employees Who Are Owed Salaries Might Not Get Them Back That Fast

2023-10-25 , 3:42 pm

Flash Coffee Employees’ Salary Issue

For those who still haven’t heard about one of the most popular modern-day alleged strikes in Singapore, it all started when 11 Flash Coffee outlets across the country were abruptly closed down on 11 October 2023.

And this news came to many, even their own workers, as a surprise (or more like a nightmare).

According to the filings seen by The Business Times, founder David Brunier and director Sebastian Hannecker revealed that it is due to “reason of liabilities”.

But maybe they forgot about their basic liability: employees’ salaries of up to two months, comprising over S$14 million to more than 150 creditors.

How does that look in the shoes of the employees? Well, that is the salary for almost the entire months of September and October. The employees are also owed CPF contributions.

So what’s brewing now?

Under Provisional Liquidation with BDO Advisory

It’s been about two weeks since the closing down of Flash Coffee.

In the meantime, Flash Coffee co-founders had filed for a voluntary winding-up, and was placed under provisional liquidation. BDO Advisory is appointed Flash Coffee’s liquidator.

To put it simply, Flash Coffee is trying to sell off their assets to pay off creditors.

But what is taking so long for them to pay their employees?

Well, Flash Coffee is still being pretty silent in their updates.

But one thing we know is that a creditor’s meeting is going to be conducted either on or before 10 November. That’s in the next two weeks.

Flash Coffee was one of the rising Singapore-based coffee chains, and had raised US$1 million in Series A funding led by White Star Capital even during the pandemic in 2021.

Salary payout delays began this year and given the most lighting speed exit from the industry, a silent question we hate to ask is whether these employees can even get their salary back.

No Salary, But O$P$

The Food, Drinks and Allied Workers Union (FDAWU) is providing assistance to the former employees to help them file their cases of owed salaries with the Tripartite Alliance for Dispute Management.

According to the president of FDAWU, Ms Julie Cheong, they are also answering the burning questions the employees might have regarding the filing of proof of debt.

This proof of debt is basically a written declaration creditors make to note down the debt Flash Coffee owes them.

In accordance with Singapore’s legal provisions, workers employed by a financially troubled company have the right to receive their regular pay and compensation, which takes precedence over other unsecured debts, including severance packages and voluntary additional payments.

The amount disbursed in this regard is capped at the lower of either five months’ worth of wages or $13,000.

Nevertheless, it would “will take some time” before the liquidation process is completed, so former employees would have to wait a while before they get paid (if they ever get paid)

Helping Former Employees Find Job

In her update, Ms Cheong mentioned that FDAWU had provided support to former employees by helping them find suitable employment opportunities.

A number of these individuals have already had interviews with companies that reached out to the union.

Furthermore, Ms Cheong noted that they have shared information about the National Trades Union Congress’ Union Training Assistance Programme, which offers subsidised training, with union members who were employed by Flash Coffee.

She also stated that the FDAWU is collaborating with Flash Coffee’s former area manager to inform employees who were previously under his supervision about the support available through the labour movement.

Flash Coffee Not Unionised

One thing to note though, is that Flash Coffee is not unionised.

What does that mean?

Most of these non-unionised companies typically handle employment matters and negotiations directly with individual employees, or through other forms of representation.

Yes. Yet another truth that makes us so gek sim.

This simply means the employees are not so protected. While they can go on strikes legally, most of them will have to try and get back the money themselves.

You can watch this video to know more about strikes in Singapore: