MOM issues stern warning to Twelve Cupcakes after unpaid salaries affecting 80 workers

SINGAPORE: The Ministry of Manpower (MOM) has issued a stern warning to Twelve Cupcakes Pte. Ltd. following the non-payment of salaries to 80 employees after the bakery chain ceased operations on 29 October 2025.

In a statement dated 1 April 2026, MOM said investigations found the company’s closure resulted from severe financial difficulties rather than intentional wrongdoing. The firm had been placed into liquidation by its parent company, Dhunseri Ventures Limited.

“MOM assessed that this was a case of genuine business closure arising from severe financial distress, rather than a deliberate attempt to evade salary obligations,” the ministry said.

“MOM therefore determined that a stern warning was the appropriate enforcement action in this case.”

Closure linked to cash-flow crisis

Investigations revealed that Dhunseri Ventures Limited, part of the Kolkata-based Dhunseri Group, decided to liquidate Twelve Cupcakes after determining it could not meet its obligations due to an acute cash-flow shortfall.

"MOM assessed that this was a case of genuine business closure arising from severe financial distress, rather than a deliberate attempt to evade salary obligations."

Despite prolonged operating losses, the parent company had paid employees’ salaries in full up to September 2025.

However, Twelve Cupcakes’ management was only informed of the liquidation plans on 28 October 2025, one day before the company ceased operations.

The sudden closure left 80 employees unpaid for work completed between 1 and 29 October 2025. These salaries had been due on 7 November 2025.

Once management became aware of the liquidation, the Food Drinks and Allied Workers Union (FDAWU) was notified on the same day.

Workers begin receiving partial payments

After months of negotiations, affected workers have begun receiving part of their unpaid salaries through the liquidation process.

According to Channel NewsAsia, FDAWU said: “After months of sustained engagement by FDAWU with the liquidator since October 2025, affected Twelve Cupcakes workers will begin receiving a portion of their unpaid salaries from end-March 2026.”

The union added that it had worked closely with members throughout the process, assisting with salary claims and procedural requirements.

“Throughout this period, FDAWU has worked closely with affected union members on their salary claims and guided them through the liquidation process and will continue to support them as the process progresses,” it said.

Salary payouts are being made based on verified claims and depend on available funds within the liquidation.

Most affected workers have already been informed of their expected payouts, while others are still being notified.

Liquidator prioritises employee claims

Separately, the Straits Times reported that the liquidator, AAG Corporate Advisory, confirmed that employees will receive 50 per cent of their admitted salary claims.

“We are paying 50 per cent of the admitted (salary) claim,” said Yessica Budiman from AAG Corporate Advisory, referring to the priority given to employee wages under insolvency laws.

The firm is also working with the Inland Revenue Authority of Singapore on tax clearance matters related to payments.

Budiman noted that the total value of claims continues to evolve as more creditors come forward.

“We have not tabulated the figures as they change daily with new claims being filed. We are currently prioritising payments to employees,” she said on 31 March 2026.

Earlier disclosures indicated that nearly 100 creditors were owed slightly over US$750,000 (approximately S$1 million).

Due to insufficient funds, unsecured creditors such as suppliers and customers are unlikely to receive payments or be invited to submit claims.

Union support and assistance efforts

FDAWU has played a central role in supporting affected workers since the company’s liquidation.

The union assisted members in filing proofs of debt, completing documentation, and addressing tax and procedural queries.

It also maintained regular communication with workers, explaining updates from the liquidator and advising on next steps.

“Where updates were received from the liquidator, FDAWU proactively explained these developments to members, including advising them on the next steps, so that affected members remained informed throughout the process,” the union said.

Beyond claims assistance, FDAWU helped workers transition to new employment opportunities.

More than 400 job vacancies were shared with around 70 affected workers through the labour movement’s network, including the National Trades Union Congress’ Employment and Employability Institute.

Onsite interviews were also arranged to facilitate direct engagement with prospective employers.

To support workers financially during the transition, the union distributed over S$9,000 in assistance, including grocery vouchers, since November 2025.

Background of the company

Twelve Cupcakes was founded in 2011 by entertainment artiste Jaime Teo and former radio DJ Daniel Ong.

The brand gained popularity as a local bakery chain before being acquired by Dhunseri Ventures Limited in 2016.

On 31 October 2025, about 15 former staff gathered outside the MOM Services Centre on Bendemeer Road seeking assistance. Several stated that their salaries and Central Provident Fund (CPF) contributions for October had not been paid.

Foreign workers, including S Pass holders, faced urgent deadlines to find new employment or return to their home countries.

The Ministry held closed-door meetings with worker representatives, and investigations into the case were launched shortly thereafter. In a joint statement on 31 October, MOM and the CPF Board confirmed that CPF arrears for September and October would be claimed from the liquidator.

The sudden closure in October 2025 drew criticism from FDAWU, which described it as “completely unacceptable and unfair” due to the lack of prior notice to employees.

A Government Gazette notice published on 25 February 2026 set a deadline of 11 March 2026 for creditors, including former employees, to file proofs of debt.

Earlier MOM reply affirms wage priority but no mention of IRDA change to rank wages above secured creditors

In a written parliamentary reply on 13 January 2026, the Ministry of Manpower reaffirmed that employee salary claims are prioritised during corporate insolvency proceedings, following queries by Workers’ Party MP Gerald Giam.

Giam asked the Ministry whether it would consider exploring structural reforms, such as mandatory wage recovery insurance, holding directors personally liable for unpaid wages, and amending the Insolvency, Restructuring and Dissolution Act 2018 (IRDA) to prioritise employee wage claims over those of secured creditors by default.

In response, Minister for Manpower Tan See Leng stated that the Government fully recognises the importance of protecting employees’ wage entitlements in liquidation cases.

He noted that under the IRDA, employee claims already rank above all unsecured debts, second only to administrative expenses necessary to conduct the winding-up process.

Tan emphasised that employers are expected to act responsibly and make wage payments as a priority, even when facing insolvency.

MOM continues to investigate and take action against companies that breach employment laws during closures.

Addressing suggestions to revise the law further, Tan did not commit to amending the IRDA but reiterated that employees’ claims are already ranked above unsecured debts. No mention was made of pursuing personal liability for directors or instituting mandatory wage insurance at this stage.