Workers group criticises MOM for issuing only a stern warning over Twelve Cupcakes unpaid salaries case
A workers’ rights group has criticised Singapore’s Ministry of Manpower for issuing only a stern warning after 80 Twelve Cupcakes employees went unpaid, calling for stronger labour safeguards.
- Workers’ group says MOM’s stern warning sends wrong signal to businesses
- 80 employees left unpaid after Twelve Cupcakes liquidation in October 2025
- Partial salary payouts underway, with calls for stronger worker protections
SINGAPORE: A workers’ rights group has criticised the Ministry of Manpower’s response to unpaid salaries at Twelve Cupcakes, arguing that a stern warning is insufficient given the impact on employees.
In a statement dated 1 April 2026, Workers Make Possible (WMP) said the decision sends a “very worrying signal” to businesses operating in Singapore.
The case involves Twelve Cupcakes Pte. Ltd., which ceased operations on 29 October 2025 after its parent company, Dhunseri Ventures Limited, placed it into liquidation.
According to the Ministry of Manpower (MOM), the company faced an acute cash-flow shortfall and could not meet its obligations on a sustainable basis.
Eighty employees were not paid salaries for work completed between 1 and 29 October 2025. These wages had been due on 7 November 2025.
Twelve Cupcakes’ management was informed of the liquidation plans only on 28 October 2025, one day before closure.
The Food Drinks and Allied Workers Union (FDAWU) was notified on the same day.
WMP highlighted the human cost of the decision, stating: “80 families’ lives disrupted. Bills unpaid, debts accumulated, meals foregone.”
MOM cites financial distress, not deliberate wrongdoing
MOM said investigations found the closure to be a genuine case of business failure rather than an attempt to evade salary obligations.
The ministry noted that salaries had been paid in full up to September 2025 despite prolonged losses.
A liquidator was appointed to manage the company’s affairs under the Insolvency, Restructuring and Dissolution Act 2018, with employee salary claims prioritised over other unsecured debts.
Based on these findings, MOM determined that a stern warning was the appropriate enforcement action.
Group warns of “double standards”
WMP questioned whether the response reflects unequal treatment between workers and business owners.
It argued that low-wage migrant workers often face strict penalties for minor infractions, while company directors may face limited consequences in cases involving unpaid wages.
The group said this could create a perception that businesses can liquidate operations to avoid liabilities, then resume operations under a different entity.
“This sends a very worrying signal to businesses – local and foreign,” WMP said, warning of potential abuse of the system.
Calls for stronger worker protections
In response, WMP has proposed several policy changes aimed at strengthening worker protections.
These include holding company directors personally liable for unpaid salaries when firms become insolvent.
The group also called for mandatory wage recovery insurance and the creation of a government-backed compensation fund for affected workers.
WMP argued that such measures would provide greater assurance to employees and deter irresponsible business practices.
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Partial payouts begin after months of delay
Following months of negotiations, affected workers have begun receiving part of their unpaid salaries through the liquidation process.
According to Channel NewsAsia, FDAWU said workers would start receiving payments from end-March 2026 after sustained engagement with the liquidator.
“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,” the union said.
The union added it had supported workers in filing claims and navigating procedural requirements.
Liquidator prioritises employee claims
The liquidator, AAG Corporate Advisory, confirmed that employees would receive approximately 50 per cent of their admitted salary claims.
“We are paying 50 per cent of the admitted (salary) claim,” said Yessica Budiman from the firm on 31 March 2026.
Payments depend on verified claims and available funds, with the total value of claims continuing to evolve as more creditors come forward.
Earlier disclosures indicated that nearly 100 creditors were owed slightly over US$750,000.
Due to limited funds, unsecured creditors such as suppliers are unlikely to receive payments.
Public response has included calls for MOM to review its decision, with some urging that the company’s owners pay salaries in full, including interest for delayed payment.
FDAWU said it continues to assist affected workers with documentation, tax matters, and job transitions.
The union also noted that most workers have been informed of their expected payouts, while others are still being notified.
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.
