Ministry of Manpower Committee of Supply 2021 – Cuts by WP MPs and LO

Re-skilling and the Promise of Reemployment – Jamus Lim

The existing co-funded conversion program

Currently, WSG offers a professional conversion program (PCP) that seeks to enable mid-career PMETs to undergo skills conversion into new occupations or sectors, as well as SkillsFuture credits for all Singaporeans to prepare themselves for potential career transitions. SkillsFuture and the PCP received a further boost under the Jobs Growth Incentive (JGI), announced in August 2020, where the government committed to copay a quarter (half for those aged over 40) of the salaries.

In a world where changing technology, continued globalization, and environmental considerations mean that jobs displacement and structural unemployment is liable to become more pervasive, co-funded PCPs of this nature will take on growing importance in helping our economy evolve into the competitive landscape of the future. Yet while we have some anecdotal evidence of the program’s benefits—a resident-employer I know shares, for example, of a number of successful placements—we have less systematic evidence that there is proactive reemployment of recently-displaced workers.

Refining the existing program

Currently, the JGI is applicable for up to one year, for hires commencing in September 2020 onward. This sort of certainty, for both the employer and employee, is critical. From the employer’s perspective, it is effectively coinsurance for a risky hire, since the potential employee’s ability to adapt and perform in a new role is largely unknown. From the employee’s perspective, it is insurance of a different kind; the promise of a job—even if it is only guaranteed for a year—is a solid incentive to be willing to undergo uncertain (and often painful) retraining.

Given the inherent complementarities between the PCP and JGI, I propose that the co-funding support be made permanent. I would even go as far as to venture that the PCP be permanently paired not only with co-funding, but to suggest that the program become the natural extension of a more holistic unemployment insurance program, which commences at the point of redundancy. The Workers’ Party had previously suggested the contours of a redundancy insurance system, which I will not repeat here. However, I am making the case to further incorporate unemployment insurance, given how it is a natural complement to a PCP-JGI program.

Existing precedents and models

Such an extended program is not unprecedented elsewhere. Sweden’s Job Security Councils, for instance, receive not just standard unemployment benefits but also financial compensation to assist in a job transition; the system seeks to provide security for a job, just not necessarily the job that you originally trained for.  Denmark’s Flexicurity encourages low-cost, flexible firing and hiring, but displaced workers receive unemployment support alongside retraining and reeducation programs.  And Germany recently refashioned its national unemployment agency to become more of a job-matching entity that issues not only career advice but also vouchers to finance retraining costs.

The underlying principle behind these efforts is clear: there is a natural end-to-end complementarity between unemployment insurance on one hand, and retraining and reintegration into the workforce on another.

Of course, costs are a perennial concern, but it should be kept in mind that redundancy insurance can be a self-financing system, heavily supported by workers’ own contributions, with perhaps some government top-up funded by recurring revenue.

Singapore already has most of the elements of the end-to-end jobs safety net in place, including the functional equivalent of unemployment insurance, which was widely deployed over the course of the COVID-19 crisis, via a number of relief schemes and support grants. All that is lacking is a willingness to fully institutionalize this approach, and ensure that the system is cohesive, so that Singaporeans unfortunate enough to be displaced from the jobs that they had previously prepared for also receive the support and guidance they need in a tough labor market.

Enhancing CPF Returns – Chua Kheng Wee Louis

Chairman, CPF has been able to maintain its interest rates of 2.5% for Ordinary accounts and 4% for Special, Medisave and retirement accounts. The interest helps our CPF members to grow closer to their retirement goals, which is to meet or exceed the minimum retirement sum.

Even though 2.5% or 4% compounded over a long period of time can lead to significant interests, I would like to ask if there can be a choice for CPF members, especially with a long-term investment horizon (i.e. 20-30 years old today, with 30-40 more active working years) to devote a portion of their CPF to earn higher returns?

For example, MINDEF already has a Saver-Premium fund, where investors have an option to choose between Dynamic, Balanced and Stable according to their investment needs. Is there a possibility for CPF members to have similar options, where they can opt a portion of their CPF savings for a “dynamic” portfolio, such as co-invest with the Government’s investment vehicles to enjoy the higher returns?

While up to 50% of the net returns from the reserves flow back through the NIRC, there could be a more direct means by which members will be able to earn higher investment returns through co-investing with the Government’s investment vehicles. Especially given the long term horizon for CPF monies held for members’ retirement. While there is already a CPF investment scheme in place, with a list of investment products included under the CPFIS, why should we look further when we already have the highest quality fund managers in the Government’s investment vehicles, and does it not make sense to allow Singaporeans to directly benefit from the Government’s prudent and astute investment capabilities?

Re-skilling and the Promise of Reemployment – Jamus Lim

Chairman, based on Ministry of Manpower’s latest 2020 labour statistics, own-account workers, defined by persons who operate their own business or trade without employing any workers, such as taxi drivers, property agents, tour guides, freelance artists, designers, caregivers, ridehailing drivers and delivery personnel accounts for 9.7% of total workforce, or 228,200 workers, up from 8.8% in 2019. 

While some own account workers are truly independent such as working proprietors, there are many who offer services as part of a wider organisation, such as taxi drivers, private hire car drivers and food delivery riders. The COVID-19 pandemic has arguably pushed more workers into the “gig economy”. Such a rise can be attributed to the advent of aggregator apps such as Grab and Deliveroo which has provided platforms for people to seek assignments in exchange for monetary incentives.

We have to recognize that this is a sizeable population of the workforce that are not protected by employment laws and regulation. These own account workers are not deemed as employees of the companies, and the companies are not obliged to provide CPF, Medical insurance and other worker benefits for these group of workers. Moreover, the own account workers’ income is subjected to the incentive structures which these companies can have the power to change at any time, without notice and do not require consent. Many of these workers end up stuck in a cycle of insecure work, reducing their opportunities for career advancement, and access to credit (mortgage, credit card) is restricted, exposing them to greater risks of financial shocks.

For many of these own-account workers, especially in the ridehailing and delivery industries, they exhibit many employee-like characteristics such as working exclusively for only one company, and/or having fixed working arrangements and KPIs with the company.

On 19 February, the UK’s Supreme Court has upheld a ruling that Uber’s drivers should be classified as workers rather than independent contractors. California’s Prop 22 ballot measure, passed by California voters in the November elections, could serve as a “third way” of classifying gig economy workers. It allows companies to offer private hire drivers partial benefits, such as a minimum base pay that is higher than the minimum wage, and healthcare subsidies for some drivers depending on the number of hours they work.

We would like to ask if more could be done to protect the interests and provide a safety net for this group of workers, such as mandatory insurance and minimum levels of benefits and protections for these workers?   

Work Passes for Foreigners – Leon Perera

Mr Chairman, in October 2020, I called for a mix of fixed-term and non-fixed term workpasses to attract investments in next-generation industries, and stave off job displacements. Such a mix could be offered to investors for specific projects, especially in highly desirable, future-ready industries where Singapore has competitive advantages. The mix could be tweaked depending on the degree of international competition for that investment.

I reiterate this call today. For fixed-term workpasses, the foreign worker would be hired for a fixed term of say, five years, and this time would be used to train up Singaporeans with equivalent skills. After the fixed term, hopefully there will be enough Singaporeans with the relevant skills to replace the worker.

This shares similarities with the Temporary Skill Shortage visa in Australia, where if appropriately skilled Australian workers cannot be found, employers can bring in skilled workers for a fixed period. Furthermore, the EP scheme aims to train Singaporean citizens and upgrade their skills . Fixed-term workpasses meet precisely this aim.

I acknowledge that current workpass schemes such as the EP and newly-launched Tech.Pass aim to attract skilled workers, redressing skill shortages. However, more should be done to train up a Singaporean Core in next-generation industries and incentivise employers to hire Singaporeans. For example, while the Tech.Pass is targeted at the “movers and shakers of the tech world”, fixed-term workpasses target a broader spectrum of skilled workers across disruptive industries.

For fixed-term workpasses, firms should have action plans for capability transfers to equivalent locals, as well as mentorship schemes, if feasible. Training can be tied to existing schemes (in workplaces or academic institutions). Extensions to fixed term work passes can be considered in the case of very extreme, extenuating circumstances.

Verifying Qualifications of Pass Holders – Dennis Tan Lip Fong

Mr Chairman, while the Workers’ Party welcome the recent tightening of work pass requirements, there remains a need to review other aspects of these requirements.

One aspect is the issue of unaccredited certifications which has been in the news again of late. Holders of certificates from degree mills and unaccredited schools have perplexed Singaporeans in previous incidents and made uncertain the belief that all our work pass holders can do the job they claim to be able to do on paper.

To be clear, such academic qualifications may not be forged, and we have a system in place to deter forged qualifications. However, these unaccredited qualifications are viewed with scepticism by our citizens, and the various degree mills that offer academic degrees and diplomas for a fee with little to no real coursework give little confidence. 

While MOM has indicated its risk-based approach in dealing with such matters, and employers do have a primary responsibility to ensure the authenticity and quality of the academic qualifications submitted, this approach should improve so that the trust necessary for Singaporeans to accept truly talented foreign PMETs in Singapore can be improved.

Therefore, I urge MOM to consider mandatory educational credential assessments (ECAs) for all Employment Pass and S Pass job applicants that need university degrees and diplomas, with costs to be borne by the applicant. Such ECAs would only be accepted from a panel of government-appointed established, independent consultants. The ECA report will be sent to the relevant agencies, the prospective employer and applicant.

This is not a novel idea, since our medical and legal professions have a list of recognized institutions that have only recently become narrower to uphold the standards of the professions. I urge the Minister to look into this.

Underpayment of Foreign Workers – Pritam Singh

Chairman, the underpayment of foreign workers and pass holders working in Singapore is not just a travesty against foreign workers, it sabotages Singaporean workers by undercutting their wage competitiveness. Unscrupulous employers take advantage of the significantly imbalanced negotiating position of foreign workers and coerce them to return a portion of their salaries in cash. Foreign workers are usually in debt by way of agency fees owed back home, or to middle-man employment agents many of whom are outside Singapore’s jurisdictional reach. Foreign workers and pass holders would unsurprisingly more concerned about their prospects for continued employment or employability in Singapore. In such a scenario, the disadvantages of reporting an errant employer to the Ministry of Manpower can far outweigh the advantages.

The Minister of Manpower, arising from Parliamentary questions filed by WP MP Mr Faisal Manap and PSP NCMP Leong Mun Wai recently confirmed that about 190 employers were found underpaying their foreign employees every year between 2015 and 2019. That total corresponds to close to 1000 employers over a five-year period. The total number of foreign workers who were underpaid was not disclosed nor were any details of restitution made to these workers disclosed. Can the Minister makes these details known. Minister also shared that the number of errant employers caught was the result of “improved detection capabilities” and education efforts to encourage foreign employees to report salary irregularities. Minister committed that the Ministry would continue to take strong surveillance and enforcement action against errant employers.

Under the Employment of Foreign Manpower Act, it is an offence if employers do not pay their foreign employees their contractually fixed monthly salaries or inflate their foreign employee’s salaries with no intention of paying them the amount declared to the Ministry of Manpower. For each charge, an offender can be jailed for up to a year or fined up to $10,000 or both.

Sir, I believe it is time to come down harder on errant employers who deny their foreign workers and pass holders a fair wage, and in doing so, also lower the employment opportunities of Singaporeans who are qualified to do the same jobs. Compared to the numbers from 2010-2014 where 60 errant employers each year were found to have illegally deducted the salaries of their foreign workers, the numbers are clearly on the increase. One direct way would be to raise the deterrent effect of the enforcement regime by increasing the penalties for underpayment of foreign workers and pass holders under the Employment of Foreign Manpower Act. A second approach could be to tweak the law to require an errant employer, in addition to criminal penalties, to pay the foreign worker a penalty amounting to six months of the foreign worker’s wage for each instance of intentional underpayment to circumvent Ministry of Manpower regulations. This amount would represent a punitive element that seeks to activate a behavioral effect to nudge foreign workers to pro-actively report employers who do not pay their declared wages as required by the Ministry of Manpower.

Job Advertisements for Migrant Workers – Leon Perera

Mr Chairman, migrant workers currently pay hefty agency fees to secure a job in Singapore. In 2019, migrant worker NGO TWC2 found that for first-timers, the average agency fee paid, especially for Bangladeshi workers, was $7,606 and the median was $7,750. For repeat workers, the average was $4,733 and the median was $4,000.

When migrant workers lose their jobs, they fall into heavy debt because they are unable to pay off the loans that they had taken for the agency fees.

It is perplexing that migrant workers bear the brunt of agency fees when it is common in many industries and countries for the employers to bear such fees.

MOM could consider setting up a standardised, Singapore-licensed and mandatory online job portal for both job-seekers who are already in Singapore, as well as overseas job-seekers who want to work as migrant workers in Singapore. Employers (with quota) and Singapore-licensed employment agents should be the only ones allowed to advertise vacancies on the portal. This cuts out unlicensed job brokers. Under such a scheme, it would be mandatory for the company and worker to transact the job application and acceptance through the portal. Mr Alex Au TWC2, and others, have called for such a reform.

Singapore-licensed and regulated employment agents could still engage in bulk recruitment for specific end-employers in Singapore, provided all recruitment goes through the portal for the sake of transparency to the worker, MOM and all stake-holders.

Such a portal may also be useful to enable the authorities and the workers themselves to track compliance with insurance requirements.

Entry of Approved Foreign Workers – Sylvia Lim

Additional processes have been put in place for employers of foreign workers seeking entry or re-entry into Singapore.  After getting MOM approval for the workers, there is now an additional requirement for employers to apply for slots for their entry into Singapore on specific dates.   It was explained that there is a need to stagger the entry of foreign workers to reduce the risk of imported COVID-19 cases.  I believe employers understand the rationale, especially since Singapore has had a major headache dealing with outbreaks of COVID-19 in foreign worker dormitories.

The issue with the implementation is the uncertainty it creates for employers.  Employers are advised by MOM to apply for workers to enter on specific dates, only to receive replies that the slots are full and to re-apply on specific later dates, with the cycle repeating itself. For employers working on construction projects, not knowing when approved workers can enter Singapore renders them unable to plan when work can resume.   Some are working on key infrastructure projects which promise enormous social benefits, such as new MRT lines.  Other employers might be waiting for new domestic workers to assist in desperate family circumstances.

Can the Ministry clarify how many daily slots are available for entry of foreign workers into Singapore, and how these are allocated?

Progressive Wage Model for Lift and Escalator Sector – Pritam Singh

Sir, the Progressive Wage Model (PWM) for the lift and escalator sector was approved by the Government in 2018 after a Tri-Sector Committee comprising of union representatives, the Government and lift companies made its recommendations. Arising from this agreement to raise the wages of Singaporeans and PRs in the lift and escalator sector – a move that all Singaporeans should support – it is inevitable that some maintenance costs will rise.

The lift and escalator industry is one with relatively high barriers to entry, and it is dominated by a handful of major players. Some years ago, arising from a number of high-profile accidents in the Town Council setting, many Town Councils moved to, as far as possible, tag the maintenance of their lifts to their original equipment manufacturers. This was also done in anticipation of a smoother roll out lift enhancement initiatives.

Currently, Town Councils are in discussions with the various lift companies that seek to increase the maintenance cost of lifts in HDB estates arising from the implementation of the PWM in the lift and escalator sector. In tandem, lift companies are also increasing the fixed schedule of rates for their lift parts. The latter move should not have any direct connection with the roll-out of the PWM in this sector as the cost of spare parts generally rise in tandem with inflation, accounting for a reasonable 3-4% increase in costs for Town Councils.

In my discussion with lift companies as an elected MP of Aljunied-Hougang Town Council, the starting position of some lift companies has been to throw a steep increase in maintenance fees. One major lift company started with a more than 40% jump in lift maintenance fees posting that costs would likely rise by 40% on account of the implementation of the PWM in this sector. When this company was questioned what percentage of the increase would go to its workers, considering it maintained thousands of lifts across various Town Councils and should benefit from significant economies of scale to accommodate a mandated rise in wages through the PWM, company representatives demurred and argued that a rise in excess of 40% was just an opening position and that this amount was subject to negotiation.

Sir, I recognize that such discussions with lift companies are commercial arrangements. The argument from some when a minimum wage like the PWM is applied, is that costs will rise and this burden will have to be borne by consumers. But it would appear that some vendors could take advantage of the PWM to profiteer under the pretext of increased costs.  In view of the design of the Progressive Wage Model and the extended conversations that take place between union representatives, the government and the companies, I would like to know how the tripartite partners ensure that the prospects of profiteering by unscrupulous vendors are kept in check under the guise of rising wages for workers. This is especially in sectors like the lift and escalator sector where a number of major players dominate and have a large footprint in the sector.

Sir, I filed this cut before SMS Koh Poh Koon delivered his speech last Wednesday where he recommended the set-up of a committee to guard against companies profiteering from the roll-out of the Progressive Wage Model. To this end, what role do Government bodies like BCA play to ensure that the interests of Singaporean HDB dwellers and consumers are protected from unjustified hikes in the guise of adherence to the PWM in the lift and escalator sector?

Progressive Wage Model – Gerald Giam Yean Song

The progressive wage model (PWM) currently covers three industry sectors: cleaning, security and landscaping. It will cover the lift and escalator maintenance sector by 2022 and there are now discussions to implement PWM in six more sectors.

Based on MOM labour force data, apart from the aforementioned sectors, there are still more than 80,000 Singapore citizens and permanent residents aged 15 years and over working in other sectors, earning a gross income of less than $1,000 per month. These include 27,300 in transportation and storage, 10,900 in public administration and education, 8,000 in manufacturing, and 7,400 in health and social services. If we include those earning less than $1,500 per month, the numbers more than double.

Can the Minister share whether MOM has plans to roll out PWM to these sectors and, if so, what are the broad timelines for doing so?

The NTUC wants to look at a vocational PWM for lower-wage occupations like clerks, general machine operators and electricians. How does MOM plan to implement PWM for these vocations given they cut across multiple sectors? What levers will MOM use to impose wage, training and career progression requirements, in the absence of licensing conditions?

Finally, DPM Heng said that the Government’s aspiration is for every sector of the economy to have some form of progressive wages. Moving forward, how will the Government roll out the PWM differently, so that it can be implemented at a quicker pace and made universal? Which processes and requirements will be streamlined or removed, to ensure a faster rollout?

Work Injury Compensation Act for All Singaporean Workers – Pritam Singh

Sir, work injury compensation coverage has represented a form of worker protection that long predates even Singapore’s independence. It serves as a critical bulwark to protect workers against accidents, providing them important financial relief and some degree of protection in times of uncertainty and distress.

Even so, the central role of platform workers or gig-economy workers in the economy over the last few years shows no signs of abating. In a time of heightened retrenchment and lower salary prospects, such work provides an important outlet for many Singaporean workers. In this light, concerns abound over the lack of important worker protections for this group of Singaporean workers. Independent contractors under a contract for service context also find themselves in a similar predicament. I have come across Singaporeans undertaking delivery work and couriers finding themselves without WICA coverage. In the event they injure themselves in the course of their work while loading or unloading their vehicles, no prospect of work injury compensation coverage exists for them, and in cases of serious injury, their future rehabilitation prospects are far poorer without an injury payout.

Does MOM have any indication of the number of such Singaporean workers without WICA coverage especially those in the low-income bracket? Separately, does MOM have any plans to address the worker protections for such Singaporean workers in light of developments in other jurisdictions like the UK where the Supreme Court recently recognized platform workers as employees – lending weight to important questions over the appropriate statutory protections that should be extended to such workers in future?

Childcare and Parental Care Leave – Chua Kheng Wee Louis

Chairman, while eligible working parents of Singapore citizen children are entitled to 6 days of paid childcare leave per year, this only applies to children below the age of 7.  Parents whose youngest child is between 7 and 12 years old is only eligible for 2 days of extended childcare leave per year, while childcare leave is held constant regardless of the number of children a couple has. Given that there is a rising trend of dual-income families (66% as of 2015), we would like to ask if childcare leave can be extended on a per child basis and up to the age of 12, as our primary school going children would still need a degree of care if they fell ill, or simply to allow families to spend more time together. With an increasingly ageing society, there is also duties to take care of parents. Many companies have started to offer elder care leave as an Employee Value Proposition, and we would like to ask if this could be considered as a statutory leave.

The workplace has become more pro-family over the years, with more establishments offering various work-life initiatives such as flexible work arrangements and non-statutory family friendly paid leave. Flexible work arrangements are important, but it is also equally important to give our workers the flexibility to take time off without taking no pay leave to care for their children or parents.  

Chairman while it can be argued that increasing leave provisions could be difficult against the challenging economic climate, the challenges of our low fertility rate and ageing population are no less critical. If we wish to uphold the ideal of family support and enable children to play their role as caregivers to elderly parents, and for working parents to look after their young children, while balancing other demands on their time, then a baseline level of parental care leave should be legislated to send the right signal to society on this matter.

Flexible Work Arrangements – Chua Kheng Wee Louis

In 2019, about 85% of employers offered some form of formal or ad hoc FWAs in the workplace. However, FWAs come in a spectrum, and clearly, the level of flexibility that was in place pre-COVID is dramatically different from what we have seen in 2020 or even today with WFH being the default work arrangement.

Amongst many companies in Singapore, UOB has already instituted a two day work from home policy post COVID, while DBS will give its workforce the option to work remotely up to 40% of the time. Is it now time for the Government to reflect the needs of today’s employees and employers, and legislate a baseline level of flexible work arrangement?

Annual leave, sick leave, maternity leave and childcare leave are amongst the various leave provisions currently legislated for under the employment act, although the right number is a separate topic for debate. It is not lawful for employers to give notice of dismissal to a mother during her absence, and neither is it conscionable to for employers to discriminate against hiring women and mothers. Legislation is no silver bullet, but it is an all important first step. In the same vein, I do hope that the government, businesses and society do not view flexible work arrangements as one which has unintended consequences of reduced employability, and it is imperative for the government to demonstrate leadership on this matter.