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ESTIMATES OF EXPENDITURE FOR THE FINANCIAL YEAR
1ST APRIL, 2008 TO 31ST MARCH, 2009
(Paper Cmd. 2 of 2008)
Order read for consideration in Committee of Supply [6th Allotted Day].
[Mr Speaker in the Chair]
Head S - Ministry of Manpower (cont.) –
Resumption of Debate on Question [4th March, 2008],
"That the total sum to be allocated for Head S of the Estimates be reduced by $100." – [Dr Ahmad Mohd Magad].
Question again proposed.
The Minister of State for Manpower (Mr Gan Kim Yong): Sir, during the last COS in 2007, we announced the intention to introduce re-employment legislation by 2012. This will allow our older workers to work longer and save more for retirement. The tripartite partners have been working to encourage and help older workers to stay employed longer and to prepare them for re-employment.
More older workers are employed now than ever before. Last year, 56% of residents aged 55 to 64 were working, compared to 54% a year ago. This is equivalent to about 20,000 more people – a significant improvement.
To encourage older workers to take advantage of the employment opportunities brought about by the strong economic growth, the TriCom on Employability of Older Workers, which I chair, has adopted two major thrusts.
First, we will press on to prepare our companies and workers for re-employment. A tripartite workgroup led by the Singapore National Employers Federation (SNEF) is preparing a set of guidelines to help workers and employers implement re-employment. We aim to finalise the guidelines by the end of 2009.
Meanwhile, the tripartite workgroup has drawn up a checklist of good re-employment practices. The tripartite partners will consult widely with industry and union leaders over the next 12 to 18 months before finalising it.
Companies that need help to implement re-employment can tap on ADVANTAGE!. For example, West Pharmaceutical Services implemented a re-employment policy in November last year, after it joined the ADVANTAGE! scheme. The company has put in place a process to discuss with its workers on available re-employment options 12 months before their retirement, and makes an offer to them six months before their retirement. For workers who are re-employed and re-deployed to a new job, relevant training will be provided. West Pharma offers re-employment contracts of at least two years' duration, subject to a yearly review. Wages for re-employed workers may be adjusted to take into account the value of the job and the workers' competencies.
Mr Heng Chee How suggested ways to enhance the ADVANTAGE! scheme including supporting pilot projects and specific help for SMEs. I thank him for the feedback. Indeed, ADVANTAGE! does support pilot projects provided they lead to preparing companies for re-employment. We also introduced ADVANTAGE! for SMEs last year to help the SMEs more specifically.
Workers have an equally important role to play to make re-employment work. They must be prepared to accept a different job and undergo training for the new job if necessary. They must also be prepared for adjustments in wages and benefits to better reflect the value of the job and their competencies. This is particularly so if a significant portion of their wages is seniority based.
Re-employment is still a new concept and I agree with Mr Heng Chee How and Ms Cham Hui Fong that we will have to actively reach out to both employers and employees to help them understand what re-employment means and how it can be a mutually beneficial arrangement.
The workgroup will be driving these efforts. Feedback received and experience gained in the process will help us better address the operational issues that companies and workers may face in implementing re-employment.
Dr Ong Seh Hong proposed to remove the concept of a retirement age. I agree with his objective of helping workers stay employed longer, but I think removing retirement age will not achieve this. Re-employment, on the other hand, is a more flexible and effective way to help workers work for as long as they are able to. It allows both the employer and the worker to make changes to the existing job arrangements when the worker reaches retirement age. For instance, the worker may wish to work part-time or to take on less responsibility. The company may, on the other hand, need to re-deploy the worker to another job to facilitate leadership renewal. And, even if the worker is retained in the same job, the company may have to adjust his seniority-based wages. This flexibility will allow the company to remain competitive and keep the worker employable.
A second key thrust is increasing the employment rate of older women. This chart that I am showing you shows that Singapore is among countries with the highest employment rates for older men (at 74%), but relatively lower employment rates for older women (at 39%). We need to improve the employment rate for women.
Currently, a significant number of women leave the workforce in their 30s or 40s. Many of them do not re-join the workforce thereafter. We need more examples like the 52-year old Mdm Noormalin. After having left the workforce for two years, she found a part-time job as a customer service assistant at the SMRT Taxis contact centre. Having a job near her home allows her to earn an income while caring for her four children.
Mdm Noormalin is one of the beneficiaries of a "30 minutes to work" job fair. This was launched by a workgroup under the TriCom, led by Mdm Halimah and the NTUC, and in partnership with the South West CDC. This year, the workgroup has set a goal of helping 2,000 women enter the workforce.
Let me now move on to another issue raised by several MPs, that of help for low-wage workers. With strong economic growth, the number of low-wage residents in full-time employment earning $1,200 or less per month fell by 6.6% between 2006 and 2007. The long-term unemployment rate has also come down from 0.8% in December 2006 to 0.4% in December 2007. This is comparable to levels last seen before the Asian Financial Crisis. Nonetheless, as Mr Ong Ah Heng, Mr Hri Kumar, Mr Ang Mong Seng and Dr Ahmad Magad have observed, there are still those who are unemployed or in low-paying jobs because they do not have the skills that are in demand.
Currently, the CDCs and other Distributed Careerlink Networks (or DCNs) already provide free employment facilitation services to residents who are unemployed or retrenched. The DCNs link job seekers to highly-subsidised WDA training programmes for skills upgrading and re-skilling for new jobs in growth sectors. We will be doing more under the newly-unveiled CET Masterplan, which the Minister has elaborated on yesterday.
Dr Amy Khor, Mrs Josephine Teo and Mr Seng Han Thong have also mentioned the importance of job redesign. Job Recreation Programmes (JRPs) are being implemented in a number of sectors to make the jobs appealing to Singaporeans by enhancing job worth, working conditions, and the image of the profession. Overall, JRP efforts re-created over 15,000 jobs last year. We will press on with the JRPs.
For those in low-wage jobs, the Workfare Income Supplement (WIS) Scheme is an important tool to help them and encourage them to stay employed. The lower CPF contribution rates for low-wage workers improve their employability, while WIS makes up for the lower CPF rates and gives them additional income.
The first WIS payment was made in January this year, with 287,000 workers receiving $146 million. The second payment will be made in April and May this year.
There have been many suggestions by MPs on how we can help workers benefit more. Mdm Halimah, for example, has suggested excluding overtime pay in computing WIS. Sir, whether a worker's income is in the form of basic salary or overtime pay, they are both income that will help support the worker and his family. Given that WIS' aim is to help low wage workers by supplementing their income, I think it is fair to consider all income earned by the worker.
Ms Cham Hui Fong also highlighted the case of workers who had received the provisional WIS payment for the first six months of work, but later received a year-end bonus, which increased their average income to above $1,500 a month, making them ineligible for WIS. Firstly, let me clarify that the first WIS payment is an advance payment paid for work done in the first half of the year, but WIS is actually based on the average monthly income for the whole year. The intent is to help workers by paying them early rather than making them wait for the whole year to be over. If we were to wait for the whole work-year to finish, they would have to wait much longer. It is not, as Ms Cham says, a disincentive to earn more.
It is only fair that we should recover WIS paid to those whose average monthly income exceeds $1,500, as such members are not in our target group. Excess WIS in the form of CPF can be recovered directly from the member's CPF account, but we will be flexible when recovering the cash component. Since the WIS is a long term scheme, excess WIS paid in cash will be recovered against future WIS payments should the worker receive them. This will not inconvenience the affected workers.
During the Budget debate, Mr Inderjit Singh, Mr Christopher de Souza and Dr Ahmad Magad also made many suggestions on the WIS Scheme such as including workers earning up to $1,800 a month, increasing the payment frequency, and adjusting WIS to take into account inflation. As WIS has just been implemented, MOM can consider these suggestions during the review of the scheme in 2010.
Mr Ong Ah Heng highlighted the difficulties faced by odd job workers in receiving the WIS. While we have measures to help informal workers on this front, bringing them into formal employment, where they can benefit from both WIS and the CPF system, will be a better outcome.
To achieve this, the CPF Board has stepped up enforcement against employers who fail to make CPF contributions for their workers. The CPF Board took 14,000 cases to court last year for failure to pay CPF. One of the cases involved a labour supplier that classified its workers as "independent contractors" when they were in fact employees. The CPF Board recovered $47,500 in CPF contributions for 51 employees. Forty-seven of them subsequently benefited from the WIS as formal employees.
In addition, the tripartite partners have been reaching out to educate workers on their employment rights and the benefits of formal employment. Together with the CPF Board's enforcement efforts, this has contributed to some 10,000 informal workers converting into formal employment and benefiting from WIS. We will continue to encourage more workers to join the CPF system to build up their retirement nest eggs and benefit from WIS.
For those who remain in informal employment, we encourage them to contribute to CPF by allowing them to qualify for WIS if they contribute at the lower rate as self-employed workers. As Ms Cham Hui Fong has suggested, the tripartite partners have been reaching out to these workers on the benefits of contributing to CPF and on the WIS Scheme. We do so very extensively through the "Be a Winner" campaign. MOM has also worked with various partners to brief hawkers, cleaners and grassroots representatives, and to educate employers through seminars and workshops.
To date, about 54,000 self-employed and informal workers have received their WIS payout. Another 46,900 have registered with the CPF Board but have not fulfilled their Medisave contributions. This shows that while they are aware of the WIS scheme, they have not made the contribution to their Medisave to qualify for WIS.
To encourage informal and self-employed workers to contribute to Medisave and receive WIS, we introduced the Medisave Contribution Draw. The first one will be held in June 2008. We have made it easy for workers to contribute, by allowing payments in instalments and at many locations, including CPF service centres, AXS machines, and the 62 Singapore Post outlets.
To make WIS more attractive to the self-employed and informal workers, Dr Ahmad Magad has suggested that there should be a cash component in the WIS payout to them. Mr Siew Kum Hong has suggested waiving the Medisave contribution requirement altogether.
They are concerned that many informal workers and self-employed do not find it worthwhile to contribute cash to their Medisave just to benefit from the WIS. While I understand their concern, I should stress that each person must take responsibility for his CPF contributions. This principle is the foundation of the CPF system and applies to all workers, self-employed or otherwise. The Medisave Account enjoys higher interest, including the bonus interest offered by the CPF Board. It provides for the workers' medical needs and allows them to participate in MediShield.
Furthermore, self-employed persons and informal workers already contribute far less to CPF than formal employees earning the same amount – only 8.5% compared to 34.5%. For low-wage self-employed persons, their contribution rate has been further reduced, to as low as 2.5%, for those earning less than $12,000 a year. For example, those who are earning $1,000 per month, Medisave contribution required for a 40-year old worker earning $1,000 a month is only about $25 a month, less than a dollar a day (or about the price of a cup of kopi-o ). Waiving the Medisave contribution requirement for self-employed or informal workers to qualify for WIS will undermine the principle of individual responsibility, and may inadvertently discourage informal workers from converting to formal employment.
Given the increasing importance of the CPF system in providing for workers' medical and retirement needs, we should encourage self-employed and informal workers to put more into their CPF, and not ask for their contributions to be reduced or waived.
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ComfortDelgro recently announced that they will be passing on road tax rebates to its taxi drivers in the form of CPF top-ups to the driver's CPF Account to improve their retirement adequacy. This is a positive move and I encourage other principals to consider similar initiatives for their self-employed agents. My Ministry together with the CPF Board will engage the principal associations and other organisations on ways to help the self-employed build up their CPF savings.
Besides informal workers, contract workers is another area of focus for MOM. Ms Jessica Tan and Mr Zainudin Nordin have expressed concerns about the employment conditions of these workers. Informal workers are covered by existing labour laws such as the Employment Act and the CPF Act. Employers are therefore required to provide their contract workers with basic employment benefits, such as CPF contributions, overtime allowance, prompt salary payment, annual leave and medical leave.
We have been taking actions against errant contractors and helping vulnerable contract workers understand their employment rights. The support of end-user companies of outsourced services is important. Recognising this, the Tripartite Committee on CPF and Work-related Benefits for Low Wage Workers has formulated a tripartite advisory on responsible outsourcing practices, which will be released later today. The Tripartite Advisory will serve as a useful reference for end-user companies when they outsource their functions. For example, end-users are encouraged to require third party contractors to adopt responsible practices, such as providing written employment contracts for their workers and hiring workers for at least six months, so that they can qualify for employment benefits under the Employment Act.
The public sector will take the lead to adopt the Tripartite Advisory. The Tricom has also secured commitments from the private sector end-user companies like the NTUC FairPrice Cooperative Limited and the National University Hospital.
In conclusion, Sir, we have made progress in helping older workers stay employed. But we need to continue to prepare employers and employees for re-employment. The WIS Scheme has helped lower income workers and we will continue to reach out to informal workers and the self-employed. However, these workers must also take on the responsibility to contribute to their Medisave to benefit from the WIS. This way, we will be able to achieve a win-win outcome for all. My Senior Parliamentary Secretary will now respond to the remaining points.
The Senior Parliamentary Secretary to the Minister for Manpower (Mr Hawazi Daipi): Sir, the Minister of State has spoken about the policies and measures to facilitate the re-employment of older workers as well as to encourage women to return to the workforce. I shall elaborate on the efforts to promote flexible work arrangements and fair employment practices, both of which can impact the employment of older workers and working mothers.
First, flexible work arrangements. I agree with Dr Ahmad Magad and Dr Lim Wee Kiak as well as Miss Penny Low and Dr Amy Khor who spoke during the Budget debate, about the need to encourage economically inactive residents to join the workforce. Indeed, one of the key strategies to achieve this would be to facilitate part-time employment and flexible work arrangements. A study done by MOM in 2006 on economically inactive women of ages 25 to 49 and older persons of ages 50 to 64, found that more than nine out of 10 of those intending to look for work in the next two years, were looking for part-time work. In this tight labour market, employers can therefore address part of their staffing needs by encouraging more of the economically-inactive to take up jobs.
To address Dr Lim's concerns about the legal protection for part-time workers, I would like to point out that part-time employees are covered under the Employment Act. Part-time employees enjoy similar benefits as full-timers, such as annual leave, sick leave and maternity leave, except that these are pro-rated based on their working hours. They are also entitled to CPF contributions from their employers.
Dr Amy Khor has asked for a study to examine the obstacles preventing employers from offering flexible work. Such a study was conducted by MOM in 2005. It found that some employers were ill-informed about work-life practices and sceptical about the benefits. We have therefore rolled out a series of promotional activities to raise awareness, including the Work-Life Harmony Week and the Work-Life Conference since 2005. MOM also works closely with the Employer Alliance, which is a group of employers committed to work-life promotion, to generate buy-in amongst CEOs and business leaders. The results have been encouraging. In a recent survey of four Asian countries (ie, Japan, China, Hong Kong and Singapore) by Hudson, Singapore companies were found to be the most likely to implement work-life policies.
To encourage more companies to employ new workers on part-time work or flexible work arrangement, MOM launched the Flexi-Works! Scheme in November last year. Administered by the National Trades Union Congress (or NTUC) and Singapore National Employers Federation (or SNEF), the scheme offers grants of up to $100,000 to help companies defray the cost of implementing flexible work arrangements, including the various examples mentioned by Dr Ahmad Magad. The Flexi-Works! Scheme complements other work-life initiatives by the Tripartite Committee on Work-Life Strategy, including the Work Life Excellence Award, which recognises companies with excellent work-life culture and practices, and the Work-Life Works! Fund (or WoW! Fund).
Flexible work arrangements can lead to win-win outcomes for the employer and employee. Employees who are better able to balance their work and personal lives are likely to be more committed and productive in their work. One example is Terra Holdings, a small IT company with about 20 staff. With assistance from the WoW! Fund, Terra Holdings has put in place flexible work arrangements such as telecommuting and part-time work. This has led to an increase in productivity and staff retention - Terra Holdings halved its turnover rate from 30% in 2006 to 14% last year, while improving their year-on-year sales.
Going forward, we will continue to refine our programmes and funding schemes to encourage and facilitate more employers to implement flexible work arrangements and other work-life strategies as well as build platforms to share and recognise good practices.
Second, fair employment practices. Dr Ahmad Magad has asked whether legislation would be effective in addressing workplace discrimination and preventing discriminatory job advertisements. The experiences of other countries have demonstrated that legislation has not effectively addressed the issue of discrimination. In some cases, the number of complaints has in fact increased after laws have been enacted. But far from addressing the problem, such legislative measures have resulted in a litigious labour-management climate.
Ms Ellen Lee has also raised the issue of workplace sexual harassment. MOM hardly receives complaints of such nature. Notwithstanding this, as with cases of workplace discrimination, workers who experience sexual harassment problems could take up the issue with their management, or through their unions if they are union members. If necessary, they could also lodge a police report. As alluded by Ms Lee, the Penal Code has provisions against insulting the modesty of a woman and making obscene or lewd acts at woman. Since there are already avenues of recourse and legal protection available, there is no need for additional legislation against workplace sexual harassment.
Sir, the real challenge is to positively shape mindsets and behaviour. In this regard, a promotional approach supported by the tripartite partners – unions, employers and the Government – is more effective in dealing with the issues of workplace discrimination and harassment. In 2006, we formed the Tripartite Alliance for Fair Employment Practices (or TAFEP), led by Mdm Halimah Yacob from NTUC and Mr Bob Tan from SNEF, to raise awareness of fair and responsible employment practices and facilitate the adoption of such practices among employers.
TAFEP has received strong support from employers, with the number of employers pledging to embrace the principles of fair employment doubling to more than 600 within the last year. Just last Thursday, TAFEP and the Association of Small and Medium Enterprises organised a breakfast session for CEOs of SMEs. By the end of the morning, more than 30 CEOs have signed the Employers' Pledge of Fair Employment Practices to signal their support for fair employment.
With respect to job advertisements, TAFEP will continue to work closely with the newspapers and employers to ensure that job advertisements are in line with the guidelines. Many of the discriminatory job advertisements arise from a lack of awareness, rather than blatant biasness. Often, it is a matter of helping employers phrase their requirements accurately. For example, some employers advertised for fresh graduates when their intended message was that working experience was not a pre-requisite. Such advertisements not only turned away experienced graduates, but could also be viewed as discriminatory. At TAFEP's advice, these employers reviewed their job advertisements and removed the "fresh graduates" clause. Doing so enhanced their image as fair employers. But more importantly, it allowed them to reach out to a wider pool of candidates.
Dr Ahmad Magad also spoke about the need to monitor discriminatory employment practices. Last November, the Tripartite Centre for Fair Employment, or TAFEP Centre, was launched. It offers a channel for the public to give feedback and seek advice on fair employment matters. The Centre will continually monitor the feedback received, and engage employers to review their employment practices and adopt the guidelines on fair employment.
I am confident that the tripartite efforts will encourage and facilitate fair and responsible employment amongst companies, and enable them to better attract and retain valued employees and talents.
Let me now speak on workplace safety and health. Mr Heng Chee How would be pleased to know that the workplace fatality rate has continued its steady decline from 4.9 fatalities per 100,000 employees in 2004, to 2.9 in 2007. This is a 40% improvement over the past four years and we are on track to achieve our target of reducing workplace fatalities to 2.5 fatalities per 100,000 employees by 2015.
Specifically, in response to Mr Ong Ah Heng's question, high-risk sectors such as the construction and marine industries have also continued to improve their safety outcomes. The fatality rate in the construction industry fell from 9.4 per 100,000 workers in 2006 to 8.3 in 2007, while for the marine industry, the fatality rate dropped from 9.8 in 2006 to seven in 2007. This translates to improvements of 12% and 29% for these two sectors respectively. The injury rates have similarly fallen by 10% for the construction industry, and 39% for the marine industry.
Notwithstanding the progress made, the construction and marine sectors remain two of the riskiest sectors, accounting for over 50% of the total workplace fatalities in 2007. The recent NUS crane collapse which resulted in three deaths is a reminder that we cannot afford to ease up in our efforts. I agree with Mr Ong that efforts to expand the coverage of the WSH Act to the six new sectors from 1st March should not come at the expense of the existing high-risk sectors. That is certainly not MOM's intention, as evident from the measures implemented in recent months. In July last year, MOM introduced a compulsory worker safety and well-being test for workers in the marine and construction industries. The test ensures that our workers understand their safety responsibilities, and can identify workplace hazards. In January this year, we also enacted the WSH (Construction) Regulations, which require all worksites to have an adequate safety management system and all construction supervisors to receive safety training.
Mr Heng Chee How has also asked about the safety of transporting workers to and from workplaces. A Work Group, which would be co-chaired by the Land Transport Authority (or LTA) and MOM, will be formed to review the safety of workers transported on lorries.
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Mr Heng Chee How was also concerned that the competitive tender-bidding process
may result in safety standards being compromised by some construction companies. As Mr Heng has correctly observed, for any WSH improvements to be sustainable, there must be industry ownership of safety outcomes. It is in this context that the WSH Advisory Committee launched the Construction Safety Audit Scoring System (CONSASS) last November to make safety an integral part of business. While it is a voluntary system, CONSASS has received widespread support from both developers and contractors. This will help foster a stronger WSH culture in the construction industry.
Sir, I will now turn to the management of our foreign workers and the protection of their well-being. As mentioned by Ms Denise Phua, foreign workers play an important role in keeping Singapore competitive. As long as we have more jobs than locals can fill in, and some jobs that locals are not keen to take up, we will have many foreign workers in our midst. This is inevitable for a small place like Singapore. As a result, as observed by Mr Ong Ah Heng during the Budget debate, and Ms Phua yesterday, when Singaporeans see such workers congregating in HDB areas or other public spaces, they are concerned about the management of foreign workers.
For foreign workers who commit public order offences or other offences like littering, Government agencies like the police and NEA have been actively taking enforcement action. The feedback that Ms Phua has received from her residents is understandable. Members of the public should report to the authorities if anyone or any group has broken the law or caused public disorder. However, I would like to highlight that the vast majority of foreign workers in Singapore are law-abiding. Statistics from the police show that foreign workers are no more likely to commit crimes than locals.
The solution, therefore, cannot be to segregate foreign workers from areas where locals frequent. Indeed, we cannot completely keep them off our housing estates, because they are there. Except for those in the construction and marine industries, work permit holders are in our midst in the housing estates. Rather, we need to balance the housing and recreational needs of foreign workers with the concerns of Singaporeans. And this will require Singaporeans to adopt and accept foreign workers within our society. I applaud Ms Phua for recognising this and refusing to take a "not in my backyard" attitude. We need to bring this message to the heartlands.
I agree with Mr Ong and Ms Phua that this is a multi-faceted challenge that requires a whole-of-Government effort. MOM, therefore, works closely with the relevant Ministries and Government agencies to identify and resolve the various issues concerning foreign workers. For example, to address the shortage of proper accommodation for foreign workers, an inter-agency committee led by MOM and MND was set up in 2006 to increase the supply, as well as to coordinate enforcement efforts against errant employers for housing their workers in unacceptable accommodation. I would like to assure Ms Phua and Mr Ong that MOM will continue to work closely with various Ministries and Government agencies to proactively monitor and address the housing and recreational needs of foreign workers, as well as the concerns of Singaporeans.
Mr Ong Ah Heng has also expressed concern about employers who illegally deploy their foreign domestic workers (FDWs) to work in other premises and those who do not pay salaries to FDWs. Under the Employment of Foreign Manpower Act, FDWs are only allowed to perform domestic duties at the residential address stated in their work permits. Employers are also required to pay their FDWs monthly. Errant employers can be fined up to $5,000, and/or jailed up to six months, and barred from employing another FDW.
MOM is committed to safeguarding the well-being of FDWs and treats such offences very seriously. Last year, MOM prosecuted 229 employers for the illegal deployment of FDWs. During the same period, MOM helped to recover more than $270,000 in unpaid salaries for 276 FDWs.
To complement the enforcement efforts, MOM has also implemented a series of educational measures, such as the mandatory Safety Awareness Course and a bi-annual FDW newsletter, to inform FDWs of their employment rights and the available channels for recourse. In addition, we conduct random interviews with first-time FDWs during their initial months of employment to reiterate to them their employment rights, and determine if they have adjusted to their new work environment in Singapore.
Sir, in conclusion, our efforts to nurture a competitive workforce must go hand in hand with efforts to build workplaces that facilitate optimal performance. To maximise the potential of our workforce comprising both local and foreign manpower, our employment practices must be progressive, fair and equitable, based on an individual's merit and productivity. At a more fundamental level, basic standards for employment as well as safety and health must be complied with. The confluence of these factors will make Singapore a great place to work for both local and foreign workers.
The Chairman: We have time left. Mdm Halimah.
Mdm Halimah Yacob (Jurong): Sir, the number of cases involving foreign workers being swindled by agents has increased. Are there any measures to help such abuses, which may require collaboration with the sending countries, because some of these problems have originated in the sending countries? Are there any measures to deal with that?
My second clarification, Sir, is with regard to the issue of discrimination against women and contract workers. I would like to ask the MOM what is the progress and whether it is looking into reviewing the Employment Act with regard to two aspects. The first aspect is the better protection for retrenched pregnant women who currently are not entitled to maternity benefits when they are retrenched, although they are obviously pregnant even in their ninth month of pregnancy. The second aspect is whether MOM would review the Employment Act with regard to providing better protection for contract workers. Right now, although they are protected by the Employment Act, the employer can truncate the contract in such a way that they will start from zero base every time, which affects their ability to earn the entitlement under the Act, whether it is for leave, sick leave or annual leave.
Mr Hawazi Daipi: Sir, internally, we review the Employment Act from time to time. With regard to part-time or contract work, we will look at the issues and, if necessary, we will review the Employment Act pertaining to that.
As to the Member's first question, it is a complex issue which involves agents in the sending countries. As far as we are concerned, where we can manage local agents, we will do so. In fact, in the case of foreign domestic workers, for employment agents, there are two accreditation bodies which look into standards. The number of accredited members has increased and compliance has also improved. In fact, I was told recently by the Association of Employment Agencies (Singapore) (AEAS) that they had actually deregistered the membership of some of their members who did not comply with their standards. But in the case of cheating done in sending countries, it is outside our purview.
Ms Sylvia Lim (Non-Constituency Member): Sir, two clarifications for Minister of State Mr Gan on the plans to re-employ workers between 62 and 65 years of age. Earlier, he mentioned that the Ministry would actually allow employers to re-employ workers turning 62 at the same job but at a lower pay. What is the justification for doing that, especially since the drawdown age for CPF monies is being moved to 65 and such a pay cut for the same job is hard to justify?
The second clarification is: could he elaborate more on what are the enforcement mechanisms for the new re-employment law? Does it have any teeth? What recourse do workers have?
Mr Gan Kim Yong: Sir, with regard to the first question why employees when they reach the retirement age of 62 and are re-employed, there will be adjustments to the salary, we have to take into account and look at this issue in perspective. Because of the historical factors, many of our employees today are on a seniority-based wage structure. They have been receiving annual increments for the last 30 or 40 years as they worked. This seniority-based component in their salaries has made these employees uncompetitive, compared to the current employment scenario where some of the salaries are now based on performance. So we want to encourage employers and employees to work together to find ways to adjust their salaries so that they reflect the value of the job, ability, contribution and productivity of the workers. Because of this change in concept and approach, and our desire to move into a performance-based system, we would want to encourage both workers and employers to consult one another and work out a remuneration system that would better reflect job worth, and this may result in adjustments to their salary downwards, especially in the case where there is a very high component of seniority-based structure in the salary.
With regard to the question of enforcement of the Re-employment Act that we are working on, at the moment we are still in the process of drawing up the re-employment legislation. As I mentioned earlier, we are also in the process of preparing a set of guidelines on re-employment to help employers and employees work out their re-employment arrangement. In the meantime, the tripartite partners have worked out a checklist which we will use to consult the industry to work with employers as well as the employees to understand better the operational issues involved in re-employment so that these issues can be incorporated into the Re-employment Bill when we present it to Parliament. At that point in time, we will also consider what are the penalties or enforcement capacity that we need to incorporate in the Bill. In the meantime, our focus is on how to encourage workers and employers to adopt re-employment even before re-employment legislation comes into effect by 2012. So, this is the focus of our efforts currently.
Dr Ahmad Mohd Magad (Pasir Ris-Punggol): Sir, I am deeply impressed with the chart displayed on the screen yesterday which plots our economic growth and job growth over the five-year period compared to several other countries. Clearly, it takes the best brains and meticulous planning to achieve such a superlative performance. Can I ask the Minister for Manpower to explain the extent of how well he thinks we can sustain this trend, going forward?
Secondly, how could we tweak our open-door foreign talent and foreign worker policies such that it has a more uniformed favourable impact on our society – professionals, PMETs, and especially our older and lower-income workers who seem not to have benefited proportionately from our economic growth efforts?
The Minister for Manpower (Dr Ng Eng Hen): Firstly, let me thank Dr Ahmad Magad for putting it succinctly that the policies have worked.
But I would disagree with him that lower-wage workers and Singaporean PMETs have not benefited proportionately. In fact, as I showed yesterday, they benefited the most. If we look at the job creation for Singapore citizens, first of all, for PMETs, the number of job profile has changed compared to 10 years ago. More Singaporeans are occupying higher grade jobs. Even for low-wage workers, they have benefited. Real incomes have gone up. Employment for older workers has gone up. Employment rates, as we showed today, have gone up. So, if we look at the data, it tells us that this policy of cleverly using both our limited local manpower and allowing businesses foreign manpower when they need it, has benefited Singaporean workers across all occupations and grades. This is why I said
yesterday, it is a very precious tool, we have to calibrate it, and we can show you some figures. But we have to do it cleverly and I think the clever way of doing it was the Workfare Income Supplement. In other words, the market dictates a certain amount of wage rise. The real wages even for the bottom 20% went up by 2%. But Workfare and other transfers supplement that. So there are other measures without distorting the labour market and we can help address our low wage workers as well as our older workers.
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Ms Jessica Tan Soon Neo (East Coast): Sir, two clarifications. One is with regard to the lower employment rate for older women. Could I ask the Minister of State to clarify, for the 39% of jobs that the women are employed in, what kind of jobs are these? I think that will give us an insight as we look at encouraging women to come back to the workforce. What are the factors and the types of opportunities matching the skills base?
The other clarification I would like to ask is with regard to WIS advance recovery. I agree with the principle that it was advance payment. However, WIS being a new scheme, and given the fact that this is the first payout and when the workers are looking at this, especially when we look at the segment of the workers that actually benefited from WIS, the understanding of the scheme may not have been as clear. So I would ask the Ministry to really consider, on the basis of goodwill for the first phase, the impact of the recovery because administratively it is also going to be fairly difficult, and we are talking about the lower income here. The CPF component is another factor, but to recover cash is pretty difficult. And, psychologically, I think the impact on that group, in terms of the motivation that we were talking about, getting people on WIS, may be higher than in terms of the disadvantages.
So, I would like to ask the Ministry whether they can consider not recovering that particular payment, on goodwill, for this transition phase.
Mr Gan Kim Yong: On the first question about women and employment, for the 39% that are employed, they are employed in quite a variety of jobs and women coming back to work face a number of challenges. Some of them have to also balance the needs and demands of their homes. That is why we introduced '30 minutes to work' to provide job opportunities within the vicinity of where they live, so that they will find it easier to go to work. We also want to encourage some of the companies to offer flexible work arrangement so that these women can also find it easier to get back into the workforce. And we believe that once they start working, even on a flexible work arrangement or part-time, over time they will get used to it and they will be able to go on full-time employment as well. I think it is important to get them to go back to work in a very flexible way and make it even more convenient for them to do so, and we will continue to do that.
With regard to her second question, I have mentioned in my speech just now that for the CPF component, we will have to recover because that is in the CPF, and that is not an administrative problem. For the cash component, I have also explained that we would only recover when there is a future payment for WIS for this particular worker, which means that there will be a credit note or a debit note. In the event that this worker is eligible for WIS in future, we will offset against future payments to him. So, there will also not be any administrative difficulty for him as well.
Mr Siew Kum Hong (Nominated Member): Sir, I have two clarifications for the Minister, arising from of his comments yesterday. Firstly, the Minister mentioned that the unemployment rate for diploma holders is 3.4%. This is actually 50% higher than the overall resident employment rate as at December 2007, which was 2.3%. I would like to ask the Minister to clarify why this is so. In particular, and I know that the Minister has addressed the issue of S-Pass holders, could these statistics be attributable to competition from the S-Pass holders?
Secondly, the Minister touched on the drop in labour productivity last year where it decreased by 0.9%. His explanation was that wages had gone up. I would actually like to ask the Minister to clarify just how increased wages affect productivity. Because, as I understand it, labour productivity is the average output per unit of labour, which is not dependent on wages. Instead, it is unit labour cost that has been adversely affected by rising wages and decreasing productivity. So I hope that the Minister can clarify this point, especially on the reasons why labour productivity dropped in 2007, and how we intend to arrest this worrying development.
The Chairman: Can I again remind Members to make your clarifications short, so that we can take as many questions as we can?
Dr Ng Eng Hen: Sir, on the first question of unemployment rate, there is a thing called frictional unemployment. Within any given survey, various groups will be coming in and out of jobs. So I will not take the 3% as something alarming. It is quite common. Most economies at various stages will have a certain level of unemployment.
What is more important, really, is the employment rate, because the unemployment rate captures a number of things. You may be looking for a job and you have not found a job. I think the employment rate gives us more information because it just tells us how many people are working at any given point of time. As we have shown, our employment rates are among the highest in the world for men. Even for those 25 to 64 years, it is extremely high. I think that is a good measure that our labour market policies are working.
When it comes to productivity, I did mention that it was also due to the fact that more were employed. And exactly at this point last year, our unemployment rate grew, and I think this is something that NWC has to deliberate.
How do we maintain productivity? Yesterday, I spent quite some time expressing my response to certain points brought up my Mrs Josephine Teo and Mr Seng Han Thong, that this is indeed something that we have to work at to upgrade skills and processes, and get our companies to upgrade, our jobs recreated, to enhance productivity.
Dr Lim Wee Kiak (Sembawang): Sir, I would like to thank the Senior Parliamentary Secretary for his comprehensive reply, but allow me to ask about the flexi-work scheme. I read in the papers yesterday that the hotels have started to employ people using this fund. I am just wondering whether the Government sector, including the restructured hospitals and the statutory boards, has introduced such schemes in the first place.
My second clarification: based on the example that I quoted yesterday, instead of reducing the pay by 10%, could a flexi-work scheme be introduced as well, so that there is a 10% reduction in working hours too, which is more equitable.
Mr Hawazi Daipi: We will encourage all sectors, including the Government sector, to implement the flexi-work scheme. I do not have the information here. What is the second question?
Dr Lim Wee Kiak: For those who are reaching 60 or 62 years old, because they are taking a 10% pay cut, could such a system be like the flexi-work scheme, ie, instead of working 100%, they work 90%, so as to commensurate with the 10% pay cut?
Mr Hawazi Daipi: Sir, duration of hours of work and pay are matters for the worker and employer to decide. We will provide the guidelines on fair employment. I think this is a journey. TAFEP and the various agencies – Government, unions and employer federation – will continue to work closely. We will get companies to buy in. There have been good signs. TAFEP has done a very good job on fair employment, and we have been encouraging companies to practise flexible work arrangements. It is working, and we will have to make refinements from time to time. In the meantime, we will try to solve some of the teething problems experienced by workers as well as employers on the ground.
Ms Ellen Lee (Sembawang): Sir, two questions for the Senior Parliamentary Secretary. What is MOM's policy regarding workplace sexual harassment, as it appears from SPS' reply that MOM is pushing the victim to seek any recourse under the Penal Code instead? And, secondly, what is the mechanism that MOM has in place to track complaints lodged at MOM, particularly in relation to workplace sexual harassment, because MOM would be the first place for workers to turn to for help when this happens?
Mr Hawazi Daipi: MOM need not necessarily be the first place workers turn to, but we will definitely look into complaints and reports made by workers. We now have the TAFEP Centre which can look into the concerns of individual workers or feedback on the bigger picture. Yes, there is already the Penal Code to protect women at workplaces. If they have serious concern about sexual harassment, they can report to the Police if they feel very seriously about it. And if they want it rectified at the workplaces, they can also work with the union, which will work with the management, if they are union members. Very often, it is something that has to be dealt with at the personal level. But where a complaint is lodged, we will investigate it and, if action is needed, we will take action.
Ms Cham Hui Fong (Nominated Member): One clarification – would the Ministry review the Retirement Age Act? There is a particular provision on a cut of up to 10% for worker reaching 60 years. Currently, there are already sectors that have significantly reduced the salary ratio, eg, the banks which have already moved to 1.5 and below. These sectors have also moved into a performance-based system, because the rationale of having a 10% cut was actually to address the seniority-based wage system then.
Mr Gan Kim Yong: Sir, I think it is more important for us to look at re-employment where we allow flexibility for workers who have reached retirement to continue working and inject certain flexibility for wages and remuneration to be adjusted to reflect the worth of the job. For retirement age, at age 60, the wage adjustment that is in the retirement age is on the same basis that we provided this adjustment to the salary, so as to ensure that older workers will continue to be competitive, and mainly because of the historical seniority-based wage system that is inherent in the current wage structure. But companies are free to continue to pay workers what they are and for workers who are productive and performing well, companies may even give them a raise and increase.
So we want to make sure that the structure itself does not prohibit workers from continuing to work and the structure should not make older workers less competitive. We want to ensure that the structure under even the Retirement Age Act continue to be flexible, and allow this adjustment to happen. But if the workers are productive and can contribute to the companies, I think enlightened companies will see value in these older workers and will continue to find ways to retain these workers within the company.
Mdm Halimah Yacob: I just want to seek a clarification on the clarification that the Senior Parliamentary Secretary gave to me on the swindling of foreign workers by agents, where he said that some of these countries are outside MOM's purview. Could I ask the Ministry to be more proactive, such as working with ASEAN counterparts under the purview of ASEAN Charter, to ensure that the governments take more responsibility, especially when it comes to foreign workers coming from the sending ASEAN countries. We now have a Charter, and I expect the Charter to be more proactive as well.
I want to seek a second clarification from the Minister. The labour market seems to be a lot more segmented because, last year, 237,000 jobs were created. Despite that, segments of the workforce – the women and older workers – find it difficult to get jobs. Apart from the measures already mentioned, does the Ministry envisage any other measures from the policy perspective to address this tricky problem, because it is a problem that is not going to go away? Even as more jobs are created, these two segments will continue to face obstacles.
Dr Ng Eng Hen: Thank you to Mdm Halimah. She is right, we need to work with other governments when it comes to problems that arise before they come here. We want to put pressure to bear, but we have to do it in a sensitive way and MOM regularly attends global forums like the IOM (or the International Organisation for Migration) recently held in Abu Dhabi where both sending and receiving countries talk about how to resolve this. But there has to be a language, there has to be a comfort zone, so it will take time. She is right that it is a general direction that we want to reduce problems, because you really do not want to receive foreign workers who are at the same time saddled with debts. So it is something that we want to actively engage.
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Mdm Halimah Yacob is also correct to say that this third group – women and low-wage workers, a point also raised by Dr Ahmad Magad – will continually be structurally vulnerable as we move up and as the economy restructures. This is why we want to place great emphasis on our continuing education training infrastructure.
Policy-wise, the reduction in CPF that we did for low-wage workers, but supplemented from Government through the Workfare Income Supplement, is a structural change. And we are already seeing results, as we showed to Members. For the older workers, it has gone up. For the low-wage workers, real wages, even apart from Workfare Income Supplement, actually rose. I think we want to watch it. I like to remind Members of the House that we only started Workfare two months ago. I think we should give it some time, see how it goes into the market.
Actually, the largest group of untapped labour, in that sense, as the chart shows, is women. But, to me, that is the hardest group, because these are women in their 40s and many of them have not been working for 10-20 years. How do we upskill them? I think it is a potential pool, but there are also challenges. I think this is where we want to put resources and try to bring some of them back into the workforce, because that will help their household income.
Er Lee Bee Wah (Ang Mo Kio): Sir, I would like to clarify with the Minister. In view of the acute manpower shortage in the construction industry, will there be any relaxation on the employment of foreign workers and professionals? Will there be a review on MYE and S-Pass requirements?
Dr Ng Eng Hen: Sir, first, an observation. Contrasting questions from this side of the House show the tension in the market place. There are some who advocate that we tighten, and make it rigid, so that Singaporeans have an easier chance to find jobs. But those who are running companies and those who are involved in business say, "relax so that businesses can grow". And this will continue, I suspect, in this House for many years to come.
MOM's job is to maintain a tightly tuned balance to make sure that our economy grows. I think, as our results show last year, we sort of got the balance right. But there will never be a point where Members of the House will say, "well done". We always have to live with the tension.
We have relaxed specifically for MYEs. We said that there are certain construction workers who do not need MYEs who work here more than two years. We have moved it from four years to two years; so that is a relaxation. We have also relaxed the quota. We will continue to watch and get signals from industry players. We have industry sensing mechanisms, and calibrate it if and when we need it. But the overall aspect is grow the economy, let businesses get the manpower they need, because that will generate jobs for Singaporeans at the same time.
Ms Irene Ng Phek Hoong (Tampines): Sir, I agree with the Minister that there is a very tight tension now, but the balance should tilt towards Singaporeans. As mentioned by some of the Members earlier, our older workers, especially the low skilled, find that it is very hard to compete against foreign workers, who work longer hours at cheaper rates. Even at my MPS recently, there was a man in his late 60s wanting a job as a coffeeshop assistant, but he found that the job went to a China worker who is willing to work 12 hours for $900, whereas he was hoping to work seven hours for $1,200, which is what he needed to support his family. Can I ask the Minister: what assurance can he give to Singaporeans, especially the older ones, who feel that it is an uphill battle, an almost impossible task, to compete with foreign workers who are cheaper.
On the flip side, can I ask the Minister to also guard against the exploitation of foreign workers, because we see many of them exhausted, sleeping at corridors, and they work long hours at cheap rates? Can I ask the Minister to also take care that, because of the exploitation of foreign workers, our own workers cannot compete with them?
Dr Ng Eng Hen: Sir, I thank Ms Irene Ng for her observation, which I would say, give hope to those who feel that they cannot compete. And indeed our figures show that the employment rate has increased overall. So more of even those who were structurally at risk and who were vulnerable have found jobs. That is a good sign that our policies are working right. If the number of people working in Singapore as a result of allowing foreign workers to work here has dropped, I think we worry. But it has grown as the economy has grown. And it has produced more jobs, as I showed yesterday, than other economies that have employed exactly these policies by trying to make the labour market very rigid.
Exploitation of foreign workers, yes, it is something that we watch over. Our basic strategy is to explain to the foreign workers their rights, and to take enforcement issues where we can. And it will help if we can communicate and create channels for them to be able to have access to inform the right agencies in their languages, and we are working at that. But this is something that we also want to watch, because I agree with the Member that if they are overworked, they can have safety lapses, they can have physical aspects. We also want to make sure that the foreign workers are well treated and their well-being is guarded.
Dr Ahmad Mohd Magad: Sir, looking at this chart, which was also flashed on the screen yesterday, I can still vividly remember that when we were at this point in 2001 how bleak things were then. And to achieve the phenomenal progress that we have accomplished over the 5-6 years to where we were in 2006 and where we are today is certainly no mean feat. So, for this, I really would like to congratulate the Minister for Manpower and his team for the sterling performance, especially in creating an unprecedented number of jobs for Singaporeans. Most of everything else is academic if there are insufficient jobs for Singaporeans. I would like to thank the Minister, Minister of State Gan and Senior Parliamentary Secretary Hawazi for their comprehensive and detailed responses and clear explanations to the multitude of issues raised.
I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The sum of $687,107,400 for Head S ordered to stand part of the Main Estimates.
The sum of $37,738,300 for Head S ordered to stand part of the Development Estimates.