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MOM Committee of Supply 2019 debate: All the labour market issues discussed



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In Parliament on 5 March (Tuesday), Singapore’s ministers came forward for the Committee of Supply Debate 2019 which determines the working path on the items discussed in Budget 2019. We sum up the key areas discussed in Ministry of Manpower’s (MOM) Committee of Supply (COS).

Starting with Minister for Manpower, Josephine Teo, who updated members of the Parliament on the positive labour market situation in 2018:

 

She then highlighted the challenges facing the Ministry: moderate growth forecast for 2019; employment of seniors (“not all seniors who want to, have jobs,” she cited); and uneven labour market performance across sectors, and prospects to improve job quality and grow wages in these sectors (referring to the moderating of foreign manpower growth in services sector).

Minister Teo broke down MOM’s responses in three areas (marked in red below). For a TL,DR version of the Minister’s Teo responses, feel free to browse through the image gallery first:

 

1. Walking the tech journey with workers

“Our goal in Singapore must be to enable all businesses to take full advantages of technology to create new jobs and improve job quality. Just as importantly, we must walk the tech journey with workers. Help them adapt and take up new opportunities,” Minister Teo explained.

The following are some of the initiatives taken to this end:

  • Effectiveness of Adapt and Grow (A&G): Last year, over 30,000 jobseekers secured jobs (about 20% more than 2017) through A&G, as well as career matching services by WSG and NTUC’s e2i.
  • To better support retrenched workers, a Taskforce for Responsible Retrenchment and Employment Facilitation has been set up, led by WSG.
  • There are now more than 100 Professional Conversion Programmes (PCPs) in over 30 sectors. In 2018, close to 5,000 people were re-skilled and employed through PCPs (gain of 30% over 2017).
  • Career Support Programme (CSP) to help close the salary gap: Last year, more than 1,200 jobseekers were placed with the help of CSP. CSP will be extended by two years.
  • Career Trial, which helps jobseekers and employers get to know each other better before signing on the dotted line, helped about 730 jobseekers obtain jobs in 2018, 40% more than 2017.
  • Utilisation rate of Jobs Bank and MyCareersFuture: Since its launch in April last year, the site received more than 2 million visits and over 1.7 million applications. More than 20,000 employers placed job postings on the Jobs Bank last year.

Areas to improve for A&G:

  • The A&G initiative is relatively new, and people may not be aware of the help available. More will be done to strengthen outreach.
  • The second area of improvement is the programmes itself. More PCPs will be launched, while the existing ones will be revamped to to be more effective.
  • “Finally, for every successful jobseeker, there is probably another who is still searching,” Minister Teo said, pointing to helping as many as we can to stay relevant so they need not be displaced at all.

Self-Employed Persons (SEPs) and gig economy:

“Up to now, the much-feared tsunami of gig work has not quite materialised, certainly not in Singapore,” she noted. However, SEPs are a proxy for gig workers in Singapore, even though most of them are in traditional occupations like taxi-driving, real-estate marketing, insurance or financial advisory.

  • While it cannot be predicted how the numbers of SEPs may grow in future, MOM has formed a Tripartite Workgroup to recommend ways to better support SEPs.
  • Close to 500 businesses have adopted the Tripartite Standard on Contracting with SEPs, covering 30,000 SEPs. Meanwhile, a new tempate has been launched to shape contracting norms.
  • A “contribute-as-you-earn” (CAYE) scheme will be introduced to help SEPs make small regular contributions to MediSave instead of bigger lump-sums at year-end. Pilot from Q1 2020.
  • To plug the lack of options for SEPs to protect themselves from loss of income when they are unable to work due to illness or injury, Prolonged Medical Leave (PML) insurance has been launched by NTUC Income and Gigacover as standalone products.

Underemployment: An area to keep watch over

Internationally, the only form of underemployment which has a recognised statistical definition is time-related, defined as part-time workers who are willing and able to engage in additional hours.

However, MOM is interested in tracking other forms of underemployment, such as skills-related underemployment. But today, there are no internationally recognised measures. “We are therefore working closely with the International Labour Organisation to develop suitable methodologies,” she said.

One possibility is to use wage or qualification-based indicators, as cited in an Ong Teng Cheong Labour Leadership Institute study.  However, the best way to reduce the risk of underemployment is to keep the labour market tight. “When the labour market is soft, most people will consider it better to have some job rather than no job. They may also become SEPs, involuntarily,” she explained

“Therefore, every time we tweak labour market policies, we must always remember not to go overboard, and we should avoid weakening the labour market inadvertently.”

2. Providing better assurance

Tightening foreign worker policy in the services sector:

She spoke about the policy: “We decided we need a stronger push to restructure and be more manpower-lean. This will sustain business growth for our companies and help to improve job quality for our workers. In the longer term, it will make our labour market more resilient.”

She added that sweeping changes are typically avoided while adjusting foreign worker policy. It was only done in the services sector where most restructuring is needed. Second, beyond moves already set in motion, no further changes will be made to quotas and levies in other sector this year.

To clarify, employers will be able to retain an existing S Pass or Work Permit holder until the current pass expires. It is only at the point of work pass renewal that they will be require to meet the new quotas.

Raising local qualifying salary:

For the purposes of meeting the local workforce quotas, MOM applies a simple test of whether a job pays above a certain level, called the ‘local qualifying salary’ (LQS).

Given the rise in the wages of locals, the Local Qualifying Salary will be raised from S$1,200 currently, to S$1,300 in July 2019. The minimum qualifying salary for S Pass holders will also be increased to S$2,400 from 1 Jan 2020.

However, she clarified that there will always be expertise or specialist skills that are in demand globally, and in short supply in Singapore.

“Our policies must enable Singapore-based businesses to assemble the best international teams to compete on the world stage, and create more quality jobs for our people while we build the local pipeline,” she said, referring to the Capability Transfer Programme (CTP).

More than 100 companies are expected to benefit from CTP-supported projects, which includes industry-level and company-specific projects in areas such as precision engineering, logistics, lift maintenance, waste management and air transport.

Fair Consideration Framework (FCF):

  • From July 2018, the FCF requirement was expanded, whereby more firms must advertise more jobs to locals before MOM will accept the Employment Pass application.
  • There are 350 employers on the FCF Watchlist, while the top five sectors are Administrative & Support Services, Education, Infocomm, Professional Services and Wholesale Trade.
  • Since 2016, 2,300 EP applications have been rejected or withheld by MOM, or withdrawn by employers.
  • So far, 260 firms have improved their HR practices and exited the FCF Watchlist. In addition, firms on the FCF Watchlist have hired more than 3800 Singaporean PMETs to date.

Human Capital Partnership (HCP) Programme:

  • In 2018, about 130 new HCP firms were recognised as fair, progressive employers who make it a point to develop a strong local core. This brings the total number of HCP firms to about 540; 40% of whom are SMEs.
  • HCP firms employ more than 190,000 locals, which is about 8% of the total local workforce. Local PMETs account for about 90% of HCP firms’ total PMET workforce. Even at the senior to top levels, more than 80% are locals.

3. Support senior employment

WorkPro job redesign and age management grants:

  • The WorkPro Scheme offers the Job Redesign Grant (JRG) and the Age Management Grant (AMG) to help employers make their workplaces more age-friendly.
  • Over 1,750 companies and about 20,000 older workers have benefitted from JRG since it was enhanced last year. Under AMG, over 250 companies and 3,800 older workers have benefitted.
  • The current WorkPro funding period will end by June 2019, and is currently being reviewed.

Tripartite Workgroup on Older Workers: Retirement and re-employment

Minister Teo justified talks on removing the retirement age: “When a company removes the retirement age from its HR policy manual, it is good news for its workers. It means the company will not retire any employee at any age, for as long as he or she wishes to continue working.

“But if the retirement age is removed from the law, it is bad news. It means employers no longer have any obligation to keep their workers up to any age. In other words, any employer can retire any worker at any age.”

To build a tripartite consensus on such issues that concern employers and workers, in May last year a Tripartite Workgroup on Older Workers, which has been reviewing the longer-term relevance of the retirement age (RA) and re-employment age (REA).

It needs a few more months before putting up detailed recommendations, but the clear tripartite consensus is is believes both RA and REA should be raised. “I agree with the workgroup and I will try my best to make it happen,” Minister Teo said.

The Workgroup’s three-point agreement is as follows:

  • The Retirement Age (RA) remains relevant and should go up beyond 62, given that locals enjoy more years of good health and remain productive at work. A higher retirement age will motivate both workers and employers to invest in skills upgrading and job redesign.
  • The Re-Employment Age (REA) remains useful and should also go up beyond 67.  Although most workers who are eligible get re-employed in the same job at the same pay, the flexibility to reset jobs and terms helps employers cope with business uncertainties.
  • The increases in RA and REA should be implemented in small steps over time. This is because employers will need to make considerable adjustments.  They must plan ahead and step up efforts to make workplaces more age-friendly.

In the next phase of its work, the Workgroup will build a tripartite consensus on (a) how far and how fast the RA and REA should be raised, and (b) the CPF contribution rates for older workers. However, even when RA or REA are raised, the CPF payout eligibility age of 65 will remain unchanged at age 65.


In her speech, MOM’s Senior Parliamentary Secretary Low Yen Ling, made a point about progressive and inclusive workplaces, focusing on efforts to help three demographics: young graduates, women, and ex-offenders (explained in red below).

1. Efforts for young job seekers

  • Career Starter Programme’s Career Starter Pack has been given to about 28,000 graduating ITE and polytechnic students since January this year.
  • Career Booster workshops are being held to rovide more hands-on help, such as good resume writing techniques, and approaches to the job search for different career opportunities.
  • Personalised career coaching and other tailored support by career coaches from WSG’s Careers Connect is being held for for graduating students who may require more in-depth assistance.

2. Equipping and re-integrating ex-offenders

  • WSG works closely with the Singapore Corporation of Rehabilitative Enterprises (or SCORE) to help ex-offenders find gainful employment.
  • Two A&G programmes under the Adapt and Grow initiative – namely Project Phoenix and Career Trial are underway. More than 1,200 ex-offenders found jobs through this last year.
  • Since 2006, ex-offenders do not need to include information on their spent criminal records in their job application to public agencies. For a criminal record to be considered as “spent”, the offender must not have been sentenced to more than three months in prison or be fined above $2,000. They must also be crime-free for five years, among other criteria.

3. Supporting women in the workplace

  • Adoption of flexible work arrangements (FWAs): About seven in 10 of employees in Singapore now work in companies that offer at least one formal FWA, such as part-time work and flexi-time or staggered hours. In addition, about nine in 10 of workers are in companies that provide at least one ad-hoc FWA, either unplanned time-off, ad-hoc teleworking or both.
  • As of end January 2019, about 1,300 employers employing 400,000 employees have adopted the Tripartite Standard on FWAs launched in October 2017.
  • Work Life Grant increased to S$100m from the current S$30 million:  This will allow more companies to benefit from the grant to sustain their employees’ FWA adoption, including job-sharing by PMETs.
  • MOM and SNEF are developing a job-sharing implementation guide for employers.

Managing workplace harassment:

MOM encourages companies to take clear steps to prevent and manage workplace harassment, such as:

  • Being explicit about what is considered unacceptable behaviour at the workplace;
  • Making clear the disciplinary actions that would be taken against such perpetuators
  • Having in place safe avenues for affected employees to surface their complaints to management
  • Providing adequate support for affected employees. For example, time off or the flexibility to work from home during the investigation and/or recovery period.

Tripartite Alliance for Fair and Progressive Employment Practices (or TAFEP) will now be a help and resource centre for workplace harassment for both employers and employees. Besides providing advice, TAFEP will provide a host of resources on its website that includes:

  • A new introductory video on how to manage workplace harassment,
  • A sample Workplace Harassment Prevention Policy that companies can incorporate, and
  • A list of training providers for employers to train their supervisors in managing harassment.

Further, affected employees can call (6838 0969) or write to TAFEP for assistance.


In his COS speech, Minister of State for Manpower Zaqy Mohamad touched on four areas:

  • Supporting the integration of persons with special needs into the workforce;
  • Improving the well-being of lower-income workers;
  • Safeguarding the well-being of foreign workers; and
  • Making work conditions safer and healthier for all workers.

1. Integration of persons with special needs into the workforce

  • Employers of Singaporeans with special needs receive the Special Employment Credit (SEC) that provides wage offsets of up to 16% of the employee’s monthly income, regardless of age; and up to 22% with the Additional SEC (ASEC).
  • SG Enable has been organising the Enabling Employers Awards, which recognises the efforts of employers in hiring and retaining employees with special needs. Since 2011, more than 100 employers have been recognised for their inclusive efforts and excellence.
  • Under A&G’s Open Door Programme (ODP) and Career Trial, catering to both PMETs and rank-and-file, in the past three years, more than 1,600 persons with special needs have been placed.
  • MOM and SG Enable will be releasing a Job Redesign Guide by the first half of this year.
  • As MP Patrick Tay raised, we will also continue to study the successes of overseas models to build a strong framework in Singapore.
  • Notably, hiring targets for persons with special needs have not been set for companies and the public service for three main reasons: it introduces labour market inflexibility and may invite competing calls for targets for other workforce segments such as older workers; companies may offer menial or low-paying jobs to meet the targets; and it may signal to companies that they only need to meet the targets, even when they have the capacity to hire more.

2. Improving the well-being of lower-income workers

In addition to enhancing lower-income workers’ wages and employability, care will also be extended to their working conditions and how they are treated at work.

  • MOM advocates safe and conducive environments for their rest breaks, such as for meals. It will look into companies’ practices in giving workers’ access to proper rest areas, starting with the cleaning sector.
  • If employers fail to pay owed salaries to employees do so because the company has closed down, employees can commence debt recovery by applying to the State Courts for a Writ of Seizure and Sale (WSS). MOM will assist lower-income claimants through the WSS process, including providing financial aid.
  •  If lower-income workers are unable to recover their claims via WSS, they can receive financial assistance from the Short Term Relief Fund (STRF). The Tripartite Alliance for Dispute Management (TADM) will also refer them to MSF and their Social Service Offices.

3. Safeguarding the well-being of foreign workers

“As we moderate the intake of foreign workers, treating them well can help us retain skilled and experienced foreign workers, Minister Mohamad said.

  • Since 2012, employers are prohibited from collecting kickbacks from foreign workers in consideration for employment. In 2018, 46 agencies and employers1 were taken to task for kickback-related offences.
  • MOM regularly updates the work pass obligations of employers in employers’ copy of the In-Principle Approval letter. Employers are also kept informed of new and existing work pass requirements through direct mailers and MOM’s website.
  • MOM last increased the maximum period of employment by four years in all sectors in 2018. It can now extend up to 26 years for skilled Work Permit holders in selected sectors.
  • For foreign workers in the Construction and Process sectors, they can be transferred to another employer, upon the agreement of their existing employers, or the expiry of their work permits. They are given about a month to look for new employers.
  • All foreign workers are allowed to find another employer if they have valid claims. While they are given two weeks to seek new employment, short extensions are given on case-by-case basis.
  • In 2018, about 34,000 workers in the Construction and Process sectors were successfully transferred to another employer. Additionally, about 900 workers with valid claims successfully found new employers, and continued to work in Singapore after their claims were resolved.

4. Making work conditions safer and healthier for all workers

Singapore’s goal is to further reduce and sustain workplace fatality rate at below 1 by 2028. Only four amongst the OECD countries have achieved it so far.

Additionally, one in three working residents have either diabetes, high blood pressure, or high cholesterol; a greater emphasis on workplace health is needed to address its potential impact on safety.

He explained three main ways to improve further:

  • Company management needs to be committed to improving WSH within their companies.
  • Greater emphasis on workplace health is needed to address the potential impact of poorly managed health on workplace safety. The WSH Council has partnered HPB to introduce Total WSH, which involves injury and occupational disease prevention, together with occupational health promotion, through health screening, physical activities, healthier diet, and adjustments in work processes.
  • Companies can leverage on technology advancements such as sensors, predictive analytics, and the Internet of Things to more effectively manage WSH risks.

He added that MOM agrees with MP Melvin Yong’s suggestion to have a tiered insurance premium framework for work injury compensation, where companies with poor WSH records will have to pay higher premiums; and is looking into ways to facilitate this.


Lead image and all graphics / Ministry of Manpower



Human Resources Online is heading to Bangkok with the Accelerate HR conference on November 26-27.
HR leaders from Agoda, DKSH, Fonterra, FWD, Kasikornbank, Minor Food, Nissan Motor and more have already confirmed to speak.
Bring your team for additional group discounts.

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