Tan Chuan-Jin
Singapore
“A step-parent who wishes to leave any part of his or her estate to a stepchild is encouraged to make a will. Intestacy law would apply in cases where a person passes on without a will.”
“Last year, we reviewed and extended the Child Development Account, or CDA benefits to children of unwed parents. The Government granted CDA benefits, to children of unwed parents born, or with an estimated date of delivery, from 1 September 2016. It is generally good practice to implement our policies prospectively.”
“The Ministry of Social and Family Development (MSF) does not track the number of persons who choose to remain homeless instead of being admitted into shelters. When MSF receives information on persons who may be homeless, we initiate contact with these persons on the ground to offer assistance.”
“Our law places the child's welfare and interests at the heart of an adoption decision. We must not forget that such an adoption is a life-changing event because when an unwed mother adopts her child, the duties, obligations and liabilities of the biological father are terminated.”
“The Early Childhood Development Agency (ECDA) works closely with the Housing and Development Board (HDB) to plan for preschools in upcoming Build-To-Order (BTO) developments, including Bidadari new town. To better meet the needs of young parents, new preschools will have larger capacities and also be completed earlier where possible.”
“The Silver Support Scheme under the Manpower Ministry provides an income supplement to seniors who had low incomes through life and who now have little or no family support. Beyond ComCare, we are also expanding upstream intervention to strengthen the resilience of vulnerable families and their children to set a good foundation.”
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“An innocent worker can rebut the presumption by showing on a balance of probabilities that he was duped or intentionally kept in the dark on the submission of the forged qualifications. So, please, do be assured that my Ministry will exercise judgement in assessing any worker's defence to ensure that no truly innocent worker is unfairly prosecuted as a result of this presumption. To ensure that workers are cognisant of their responsibilities, my Ministry has put up signs at the Work Pass Services Centre in native languages warning workers not to put their signatures to forged educational certificates and assuring workers that no action will be taken against them if they report the forged certification abuses by their employment agencies or employers to MOM officers immediately. Let me address the concerns raised by various Members, including Mr Zainudin Nordin, Mrs Lina Chiam, Mr Dhinakaran, Mr David Ong, Mr Teo Siong Seng and Ms Tan Su Shan that as MOM steps up enforcement against EFMA contraventions, employers, especially SME employers, may find it more challenging to operate. I would like to emphasise that none – and I repeat – none of the measures in this Bill are aimed at increasing the duties of honest employers which make up the bulk of all employers. In fact, our measures are aimed at helping to make sure that we level the playing field for law-abiding employers by penalising unscrupulous competitors who under-cut costs by bypassing the work pass framework. Page: 774 Mr Kumar has sought greater clarity on the circumstances under which an associate would be debarred and raise concerns that such a broad definition of the term "associate" may result in people with little connection to the debarred person being caught.”
“Page: 773 Mr Hri Kumar had concerns that the introduction of the presumption clause for forged educational certificates will make it too easy to convict foreign workers, particularly since they are less likely to be informed about their obligations or might feel compelled to go along with their employers or agents who falsify documents. It is really about recognition of the imbalance in their relationship. I think that is a fair concern. But as a matter of principle, I think we all agree that any party who submits any application declaring certain facts about himself or herself to the Government should also at the same time bear responsibility to its contents. Errant foreign workers have been known to submit forged educational certificates to circumvent S Pass and EP controls or collude with foreign employment agencies in their home countries to submit forged certificates and subsequently feign ignorance. In response to Mr Gan Thiam Poh's point, we investigated about 300 such cases last year. We have encountered many cases where workers denied that they signed the application form or claimed that they signed blindly without knowing the contents of the form. Such a defence is easy to raise but it is very difficult to rebut as ultimately the knowledge lies in the mind of the beholder. For example, we had a case last year where a worker was actually acquitted despite confessing that he knew that the forged certificate had been prepared by his agent. His defence was that he was unaware that the forged certificate was part of the stack of supporting documents for his S Pass application that he had, in fact, personally submitted to the Ministry. Sir, such cases amply demonstrate the need for a presumption clause.”
“The work pass conditions currently already impose requirements on employers, including provisions on ensuring acceptable accommodation, the prompt payment of salary, the provision of medical treatment and ensuring the safety and health of the workers at work. To answer Assoc Prof Fatimah Lateef's queries specifically, arrangements for foreign workers to pay part of their medical bills are only allowed for employers of non-domestic foreign workers. Businesses that wish to have such arrangements for their employees' medical costs may do so provided that the part of the medical cost to be paid by the foreign worker is only for costs that have exceeded the minimum $15,000 mandatory medical insurance coverage. Under these amendments, the penalties for contravening the work pass conditions will be increased to a maximum fine of $10,000 or a maximum imprisonment term of 12 months or both. We will continue to take to task employers who are remiss in their obligations. Ms Tan Su Shan also questioned the supposed disparity between the penalties for the submission of forged educational certificates by foreign workers and falsification of documents by employers. To clarify, there is no disparity. The penalty for the former is a maximum fine of $20,000 or a maximum imprisonment term of two years or both. Under the increased penalties for section 22(1)(d), the provision of false information to the Controller of Work Passes, employers who falsify documents will likewise be subject to a maximum fine of $20,000 or a maximum imprisonment of two years or both.”
“For employers who illegally employ foreign workers, we will impose a mandatory minimum fine of $5,000 per charge on first-time offenders and the mandatory minimum fine of $10,000, again, per charge plus a minimum imprisonment term of one month on repeat offenders. There are no corresponding minimum fines or imprisonment terms for foreign workers. Further, employers who employ more than one illegal foreign worker would potentially face multiple charges and therefore be subject to heftier total penalties. Page: 772 Mr Hri Kumar further pointed out that some illegally employed workers might, in fact, be victims of human trafficking. I fully acknowledge his concerns. However, the possibility that some of them might be innocent victims should not lead to a lax enforcement approach towards all foreigners trying to work here illegally. Rather, the approach that my Ministry and the Ministry of Home Affairs have adopted under the National Plan of Action against Trafficking of Persons is to put in place procedures to identify victims who have been coerced or deceived into false labour situations. Labour trafficking victims will not be prosecuted as illegal workers. Under the national plan, we also intend to take appropriate action against those who are found guilty of offences that amount to trafficking in persons. Ms Foo Mee Har and Mr Yeo Guat Kwang expressed hopes that these proposed amendments would address common problems faced by foreign workers such as medical coverage for foreigners who do not enjoy any of the healthcare subsidies that are given to local workers. Assoc Prof Fatimah Lateef also sought clarity on whether it is acceptable to make deductions from workers' salaries for the cost of medical treatment.”
“What we can do – and what we can try to do better and to do well – is to make sure that we get our act right in Singapore. Reducing the number of work permits or guaranteeing the length of employment of a foreign worker, as suggested by some Members, will have the contrary effect of raising the value of a work permit and result in foreign workers being willing to pay their home agencies even higher fees. We will continue to work closely with foreign embassies and relevant Ministries in labour-sending countries to eliminate recruitment malpractices and improve the recruitment process. We do know of these problems. As I mentioned earlier, there are jurisdiction limitations but it does not stop us from continuing to work with some of these countries to see what else we could do. Mr Patrick Tay suggested stepping up enforcement against employers who illegally employ foreign workers. Under section 5 of the Bill, MOM is increasing the penalties for the illegal employment of foreign workers. I noted Mr Hri Kumar's concern that the maximum imprisonment of two years for foreign workers who work without a valid work pass is longer than that of a maximum imprisonment term of 12 months for employers who illegally employ foreign workers. I share his concern at face value, if we were to look at it from that perspective. However, I think it is important to look at the discussion in context. The courts have thus far typically awarded fines only and not jail terms for illegal employment offences, regardless of whether they were committed by employers of foreign workers. That is what happening presently. In any case, we should view these proposed penalties holistically. The penalties for illegally employed workers and employers who hire them differ in several ways.”
“In response to Ms Tan Su Shan's concern about uncovering such kickbacks, we have created a clause that any employer collecting monies from workers will be presumed to be taking a kickback, unless he can show that the collection was conducted legally and that they have valid grounds for it. Also, let me clarify that my Ministry does not restrict Work Permits to just one year. Mr David Ong and Ms Foo Mee Har have also called for measures to encourage workers to whistle blow on employers who contravene the EFMA. Whistle blowing would play an important part in uncovering some of these cases, and this is certainly an area in which we are working out the details. Page: 771 Mr David Ong and Mr Patrick Tay also raised pertinent points on issues related to the role of employment agencies in the recruitment process. Sir, we recently conducted a fairly fundamental review of the Employment Agencies Act and effected the changes in April last year. One of the key initiatives was to curb the excessive charging of fees by Singaporean agencies to the worker. Fees are now limited to no more than one month of his salary for each year of the duration of the approved work pass or employment contract, whichever is shorter, subject to a maximum of two months' salary. Local employment agencies are also prohibited from abetting or taking employment kickbacks, and the earlier measures described will kick in if this happens. However, a significant part of what foreign workers pay is actually paid in their home country. I think it is difficult for us to extend our jurisdiction upstream into those countries. We cannot police the recruitment practices of foreign employment agencies outside our jurisdiction who are responding to the demand by their countrymen to come to work in Singapore.”
“The adjustment from just purely a criminal route to an administrative route is not about efficiency, it is about making sure that these moves are effective. One example of how the administrative penalty regime will help us enforce against errant employers relates to a point by Mrs Lina Chiam. She asked my Ministry to do more to prevent salary collusion between EP holders and their employers. Indeed, under the new administrative penalty regime, the inaccurate or erroneous submission of information, such as salaries, is punishable by an administrative financial penalty of up to $20,000. Under the employment of foreign manpower regulations, we will also make it an infringement if employers reduce the salaries of the S Pass and EP holders without submitting a request for re-assessment of their work pass eligibility to the Controller of work passes. This infringement will be punishable by an administrative financial penalty of up to $10,000 per infringement. As several Members have also pointed out, many foreign workers do pay high fees to secure jobs in Singapore. These fees typically consist of: (1) fees paid to agents in their home countries, some of whom may have given them false promises about their employment terms here; (2) fees to Singapore employment agencies; and (3) possible kickbacks to the employers themselves. In this Bill, we have introduced a standalone provision against a collection of such employment kickbacks with increased penalties of up to a maximum fine of $30,000, or a maximum imprisonment of two years, or both.”
“The fact is abuses do occur but stories amplified are not necessarily wholly accurate. Nor do they make the problem chronic, meaning that most Singaporean employers are fair and reasonable. Just because there are abuses and dramatised in many ways and sometimes accurately as well, do not make our Singaporean employers unreasonable, unfair and abusive. In our efforts to look after our foreign workers – which is the correct thing to do – we should not at the same time paint an inaccurate picture of our businesses in Singapore as well. We will deal with all cases put before us. Over time, we have also realised that not for a lack of desire but if the laws and regulations do not permit certain actions to be taken, we would have to figure out how to get round that. So, hence, the adjustments and amendments to this Bill to make sure that some of these gaps that might have existed in the past are breached so that we can continue to make sure that the appropriate actions can be taken. Page: 770 Mr Patrick Tay was wary that we might send the wrong signal to errant employers by choosing to enforce certain infringements under the new administrative penalty regime, notably the use of phantom local workers to inflate the quota for foreign workers. As I said earlier, we are by no means softening our approach. Since most employers who use local phantom workers are seeking to bypass the work pass framework for economic gain, we should hit them quickly and hard where it hurts most − which is in their pockets. With the new regime, enforcement will be swifter and financial penalties will be high enough to disgorge their illegal profits and hence, deter employers from such wrongdoings.”
“We will constantly track how the situation evolves and if need be, to make future adjustments. Page: 769 Now, allow me to summarise the concerns and questions that have been raised about the details of the proposed amendments to the EFMA. On one hand, some Members feel that more needs to be done to protect vulnerable workers, and raised concerns that the proposed changes might be construed as going soft on errant employers, or that certain proposals might penalise too harshly workers who are coerced, or have committed offences inadvertently. Conversely, other Members have also raised concerns that these measures will add to the challenges that businesses, notably SMEs, are already facing in operating in a tight labour market with rising business costs. Finally, Members called for concerted efforts to be made in stepping up enforcement in order to give real teeth to these legislative amendments. As you can see, there are, as with all cases, divergent tensions. There are different interests and they are all valid in their own ways. We have to figure out how best to navigate that space. Let me first address the broad group of comments that more should be done to protect vulnerable workers and related questions on our treatment of culpable but inherently vulnerable workers. Let me first make some general comments. Do abuses exist? They do. In fact, we could swap stories. They are all fairly dramatic in their own right. What is consistent is that they are all unacceptable. The reality is not all the stories are always wholly accurate. Even in our own internal investigations, certain issues arise and we will try to probe and sometimes, we will unravel details which fundamentally change the context and the feel of those issues.”
“Sir, I thank all the Members who have given their views and voiced support for the Bill. Members have recognised the rationale of these amendments and understand that ultimately, it is the interests of Singaporeans that are at stake here. Honest business owners will be disadvantaged and Singaporean workers will ultimately lose out if we do not take these steps. Mr Zainudin Nordin, Mr Dhinakaran, Mr David Ong, Ms Foo Mee Har, Mr Yeo Guat Kwang, Mr Teo Siong Seng and Ms Tan Su Shan commented on our broader manpower policies, particularly in relation to the tightening of our foreign manpower framework. This is important. We have debated it on various occasions. And some Members have also called for more to be done to encourage and equip locals to take up jobs in industries with many foreigners. So, these are important. We have discussed it on various occasions, as well as with the public. We will examine them closely and deal with them. However, as they are not the subject of this Bill, I will focus on addressing the specific comments and concerns which are directly related to the amendments and enforcement of the EFMA contraventions. Assoc Prof Fatimah Lateef had queried how widespread these malpractices are. It is difficult to ascertain the exact extent of some of these problems − because employers and sometimes workers themselves reap immediate benefits in not complaining. However, we anticipate that the imposition of foreign labour tightening measures will tempt errant employers to try harder to circumvent the work pass framework. We are fully aware that this can happen, and it will happen. Thus, in proposing these amendments to the EFMA, the Ministry of Manpower has moved to pre-emptively deter more widespread contraventions.”
“Is it due to inappropriateness or the inappropriate quality of the candidates, or is it because they are still looking at perhaps cheaper options elsewhere? Those are the dilemmas that we need to manage. But I do agree that we can carry out that matching process a lot better. It is really about information − how do we match our awareness of the people, even though our unemployment rate is low – about 3%. But it does represent 50,000-60,000 Singaporeans. How do I make sure that the awareness of who they are, where they are, which sectors they are in, so that we can help to upgrade them and so on, through courses, but at the same time where are the needs in industries, and see how best we can match them. So, working with the unions and companies would be an important step to see how we can move ahead. But to formalise it, that is something that we are open to, but I do not think we need to do that at the moment. It is something that we can consider. Page: 717”
“If I may complete the tripartite conversation between the Member and Mr Teo, to provide the Government perspective. There have been calls, and they are not unreasonable, to look at whether we want to tie the approval of Employment Passes with this step in between. I am open to considering that as a possibility. That is something that we can do without hot-wiring that process in a formal way for now. Again, it is a balance. We do feel that having a fairly flexible adept workforce is important in keeping the companies competitive. I just want to return to this key point – that at the end of it, it must make sense for Singaporeans and Singaporean workers, because that is at the core of our interest. How do you then construct a framework that allows that to happen? Having a flexible adept workforce remains important because it allows the whole economy to remain that way, and to remain competitive. We do see that there are gaps, so there are matching issues. This is where we think that we could do more to plug the gaps where the needs are. We have begun to do that, and we can extend that effort. For example, I get emails from companies appealing and saying, "Look, I have been trying very hard, but I cannot find Singaporeans who want to do this particular job." Then, what we try to do is link them up with WDA, with e2i, where they know who are the Singaporeans who are also looking for openings, and then try to match them. Sometimes, there is actually a match in terms of people with certain expertise and with those needs. But we also find that it does not always work out that way because sometimes the companies say, "Notwithstanding they are skilled in a way, but I do not want to take them".”
“There is indeed space for us to look at individual appeals on a case-by-case basis. For new applicants, I think the rules will kick in quite firmly and quite decisively. I do not think there is any room for manoeuvre with regard to new applicants. But for older applicants, that means those who have been with the companies, and this is where we do understand because someone has been with the company for some time, whether on EP or S Pass, I think there is also, over time, productivity that has been built in because they are fully familiar with the system. So, that is where I think we can look at on a case-to-case basis, how do we then accede to requests and appeals. There is also a challenge because we get appeals from all over. Every company will swear that theirs is a special circumstance, they need exceptions, and if we go down that path, it actually becomes difficult because the whole framework will start to unravel. So, there is space, but it does mean that we need to scrutinise the various appeals and, in some cases, we have to accede but not all cases. A lot depends on the circumstances of these companies. Page: 716”
“Like I mentioned earlier, we do think there is upside certainly in a number of industries and a certain number of businesses where they can transform. Many have begun to do that. Anecdotally, a lot of them are looking at us to make a change and re-calibrate back to the old levels. The point is we are not. Going forward, this is something that we have to do, and companies are taking that on board. And we would like to support the companies in that process.”
“Mr Speaker, Sir, in some sense, it is a happy problem. Not so happy for the individual companies. Let me explain. From an individual company's perspective, I agree. I get a lot of emails from companies and we meet many of them on a regular basis. There will be individual companies that will find difficulties in renewing Work Permits, S Pass and even EP. They may not even get new ones. At the same time, from the market perspective, from the overall economic perspective, the demand is continuing to increase. Companies are growing across the board. Some companies may not get it; other companies do. There are new companies coming online as well, and they are all competing for the workforce that is available. Overall, even as we are calibrating downwards, it is not that the growth has become negative. We have basically slowed down the growth, but it is still growing. We need to watch that growth to make sure that from a macro perspective, it is at the rate that we can sustain; it is a rate that we can be comfortable with. We are still looking at, from a broad basis, about one-third of our overall workforce to comprise of foreign workforce. Page: 715 That is a target from the ESC and which is something that we want to keep to. It will hover at about that level, but the way we calibrate it is through these different measures. Individual companies may find difficulties but other companies manage to get them. And a lot of it will depend on the different criteria put in place. What I would like to assure companies is that we are fully aware that companies do need to draw on foreign workers, foreign talent in various forms but, at the same time, we also need to wean companies off easy access to them. In order for that to take place, they need to change the way they do business.”
“But companies find it worthwhile because there is stability, there is certainty. Over time, we have also developed as a hub in many different areas. Much as the world is wired up, a lot of businesses still need to be done on a face-to-face basis. People need to meet. There is a legal infrastructure. There is a financial infrastructure in place. And this hub is created over time, and you create a dependency that exists here. That is why companies remain here. When good companies remain here, good jobs are created. We all know that, increasingly, there are more young people entering the workforce as graduates − one in three; in fact, one in two if we include all the Polytechnic graduates who, after working a few years, will then go on to acquire more degrees. With that, come aspirations, and aspirations for good dynamic competitive jobs. Singapore, by and large, has become that way. But to do that, we need to maintain a decent level of economic growth while at the same time making sure that Singaporeans are at the core of it, so that these good quality jobs can be created to meet the aspirations of young Singaporeans. That is something that we will continue to work at. In terms of take-up rates, in terms of employment for young graduates and so on, we have seen that the employment rates are good. We do see that real wages continue to grow. But that is not something we want to take for granted. This competition is quite acute, it is something that we need to try to calibrate, and at the same time, maintaining it at a sustainable level. Page: 712”
“I would like to thank the Member for the question. We have talked about how real wages have grown, especially in the last five to six years. As we have mentioned, when we look at the decade as a whole, in the first half of the decade we did not really see particularly strong income growth. If anything, in real terms, there was a slight decrease. But for the second half, we were grappling with how the economy was going, how do we then anchor ourselves in a competitive world to find the right opportunities. That was also the period when we began to look at new opportunities. We did also, as we acknowledged, open up access to foreign workers coming in, in terms of the foreign labour workforce, which we know has also caused some strain on our infrastructure. But what that period also produced was a growth in terms of jobs created, and very good quality jobs. That was also the same period where we saw real income growth. And it is not just at the middle class and the upper end but even at the low-income level, that was where we actually saw the growth, which helped to improve the overall data for the decade. Page: 712 What is quite clear to us is that economic growth remains important. Not growth at all cost, but good quality economic growth. When we look at how we have evolved over the last decade, it has put us in a decent position. We need to calibrate because there are obviously disamenities that come and the labour force has grown a bit faster than perhaps we could have adapted to. But we are in a strong position to adjust. We do see jobs continue to be created. Foreign multi-national companies and good Singapore companies remain anchored here, even though we know that Singapore is not a low-cost operating base.”
“It is quite straightforward, I could actually, potentially do it." The key is how we share these best practices. I have mentioned it before that it is always challenging because they are all competitors as well. Some companies might have taken on board some of these changes. What we really need and I do urge the business federations and associations is to come together and help the industry as a whole, because the ability to do things differently and to do it better is out there. Some companies have embraced it. What we need is to make sure this information is shared and transmitted across-the-board. This is an effort that we continue to work on and we will be quite happy to consider options – even putting materials online, pamphlets, whatever means available – to provide companies with ideas. That is something that we do want to explore. We do see the upside. It is a very fair point. We do get that feedback but we are actively trying to promote this effort in terms of gathering lessons learnt from overseas. That is the continual effort that we need to press on with.”
“I would like to thank the Member for her question. It is an important feedback and something that we are aware of. The industry is very large. Especially with SMEs, we do recognise, in particular for the smaller enterprises, they may not always have the capacity and resources to really scour the market to find out what is happening elsewhere. We do know that when we look at other industries, for example in F&B industry – if you look at, say, Japan, the way they construct, it is almost like a production line. The way you operate your shop, your restaurant, it is really geared towards maximising the productivity, maximising the output, in terms of the fewer workers that they have. So, the same person could be the cashier, he could be serving, he could be also running from the kitchen and so on; because they operate in a much tighter labour market. Similarly so in the construction industry which the Member would be familiar with. I just came back from Australia and I have seen how the industry has transformed. They have a limited workforce. They also have a very highly skilled workforce. The difference, of course, is theirs is a domestic workforce. But, as a result of that, the construction industry has also transformed into a lot more pre-fabricated work. Something that we are encouraging our industries to go into and a lot of other new innovations which I am quite keen to see how they can be best explored, and a combination of these various events. Page: 711 We are looking at how study visits have taken place. Companies have participated. SMEs have participated in study visits led sometimes by industries, sometimes by Government. It is important to see how it is done. It is one thing to read about it, hear about it but when you go there and you see that, "Oh!”
“I just want to ask, does MOM have any expertise or consultancies that can guide SMEs along, so that they can further improve on their productivity?”
“It is a combination of these measures which we need to unfold in the course of the next few years. This is part of the whole restructuring of the economy, where we can move towards lesser reliance on foreign workers. The workforce still needs to be diverse. That is something we need to accept. Most Singaporeans understand that. But we need to manage that growth and manage that dependency. In the process, companies must adjust. Page: 710 Forced by circumstances, companies, in order to survive, in order to thrive, they will have to find measures to adjust. Secondly, we can also help in the process, which is why the whole range of incentives and programme schemes are available to incentivise the companies. SPRING works actively with companies as well. We have a lot of dialogues and a lot of sessions with the federations and associations. The best practices are also shared. We are confident that companies will adjust. We have begun to see companies adjusting. My message to the companies, whenever I meet them, is we are not U-turning on this policy. This is a path that we need to embark on and we cannot turn back in terms of loosening the tightened-up measures. It is really a combination of these measures that will unfold over the course of the next few years, which I think will put us in a very good position to compete on a very competitive basis but at the same time, generating good jobs for people, and with that, good wages as well. Er Dr Lee Bee Wah (Nee Soon): Mr Speaker, Sir, I would like to ask the Acting Minister this: Minister mentioned that overseas, in similar sectors, they are more productive. But a lot of SMEs have given the feedback that they do not know what to do.”
“Mr Speaker, Sir, I would like to thank Mr Zainudin for his follow-on questions. What we have seen in the last 10 years is that productivity growth has moved in tandem with real wage increase. Productivity growth was about 1.7% in the course of the last decade, and real total wages grew at about 1.6% per annum during the same period. Our sense is that with wage productivity growth, as a whole, there would be a possibility for wages to rise at the same time. But as the Member mentioned, it is also important at the same time to have a tight labour market. This is where it is important for us to continue to grow the economy so that it remains competitive. That will also create pressures, which is why the effort of productivity does not exist on its own. The effort in terms of raising productivity is very much tied to our policies in terms of tightening the workforce, especially the foreign workforce. Something that we have embarked on – it largely peaked in the 2008 period and has gradually come down. We continue to step up. There is a range of measures that we take, whether it is a DRC, whether it is a levy and so on. That is very much an effort that we need to continue to focus on. As we tighten the labour market, especially access to foreign labour, companies are feeling the squeeze. We know that. We speak to the companies regularly. But at the same time, we have to begin to restructure. They need to think about how they can operate with fewer workers. We look at developed economies elsewhere. Companies in the same sectors, in the service sector, in the retail sector and so on, their productivity levels are significantly higher. They also operate with a much more restricted access to foreign labour.”
“The tightening measures on foreign work passes are not targeted at SMEs. All companies with foreign manpower are affected. Those who employ a larger proportion of foreign workers or a smaller base of local workers will be affected more. From 1 January 2012 to 31 July 2012, 30% of Employment Pass (EP) and S Pass applications were rejected, an increase from 26% for the whole of 2011. And 29% out of the total number of rejected applications were for renewals, an increase compared to 21% for the whole of 2011. The higher rejection rates were due to a) The increase in EP and S Pass qualifying salaries from 1 July 2011. To give companies time to adjust, existing EP and S Pass holders who were due for renewal before 1 January 2012 were given at least an additional year to meet the prevailing more stringent criteria; b) The tightening of the educational qualifications for EPs, and with older applicants having to command a higher salary commensurate with their working experience and the quality expected of them, from 1 January 2012; and c) The tightening of the S Pass sub-Dependency Ratio Ceiling (DRC) from 25% to 20% of the total workforce from 1 July 2012, which has taken effect for all new foreign workers. However to give companies time to adjust their strategies, their existing foreign workers will have up to 30 June 2014 to comply with the new DRCs. Since its introduction in 2005, more than 3,000 companies have tapped on ADVANTAGE! to recruit, retain and re-employ more than 26,000 mature local workers. We will continue to work with tripartite partners to help employers tap on our valuable pool of older residents for their manpower needs.”
“In this regard, MOM is aware that restructuring and readjustment are a gradual process. As such, the changes in manpower policies were taken in steps, with companies granted up to two years to transition and adjust to the new changes. For example, for the changes in the Dependency Ratio Ceiling (DRC) that have taken effect on 1 July 2012, companies have up till 30 June 2014 to adjust to the new requirement. The Government has also provided various schemes to assist SMEs. On 23 August 2012, Minister of State for Trade and Industry, Mr Teo Ser Luck, has further announced a review on the current schemes. The objectives are to simplify the process through which SMEs can apply for existing schemes, and to intensify assistance to SMEs in innovation, branding and overseas expansion. Companies are also now able to apply for Innovation and Capability voucher online, instead of having to submit hardcopy documents. In conclusion, the Government is committed to help SMEs grow and thrive, not just in Singapore, but in the region and internationally. The Government will continue to engage SMEs actively, work together to enhance current programmes and develop new schemes to ensure that SMEs continue to be a vibrant and important part of our economy.”
“MOM engages SMEs regularly, and on multiple levels, to understand concerns over their business and the operating environment, and gather feedback on the manpower measures. These engagement sessions include meetings with industry associations, such as the Association of Small and Medium Enterprises (ASMEs), discussions with representatives from various sectors, such as F&B and retail; and meetings with individual companies themselves. Through these sessions, MOM has obtained a good understanding of the issues that SMEs face, and taken actions to address the concerns raised. One recent example is the extension of the Period of Employment (POE) for work permit holders. Before 1 July 2012, every unskilled work permit holders was subjected to a POE of six years, which is the maximum period of time the work permit worker can work in Singapore. MOM had received requests from companies to extend the POE of their unskilled workers. These companies highlighted that these workers were valuable to companies as they were experienced and had gained tacit knowledge of the companies they work for. After conducting a review, MOM decided to extend the POE from six years to 10 years, with effect from 1 July 2012. This was to accord companies with greater flexibility to retain good and experienced work permit holders, and reduce the need for them to recruit and train new workers to replace work permit holders who reached their maximum POE. This flexibility in retaining workers enabled companies to save cost and increase their productivity. The engagement sessions provided opportunities for MOM to explain the measures on foreign manpower. Companies realised the need to reduce the overall reliance on foreign workers and restructure their operations towards raising productivity.”
“MOM issues warnings, composition fines of up to $2,000 per charge, or prosecutes employers for housing their foreign workers in unacceptable accommodation. Employers convicted in Court face a fine of up to $5,000, or six months imprisonment or both, for each count of offence. Since 2005 to June this year, MOM has taken enforcement action against 7,660 employers for failing to provide acceptable accommodation for their foreign workers. As a result of MOM's enforcement actions against these employers, over 50,000 foreign workers were relocated to acceptable accommodation. The Table below provides a breakdown of the number of employers taken to task each year. Unacceptable accommodation takes the form of makeshift shelters, bin centres and illegally converted factory premises. In addition to taking errant employers to task, enforcement action may also be taken against dormitory operators if they are found to be responsible for the unacceptable conditions. They face similar penalties as the employers for abetting the offence.”
“The DRC alone is insufficient in ensuring that locals enjoy good job opportunities and wage growth, and compete with S Pass holders on a level playing field. This is why we have other measures in place to complement the DRC. To compensate for the cheaper wage expectations of foreign workers, we are increasing Foreign Worker Levies until July 2013. To select quality candidates, we require S Pass holders to meet salary and other qualifying criteria, such as qualifications and work experience. We are well aware of the need to carefully manage the balance between allowing businesses the foreign manpower they require to grow and safeguarding the interests of Singaporeans in the process. Over nine in 10 graduates from our polytechnics and universities last year found a job within six months from graduation1, while our overall unemployment rate remains well below that of most other countries2. Ultimately, our young graduates can only have good employment opportunities if our companies do well. Hence, we do not make changes lightly and will continue to monitor the impact of our policies closely.”
“Our purpose is to create jobs and to constantly ensure that there are better jobs with good wages for Singaporeans. For these to happen, our business environment must be attractive for companies to be here in Singapore and to stay here and not go elsewhere. They need to grow, prosper and achieve productivity gains. Our foreign workforce policies – including the Dependency Ratio Ceiling (DRC), are instruments that help MOM attain these goals. The DRCs need to be open enough to give companies access to supplementary manpower to grow, start new ventures, obtain expertise not easily available. Yet, they have to be stringent enough so as not to compromise job and wage growth opportunities for Singaporeans. At the same time, the needs of different sectors vary according to the way they operate, the willingness of Singaporeans to take up jobs offered, and prevailing economic conditions. Hence, in determining the DRCs across sectors, we take into account both quantitative and qualitative factors. These include, but are not limited to, the mix of skills required in a sector, availability of local workers, the willingness of locals to do the job, and our overall need to manage foreign worker inflows. For example, the Construction sector has a more generous DRC given the physically strenuous nature of the work, while Services has the tightest DRC as many jobs there can be filled by locals. Maintaining the right DRC is a delicate balance. It is not an exact science, and may have to be recalibrated from time to time. Most recently, we reduced the Services, Manufacturing and S Pass DRCs from July 2012 to moderate foreign workforce inflow and encourage companies to invest in productivity improvements, rather than rely on labour-intensive business models.”
“We must be careful not to over-extend when we decide how much CPF savings to use for housing, be drawn into investing them for higher returns if we are unable to bear the higher risks involved, or expect to dip into this nest egg when we find ourselves urgently short of cash. It takes discipline and careful planning to ensure a sufficient nest egg in retirement. On our part, the CPF Board will make sure that the system will do its best to support all our Singaporeans in their retirement needs. With that, Sir, I beg to move. [(proc text) Question put, and agreed to. (proc text)] [(proc text) Bill accordingly read a Second time and committed to a Committee of the whole House. (proc text)] [(proc text) The House immediately resolved itself into a Committee on the Bill. – [Mr Tan Chuan-Jin]. (proc text)] [(proc text) Bill considered in Committee; reported without amendment; read a Third time and passed. (proc text)] Page: 643”
“Page: 643 Today, members are already informed yearly through their annual CPF Statement of Account, which is mailed to their homes, that they have made a nomination. While the Board promotes awareness that members may make or revise their nominations, they do not actively encourage members to do so. If a member does not make a nomination, his CPF savings will be distributed to his loved ones through the intestacy laws upon his demise. It is the personal choice of the member whether he prefers his CPF savings bequeathed to the nominees or distributed to his loved ones under the said laws. While we work on educating members on the various aspects of CPF, we also listen keenly to members' feedback and make improvements to our policies. Hence, the changes made today. Many of the amendments we are making arose from members' feedback – the refinements to our housing refund policy, expansion of the MSTU scheme to include parents-in-law and grandparents-in-law and the merging of various channels for voluntary contributions to simplify the topping up process for members – just to name a few. We will continue to listen to members' feedback on ways to improve our CPF policies and, indeed, appeals from Members of Parliament for their residents also play a big part. As we investigate these particular cases, we would also learn and see how best we can improve the process. Sir, in closing, I would like to reiterate Mr Zainudin's thoughtful points on exercising prudence in the use of CPF savings. For the majority, the CPF will be an important source of savings for their old age.”
“For instance, the Board's website carries comprehensive information packaged in bite-sized chunks for members going through different life events – for example, when they start work, when they get married, when they buy a house, when they turn 55 years old, and so on. Last year, the Board also launched the "Are You Ready?" campaign to encourage Singaporeans to kick-start the financial and retirement planning. As part of this campaign, the Board provides information through talks, webcasts, and other tools to help Singaporeans at different stages of their lives make better financial decisions. I encourage all CPF members, young and old – it is never too young to start financial planning – to take full advantage of the information and tools provided by the Board. And the website itself is useful, comprehensive and has received a lot of good feedback from members. So, do use it. On CPF nominations, Mr Seng Han Thong suggested that the Board should take a more proactive approach in informing members of their nominations when they reach certain important junctures in their lives, for instance, when they get married or when they approach old age. This would serve as a reminder to members, should they wish to review and revise their nominations when their individual or family circumstances change. I think it is a very good suggestion raised by Mr Seng. In fact, currently, when members get married, the nominations that they have made prior to marriage become invalid automatically due to the change in the family circumstances. We could explore whether it is possible to reach out to members at these significant milestones in their lives to get them to come forward more proactively to re-make or update their nominations, as the case may be.”
“Furthermore, we pay an additional 1% extra interest (EI) on the first $60,000 of a member's combined CPF balances, which means that MSTU top-ups can earn up to a total of 5% interest. So while our lower income members who make MSTU top-ups may not be able to benefit from the tax relief offered as Mr Seng Han Thong mentioned, because they do not pay taxes, they can be assured that the top-ups to their loved ones' CPF accounts will go a long way in boosting their retirement savings through interest accumulation over the years. Aside from benefiting disproportionately from the extra interest I mentioned just now, lower income members also receive larger GST Vouchers and various Government grants. Their CPF savings are also boosted by Workfare. This is the Government's way of helping the lower income build up their retirement nest egg. Next, let me move on to another point that Mr Seng highlighted on the importance of actively reaching out to members in a targeted way, so that they can benefit from the improvements that we have made to policies such as the MSTU scheme. Let me assure you that the CPF Board is fully engaged in its member education efforts. Taking the MSTU scheme as an example, the Board taps on a range of channels to reach out to members to make sure that they understand how they can tap on this scheme. Through regular talks with members and outreach events in the community, CPF Board promotes awareness of the MSTU scheme. There is extensive information on the CPF Board website as well as brochures which are freely and widely distributed. Over the years, we have also learned to tailor our communication to members.”
“Mr Speaker, Sir, let me thank Mr Zainudin Nordin, Mr Patrick Tay and Mr Seng Han Thong for their thoughtful speeches and for their support for the Bill. Some of the issues that have been raised pertain to general CPF policies. These are important points that they have raised. Mr Patrick Tay shared with us several stories which we are familiar with. There are concerns or issues raised amongst them – returns to the CPF, providing more for those who have not saved enough, or, in some of the cases, for those who have not really been working, and housing withdrawal limits. These are important and we are looking into how we can better address these issues to continually improve the CPF system. But we will take these up separately at other forums as appropriate. I will now address the specific comments that have been made on various aspects of the Bill. First, the expansion of the MSTU scheme. Now, all three Members who spoke on this topic have voiced their support for the changes to the MSTU scheme. We believe that this is the right way to go. An increasing number of members are tapping on the MSTU scheme to boost their family members' as well as their own retirement savings. I mentioned earlier that the number as well as the amount of top-ups made under MSTU scheme have increased over the years. This is encouraging and we hope that this continues. Page: 642 But, more importantly, it also means that Singaporeans do see the CPF as a good way to save for their retirement. As Mr Zainudin has said, the interest rates offered by the CPF are higher than what you can find in the market, and also more stable and lower in risk.”
“I would like to thank the Member for the follow-up questions. If he has specific details about how contractors are deliberately contravening the regulations, we will be quite happy to look into the details. But as mentioned, the investigations will take place and if the company is found to have violated any of the requirements, we will take the necessary actions. Similarly, this would also apply to the latter point raised about workers under the formwork structures. Let us allow the investigation to run its course. We will take note of the findings, and we will carry out adjustments and actions accordingly. Page: 602”
“I would like to thank the Member for the supplementary questions. I do not have the specific details. But what I would say is that I would like to just take the opportunity again to place on record our thanks for the DART officers who performed admirably. As mentioned, it is a complex operation. As with all operations, I am quite sure that SCDF will conduct its own after-action review to see how the operation was carried out and if any lessons were learned, and to continually improve. That is something that I am quite confident that they will be doing. Page: 602 Similarly, in terms of the chemical burns suffered by the officers, I am quite confident that that is something that they are looking at as well and they will follow up, in terms of future adjustments or procedural change if need be. I do not have the specific details with regard to that. But I believe those would be the steps that would be taken by SCDF.”
“After a thorough review of the company's work procedures as well as their submitted recovery plan to ensure that all necessary safety precautions were in place, we lifted the stop-work order on 28 August 2012. One of the areas that we are investigating is whether fatigue and extended working hours could have contributed to the accident. If the employer is found to have breached any regulations on hours of work under the Employment Act, relevant action will be taken. Other areas of investigation that we are focusing on include the adequacy of the formwork structure design, the conformity of the erected formwork to the approved design and the quality of formwork structure material. In the course of our investigation, we will continue to share, where appropriate, the findings that may have an impact on formwork processes at worksites to ensure work safety.”
“We are all saddened by the news that two workers had to lose their lives as a result of the accident at the worksite of the new Downtown Line Bugis station. This is a stark reminder that accidents can happen at any time which can result in the loss of lives, injuries or even damage to public and private properties. We must, therefore, be on our guard and take the necessary precautionary measures to ensure that work is carried out without risk to our workers. Page: 601 The Ministry of Manpower will not tolerate employers who contravene safety regulations. If employers are found to be endangering the lives of their workers, firm enforcement actions will be taken. We are currently investigating the cause of the Downtown Line accident. As such, I will only share some preliminary findings. A group of workers were concreting the roof slab of a linkway to connect the existing East-West line to the Downtown Line at Bugis station. Most of the concreting work had been completed when sometime between 6.00 am and 6.50 am on 18 July 2012, the formwork collapsed. Two workers who were working underneath the structure at the time of the accident died, while the eight workers who were working on top of the structure suffered minor injuries. Following the accident, BCA conducted the necessary checks to ensure that the structural safety of the surrounding buildings and the road above were not affected. My Ministry ordered all formworks and concreting works at the accident worksite to cease so that risk assessments and work procedures at the worksite could be reviewed. At the same time, the company was required to devise and submit a recovery plan to remove the collapsed formwork structure and its associated material safely.”