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Speech by Mr Sam Tan, Minister of State for Manpower at Committee of Supply 2017

Mr Sam Tan, Minister of State for Manpower

Introduction

  1. Madam, I will speak on how MOM intends to drive inclusive growth and foster progressive workplaces that are age-friendly, family-friendly, safe and healthy.
  2. We will do more for our older workers, low-wage workers, and workers with caregiving responsibilities.

    Older workers
  3. First, let me talk about older workers. Madam, in January this year, we passed the Retirement and Re-employment (Amendment) Bill.
  4. The re-employment age will be raised to 67 from 1 July 2017, to allow our growing pool of older workers to contribute to the workforce for as long as they can.
  5. To encourage employers to voluntarily re-employ older workers not covered by the new re-employment age1, the Government has extended the Additional Special Employment Credit to incentivise employers to do so.
  6. In addition, it is equally important to ensure that workplaces are age-friendly to meet the needs of our older workers and also help them to stay productive. Employers must play their part in this aspect.
  7. Mr Chen Show Mao asked about the progress of workplace and job redesign for our older workers. In 2013, we introduced WorkPro to support companies to develop age-friendly workplaces and make jobs for our older workers easier, safer and smarter. WorkPro was enhanced in July last year with more generous funding. A company can now receive funding up to $300,000, up from $150,000, to redesign jobs for older workers under the WorkPro Job Redesign Grant.
  8. Besides increased funding, companies from all industries can also tap on the Job Redesign toolkit and clinics to improve their knowledge about job redesign. More employers have since taken up the WorkPro Job Redesign Grant.
  9. Over the last seven months, 103 companies have tapped on this grant, and more than 1,800 older workers aged 50 years and above stand to benefit from the enhanced WorkPro.
  10. Take Sheraton Towers Hotel as an example. The hotel obtained WorkPro funding to replace the standard tables in their restaurant with a multi-purpose table called livecookintable that can be used as a cooker, warmer or even cooler.
  11. Mr Au Tiang Kok is one of the older workers who have benefitted from this change. In his job, Mr Au is responsible for the set up and clearing of the buffet trays at the restaurant. These buffet trays with burners weigh around 30kg each. It was a laborious job for Mr Au.
  12. With the livecookintable, the restaurant now uses a different type of buffet tray without burners. These new trays are lighter to carry and Mr Au is no longer at risk of getting burnt by the open flame.
  13. I am heartened to know that 67-year-old Mr Au is happy with this job redesign and he intends to continue working to contribute meaningfully for as long as he can.
  14. Mr Au’s story tells us that the commitment of management is important. I am therefore glad that the HR Director, Mr Francis Tan, believes strongly in job redesign and makes use of technology to improve older workers’ productivity. I would like to take this opportunity to encourage more employers to learn from Sheraton Towers Hotel, to tap on the WorkPro Grant and enhance the productivity of their older workers.
  15. During the Budget Debate, Mr Heng Chee How spoke passionately about the need for older workers to continue to adapt and grow while companies transform and grow. I agree fully with Mr Heng, that older workers must continually upskill, reskill and deep skill to enhance their employability. Skills upgrading is the best safeguard for old workers during this period of economic and job transformation. Older workers should also take advantage of the various Government training schemes available, such as SkillsFuture, to enhance their employability.

    Low wage workers
  16. Madam, I will now touch on the low wage workers.
  17. Over the last 5 years, incomes of full-time employed Singapore citizens at the 20th percentile grew by 3.2% per annum in real terms. This has kept pace with the 3.1% annualised growth in real median incomes of our employed citizens over the same period. This progress is indeed encouraging.
  18. To continue with our efforts to uplift our low wage workers, we adopt a three-pronged approach.

    I. Supporting sustainable wage increases
  19. First, through sustainable wage increases.
  20. Currently, companies’ entitlement to foreign workers is based on the dependency ratio ceiling. For example, a dependency ratio ceiling of 60% in the manufacturing sector means that the employer can hire up to 1.5 foreign workers for every full-time equivalent local worker hired.
  21. A local worker who earns a monthly salary of $1,000 or above is considered a full-time equivalent. We review this salary threshold regularly to stay in line with rising income trends. If not, it means that we are gradually loosening our foreign worker controls simply due to rising nominal wage.
  22. So given the rising income levels, my Ministry has decided to adopt a new salary threshold of $1,200. This will be done in two steps. First, to $1,100 from 1 July this year and next, to $1,200 from 1 July next year. We expect that low wage workers’ wages will adjust in line with the new threshold.
  23. We last reviewed the threshold in 2013. That was about four years ago, and the 10th percentile income2 then was already $1,200 and had risen to $1,300 in 2015. So, if we do not update the salary threshold now, it will mean having to make even larger increases in the future.
  24. So, another way to support wage increases is through the Progressive Wage Model, or PWM in short, which is mandatory in the cleaning, security and landscaping sectors.
  25. The PWMs have helped more than 70,000 resident workers in these sectors grow their wages. Before the introduction of the cleaning PWM, median gross wages for full-time resident cleaners grew by 2% per annum from 2009 to 2012. After the announcement of the cleaning PWM, median gross wages for full-time resident cleaners grew by 12% per annum from 2012 to 2015.
  26. I thank Mr Zainal Sapari for his suggestions on incorporating annual increments and annual bonuses in the security and landscape PWMs. I support this proposal. As Mr Zainal has pointed out, we have already done this for the cleaning sector.
  27. The cleaning sector sets out annual adjustments to the PWM wage levels from this year up to 2022.
  28. The Tripartite Cluster for Cleaners also encourage cleaning companies to provide increments to better performing workers. This will raise their salaries to be above the PWM wage levels and still within the recommended salary range of their job rungs. All resident cleaners will also receive an annual bonus equivalent to two weeks of basic monthly wages from 2020 onwards.
  29. The security and landscape sectors only implemented PWMs recently in 2016. We need to give them time to evolve, progress and improve. However, I still want to take this opportunity to encourage the tripartite committees in these sectors to learn from the cleaning sector, and enhance their PWM commitments over time.
  30. I also encourage employers and unions in other sectors to adopt the PWM concept, which brings together wages, skills, and productivity to create meaningful career ladders for their workers.

    II. Raising employment standards
  31. Our second prong to help low wage workers is to step up our best sourcing efforts.
  32. I am pleased to announce the release of the updated Tripartite Advisory on Best Sourcing Practices today. It will provide new guidance on supporting progressive remuneration and benefits for outsourced workers as well as fair contracting practices.
  33. MOM has worked closely with the Ministry of Finance (MOF) to ensure that all Government agencies support the updated Advisory.
  34. Today the Government procures cleaning and security services from accredited cleaning businesses and well-graded security agencies. These accreditation and grading frameworks take into account the progressive employment practices of these companies.
  35. MOM is working with MOF, the Singapore Police Force, the National Environment Agency and the National Parks Board to review further measures against contractors who fail to safeguard basic employment rights of outsourced workers working under Government contracts. More details will be announced at a later stage.
  36. While Government agencies outsource many activities, Government contracts still make up only a small fraction of the total market for outsourced services. So, I want to urge tripartite committees, such as the one chaired by Mr Zainal Sapari for the cleaning sector, to reach out to more private sector buyers to adopt best sourcing. My Ministry stands ready to work with the labour movement and employers to increase adoption of the Tripartite Advisory on Best Sourcing Practices.
  37. Mr Png Eng Huat asked about our efforts to protect foreign and local conservancy workers from unfair treatment and abuses. I would like to assure Members that all cleaners who are employees are covered by the Employment Act. If they feel that they are unfairly treated, they should approach MOM or their unions for assistance. Or to the minimum, they can approach the Migrant Workers’ Centre or the Centre for Domestic Employees, the NGOs and the VWOs for assistance.

    III. Supplementing incomes and CPF - Workfare
  38. Third, we will continue to supplement the incomes and retirement savings of low wage workers through the Workfare Income Supplement (WIS) scheme.
  39. Associate Professor Daniel Goh proposed several changes to the WIS scheme, and I would like to inform the House that recent enhancements to WIS had already addressed most of these points. They were announced at last year’s Budget and implemented since January this year.
  40. So, just allow me to recap them. First, we have raised the WIS income cap, so that workers earning up to $2,000 are now able to receive WIS.
  41. Second, we have increased the WIS payout. Workers can now receive higher WIS pay-outs of up to $3,600 a year.
  42. Thirdly, we will make more frequent WIS payouts, from quarterly to monthly, starting from March 2017. This provides a more direct and timely reward for work efforts.
  43. Aside from helping them meet their immediate needs, WIS payouts are intended to help low wage workers meet their basic retirement needs. This is why WIS pay-outs comprise 40% cash and 60% CPF.
  44. Raising the cash component and reducing the CPF component, as suggested by Associate Professor Daniel Goh, will mean workers will have less to set aside for retirement, and may not be able to meet the basic needs in old age. We think that this may not be a wise approach. The Government has already provided other grants andtransfers, such as GST Vouchers, Service & Conservancy Charges rebates, WIS, etc., to top up low wage workers’ salaries. So taking all these together, it’s really quite a substantial increase in the low wage workers’ income. So, while the cash component of the WIS remains at 40%, but in actual terms, low wage workers receive more cash, with all other social transfers from the Government. More than 460,000 low wage workers will benefit from this round of WIS enhancements. We will periodically review the WIS scheme to ensure that it continues to support the bottom 20% to 30% of our workers.

    Workers with care-giving responsibilities
  45. Madam, I will now turn to our efforts to make workplaces inclusive for workers with caregiving responsibilities.
  46. More employers are now adopting flexible work arrangements such as flexi-time, flexi-place and flexi-load. In 2016, about two in three (67%) of the employees worked in firms that offer formal flexible work arrangements. This is up from just over half (56%) in 2011. More than eight in ten employees (82%) worked in firms that offer ad-hoc flexible work arrangements. This is up from seven in ten in 20113.
  47. Dr Intan, Ms Thanaletchimi and Mr Desmond Choo asked about our efforts in promoting flexible work arrangements, especially for people with care-giving responsibilities. Madam, our efforts need to be targeted in order to be effective.
  48. We looked at the employment rate of local women who continue to shoulder many caregiving responsibilities. We are already among the top in terms of full-time employment4 of females aged between 25 and 64, compared to other OECD countries5. Conversely, Singapore’s part-time employment6 is lower than that of most OECD countries.
  49. While we are doing reasonably well, there is still room to improve employment of our female residents, especially in the area of part-time employment. So, we can do this through flexi-load options such as “job sharing”.
  50. Such options are important, because they give caregivers an option to reduce or adjust their workload so that they can better manage their multiple responsibilities.
  51. Today, nearly all PMETs are on full-time employment, but they can still benefit from job sharing, which offers more choices to both PMETs and employers.
  52. Job sharing may come with some handover and coordination issues, but employers should think of ways to overcome them and make necessary adjustments and arrangements to promote greater job sharing in their companies.

    Raising WSH standards
  53. Madam, allow me to turn to my last subject on Workplace Safety and Health, or WSH in short. Our workplace fatality rate stayed at 1.9 per 100,000 employed persons for the past two years. In 2016, as pointed out by Member of Parliament, Mr Melvin Yong, 66 workers lost their lives at work. Among them, 42 fatalities occurred in the first half of the year. Through concerted efforts by our industry partners and also our stepped-up enforcement and engagement, the number of fatalities dropped to 24 in the second half of last year. This improvement continued into the first two months of 2017 with two fatalities, as compared to ten fatalities last year in the same period. However, to us, every fatality is still one tragedy that can be prevented. And every life lost is still one too many.
  54. So, we should remain vigilant and do more to make our workplaces safer and healthier for our workers.
  55. Mr Melvin Yong also asked what more can we do to reduce the number of workplace fatalities. Our efforts are both targeted and broad-based. The construction sector remained the top contributor with 24 fatalities in 2016. While it has improved from 2015, there are still three areas of concerns that we will step up our actions and focus on. One, vehicular-related accidents within the worksites. Two, accidents involving formwork. And three, lack of proper supervision, coordination and communication of work activities resulting in accidents. We will enhance the WSH Construction Regulations to address these concerns.
  56. To raise overall WSH performance, we need everyone to take greater WSH ownership.
  57. Many progressive companies in Singapore already pay close attention to WSH. In fact, nearly half of them discussed WSH issues regularly at their management meetings7.
  58. We should encourage more to do so, and we will consider laying out in the WSH Act clear roles for corporate officers in maintaining an effective WSH management system in their company. MOM investigators will also probe deeper into the role of the companies’ senior management in ensuring compliance. MOM will take actions not only on the company, but also hold the senior management responsible and accountable if their actions breach the WSH Act.
  59. I would like to assure Mr Melvin Yong and Mr Zainal Sapari that we will continue to help workers who are injured at work.
  60. First, we should ensure that the injured workers, particularly the low wage workers, receive additional financial support when needed.
  61. Mr Zainal Sapari had proposed to review the criteria and administration for the Singapore Labour Foundation Special Relief Fund, or SRF, to benefit more low wage workers who are victims of industrial accidents. Today, other than SRF, local injured workers can also obtain financial assistance under ComCare. Nonetheless, we will work with our tripartite partners, including Mr Zainal Sapari, to review the usage and administration of the SRF to provide injured workers with the assistance that they require.
  62. At the same time, we should also help our injured workers return to work quickly. Today, over 80% of injured workers are already able to return to work, and we want to do more to help them recover faster and also to return to work earlier. This will also benefit employers who are able to retain their experienced employees and save on re-hiring and re-training new employees.
  63. Mr Melvin Yong asked how we are helping injured workers return to work. I am happy to share with him and this House that we will be introducing a Return-to-Work-(RTW) programme this year.
  64. This programme provides early intervention to help injured workers and their companies through personalised case management - a point mentioned by Mr Melvin Yong. RTW coordinators will facilitate injured workers to return to their workplace early. This includes helping employers to make adjustments to their workplaces and jobs to facilitate the injured worker’s rehabilitation.
  65. The tripartite partners will also be working together to implement the RTW programme later this year. We will share more details when it is worked out.

    Conclusion
  66. Madam, I have just outlined the key efforts of my Ministry to push for more inclusive growth and progressive workplaces for our workers. However, it must be a national effort with the tripartite partners, employers and workers, all playing their part together so that we will be able to grow our workplaces to make it inclusive and progressive. Thank you.

FOOTNOTE

  1. Two groups of older workers not covered: 1) those aged 65 and above but below 67 on 1 July 2017, and 2) those beyond the new re-employment age of 67.
  2. Refers to gross monthly income of full-time employed residents (excluding employer CPF contributions).
  3. Data pertain to private sector establishments each with at least 25 employees and the public sector.
  4. This refers to the proportion of females aged 25 to 64 in full-time employment.
  5. Singapore’s data were estimated to facilitate comparison with other OECD economies which used a common threshold of 30 hours for part-time employment.
  6. This refers to the proportion of females aged 25 to 64 in part-time employment.
  7. Data pertain to private sector establishments each with at least 25 employees and the public sector.