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Committee of Supply (Speech 5) by Mr Tan Chuan-Jin, Minister of State for Manpower and National Development, 05 March 2012, 5.30PM, Parliament

  1. The management of foreign workers is important for two main reasons. Firstly, it is important to know why the framework was put in place. Companies that bypass the framework basically are trying to get more than their fair share of foreign workers. When they violate the regulations, we are essentially depriving Singaporeans of jobs as well. This is something that we should enforce. Secondly, it is also about looking after our workers, both local and foreign. And that is the right thing to do.

    A. Stronger Enforcement to Uphold Integrity of Work Pass Framework
  2. I will first talk about the stronger enforcement efforts to uphold the integrity of the work pass framework. Ms Mary Liew expressed concerns about the effective implementation of the revised Dependency Ratio Ceiling (DRC), and asked how we are enhancing enforcement to ensure compliance. During the Budget Debate, Mr Alex Yam and Mr Teo Ho Pin also raised the possibility of employers who hire phantom workers. I would like to inform Mr Zainudin, who earlier talked about creativity, that now with the Special Employment Credit (SEC), we will now also have older phantom workers being introduced into the landscape, as companies seek to not only just have phantom workers, but older phantom workers, to benefit from the SEC. So we are not short of creativity, certainly not on this front. We are aware that this will invariably happen, and will tighten our work pass framework. We know that the temptation for employers to cut corners and bend rules will increase, but the price will have to be paid.
  3. We have a duty to the majority of responsible employers to be tough on errant employers who flout the rules and the system in order to get more than their fair share of foreign labour. Deterring breaches of the work pass framework will enhance the employment opportunities of local workers. Employers who have to pay the true cost of hiring a foreign worker would have to consider that actually hiring a local worker would make more sense instead.
  4. We also need to take firm action against foreign workers who try to get around the system to get employed here. For example, some obtain forged educational qualifications in order to get work passes, and sometimes with the connivance of their potential employers.

    (i) Update on Enforcement Efforts
  5. Over the past few years, MOM has taken stern action against errant employers who over-declare the salaries of their foreign workers to fraudulently obtain S Passes and Employment Passes. They collect kickbacks. They pretend to be employing locals, we call them phantom workers, in order to boost their foreign worker entitlement.

    a. We managed to step up our enforcement efforts despite the increasing complexity of such cases and the need for more intensive investigation.
  6. So, let me highlight this case. In 2011, Lim Meng Fang and Chua Beng Kiong were sentenced to 43 months and 35 months 8 weeks imprisonment respectively for various employment offences. They set up a shell company in the manufacturing sector and falsely declaring CPF contributions made to 32 “phantom” Singaporean workers, they managed to obtain work passes for 42 foreign workers. Both also collected kickbacks from the workers. As they had no genuine business, the workers found themselves being “released” to find their own work. In addition to being jailed, the duo and their company have also been blacklisted by the Ministry from hiring foreign workers.

    (ii) Strengthening the Employment of Foreign Manpower Act
  7. Apart from increasing our inspections and enforcement checks, we agree with Mr Yeo Guat Kwang that we need stronger deterrent measures against employers that aim to get around our system. We are reviewing the Employment of Foreign Manpower Act (EFMA) to ensure that the penalties for breaches are adequate, and that we hold errant employers and other stakeholders accountable.
  8. MOM intends to strengthen the EFMA in four ways.
  9. Firstly, we will enhance the EFMA to crack down on serious contraventions. Explicit provisions will be created to define major contraventions, instead of prosecuting them as part of other less serious EFMA offences. Some new stand-alone EFMA contraventions we intend to create include the collection of kickbacks from foreign workers, the use of local phantom workers to artificially boost their foreign worker quota, as well as the submission for forged educational certificates.
  10. Secondly, we will boost deterrence by increasing the penalties for serious contraventions, such as the collection of kickbacks. Our current maximum penalties for breaching the Work Permit conditions are a $5,000 fine and/or 6 months imprisonment. These do not adequately reflect the egregious nature of such acts. Under the revised EFMA, we intend for unscrupulous employers who collect monies from their foreign workers to get or retain a job here to be subject to appropriately heavier penalties.
  11. Third, we are designing an appropriate mechanism to complement criminal prosecution. This should allow the authorities to have a timely and proportionate response for regulatory breaches of the EFMA.
  12. Finally, we are seeking to expand our powers of investigation to crack increasingly complex syndicate operations. The proposed powers will largely be benchmarked to the powers provided to MOM inspectors under the Workplace Safety and Health Act and the Employment Agencies Act.
  13. We will launch a public consultation for the proposed EFMA changes later this month and we target to implement the changes to the EFMA this year.
  14. Even as we effect these changes to ensure the integrity of our work pass framework, we are also committed to ensuring an equitable balance of rights and responsibilities between employers and workers. We will therefore separately review the work pass conditions within the Employment of Foreign Manpower Regulations, with a view to rationalise and clarify the employment responsibilities of employers, foreign workers and foreign domestic workers.

    B. Welfare and Employment Rights of Foreign Workers
  15. On the welfare and employment rights of foreign workers, we agree with Mr Christopher De Souza and Mr Yeo that we need to treat our foreign labour force decently, particularly to ensure that employment rights are upheld and that workers are not subject to exploitative conditions. Foreign workers play an important role in building our infrastructure, caring for our families and making a difference to our lives in different ways. We should treat them in a manner that reflects our Singaporean values of fairness and respect for all workers.
  16. We have found that, by and large, the majority of our employers are responsible in fulfilling their obligations, and most foreign workers in Singapore are generally happy and treated fairly.

    a. We conducted a fairly extensive survey in 2011 with over 3,000 foreign workers, which indicates that workers are generally satisfied with working in Singapore. The majority intends to continue working in Singapore after their existing contracts expire.

    b. There are also stories of exemplary employers who go the extra mile for their staff. For example, Sing Moh Electrical Engineering maintains its own dormitory with good conditions for their foreign workers. They provide free modem and wireless internet for workers to tap on. They also celebrate special occasions with their foreign workers; making the efforts to throw Chinese New Year and Deepavali parties complete with tentages and entertainers.
  17. As with every system, there is a minority of irresponsible employers who flout the rules and mistreat their foreign workers. These incidents get amplified, whether in mainstream media or social media. We will take action against such employers.
  18. For instance, we will continue to be tough on companies who do not provide acceptable housing for their workers.

    a. In May 2011, dormitory operator ST9 Pte Ltd was found guilty of failing to provide acceptable accommodation to their workers. They crowded more than 1,100 workers into three factory-converted dormitories that were meant for half that number. The company was fined $50,000; the highest fine for that offence to date.
  19. To prevent errant employers from mistreating their foreign workers, it is important that the Ministry is informed of possible problems early, whether related to housing, salary or other issues.

    a. Unfortunately, some cases have had few early indicators, such as the recent incident cited by Mr Christopher de Souza involving 200 construction workers whose employers delayed the payment of their salaries. Once alerted, MOM followed up quickly with their employers to ensure that all outstanding salaries were paid and other alleged violations investigated. I stress again that it is important for us to receive information. In this particular case, we did not have any prior knowledge of issues. We did not receive feedback from the workers or NGOs. Unfortunately, from time to time, rather than inform us, the issue is blown up. We continued to follow up and in such cases, we will still take action.

    b. Workers play an important part in informing the Ministry about their employment issues early so that we can attend to them, especially if they have not been receiving their salaries on time or if they are subject to.

    c. Feedback from non-government organisations and the public is also critical.

    i. Public tip-offs are important. While we have a system of checks, it is impossible to check on everything. If there are issues, please notify us early so that we can follow up.

    ii. We have also been working closely with NGOs who play an important role of surfacing cases or trends to us.

    C. A Weekly Rest day with the option of compensation in lieu for our Foreign Domestic Workers
  20. I will now talk about foreign domestic workers (FDWs). As we uphold laws to ensure the decent treatment of our foreign labour force, we must not forget that it also includes foreign domestic workers (FDWs).
  21. Mr De Souza raised two issues related to FDWs. One of the issues is related to a blog with a controversial Maid Review section and many like Mr De Souza find this distasteful. We would like to highlight that there are civil routes for redress for the aggrieved party if the comments are defamatory, or in breach of a duty of confidence.
  22. The second issue which Mr De Souza raised, also echoed by Mr Yeo Guat Kwang, is related to specific provisions for rest days for FDWs. We recognize that the debate over whether to implement a weekly rest day for FDWs has been long-standing and contentious. Based on a survey conducted by MOM in 2010, the majority of our employers currently provide at least one rest day a month, but many do not. Since Madam Halimah Yacob raised the issue in June 2011, we have consulted stakeholders, including FDW employers and FDWs, extensively and considered their feedback carefully. And we received a broad spectrum of views.

    a. Let me share with you a sample of what some of the views are. Some employers felt that their needs should not supersede the needs of their FDW to rest and recharge, and that they appreciated their FDW more after taking over her chores on her rest day. Other employers felt that their FDWs do not need a rest day because they have enough rest on a daily basis, or that giving FDWs weekly rest day will make it difficult for employers to cope when they need a break during their own days off. Fears were raised about forming relationships or potential comparison of employment terms with other FDWs. One oft-repeated concern is the fear that FDWs will misbehave or become less compliant as a result. Some claimed that married couples’ relationships would be negatively affected if the FDW took time off, and that this would lead to a rise in divorce rates or reluctance to have children.
  23. It is clear from the robust debate that FDWs play an important role in the lives of many families. Improving FDWs’ well-being has a direct impact on the quality of care that their loved ones receive. We need to ask ourselves how FDWs, who make a significant contribution to many households, how should be treated, and how this reflects upon us as a society.
  24. A weekly rest day is regarded internationally as a basic labour right. More than physical rest, it is an important mental and emotional break from work. Local workers and non-domestic foreign workers already enjoy this right under the Employment Act. We are currently one of very few FDW destination countries worldwide in lacking provisions for weekly rest days. This has led to us becoming less attractive to FDWs compared to other destinations in the region that provide weekly rest days, such as Hong Kong and Taiwan. Malaysia, too, has recently included this provision in a MOU signed with Indonesia.
  25. While accredited employment agencies currently use a standard employment contract that stipulates number of days in a month that the worker wishes to take off and compensation for that, not all employers use the standard contract as it is not legally mandated.
  26. Employers may also find that improving FDWs’ well-being by giving them regular rest days will have a positive impact on the quality of care that they and their loved ones receive.

    a. Increasing Singapore’s attractiveness as an FDW destination will improve FDW supply for employers.

    b. Happier FDWs will lead to better care for employers; fewer management problems; and greater peace of mind. MOM’s records and feedback from non-government organisations that provide assistance to FDWs in distress indicates that the majority of FDWs with management problems do not have rest days. Between 2007 and 2010, a significant majority of FDWs who suffered work-related injuries or committed suicide did not receive rest days. Places that shelter FDWs reported that those who run away from their employers generally did not have rest days.
  27. While most employers do ensure their FDWs have adequate rest on a daily basis, this is not the same as providing a weekly rest day for a proper emotional and mental break and rest. In fact, in-depth interviews with FDWs revealed that a rest day provides them a much needed emotional and mental break from work and time apart from their employers.
  28. We should move forward now, but in a balanced and pragmatic fashion. Therefore, we will legislate a weekly rest day for FDWs. However we will also introduce flexibility in the regulations to respond to the needs and preferences of FDWs and their employers. The family circumstances of some FDW employers make it genuinely difficult for them to cope without a FDW for one day every week. These employers may have elderly or disabled dependents to care for. We also understand that some FDWs prefer to work on their rest days for extra pay.

    a. Employers and FDWs will have the option of providing compensation in lieu of a rest day, as long as this is agreed upon in writing by both parties. The employer and FDW should mutually agree on the number of rest days she will take each month, and the amount that the FDW will be compensated for the rest days that she does not take. The compensation for each rest day must at least be the worker’s daily wage, and be paid on top of her monthly wage. Assuming that the FDW’s wage is $400, and she chooses to take 2 days off, the amount the employer will have to pay is at least $31 to compensate for the remaining 2 days.

    b. Employers who have frail elderly and are therefore most likely to offer compensation in lieu, will be eligible for the new $120 grant each month to hire an FDW. Announced by the Finance Minister in his Budget speech, this grant comes on top of the existing $95 levy concession for households with elderly, young children or disabled members, and is more than adequate to cover the rise in costs from having to compensate a FDW for working on her rest days.

    c. For employers and FDWs who agree on taking regular rest days, there will also be flexibility for both to agree on which day of the week the rest day falls. Instead of monetary compensation, employers can also give FDWs a replacement rest day within the month.
  29. To give employers time to adjust to the new regulations, we plan for them to take effect for all Work Permits issued or renewed from 1 January 2013. FDWs with Work Permits issued or renewed before 1 January 2013 will not be covered by this regulation until their Work Permits expire and are renewed after 1 Jan 2013.
  30. One of the key concerns that employers have cited is about FDWs’ activities on their days off.

    a. I would like to emphasise that MOM does not forfeit employers’ security bonds if the FDW violates her own Work Permit conditions, for instance if she moonlights on a rest day or gets pregnant.

    b. Even in extreme cases where the FDW absconds and cannot be located, only half the security bond will be forfeited if the employer has made reasonable effort to locate the FDW.

    c. In reality, MOM forfeits very few security bonds each year. Last year, 22 security bonds were partially forfeited for missing FDWs. This is not large considering that we have over 200,000 FDWs in Singapore.

    d. The Ministry is also reviewing employers’ obligations for medical costs and the cost of sending FDWs home for exceptional circumstances that employers have little or no control over. This is part of the second phase of the review on EFMA which I mentioned earlier. I hope that this would assure all employers, because the fear and the concern over the security bond does shape the behaviour of employers.
  31. With the provision of a weekly rest day and flexibility for compensation in lieu, I believe we will be taking the correct step. It will be a balanced and i pragmatic step forward to improve the employment conditions for our FDWs. While some employers may respond to this decision with apprehension, we have to ask ourselves what is the right thing to do.
  32. In the course of our consultation, we have spoken to many employers with pressing needs for a FDW to care for their children, elderly or disabled dependents. Some have managed to provide rest days for their FDW. For example, Mr Sulaiman Abdullah who stays in Jurong. His FDW, Ms Siti Mufidah, has been a big help to his family, caring for 4 children with 2 younger ones in pre-school. He recognised that Siti needed a day to herself for her own personal needs. He has better peace of mind knowing that she has a proper break and would be more motivated to continue caring for his children for the rest of the week. Mr Sulaiman told us that Siti has been using her rest days to attend courses and she can even teach his son English now.
  33. Not everyone is ready to do this, so our regulations will provide the flexibility for employers to negotiate different arrangements with their FDW. But as our country develops economically, we should not cease to ask ourselves what kind of society we want to build, about the kind of society we want to live in. How would we want to be treated ourselves as workers? We should strive to embody and uphold the right values to our children, who would observe the way we talk to and treat our FDWs. This will have an impact on their own value system and in the way they look at life, the way they look at people and treat people.

    D. Training for Foreign Workers
  34. Lastly, let me address other queries from Mr Yeo Guat Kwang, related to the training of foreign workers.

    a. Mr Yeo asked if we can help foreign spouses of Singaporeans on Long Term Social Visit Pass (LTVP) with training and job facilitation. In line with the Government’s intention to extend more assistance to families of Singapore Citizen with foreign spouse, WDA will provide such services at its career centres to LTVP Plus (LTVP+) holders. They will be eligible for needs based course subsidies, following an assessment at the career centre.

    b. Separately, Mr Yeo also suggested making the Workforce Skills Qualifications (WSQ) a criterion for the renewal of Work Permit (WP) holders. Currently, employers who hire Work Permit holders (WPHs) with the relevant skills-based test qualifications and certificates, including selected WSQ , which is one of the criteria for assessing work pass upgrades, are considered skilled and can pay a lower foreign worker levy compared to unskilled WPHs. This hopes to encourage employers who need foreign workers to hire those with better qualifications and skills as far as possible. Imposing WSQ as a pre-condition for renewal of work permit will impose unnecessary rigidity on employers.

  35. To conclude, the measures to be put in place by my Ministry this year will help us to manage our foreign workforce better and preserve the integrity of our Work Pass system. If we want to build an inclusive society, we must also ensure that foreigners working here are on legitimate passes that accurately reflect their value to our economy, that they are not subject to exploitation and that their employment conditions reflect how we believe workers should be treated in our society.