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Speech at MOM Workplan Seminar 2014, Themed “A Great Workforce, A Great Workplace - Working As One For A Better Singapore”

Mr Tan Chuan-Jin, Acting Minister for Manpower, Grand Ballroom, Orchid Country Club

Ms Diana Chia, President, NTUC

Mr Lim Swee Say, Secretary-General, NTUC

Mr Stephen Lee, President, SNEF

Distinguished Guests,

Fellow MOMers,

Good morning to all of you.

Introduction 

  1. The video we just watched is a testimony of all the work of everyone in MOM, especially the work that is supported by our tripartite partners. I would like all of us to understand that it make a difference to Singaporeans of all ages and background. Our work in MOM impacts work lives. And not just at the workplace itself, but from the moment people enter the workforce all the way until their retirement years.
  2. In the past year, we have made relatively good progress and are making the lives of Singaporeans better in real and tangible ways. Amidst strong jobs growth, citizen unemployment rate remained low at 2.9%. This is one of the lowest in the world and has remained low for some time. But I’m also mindful that this is a bit like crime – just as low crime doesn’t mean no crime, low unemployment doesn’t mean no unemployment. It is important for us to remember that for the person who is unemployed, it is one hundred percent unemployment until he gets employed. So for those individuals who are affected, we need to do as much as we can. One, to create job opportunities and that’s something that we’re doing relatively well. Two, working with our partners, particularly MOE, to equip them with the skill sets so that they are able to undertake those available jobs and to do them well. And of course, the other part is to facilitate the process where we link them up with job opportunities.
  3. Real median income for Singaporeans grew by 4.6%, which is the highest year-on-year growth since 2008. We are also concerned about low-income workers. At the 20th percentile or P20, real income grew by 10% over the last five years cumulatively, after adjusting for inflation. Over the same period, the income gap between the bottom and middle income group has also narrowed slightly, as P20 real income kept pace with that at the median. Does this mean that income inequality is eradicated? Certainly not. Income inequality remains an issue that we should be concerned about. But it’s about making sure everyone is uplifted. Can everybody be uplifted evenly? I think that’s an aspiration, but we can’t always ensure that everything is uniformed. But overall, everybody’s lot can become better than where it was before, and that’s something that we should aim for.
  4. Again, I would like to say that all of you here today have contributed to these achievements. I would like to thank MOMers for your hard work and our partners for your support in the past year, especially during this time of economic restructuring and heightened citizen expectations. Of course as Singaporeans ourselves, we also need to be mindful of our own expectations of fellow civil servants in other industries and sectors.
  5. I would like to re-emphasise and assure you that not only just what we do is important – we are also here to back you up. You do come under a lot of pressure, especially those of you who are at the frontline. Frankly, I’m really amazed at the level of patience that you exercise. When you look at the requests or demands received through emails or in-person, some are actually incredibly unreasonable. But yet you continue to put in a lot of time to engage as best as you can. I know it can be de-moralising at times, but I want to say that I really take my hat off to all of you who do that. Some of you know that as a result of your contact, a result of your efforts, it turns people around. Sometimes at the spur of the moment they are angry but, because of your more considered and sensitive touch things, become better. Some customers remain quite unreasonable and difficult, but that’s how it is. I hope that in our own small ways, we as citizens remember that when we treat others.
  6. But at the same time, I want to assure you that we’re here to back you up. Our default position is that we will support you. If we make mistakes, we will learn from it and acknowledge it. If some of us have stepped out of line, we will deal with it accordingly as well. Put in the effort knowing that what we do really makes a difference especially at the frontline. So I do encourage you all to continue to make use of that space and do not be cowed by some of the pressures we’ve come under.
  7. Going forward, Singapore’s economic outlook remains robust with a forecasted growth of 2% to 4% for 2014. Our focus must continue to be on ensuring that our growth is not just a number, but ultimately the benefits do trickle down and impact Singaporeans at every level.
  8. Our collective duty is to put in place policies and processes to make sure that Singaporeans can secure better jobs and we can create better workplaces for Singaporeans. The workplace is important and I think it will be great if we’re able to make sure that these workplaces, and these work experiences, are positive. I think some of you would know that as we reviewed our vision, one of the things we seriously considered was adding “Great Work-Life”. We felt wary though, because we don’t have all the levers to make that happen. But it’s something that we want to provide as far as we can. We can’t mandate that every individual has a good boss, we can’t mandate enlightened practices. But we can encourage it, shape it.
  9. Building on the achievements in the past years, we will continue to work on three key areas:

    a) Making workplaces better and importantly, safer to provide more quality jobs for Singaporeans. safety is something we have to continually pay attention to;

    b) Ensuring Singaporeans achieve sustainable increase in real incomes; and

    c) Achieving inclusive growth and retirement adequacy for Singaporeans.
  10. Let me cite some examples of how MOM’s work, with the support of our partners, has and will make a difference. In particular, two key segments of our society – Employees and Employers.

    Employees

    Making workplaces better and safer to provide more quality jobs for Singaporeans
  11. The profile of our labour force and employment norms evolve over time. These trends – the growing number of PMEs, the growing number of people who are pursuing tertiary education – will have a very real impact. We must continue to ensure that our employment and workplace safety legislations keep pace and remain relevant. What got us here may not get us over there.
  12. In particular, we see a growing proportion of managers and executives in the workforce, and we will face increasing demands to ensure adequate representation of their interest and provision of greater support to resolve employment disputes that may arise. We see that – and many of you working in labour relations will know that many of these requests come in – because of present regulations, we may not always be able to attend to every single one.
  13. Last November, I had already moved in Parliament, an amendment to our Employment Act (EA), which has taken effect from 1 April 2014. Specifically, the EA was expanded to cover managers and executives earning up to $4,500 beyond just salary protection. Taken together, the changes to the EA have benefited about 450,000 workers.
  14. A Tripartite Workgroup was formed last year to update the Industrial Relations Act, specifically to study how employees in managerial and executive positions can be better represented by trade unions. Our union brother and sisters work particularly hard, oftentimes not always obvious, but I think they are looking at how best to represent workers. I am happy to note that the Workgroup is in its final stages of consultation with the relevant stakeholders, and will announce the details of the recommendations when ready.
  15. Our work on this front does not stop there. MOM, along with the tripartite partners, will continue to consult members of the public. Feedback is particularly important. The changes that we are making come directly from not only just your input, but also from the input of our citizens. For example during the Our Singapore Conversation process, we have various focus groups that we were running. We’re not just consulting the public, but also the experts, the HR practitioners, and specific stakeholder groups on other EA-related issues, as we continue to shape our strategies to ensure that the workplace remains progressive and standards are raised.
  16. Moving forward, we will enhance the employment dispute resolution process. There will always be employment disputes, but how do we help to resolve that, and how do we help to we address these concerns? Well, by widening the coverage and provide greater accessibility to more workers. We will also continue to encourage good HR practices where our employers can be responsible stewards of the workforce.

    (i) Small Claims Employment Tribunal Proposal
  17. We propose to set up a small claims employment tribunal to provide all workers an expeditious and affordable dispute resolution mechanism for their employment disputes. This would include managers and executives earning above $4,500, who currently can only pursue breaches of employment through civil suits, which can be a protracted and expensive process.
  18. Under our proposal, workers will be able to lodge claims, subjected to a certain claims limit, for statutory issues provided for in the EA such as salary claims and other salary-related matters as specified in the employment contract.
  19. Such contractual matters can possibly include commissions, bonuses or annual wage supplement (AWS) payments.
  20. This is a complex issue and we should not assume that the Tribunal will solve every workplace issue. I don’t think that will be possible, but we will endeavour to address as many of these issues as best as we can. Unions will continue to play an important role in representing workers at the workplace; unions will complement and will continue to play that very vital role as the interface, and to provide an outlet for workers at every level. Because of the better understanding of the employment act and all the various issues, they can also better advise the workers who have concerns of their own. What I have just sketched out is our preliminary thinking behind the broad parameters of the Tribunal. We will continue to consult and engage our stakeholders on the Tribunal proposal in the following months. This is a very important step going forward and we look forward to making this a reality.
  21. Apart from the proposed Tribunal, MOM is also working with tripartite partners to enhance the tripartite mediation framework for union members in non-unionised companies. Together, these enhancements will strengthen employment dispute resolution in Singapore by covering more workers for a wider range of issues, and further entrench tripartite cooperation in Singapore. Whatever we do, it is important that each step is taken together with the unions, and taken together with the businesses as well. It doesn’t make sense for each of us to pursue steps and journey on our own. Ultimately, working together makes for better policy, and it makes for better and more sustainable outcomes.
  22. Further details will be announced when ready.

    (ii) Written Key Employment Terms
  23. Besides facilitating dispute resolution, we also want to minimise the incidence of such disputes in the first instance.
  24. One feedback that we received in our consultations was to make the provision of written employment contracts mandatory. This is of course a good employment practice as it ensures that employment terms and benefits are clear between employers and their employees right from the start of any employment relationship. It will help to prevent, if not at least reduce misunderstandings at the workplace and also facilitate the resolution of any related disputes. It is in the interest of the workers, but I think it is in the interest of the employers as well.
  25. While it is a good idea for employment terms to be provided in writing, we think that this need not be required for all employment terms. We will instead mandate the provision of the select key employment terms, such as salary, duties and responsibilities and working hours. This however does not stop employers and employees from exercising the flexibility to agree on additional terms, whether verbal or written, that will be helpful to both employers and their employees in setting expectations and minimising disputes later on.
  26. Even so, some smaller employers shared that they may find it challenging to provide these key employment terms to their employees in writing today, and need to upgrade their practices and systems in order to do so. We are mindful that for some of the smaller companies, it is a real challenge, and I do hope that the public will understand the need to give some time for transition. Like for the issuance of payslips, we will adopt a practical approach to allow time for businesses to adjust, so that they are able to comply fully when we make it a legal requirement.
  27. As a first step, we will introduce a set of Tripartite Guidelines by the second half of this year, to help employers provide key employment terms such as salary and working hours to their employees in writing, before mandating it in two years, together with the provision of itemised payslips. For employers that are ready to do this, I’d suggest moving and beginning to put this into practice when hiring employees.

    (iii) Developing Progressive and Safe Workplaces
  28. Complementing the earlier measures, we will step up promotion and outreach to raise the level of awareness and adoption of progressive employment practices.
  29. We have expanded TAFEP to also cover progressive employment practices such as work-life harmony and age management. TAFEP is now known as the Tripartite Alliance for Fair and Progressive Employment Practices to reflect its expanded focus. It’s the right time to include not just fair, but also progressive employment practices as well to reflect the importance of that space.
  30. We have and will continue to provide a range of tools to help employers comply with upcoming changes. For instance, to help small employers with the provision of itemised payslips, we now distribute payslip templates and so on.
  31. At the same time, we will also step up our enforcement efforts to ensure that employers adhere to our employment laws.
  32. Besides fostering progressive employment practices, we will re-double efforts to strengthen capabilities of WSH professionals and entrench a safety mindset and culture in the workplace.

    Ensuring that Singaporeans achieve sustainable increase in real incomes
  33. Good jobs must come with decent pay. Raising the quality and optimising the potential of our workforce is the only way to ensure sustainable increase in real incomes for Singaporeans. Singaporeans must have the right skill-sets and knowledge to access better jobs and higher incomes.

    (i) Continuing Education and Training (CET)
  34. We have made much progress in training efforts since the introduction of the 2008 CET Masterplan. Since March 2011, CaliberLink assisted more than 5,000 PMEs with 750 PMEs gaining employment. There are now 51 CET centres offering more than 160 CET Programmes. A total of 1 million workers from more than 30 industries, from Creative industries to Precision Engineering, have now been trained under our WSQ frameworks.
  35. Consider Mdm Ho Cheng Mui, who in 2012, found employment as an Infant Care Teacher shortly after completing the Certificate in Infant/Toddler Care and Development programme at the SEED Institute. Embarking on CET not only allowed Mdm Ho to rejoin the workforce and earn an income, but also allowed her to pursue an interest in caring for young children.
  36. To help more workers like Mdm Ho enjoy the benefits of training, Government has reaffirmed commitment to training at the Budget this year, and announced the top up of the LifeLong Learning Endowment Fund by half a billion, bringing the total to $4.6 billion.
  37. Through our review of the CET masterplan, we will make our CET system more relevant to the evolving needs of our workers and businesses. We will place greater emphasis and support for self-initiated upgrading so as to empower all Singaporeans to take charge of their own learning and create a culture of self-ownership for life-long learning.
  38. We will also make employment facilitation more effective, and work with government agencies to be better at detecting changes in the labour market for earlier interventions. And this is where I would in particular like to thank our partners in MTI and also our partners from MOE for the close partnership over the years. Going forward, we are working very closely to make sure that whatever we do with our workforce is directly relevant to the fast changing world. This is an effort that we must continue to pay attention to. If anything, I think this is an effort, for us particularly, that will give us the cutting edge in staying ahead of the competition, and at the same time, creating opportunities for our people.

    (ii) Fair Consideration Framework
  39. To ensure that Singaporeans are fairly considered for jobs and not subject to discriminatory hiring practices, we will work towards the successful implementation of the Fair Consideration Framework, which will take effect this year.

    Achieving Inclusive Growth and Retirement Adequacy
  40. With an ageing population and increasingly unpredictable economic landscape, we are committed to ensuring inclusive growth, particularly for low-wage workers and older employees, and also to provide financial security for all Singaporeans.

    (i) Workfare
  41. So, what have we done? Last year, we enhanced the Workfare Income Supplement Scheme (WIS) to raise take-home pay and retirement savings of lower-wage Singaporeans. We expect over 400,000 Singaporeans to benefit from WIS for work done in 2013 and they will receive over $600 million in WIS payouts.
  42. We will at the same time provide greater subsidies through the Workfare Training Support (WTS) scheme to enhance their skills and capabilities, and thereby raising their productivity and employability to secure higher incomes. It’s not just about providing top ups through WIS, but importantly, it’s also to equip all Singaporeans, so that they can be better at what they do, so that they can do better jobs, and at the same time, get better wages. I think that is important, because there is a dignity that comes with work, there is a dignity that comes from earning your own keep. There is a dignity that comes from being better at what you do, and a certain pride that comes with it. And this is the philosophy that underpins the effort that we take. I know that many people sometimes look at other models like minimum wage. Well we are looking at it from this perspective: how do we incentivise work, how do we encourage work, how do we encourage better work performance at the workplace, and to equip our workers to do that?

    (ii) Progressive Wage Models
  43. Mandatory Progressive Wage Model (PWM) was introduced for the cleaning sector as a targeted intervention to uplift wages of rank-and-file workers through training and productivity improvements; and this will follow for the security sector. Ultimately we will also look at the landscape sector as well. I would like to take the opportunity here to thank our brothers and sisters, NTUC and our unions, for working very hard, and for coming up with this approach of having multiple ladders, not just in terms of jobs and careers, but also in terms of wages and opportunities, so that there is a process where people can move up, and make their lives better.
  44. Consider 63 year-old outdoor cleaner, Mr Tang Shee Sum. His employer, ISS, implemented the PWM as part of NEA’s accreditation scheme. As such, Mr Tang was able to command a basic monthly salary of $1,200 after ISS renewed their service contract with Nanyang Polytechnic last year. This translated to a 30% increase in his gross salary. This was supported by the Government’s Wage Credit Scheme. ISS also benefited by receiving Special Employment Credit payment amounting to 8% of Mr Tang’s monthly wages by hiring a mature worker like him. With the implementation of mandatory PWM in the cleaning and security sectors, more workers like Mr Tang will enjoy better wages, training and employment terms. So through this small example, I hope that we all realise that each policy does not exist on its own. It’s about how the different policies interact and reinforce each other, so that not only do we provide opportunities for workers, at the same time we also incentivise and encourage employers to do their part, by taking some of the steps I mentioned earlier. This is how we hope, not just from a whole-of-ministry approach, but from a whole-of-government approach, we can begin to move this space. And I’m encouraged to see the developments taking place here.
  45. This year, we will set up a Tripartite Cluster for the Landscape Industry to study the need for mandating a progressive wage model. I would like to extend my appreciation again to the unions and also to the businesses in terms of their input to shape the progressive wage model together with all of us.
  46. Our CPF policies must also evolve to help Singaporeans meet their basic retirement needs. Taking into account longer life expectancies, like I mentioned before, we’re going to live longer. I’m not sure if we’re necessarily happy or not, barring any unforeseen circumstances, we’re all probably going to live longer. So what happens? Obviously after retirement, you will have a much longer time to enjoy your retirement period. Retirement adequacy is something we need to pay attention to. So, we will be increasing CPF employer contribution rates to the Medisave Account (MA) for all workers by the start of next year.
  47. We will also tailor our approach to cater to different segments of our workforce. For instance, older workers will enjoy further increases to CPF contribution rates, to help them build up more savings for their retirement needs and let’s not underestimate the compounding effect of those additional percentage points in the CPF. We have also increased the CPF contribution rates for low-wage workers earning between $50 and $1,500 at the start of this year. Again, I would like to thank my colleagues at CPF, for constantly looking at the system, looking at how we can improve it and working with our partners, especially those at MOF. This is something we are looking at quite intently across the various ministries and the government, and we will continue working on that.

    Employers

    Supporting Employers to Restructure
  48. Restructuring for higher productivity must continue. However, we are also mindful of the need to strike a balance between providing for employment protection and retirement adequacy, and maintaining the competitiveness of the Singapore economy . Because the competition is real, it is out there. People are competing with us, they don’t even need to be in Singapore to compete with us. But as you can see, these are tensions and we need to make those choices. Unfortunately it is not a mechanical device where you can tweak and adjust to all the desired outcomes we want. A lot of it is about a judgement call. We do appreciate the input provided. We will continue to navigate to find the right balance, which isn’t about a 50-50 balance. It’s about finding the right net outcome; that one balance that benefits Singaporeans, benefits society, and importantly benefits us in the present, and into the future as well.
  49. So how do we continue to ensure that we do not undermine our international reputation as an open and dynamic wokforce, which in itself is a big plus point for Singapore? Companies have that confidence, and therefore invest in being here. And when they do that, they create opportunities for our people. This is something we need to pay attention to, and not take for granted.
  50. We understand that many companies are feeling the strain of our foreign manpower tightening measures. During this period of economic restructuring, we are committed to helping employers, especially our smaller companies which don’t always have the flexibility and scope to make some of these changes. How do we help them transform their existing business models, increase the productivity of their existing workforce, expand their manpower pool and support the adoption of progressive employment practices? These are a lot of steps, but they are important steps that need to be taken. This is where we need to work hand in glove together with unions and businesses, to help every company navigate its path.
  51. Recognising the concerns of our SMEs, the Government is rolling out the new PIC+ to help them invest more in technology, streamline their processes, and create higher value products through innovation. We will also continue to support SME training efforts through the Enterprise Training Support or ETS scheme. Companies could tap on various existing training subsidies from WDA to improve their productivity.
  52. Soon Yong Huat Engineering Construction, a construction materials company, is one of the many SMEs that had taken efforts to raise their productivity. In March 2013, they participated in the SME QIANG (pronounced as 强) training programme, jointly developed by the Singapore Manufacturing Federation (SMF) and WDA. WDA subsidised the course fees. Employees were trained to review their business processes to improve manpower productivity and machine efficiency. Applying what they learnt from the training, they installed CCTVs for their quality control operations, which allowed employees to be able to inspect the construction waste delivered to the worksite from their work stations, instead of having to do so manually. The company also modified its machine operating hours which led to an increase of their machines’ output by over 20%. So with reduced processing time and increased output, these improved working environment for its employees and allowed the business to capture a larger market share.
  53. Besides helping employers like Soon Yong Huat Engineering Construction transform their processes and train their existing employees, we also want to make it easier for employers to expand and sustain their manpower pool. So WorkPro helps employers to retain and re-employ older workers and back-to-work locals through grants and incentives targeted at specific strategies such as job redesign, better age management and flexible work arrangements. We do strongly encourage our employers to tap on these to harness the maximum potential of the workforce.
  54. For example, MOM has put in place a range of flexible work arrangement (FWAs) options such as telecommuting, staggered work hours and part-time arrangements through job-sharing to give MOMers the flexibility to better manage both their work and personal commitments. This has in turn made them more engaged and productive at work. The Ministry, as an employer, benefits by retaining valued employees through these practices. In a sense, this is a leap of faith as well, but we must believe that as we provide the flexibility for our people, they in turn will also be able to better balance their work-life. And that in turn, makes for better and more engaged employees.
  55. Many other organisations – big and small – have reaped similar benefits. Yet there are many others who are hesitant to try out FWAs due to a lack of know-how, due to a lack of awareness of how it could be translated to reality. MOM, together with our tripartite partners, will step up our efforts to bring these employers on board.
  56. We have already started working on a tripartite advisory to help guide employers, supervisors and employees in implementing FWAs. This will be ready in the second half of the year. At the same time, we are also reviewing WorkPro to better support employers in implementing progressive work practices, and expect to implement enhancements by the middle of this year.

    Conclusion

    (i) Our People
  57. Ultimately, our People remain the anchor, focus and centre for all that we do. We need to remember that. All these policies are not a theoretical or academic exercise; it’s not an initiative to score points. Ultimately, all these things do end up in real policies, in legislations, in regulations and they affect the lives of everyone working in Singapore. As our citizens become more educated and technologically savvy, they also have high expectations. Just like all of us here who have that same expectation when we work with other government agencies and private sector agencies. We will also face more questions about the way we operate and the reasons behind them. Well, it is a reality that we need to embrace. It becomes more difficult for us but, if we harness it well, it is better for us and keeps us on our toes. At the same time, we can tap on the broader wisdom out there. We also have to figure out how to manage the dynamics involved in interacting and operating in this new workspace.
  58. What this means is that we, as a Government, must continue to ensure good service delivery. This is increasingly important in garnering buy-in from our people as the policies will only work if they are supported in the workplace. Ultimately it is about strengthening their trust in the Ministry and in what we do. Because when trust is eroded, people will begin to doubt, people will begin to throw stones. People may not necessarily agree or like a particular policy, but if trust is established they will be prepared to follow and accept it and move along. So all our efforts here is to make sure that we are able to engage our people well so that workers or employers can better appreciate the rationale behind our policies, and consequently benefit from our programmes. We need to be better at the way we communicate, and I think you’ll see that a lot more effort is being put in. Videos like the opening video you saw earlier is a simple way of putting across the things that we do, hopefully in a way that is more accessible. A bit more light-hearted perhaps, but I think it goes a long way to help people understand.
  59. I would like to congratulate Mr Deyna Chan, from our Foreign Manpower Management Division, who recently proactively engaged a customer and positively shaped MOM’s relationship with him. Deyna listened to his needs and empathised, and this made a difference to this customer. We gain confidence from our citizens through such actions, so do not understand how and individual, your individual action, can make a difference to overall relationships. In so-doing, citizens will be more willing to work together with us in shaping a better future.

    (ii) Tripartism
  60. Throughout my speech, I have emphasized the importance of working closely with our partners. A strong Tripartite partnership has been a hallmark of Singapore in contributing to industrial peace and harmony. Notwithstanding some of the issues we’ve had in the last few years. But nevertheless, it’s a remarkable state of affairs, and certainly not something that we should take for granted. It is something that we need to continually work at in order to maintain industrial peace and harmony.
  61. This has a lot to do with our tripartite partnerships that have worked well, formally and informally, in many areas of our work. It is important to bear in mind that the long-standing trust and understanding that we have built over the years should continue to be nurtured.
  62. Going forward, we must continue to build on this foundation and sustain our partnership with employers and unions at all levels. We will feel strains. Unions will feel greater demands from workers, and the need to speak up more. Employers will face the same thing, and the government will face the same thing.
  63. Let me round up by thanking our partners, whom we have been working with very closely over the past year, to make our achievements possible. These include every one of you here – our tripartite partners, fellow government agencies, parliamentary colleagues, partners from NGOs, training providers, academia, industry associations and service providers.
  64. We look forward to continue working with you as one to achieve our shared goals of achieving higher incomes, better jobs and financial security for all Singaporeans.
  65. With that, thank you very much.