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Speech by Senior Minister of State for Manpower Mr Zaqy Mohamad at Committee of Supply 2021

Senior Minister of State for Manpower Mr Zaqy Mohamad

As delivered

A. INTRODUCTION

A1. Mr Chairman, earlier, Minister for Manpower outlined how MOM will strengthen our efforts to ensure workforce and workplace resilience.

a. First, by uplifting our lower-wage workers.

b. Second, by ensuring good workplace safety practices.

c. Third, by enhancing our employees’ mental well-being.

B. UPLIFTING OUR LOWER-WAGE WORKERS

Lower-wage worker outcomes over past decade

B1. We have made good progress in supporting our lower-wage workers.

a. In the decade from 2009 to 2019, lower-wage workers saw higher income growth than the average worker.

b. This has helped to reduce income inequality, and bears testament to the Government’s multi-layered approach to support our lower-wage workers.

B2. Workfare Income Supplement, which the Government introduced in 2007, laid the foundations to supplement the incomes of our lower-wage workers. It casts a wide net, covering full-time and part-time employees, as well as the self-employed.

a. In 2020, about 440,000 people were eligible for Workfare, as long as they earned less than $2,300 a month and met all other eligibility criteria.

b. It supplements workers’ wages by up to 30%, depending on income and age.

c. On top of Workfare, we have the Progressive Wage Model (PWM) and Workfare Skills Support.

B3. Although the COVID-19 pandemic has tempered progress, we are fortunate that there has been broad-based preservation of jobs and employability.

a. This has not been the experience elsewhere. At its peak, the unemployment rate for OECD countries was 3.6%-points higher than pre-COVID-19 levels, whereas in Singapore, the increase was smaller at 1.6%-points.

b. To cushion the impact on the incomes of lower-wage workers, last year, the Government assisted them with the one-off Workfare Special Payment of $3,000, fully in cash, on top of the regular Workfare payouts.

c. In total, approximately 500,000 Singaporean workers benefited from about $1.5 billion of Workfare Special Payments.

d. Such an effort has certainly supported our lower-wage workers in these challenging times.

B4. But we are not out of the woods yet.

B5. Keeping our lower-wage workers employed must continue to be our highest priority.

a. And we have done so through measures like the Jobs Support Scheme, which has helped keep our unemployment rate low.

B6. Keeping this priority in mind, we should take careful steps to raise the wages of lower-wage workers.

a. Especially in a time like this, we must not trifle with careless moves that would risk them being unemployed instead.

Meaningful progress even amidst the pandemic

B7. We will continue to build on Workfare and extend the PWM to cover more workers. This combination is a sustainable way to uplift our lower-wage workers through better wages and better work conditions.

B8. Take our security officers, for example.

a. Since January this year, security firms are no longer granted overtime exemption (OTE).

b. This means that a security officer can only work up to 72 overtime hours a month, instead of the previous industry norm of 95 hours.

c. While security officers would have been heartened by this move, many were also concerned about the impact on their wages. Because many relied on OT pay for their gross incomes.

d. To mitigate the impact of reduced overtime hours on wages, Tripartite Partners agreed to a $150 increase in the PWM basic wage floor, double that in preceding years. More senior security officers saw even higher wages.

e. What this means is that security officers can now work fewer overtime hours while maintaining their gross monthly wages.

f. I am thankful to both the labour movement and security employers for continuing with these changes despite the current challenging business climate.

g. Mr Alvin Goh is one of many who have benefited. When he joined the industry in 2017, he worked 6 days each week, averaging 94 overtime hours a month. Mr Goh was earning about $1,800 in gross wages then, with some additional support from Workfare.

h. Today, because of PWM, Mr Goh works up to 72 overtime hours a month – a significant reduction of 22 hours. This means two additional rest days a month, which he uses to spend more time to rest and spend more time with his family.

i. Thanks to PWM wage increases and his progression up the PWM ladder, his gross wages today has increased by more than 50% from the $1,800 he was earning in 2017 to about $2,800 today.

j. Besides improved working conditions, many of us have witnessed the transformation of job roles in the sector – from jagas who perform largely caretaking functions, to security officers who are skilled professionals, enabled by technology today.

k. Careful implementation of the PWM has also helped to avoid negative employment effects. We have seen the growth of more locals joining the sector of around 6% a year, from 2015 to 2021.

l. The Progressive Wages approach, with Workfare as a foundation, has benefitted the security sector, employers and security officers, who have seen better career prospects, wages, and work conditions.

B9. Amidst the pandemic, other PWM sectors also continue to show progress, with cleaners and landscape maintenance workers seeing their PWM basic wages increase last year.

a. For the lift sector, the Government took the lead from 2019 to contract only with lift maintenance firms that adopt the PWM ahead. The PWM will be made mandatory next year.

b. We expect the Tripartite Cluster for Lift & Escalator industry to submit its recommendations soon, to implement the PWM for escalator maintenance next year as well.

Workfare and Progressive Wages – a better approach for Singapore

B10. With your permission, Mr Chairman, may I ask members to refer to a handout detailing our efforts to support lower-wage workers.

B11. The story of Mr Alvin Goh and others like him bear testament to the value of building on Workfare, to adopt Progressive Wages.

a. The tripartite approach of engaging stakeholders to work out wage rungs and increases over time, makes for a more sustainable consensus.

b. With wage rungs adapted to the various sectors, there is less risk of job losses, especially to the most vulnerable of workers.

c. The Progressive Wages approach is also more comprehensive - it allows workers to benefit from not just wage increases, but also improved work conditions, skills upgrading and progression.

d. We must build on this progress with renewed vigour.

Progress of the Tripartite Workgroup on Lower-Wage Workers

B12. The Tripartite Workgroup on Lower-Wage Workers have also been working hard to ensure that our lower-wage workers can emerge stronger together with the rest of Singapore. Presently, our existing PWMs cover around 85,000 workers.

B13. Dr Koh Poh Koon and Ms Yeo Wan Ling asked if the wages and prospects of our lower-wage workers in the Food Services and Retail sectors could be uplifted. NTUC Sec-Gen Ng Chee Meng also expressed similar sentiments recently.

B14. We have been studying the extension of the PWM to more sectors. In my COS speech last year, I reiterated our intention to do so when business conditions were more favourable. We were at the beginning of the COVID pandemic last year.

B15. Now, as we strive to emerge together from the pandemic, I am pleased to announce that the Tripartite Workgroup has agreed to extend the PWM to the Food Services and Retail sectors.

B16. These sectors are among the sectors with the largest numbers of lower-wage workers. We estimate that these PWMs could cover up to 80,000 local workers.

a. The Workgroup also recognises NTUC’s aspirations for the PWMs to be implemented within 2-3 years.

b. We have convened Tripartite Cluster committees for each of these sectors, which will recommend an implementation timeline, taking on board all stakeholders’ concerns, including market conditions.

c. The Tripartite Cluster committees will target to submit their recommendations on the timeline and other implementation details to the Government by the end of the year.

B17. In good part because of the PWM, the median gross monthly wages of cleaners have seen cumulative real growth of 37% since 2013, to $1,388 in 2019. For security officers, we saw cumulative real growth of 29% since 2015 to $2,391 in 2019.

a. We are confident that our local workers in the Food Services and Retail sectors will likewise see a meaningful uplift to their wages in time to come.

b. We also welcome NTUC’s strong commitment in expanding the PWM. We look forward to NTUC bringing onboard their Social Enterprises, such as NTUC Foodfare and Fairprice, when we expand the Food Services and Retail PWMs, along with other progressive employers.

B18. Even as the Tripartite Partners work through the details, we recognise that our approach will need to be balanced.

a. During my consultations with industry, many Food Services and Retail employers supported the imperative to do more for our lower-wage workers in their sectors. I am heartened by their support.

b. At the same time, we are also mindful that while some firms are doing very well, others may still be more at a nascent stage of recovery.

c. Our interventions must therefore be carefully calibrated. It must be meaningful for the worker, but it must also viable for our SMEs.

d. We will pay close attention to the potential impact of PWM on business costs. The Government will do its part to support the transition, alongside employers and consumers.

e. We will also consult extensively with employers and unions, and be sensitive to existing industry practices – such as incentive-based wage renumeration like commissions for example – when designing the PWM in these sectors.

f. Many Retail employers have highlighted to me that incentive-based wage renumeration, such as commissions, is an important industry practice to motivate workers.

g. Similarly, Food Services employers have shared that given the nature of their industry, overtime pay and other allowances are critical components of the wage structure.

h. I understand that these industry practices have been developed over the years, in large part, to allow for good outcomes for both employers and workers.

i. I have asked the Tripartite Clusters to see how best to retain such features so that the best-performing workers are properly rewarded, while also ensuring that all workers who put in a fair day’s work will take home a meaningful wage.

B19. Today, all cleaners, security officers and landscape workers of licenced or registered cleaning, security and landscape firms benefit from being paid at least PWM wages. Other companies may also employ staff in-house to perform these roles, such as hotels and F&B outlets, which are not covered under existing PWMs.

B20. The Workgroup fully agrees with Dr Koh that it will make sense to extend the existing PWMs to benefit up to 50,000 of such workers. We intend to consult key affected sectors on a suitable timeline to move forward.

B21. To the questions from Mr Louis Ng and Mr Fahmi Aliman, I wish to reinforce the Government’s ambition to eventually cover all sectors with Progressive Wages, on top of Workfare as the fundamental layer of support for our lower-wage workers.
a. We are starting in sectors with the highest proportion of lower-wage workers in the workforce, and identifying ways to expand beyond these sectors.

b. We also recognise that there are lower-wage workers employed in similar occupations but distributed in other sectors. We are studying practical ways to cover various occupational groups under Progressive Wages, and will share more when ready.

B22. To the figures Mr Gerald Giam quoted yesterday, the discrepancy arises because of coverage.

a. Part-time employees work fewer hours so their gross wages would naturally be lower.

b. Similarly, for self-employed persons, the nature of their earnings and their working hours are not comparable.

c. But let’s also look at the big picture. The wages of our lower-wage workers have not stagnated in the past decade. We have seen our efforts improve the wages of all residents and we have seen progress at the bottom 10% and the bottom 20%. So just to give him some idea, at P20, wages have increased by 39% in real terms in the last decade from 2009 to 2019*. And at P10, wages increase by 37% in real terms during the same period*. So that’s really the big picture that the wages of our lower-wage workers have not stagnated. They have gone up and we will continue to help them progress.
*Based on gross monthly income from work (including employer CPF contributions) of full-time employed residents.

B23. Regardless of how the numbers differ, the important point is that lower-wage workers would receive Workfare support. In time to come, our aim is to cover them through Progressive Wages too.

B24. Nevertheless, more broadly, I thank Mr Gerald Giam for his consistent support of the PWM, since 2014, I believe when he was an NCMP when he commented on its launch.

a. We share similar objectives, even if our methods or approaches may differ.

b. Mr Giam may have the impression that there’s little risk of disemployment when higher wages are mandated. It is precisely because of the calibrated way in which we have rolled out PWM, negotiated with the industry and labour movement, have we been able to avoid disemployment and improve wage outcomes in which the market can bear.

c. Where feasible, the Tripartite Partners make positive improvements to the work conditions as I shared earlier with the security sector – which in turn, promotes more local hiring. It’s a win for the employer, a win for the worker, and a win for the service buyer and hopefully consumers in the future.

d. The Government stands ready to support to ease the transition for firms, including training support.

e. This is why the sectoral tripartite consultations are critical.

B25. And as Mr Edward Chia I agree when he cautioned, businesses – especially our SMEs – must be given a reasonable runway to adjust and prepare for the PWM. I thank him for his support and I also want to assure him that this is exactly how we prevent problems.

B26. I hope that Mr Giam will appreciate the delicate balance involved and the Workgroup members who are working hard to act responsibly.

B27. The Workgroup will also study how to ensure that wage growth in PWM sectors continues to outpace median wage growth, so that we narrow the wage gap amongst our workers and strengthen the cohesion in our society.

B28. Mr Chairman, the PWMs currently benefit 85,000 workers. In the short-term, we will be at least doubling the coverage – up to 218,000 workers. More importantly, it remains our aspiration to cover all sectors with Progressive Wages in the longer-term, on top of Workfare as the fundamental layer of support for all our lower-wage workers. The Workgroup expects to conclude its deliberations and issue its recommendations to the Government to do so before the end of this year.

Supporting lower-wage workers requires a whole-of-society effort

B29. Uplifting our lower-wage workers is a whole-of-society effort.

a. Employers and workers must continue to be committed to job redesign and upskilling.

b. As consumers, let us also recognise our responsibility.

B30. I am heartened that a Government poll conducted early this year found that, even amidst the pandemic:
• a considerable proportion of respondents – 39% – were willing to pay more for goods and services to help lower-wage workers receive higher wages.
• 42% were neutral, 19% were not prepared to do so.
• Though there are many Singaporeans willing to pay more, but we can see that the support is not so clear-cut.

a. So as a nation, it is important of us, that we stand in solidarity with our lower-wage workers.

b. I urge all members in this House – across Parties – to help build consensus among Singaporeans, that this is but a small price to bear together for a fairer and more cohesive society.

B31. At the same time, the extension of PWM to these sectors is not an excuse for companies to indiscriminately raise prices, which Dr Koh and Mr Singh are rightly concerned about. I fully agree.

a. With the expansion of PWM to the public-facing Retail and Food Services sectors, we will study options with relevant agencies to keep a close watch on indiscriminate profiteering.
• To Mr Singh’s specific query on lift maintenance contracts, today there is no requirement for Town Councils (TCs) to procure services from any particular firm, though I recognise that some firms specialise in particular lift models.
• Authorised dealers are required to supply parts to other players on fair, reasonable and non-discriminatory terms. Town Councils can also compare prices between firms to make informed decisions on awarding of contracts.
• Agencies will look into any unjustified contract hikes, and Mr Singh can offer us the details for follow-up, if there are.
• More broadly, Mr Singh’s example brings to bear two points.
• First, since introducing PWM for the sector through government procurement in 2019, we have seen median gross monthly wages for full-time resident lift technicians rise from around $3,300 in 2017 to about $3,800 in 2019.
• But at the same time, our efforts may have some impact to consumer prices. This highlights why careful deliberation by Tripartite Partners is necessary as we expand to more PWMs.
• No company should unjustly profit from the PWM, but we must also recognise that these moves will not be without cost.
• This is why Workfare continues to be important, as consumers and service buyers do not bear the cost impact of the wage supplements.

Launch of the Alliance for Action for Lower-Wage Workers

B32. All of us have a role to play as our lower-wage workers enjoy better wages, dignity and respect.

B33. I agree with Mr Raj Joshua Thomas that seeking the well-being of our fellow workers must be part of our culture. The Government will partner the community in this effort.

B34. With this in mind, the Workgroup has called for the formation of the Alliance for Action for Lower-Wage Workers.

B35. The AfA will mobilise passionate, action-oriented people to contribute to the whole-of-society effort to uplift lower-wage workers.

a. We are confident that there are many Singaporeans ready to roll up their sleeves to perform acts of solidarity, to contribute in deeds and not just in words.

B36. The Government supports the Workgroup’s call. We will launch the AfA soon and run co-creation workshops for AfA members over the next six months to start these ground-up initiatives.

C. ENSURING GOOD WORKPLACE SAFETY PRACTICES

C1. Mr Chairman, moving on to workplace safety, MOM is alarmed at the recent spate of workplace accidents.

a. The Ministry is investigating every incident, and we call on the whole industry to seriously review your safety protocols.

C2. We acknowledge that companies are facing manpower shortages due to border and pandemic controls.

a. Nevertheless, companies must not compromise worker safety by rushing or having workers operate machinery or perform tasks that they are not trained for.

b. They should also review their risk assessments to account for COVID-19 conditions.

C3. Since mid-December 2020, MOM has stepped up enforcement. Out of 510 inspections since mid-December, MOM has uncovered 486 contraventions and issued 7 Stop-Work Orders (SWOs). No company should be complacent.

C4. Since last November, WSH Council and industry associations have called for two Safety Time Outs (STOs) to improve safety protocols.
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C5. We are particularly concerned with the Tuas explosion on 24 February, resulting in multiple casualties.

a. It was one of the worst accidents in recent years. Our inspectors have commenced inspections on close to 500 companies that may have combustible dust hazards, and this is to ensure that risks are minimised.

b. The Minister for Manpower will appoint an Inquiry Committee to thoroughly study the causes, and recommend prevention measures, including policy or regulatory changes if necessary.

C6. Mr Melvin Yong asked about workplace safety amongst sub-contractors. Sub-contractors are not the only ones responsible for WSH.

a. Main contractors must also be responsible for ensuring overall safety across their worksites, including managing the safety performance of sub-contractors on their sites.

C7. To motivate both main and sub-contractors to improve their workplace safety practices, MOM launched the CheckSafe e-service in January this year to make construction companies’ safety track records readily available.

a. This way, developers and main contractors can make more informed decisions in appointing safer sub-contractors.

b. We intend to expand this to other sectors for service buyers to influence WSH outcomes through their choice of contractors.

c. For construction fatalities involving sub-contractors’ workers, we also prosecute the main contractor if they fail in their duty to ensure safety of workers on the site.

d. Later this year, MOM will release a framework emphasising safety performance for public sector construction tenders. In this way, safer companies will have better access to business opportunities. And I hope that the private sector will follow suit in due course.

e. This approach is an important complement to deterrent penalties in WSH prosecutions. The maximum penalty for WSH Act offences have increased from $250,000 in 2016 to $400,000 in 2019.

C8. The Work-At-Height (WAH) Safety Taskforce will also be engaging various associations, including the Singapore List of Trade Subcontractors (SLOTS), to raise WAH standards especially for SME subcontractors.

C9. Based on MOM's inspections, almost all companies have appointed a Safe Management Officer (SMO).

a. We support Mr Melvin Yong's suggestion that companies could consider upskilling their SMOs to become WSH representatives, through courses such as the WSQ Certificate in Workplace Safety and Health or through participating in the bizSAFE programme, for which training subsidies are available.

b. However, companies should not solely rely on WSH representatives to ensure workplace safety and health. Top management must continue to maintain oversight and responsibility.

C10. Mr Chairman, Singapore has come a long way in our Workplace Safety and Health standards.

a. Since the Nicoll Highway collapse in 2004, our workplace fatal injury rate reduced from 4.9 per 100,000 workers to 1.1 per 100,000 workers in 2019.

b. This is a level achieved only by a handful of developed countries. Still, we must never be complacent, and we remain committed in our goal of making Singapore one of the safest workplaces in the world.

D. ENHANCING MENTAL WELL-BEING OF OUR WORKFORCE

D1. Mr Melvin Yong has asked about the adoption of the recommendations in the Tripartite Advisory on Mental Well-Being at Workplaces, including EAP services.

a. Since its launch last November our partners (i.e. HPB, WSH Council) and mental health service providers (i.e. Singapore Anglican Community Services and Singapore Association for Mental Health) reported increased interest from employers in offering mental well-being initiatives at workplaces for the first time.

b. As the economy recovers, we expect more companies to re-prioritise their resources to more mental well-being initiatives.

D2. Besides NTUC, MOM is also working with employers and HR groups to promote the adoption of the TA. As suggested by Mr Yong, we will track adoption in MOM surveys every two years, with the first run occurring later this year.

D3. We will also emphasise de-stigmatising help-seeking behaviour, to address any hesitance in tapping on EAP services. Employers can also tap on counselling and employee assistance resources provided by counselling centres and Social Service Agencies, some of which are provided at a lower cost.

D4. To increase adoption of the TA recommendations, we will raise awareness through our National Workplace Safety and Health Campaign, and support implementation by curating a one-stop online resource portal and create guides for HR practitioners. We also appreciate Tripartite Partners’ support to encourage more companies to adopt the TA recommendations.

D5. MOM welcomes Mr Yong’s idea to recognise organisations and individuals who have adopted exemplary practices in promoting employees’ mental well-being and to honour them at the WSH awards.

D6. To help employers and employees identify and manage workplace stressors, I am pleased to announce that the iWorkHealth tool was launched on 24 February.

D7. I encourage companies to make use of iWorkHealth to measure their firms’ state of mental well-being, provide warning for excessive work stress, and gauge effectiveness of interventions over time.

a. This tool is free of charge and the results are confidential. Employers will only have aggregated findings. Pilot users have found it easy to use and insightful.

b. We are happy that NTUC is promoting adoption of iWorkHealth among unionised firms.

D8. At the same time, workers should also take ownership of their mental well-being and seek help if they need it.

E. CONCLUSION

E1. Mr Chairman, The COVID-19 pandemic has reminded us of the importance of ensuring workforce and workplace resilience. For its part, the Government is committed to continue leading efforts:

a. to uplift lower-wage workers,

b. to ensure good workplace safety practices and

c. to enhance employees’ mental well-being, not just for the benefit of every worker,

d. but also for the good of employers and society-at-large.