The following article was published in The Straits Times on 28 Feb 2010.
Jobs await IRs' foreign construction workers
By GOH CHIN LIAN
The Straits Times 28/02/2010
Construction at the two integrated resorts is coming to an end for the masses of foreign workers there, but a huge exodus home is not expected.
Construction firms told The Sunday Times they are moving their workers to new projects, from hotels and condominiums to roadworks.
They prefer renewing the work permits of these workers to taking in fresh hires.
Mr Andrew Khng, president of the Singapore Contractors Association (Scal), said: "These workers have already finished one learning curve. Why should you just let them go if they are capable and knowledgeable?"
More than 28,000 people have been building the two IRs, the bulk of whom are foreign workers.
While construction work will go on at least till the end of the year at both IRs, those hired for Resorts World Sentosa (RWS) have already completed parts of it – four hotels, a shopping and dining promenade, and a casino.
It is the same story at Marina Bay Sands, which will open its doors on April 27. By then, its casino and about 40 per cent of its hotel rooms, as well as parts of the retail mall and convention centre, will be completed.
Construction firms like Tiong Seng Contractors, however, have begun moving their men elsewhere.
The local firm hired about 1,200 skilled workers, including carpenters and tilers from China, and 400 general workers from India at the peak of building three hotels and the casino at RWS in a joint venture with Japanese-owned construction firm Kajima Overseas Asia.
Now, about 100 skilled workers and 160 general workers remain on the RWS site, said the joint venture's deputy project director, Mr Eric Yang.
Most of the others have been moved to Tiong Seng's condominium projects in Cairnhill and River Valley or have been reallocated to other projects by their employment agents.
"They are a benefit to the industry as they understand Singapore's safety mindset. If we bring in a new batch of people and we need to rush out the job, there may be safety issues," he said.
He estimates that a quarter of Tiong Seng's original 1,600 workers have returned to their home countries because they have earned enough or were not retained because of poor performance.
Plumbing company OSK Engineering's contract at Marina Bay Sands will be wrapped up in November, but it also plans to transfer its 200 foreign workers there to other projects.
These include the W Singapore Sentosa Cove hotel in Sentosa Cove, a condominium in Holland Hill and a new cruise centre in Marina South.
It is also competing for projects such as the Aquarius Hotel in Sentosa and Parkway Holdings' Novena Hospital, said managing director Tan Yeo Kee.
Scal's Mr Khng said contractors will be looking to improve the training of foreign workers so that they become more productive.
This followed the Government's announcement last week to raise the foreign worker levy over three years and reduce the foreign worker quota allocated on a project basis, to 75 per cent by 2012, for the construction sector.
Construction firms say they may absorb the costs of the higher levy, as they will still need foreign workers if they seek to secure new projects.
This is good news for Bangladeshi foreman T. Hossain Late Chan Fakir, 40, who has been working in Singapore for the past 10 years. His latest credentials involve working under intense time pressure on piping works at RWS.
Several contractors were involved in the massive project, so any delay would affect other parties, said Mr T. Hossain, a work permit holder with construction firm MEC Engineering.
Having worked at a break-neck pace in the past year, his next project will be a breeze. His employer is sending him to work at the 56-unit Madison Residences condominium in Bukit Timah Road.
Sunday, February 28, 2010
Filipino = good English = good worker?
The following article was published in The New Paper on 28 Feb 2010.
Filipino = good English = good worker?
The New Paper
28/02/2010
FILIPINO Rodel Sombilla (above), 30, followed his wife to Singapore two years ago when she found a job here via an online job portal.
Within four weeks, he found a job of his own as a supervisor at an F&B outlet.
While he credited his speedy job search partly to an efficient recruitment agent, Mr Sombilla said Filipinos do have traits that make them popular candidates for jobs.
He said: "We do our best when it comes to work, so the boss is really satisfied. Like if my boss tells me to clean something, I will clean all the things I see."
He said English is also taught in all primary and secondary schools in the Philippines, which is an advantage in countries like Singapore.
Mr Sombilla, who has a bachelor's degree in hotel management, is now on an S-Pass and earns $1,890 a month, compared to 15,000 pesos ($460) he used to make in the Philippines as a restaurant supervisor.
Recruitment agencies here say that Filipinos have been gaining popularity among employers.
Mr Eric Han, director of EC Recruitment, a 20-year-old job placement agency specialising in foreign workers, said that their ability to speak English compared to other nationalities is one of the key factors.
He has had clients who request "Filipinos only" for jobs ranging from kitchen assistants to quantity surveyors.
Another recruitment agency executive said: "In terms of work attitude, they are more hardworking and positive."
Mr Dedy Djajapermana, who runs online job portal Job-Q.com, said that Filipinos are also "quite aggressive" when it comes to searching for jobs.
He said that web traffic from the Philippines makes up 20 per cent of the 6,000 to 7,000 unique visitors his website gets per day – the largest percentage among overseas visitors.
But the recruitment agency executive said that soft skills aside, salary expectations are usually what matter for employers – the lower, the better.
But not all Filipinos enjoy such smooth job searches here. Said Mr Sombilla: "Some of my friends have been here for two months, still nothing."
Filipino = good English = good worker?
The New Paper
28/02/2010
FILIPINO Rodel Sombilla (above), 30, followed his wife to Singapore two years ago when she found a job here via an online job portal.
Within four weeks, he found a job of his own as a supervisor at an F&B outlet.
While he credited his speedy job search partly to an efficient recruitment agent, Mr Sombilla said Filipinos do have traits that make them popular candidates for jobs.
He said: "We do our best when it comes to work, so the boss is really satisfied. Like if my boss tells me to clean something, I will clean all the things I see."
He said English is also taught in all primary and secondary schools in the Philippines, which is an advantage in countries like Singapore.
Mr Sombilla, who has a bachelor's degree in hotel management, is now on an S-Pass and earns $1,890 a month, compared to 15,000 pesos ($460) he used to make in the Philippines as a restaurant supervisor.
Recruitment agencies here say that Filipinos have been gaining popularity among employers.
Mr Eric Han, director of EC Recruitment, a 20-year-old job placement agency specialising in foreign workers, said that their ability to speak English compared to other nationalities is one of the key factors.
He has had clients who request "Filipinos only" for jobs ranging from kitchen assistants to quantity surveyors.
Another recruitment agency executive said: "In terms of work attitude, they are more hardworking and positive."
Mr Dedy Djajapermana, who runs online job portal Job-Q.com, said that Filipinos are also "quite aggressive" when it comes to searching for jobs.
He said that web traffic from the Philippines makes up 20 per cent of the 6,000 to 7,000 unique visitors his website gets per day – the largest percentage among overseas visitors.
But the recruitment agency executive said that soft skills aside, salary expectations are usually what matter for employers – the lower, the better.
But not all Filipinos enjoy such smooth job searches here. Said Mr Sombilla: "Some of my friends have been here for two months, still nothing."
Saturday, February 27, 2010
Not all maid agencies give refunds
The following article was published in The New Paper on 27 Feb 2010.
Not all maid agencies give refunds
The New Paper
27/02/2010
EMPLOYERS UNHAPPY OVER MAID PAYMENT SCHEME
CHECKS with the Association of Employment Agencies (Aeas) and the Consumers Association of Singapore's CaseTrust said employers must pay the recruiter's fee.
They can then recoup the money from the maid.
Both organisations accredit maid agencies.
Aeas vice-president Allan Wee said the practice has been around for at least three years.
Ms Alice Cheah, owner of Caregivers Centre, told The New Paper the standard practice is for new maids to work for several months without salary to pay the amount.
The amount depends on the price set by the overseas recruiters.
For example, if the maid's monthly salary is $300 and the fee is $2,400, she has to do no-pay work for eight months.
Mr Wee explained: "The agents have to pay the recruiters upfront first for the maids to come here.
"If the maid is returned to the agency and you decline to take another maid, the agency may refund you whatever repayments you have made."
Mr Wee added that not all agencies give refunds when maids are returned or cause other problems.
No prosecution, no waiver
In more serious cases where the maid runs away or is prosecuted, responsible agents may agree to give a refund of 50 per cent, since the employer isn't totally to blame, said Mr Wee.
There are 190,000 maids here.
Mr Seah Seng Choon, executive director of the Consumers Association of Singapore, told The New Paper that there were 65 reports from aggrieved employers last year who sought a refund of the money they had paid.
In 2008, there were 52 cases.
In some cases, the maids had run away.
In other cases, the maids were returned to the agency when they performed unsatisfactorily.
Mr Seah said: "Problems happen when the maid asks to go home or is prosecuted. She is unable to work to pay back her 'loan' to the employer. When this happens, the employer is saddled with this loan.
"The number of maids who are doing this (running away and leaving employer to pay) is increasing. We have reports of maids who run to another agency to get out of their loan obligations."
Ms Cheah claimed some maids are street-smart about leaving their jobs.
She said: "When these maids come here, they get homesick and want to go home. They know they can just pack up and go as the employers have to bear the costs of repatriation and their loan."
Case said the current arrangement is certainly not ideal.
Mr Seah said: "Employers could ask for payment of the maid's 'loan' on an instalment basis as this would protect their interest in the event that the maid needs to be sent home."
He said employers should go to agencies licensed by the Manpower Ministry and which have the CaseTrust logo as they comply with a set of standards set out by Case to ensure they have good business practices.
"When these maids come here, they get homesick and want to go home. They know they can just pack up and go as the employers have to bear the costs of repatriation and their loan."
– Ms Alice Cheah, owner of Caregivers Centre, on some maids
"The number of maids who are doing this (running away and leaving employer to pay) is increasing. We have reports of maids who run to another agency to get out of their loan obligations."
– Executive director of the Consumers Association of Singapore Seah Seng Choon (below)
Not all maid agencies give refunds
The New Paper
27/02/2010
EMPLOYERS UNHAPPY OVER MAID PAYMENT SCHEME
CHECKS with the Association of Employment Agencies (Aeas) and the Consumers Association of Singapore's CaseTrust said employers must pay the recruiter's fee.
They can then recoup the money from the maid.
Both organisations accredit maid agencies.
Aeas vice-president Allan Wee said the practice has been around for at least three years.
Ms Alice Cheah, owner of Caregivers Centre, told The New Paper the standard practice is for new maids to work for several months without salary to pay the amount.
The amount depends on the price set by the overseas recruiters.
For example, if the maid's monthly salary is $300 and the fee is $2,400, she has to do no-pay work for eight months.
Mr Wee explained: "The agents have to pay the recruiters upfront first for the maids to come here.
"If the maid is returned to the agency and you decline to take another maid, the agency may refund you whatever repayments you have made."
Mr Wee added that not all agencies give refunds when maids are returned or cause other problems.
No prosecution, no waiver
In more serious cases where the maid runs away or is prosecuted, responsible agents may agree to give a refund of 50 per cent, since the employer isn't totally to blame, said Mr Wee.
There are 190,000 maids here.
Mr Seah Seng Choon, executive director of the Consumers Association of Singapore, told The New Paper that there were 65 reports from aggrieved employers last year who sought a refund of the money they had paid.
In 2008, there were 52 cases.
In some cases, the maids had run away.
In other cases, the maids were returned to the agency when they performed unsatisfactorily.
Mr Seah said: "Problems happen when the maid asks to go home or is prosecuted. She is unable to work to pay back her 'loan' to the employer. When this happens, the employer is saddled with this loan.
"The number of maids who are doing this (running away and leaving employer to pay) is increasing. We have reports of maids who run to another agency to get out of their loan obligations."
Ms Cheah claimed some maids are street-smart about leaving their jobs.
She said: "When these maids come here, they get homesick and want to go home. They know they can just pack up and go as the employers have to bear the costs of repatriation and their loan."
Case said the current arrangement is certainly not ideal.
Mr Seah said: "Employers could ask for payment of the maid's 'loan' on an instalment basis as this would protect their interest in the event that the maid needs to be sent home."
He said employers should go to agencies licensed by the Manpower Ministry and which have the CaseTrust logo as they comply with a set of standards set out by Case to ensure they have good business practices.
"When these maids come here, they get homesick and want to go home. They know they can just pack up and go as the employers have to bear the costs of repatriation and their loan."
– Ms Alice Cheah, owner of Caregivers Centre, on some maids
"The number of maids who are doing this (running away and leaving employer to pay) is increasing. We have reports of maids who run to another agency to get out of their loan obligations."
– Executive director of the Consumers Association of Singapore Seah Seng Choon (below)
Friday, February 26, 2010
Raising foreign worker levy will not solve problems, say critics
The following article was published in The Online Citizen on 26 Feb 2010.
Raising foreign worker levy will not solve problems, say critics
By Wong Chun Han, The Online Citizen
Friday, February 26, 2010
Raising the foreign worker levy will not reduce Singapore’s dependence on foreign labour or raise productivity, but will increase the financial burden on workers and employers, social workers and analysts say.
The levy hike – part of the government’s plan to raise productivity and control the influx of foreign labour – will not work, critics argue, as employers will pass on the additional costs to their foreign workers, thereby diminishing any incentive to switch to hiring Singaporeans.
“In the past, whenever foreign worker levies were increased, a lot of employers simply just passed on the increases to their workers, either by cutting their pay or reducing their benefits,” said financial analyst Leong Sze Hian.
Wages for locals working or seeking jobs in foreigner-dominated sectors would fall correspondingly, leaving unsolved a fundamental social problem – stagnating salaries for low-income Singaporeans.
This in turn hinders any attempt to raise labour productivity, he said. “If you’re struggling to make ends meet, how could you be motivated to raise your productivity?”
Companies hiring foreign workers are required to pay levies at rates dependent upon their industry type, the workers’ skill levels, and the number employed as a proportion of the company’s total workforce.
Changes to the levy, which includes raising rates and adjusting the tier system, were announced Monday by Finance Minister Tharman Shanmugaratnam during his budget statement in Parliament.
They will be introduced over five phases over the next three years, starting 1 July this year.
The government meanwhile has downplayed potential negatives. Manpower Minister Gan Kim Yong told MediaCorp on Wednesday that the levy hike’s impact on businesses would be “minimal”, as long as employers tap into schemes designed to support their productivity drives.
Concerns over the hike’s effectiveness were first raised earlier this month, after it was proposed by the Economic Strategies Committee in a report.
“Unless it was a massive increase, a rise in the levy would be unlikely to discourage employment of foreign workers,” wrote John Gee, president of social service organisation Transient Workers Count Too, in a letter to the Straits Times dated 5 February.
The levy “would just be an increased tax on foreign labour employment”, which “is likely to increase burdens on employers and workers without achieving its stated goal,” he added.
Foreign workers – many of whom work in very low paid jobs in construction, marine, manufacturing and service industries – would suffer the most as a result. The levy hike “will very likely lead to a rise in cases of employers attempting to deduct money from workers’ salaries on dubious pretexts,” Gee said.
Despite laws forbidding such practices, dishonest employers often cut costs by taking money, or ‘kickbacks’, from workers’ salaries. These ‘kickbacks’ are disguised on pay slips as authorised deductions, such as utility bills, food expenses and loans.
“Employers passing on business costs to their foreign workers is something that is pretty common in Singapore,” said Jolovan Wham, a social worker at the Humanitarian Organisation for Migration Economics.
This is because employers are savvy enough to not leave any paper trail or substantial evidence that can lead to prosecution, he explained.
Rather than raising the foreign worker levy, the government’s aims – helping low-income Singaporeans and mitigating exploitation of foreign workers – may be better served by the introduction of a minimum wage.
Setting minimum wage conditions would make workers “feel more fairly rewarded and salary levels in some sectors might start to look a little more appealing to locals,” Gee wrote.
Wham believes that a minimum wage policy would be more effective in reducing labour exploitation.
“I’ve seen a worker who was given a basic monthly salary of $330 only,” he said. “The point of legislating one is to provide legal remedies for unscrupulous employers who grossly exploit low wage workers with little bargaining power.”
“The minimum wage can be pegged at a level that is affordable to the majority of employers, and be subject to periodic review by the National Wages Council,” Wham suggested.
However, he conceded that it is a move the government is unlikely to make, due to concerns over its negative impact on labour costs and investor sentiment.
“The minimum wage is a very blunt instrument,” said Leong, who is president of the Society of Financial Service Professionals. “You don’t give any flexibility to companies and sectors to remain competitive.”
An alternative is to direct some of the levy receipts into the Workfare Income Supplement (WIS) scheme, he said.
Leong estimates that current government receipts from the foreign worker levy to be over $1 billion annually, which could rise over $3 billion once all the scheduled changes to the levy system come through by July 2012.
He suggested that WIS payouts, 71 per cent of which are funneled directly into workers’ Central Provident Fund accounts, could instead be made entirely in cash. This would directly improve salaries for many low-income Singaporeans, provide greater incentives to raise productivity.
“It’s not that people don’t want to take on certain jobs, but that the pay is simply too low and they can’t survive on them,” Leong said.
The changes to the foreign worker levies
Starting 1 July, levies will be raised for most Work Permit holders from between $10 to $30.
The tiered levy system will also be tightened – in manufacturing for instance, the lowest tier for firms employing up to 40 per cent foreigners will be reduced to 35 per cent, with the middle tier adjusted accordingly to range from 35 per cent to 55 per cent. The highest tier for the manufacturing sector remains at 55 per cent to 65 per cent.
Manufacturing and service companies can expect a total levy increase of about $100 per foreign worker on average, while the construction industry will see higher hikes, the Ministry of Finance said in a statement.
The graduated hikes and adjustments to the levy tiers will be phased in every six months until July 2012.
Employers will also have to fork out more for S Pass workers – mid-level skilled foreigners drawing fixed monthly salaries of at least $1,800.
The system will be expanded to comprise two tiers effective 1 July. The S Pass worker levy will become $100 and $120, rising from the current single rate of $50.
The rates will be raised every six months thereafter, until they reach $150 and $250 by July 2012.
Raising foreign worker levy will not solve problems, say critics
By Wong Chun Han, The Online Citizen
Friday, February 26, 2010
Raising the foreign worker levy will not reduce Singapore’s dependence on foreign labour or raise productivity, but will increase the financial burden on workers and employers, social workers and analysts say.
The levy hike – part of the government’s plan to raise productivity and control the influx of foreign labour – will not work, critics argue, as employers will pass on the additional costs to their foreign workers, thereby diminishing any incentive to switch to hiring Singaporeans.
“In the past, whenever foreign worker levies were increased, a lot of employers simply just passed on the increases to their workers, either by cutting their pay or reducing their benefits,” said financial analyst Leong Sze Hian.
Wages for locals working or seeking jobs in foreigner-dominated sectors would fall correspondingly, leaving unsolved a fundamental social problem – stagnating salaries for low-income Singaporeans.
This in turn hinders any attempt to raise labour productivity, he said. “If you’re struggling to make ends meet, how could you be motivated to raise your productivity?”
Companies hiring foreign workers are required to pay levies at rates dependent upon their industry type, the workers’ skill levels, and the number employed as a proportion of the company’s total workforce.
Changes to the levy, which includes raising rates and adjusting the tier system, were announced Monday by Finance Minister Tharman Shanmugaratnam during his budget statement in Parliament.
They will be introduced over five phases over the next three years, starting 1 July this year.
The government meanwhile has downplayed potential negatives. Manpower Minister Gan Kim Yong told MediaCorp on Wednesday that the levy hike’s impact on businesses would be “minimal”, as long as employers tap into schemes designed to support their productivity drives.
Concerns over the hike’s effectiveness were first raised earlier this month, after it was proposed by the Economic Strategies Committee in a report.
“Unless it was a massive increase, a rise in the levy would be unlikely to discourage employment of foreign workers,” wrote John Gee, president of social service organisation Transient Workers Count Too, in a letter to the Straits Times dated 5 February.
The levy “would just be an increased tax on foreign labour employment”, which “is likely to increase burdens on employers and workers without achieving its stated goal,” he added.
Foreign workers – many of whom work in very low paid jobs in construction, marine, manufacturing and service industries – would suffer the most as a result. The levy hike “will very likely lead to a rise in cases of employers attempting to deduct money from workers’ salaries on dubious pretexts,” Gee said.
Despite laws forbidding such practices, dishonest employers often cut costs by taking money, or ‘kickbacks’, from workers’ salaries. These ‘kickbacks’ are disguised on pay slips as authorised deductions, such as utility bills, food expenses and loans.
“Employers passing on business costs to their foreign workers is something that is pretty common in Singapore,” said Jolovan Wham, a social worker at the Humanitarian Organisation for Migration Economics.
This is because employers are savvy enough to not leave any paper trail or substantial evidence that can lead to prosecution, he explained.
Rather than raising the foreign worker levy, the government’s aims – helping low-income Singaporeans and mitigating exploitation of foreign workers – may be better served by the introduction of a minimum wage.
Setting minimum wage conditions would make workers “feel more fairly rewarded and salary levels in some sectors might start to look a little more appealing to locals,” Gee wrote.
Wham believes that a minimum wage policy would be more effective in reducing labour exploitation.
“I’ve seen a worker who was given a basic monthly salary of $330 only,” he said. “The point of legislating one is to provide legal remedies for unscrupulous employers who grossly exploit low wage workers with little bargaining power.”
“The minimum wage can be pegged at a level that is affordable to the majority of employers, and be subject to periodic review by the National Wages Council,” Wham suggested.
However, he conceded that it is a move the government is unlikely to make, due to concerns over its negative impact on labour costs and investor sentiment.
“The minimum wage is a very blunt instrument,” said Leong, who is president of the Society of Financial Service Professionals. “You don’t give any flexibility to companies and sectors to remain competitive.”
An alternative is to direct some of the levy receipts into the Workfare Income Supplement (WIS) scheme, he said.
Leong estimates that current government receipts from the foreign worker levy to be over $1 billion annually, which could rise over $3 billion once all the scheduled changes to the levy system come through by July 2012.
He suggested that WIS payouts, 71 per cent of which are funneled directly into workers’ Central Provident Fund accounts, could instead be made entirely in cash. This would directly improve salaries for many low-income Singaporeans, provide greater incentives to raise productivity.
“It’s not that people don’t want to take on certain jobs, but that the pay is simply too low and they can’t survive on them,” Leong said.
The changes to the foreign worker levies
Starting 1 July, levies will be raised for most Work Permit holders from between $10 to $30.
The tiered levy system will also be tightened – in manufacturing for instance, the lowest tier for firms employing up to 40 per cent foreigners will be reduced to 35 per cent, with the middle tier adjusted accordingly to range from 35 per cent to 55 per cent. The highest tier for the manufacturing sector remains at 55 per cent to 65 per cent.
Manufacturing and service companies can expect a total levy increase of about $100 per foreign worker on average, while the construction industry will see higher hikes, the Ministry of Finance said in a statement.
The graduated hikes and adjustments to the levy tiers will be phased in every six months until July 2012.
Employers will also have to fork out more for S Pass workers – mid-level skilled foreigners drawing fixed monthly salaries of at least $1,800.
The system will be expanded to comprise two tiers effective 1 July. The S Pass worker levy will become $100 and $120, rising from the current single rate of $50.
The rates will be raised every six months thereafter, until they reach $150 and $250 by July 2012.
Thursday, February 25, 2010
'Show us the money'
The following article was published in The New Paper on 25 Feb 2010.
'Show us the money'
By BENSON ANG
The New Paper
25/02/2010
China nationals to S'pore company: 'Show us the money'
A DISPUTE between a group of workers from China and a Singapore company over $10,500 has dragged on for more than six months, with the police and the Small Claims Tribunal getting involved.
Now, more than a month after the Small Claims Tribunal ruled in the workers' favour, they still haven't been refunded the money they paid to the company to get them employment passes.
The tribunal ordered Hoblink Business Coauther to return $4,500 to three of the six China nationals who had successfully sought the Tribunal's help.
The remaining three workers did not approach the Tribunal.
Hoblink director Max Wu Guo Hao acknowledged the court's order but he has yet to pay up.
Hoblink processes applications for work permits, employment passes and permanent residency. The six China nationals, aged between 30 and 46, were employed as construction workers here.
They began looking for new jobs when they were about to complete their contracts. They approached Hoblink to apply for employment passes.
Hoblink, however, claimed that the workers wanted EntrePasses, which would allow them to operate a business in Singapore.
Five of them paid $1,500 each to Hoblink in July. The remaining worker paid $3,000.
One of the workers, Mr Li Jian Hua, 41, said in Mandarin: "The $1,500 (each of us) paid was actually only half the full processing fee. We were supposed to pay another $1,500 when our pass was approved."
The Ministry of Manpower (MOM) website states that it costs $10 to apply for an employment pass.
The workers did not know this.
The workers claimed Hoblink said they would get their passes within three weeks. But Hoblink did not deliver.
It usually takes about seven days for MOM to process employment passes, states the ministry's website, if the applications are submitted through its online portal EP Online.
Between August and December last year, the workers made police reports after they were denied refunds.
Wu told The New Paper that the workers had asked him to apply for EntrePasses.
According to the Small Claims Tribunal order the workers showed The New Paper, Hoblink was supposed to pay three of the six workers by 21 Jan.
The Subordinate Courts website states that if debtors fail to pay the amount ordered by the court, the creditor may choose to enforce payment by filing a Writ of Seizure and Sale.
Such a writ allows the debtor's assets to be seized and sold.
With the Tribunal ruling, however, another dispute has arisen. Wu told The New Paper that he has an agreement with the workers to pay them within three months.
But the workers claim that is no such agreement.
The workers have since found jobs with other companies here on work permits.
Work permits are for foreigners earning less than $1,800. Employment passes are for those earning more than $2,500.
An MOM spokesman said: "Preliminary investigations revealed that Hoblink had assisted the foreign workers with EntrePass applications, which would allow them to operate their own businesses in Singapore.
"MOM is examining whether the company has committed any offences under the Employment of Foreign Manpower Act."
'Show us the money'
By BENSON ANG
The New Paper
25/02/2010
China nationals to S'pore company: 'Show us the money'
A DISPUTE between a group of workers from China and a Singapore company over $10,500 has dragged on for more than six months, with the police and the Small Claims Tribunal getting involved.
Now, more than a month after the Small Claims Tribunal ruled in the workers' favour, they still haven't been refunded the money they paid to the company to get them employment passes.
The tribunal ordered Hoblink Business Coauther to return $4,500 to three of the six China nationals who had successfully sought the Tribunal's help.
The remaining three workers did not approach the Tribunal.
Hoblink director Max Wu Guo Hao acknowledged the court's order but he has yet to pay up.
Hoblink processes applications for work permits, employment passes and permanent residency. The six China nationals, aged between 30 and 46, were employed as construction workers here.
They began looking for new jobs when they were about to complete their contracts. They approached Hoblink to apply for employment passes.
Hoblink, however, claimed that the workers wanted EntrePasses, which would allow them to operate a business in Singapore.
Five of them paid $1,500 each to Hoblink in July. The remaining worker paid $3,000.
One of the workers, Mr Li Jian Hua, 41, said in Mandarin: "The $1,500 (each of us) paid was actually only half the full processing fee. We were supposed to pay another $1,500 when our pass was approved."
The Ministry of Manpower (MOM) website states that it costs $10 to apply for an employment pass.
The workers did not know this.
The workers claimed Hoblink said they would get their passes within three weeks. But Hoblink did not deliver.
It usually takes about seven days for MOM to process employment passes, states the ministry's website, if the applications are submitted through its online portal EP Online.
Between August and December last year, the workers made police reports after they were denied refunds.
Wu told The New Paper that the workers had asked him to apply for EntrePasses.
According to the Small Claims Tribunal order the workers showed The New Paper, Hoblink was supposed to pay three of the six workers by 21 Jan.
The Subordinate Courts website states that if debtors fail to pay the amount ordered by the court, the creditor may choose to enforce payment by filing a Writ of Seizure and Sale.
Such a writ allows the debtor's assets to be seized and sold.
With the Tribunal ruling, however, another dispute has arisen. Wu told The New Paper that he has an agreement with the workers to pay them within three months.
But the workers claim that is no such agreement.
The workers have since found jobs with other companies here on work permits.
Work permits are for foreigners earning less than $1,800. Employment passes are for those earning more than $2,500.
An MOM spokesman said: "Preliminary investigations revealed that Hoblink had assisted the foreign workers with EntrePass applications, which would allow them to operate their own businesses in Singapore.
"MOM is examining whether the company has committed any offences under the Employment of Foreign Manpower Act."
Wednesday, February 24, 2010
Hiring for jobs locals shun may get harder, say bosses
The following article was published in the Straits Times on 24 Feb 2010.
Hiring for jobs locals shun may get harder, say bosses
By FRANCIS CHAN, ESTHER TEO
The Straits Times
24/02/2010
BUDGET 2010
Reactions
They also worry rise in foreign worker levy will increase labour costs
CHANGES to regulations surrounding foreign workers, particularly the move to raise levies, are causing a stir among companies.
Bosses fear the new Budget measures will increase labour costs and make it hard to find enough staff to undertake the kind of work Singaporeans shun.
The levies will be raised gradually over the next three years to boost productivity and reduce the reliance on foreign labour by businesses.
The Ministry of Manpower (MOM) released details yesterday on how the measures affect S Pass and Work Permit holders in specific industries such as manufacturing, marine, process and services.
Levies will increase by about an average of $100 for each Work Permit holder – except those in construction – over three years.
Rates for S Pass holders – workers with mid-level skills – will at least double from the current rate of $50 per month.
Companies will also have to contend with changes in levy tiers.
Under the existing system, companies which employ larger proportions of foreign staff have to pay higher levies categorised by tiers.
The latest changes announced yesterday force companies to gradually reduce their proportions of foreign staff if they want to continue enjoying a lower tiered rate.
Tai Hua Food Industries managing director Thomas Pek said the changes to levy rates and tiers for Work Permit holders will hurt the home-grown soya sauce manufacturer.
"If the Government decides to revise the levy tiers, then they should at least leave the levy rates alone and not revise both at the same time," said Mr Pek.
Like many others in labour-intensive industries, Mr Pek finds it hard to get locals to replace foreigners in key functions at his Jalan Besut plant.
"For example, the fermentation process requires workers to operate in a very hot environment, which no Singaporeans would want to do," he added.
The initial reaction of Mr Thomas Tan, chief executive of offshore oil and gas company Kim Heng Group, was that the levy increase was designed to discourage local companies from hiring foreigners.
"But very few Singaporeans want to work out in the field where it is hot and dirty, so I will need to rely on foreign labour," he said.
Companies in the service sector such as Legend Security Services also face similar issues.
"Even if we want to employ locals, it is difficult to get them to join us," said chief executive Randy Chua.
Most companies in similar predicaments seem resigned to the levy increases and tier changes.
But Finance Minister Tharman Shanmugaratnam said in his Budget speech on Monday that companies worried about the levy changes can turn to various government schemes for help.
These include the Productivity and Innovation Credit, the National Productivity Fund and training subsidies to help staff upgrade skills so companies can rely less on lower-skilled foreign workers.
The schemes can also help companies invest in improvements such as automating processes or training employees to lift productivity.
The Association of Process Industry (Aspri) said that while the Budget measures will impact the bottom line of its members, efforts are being made to help companies upgrade and stay competitive.
Aspri executive director Lim Jit Say said the trade association has been promoting technology innovation such as automation and giving members access to evaluation tests for their staff to ensure they hire workers with the appropriate skills.
But Mr Lim said that despite Aspri's efforts, there are still areas in the process industry where productivity improvements will be tough to implement.
"The process industry is very labour intensive, requiring thousands of mostly foreign workers, and some processes just need to be run by hand and cannot be automated," he said.
Tai Hua's Mr Pek shared Mr Lim's view that there was a limit to the level of productivity improvements that can be made.
"In the past, the fermentation process required some 21 workers," said Mr Pek. "We have since cut that down to just three foreign workers – how much more can I improve on that?"
Tru-Marine group managing director David Loke had a different take, saying the levy increase for the marine sector was "no big deal".
"I don't think the point now is to focus on cutting labour costs. Why not focus more on increasing sales?" said Mr Loke, whose company will continue to invest in technology enhancements.
"For example, we have been exploring how we can make use of aerospace technology to help enhance repair processes in the marine sector and that will go on, whether or not the Government decides to raise levies."
franchan@sph.com.sg
Additional reporting by Esther Teo
Security firm looks to tech and training
By ESTHER TEO
The Straits Times 24/02/2010
BUDGET 2010
Reactions
CASE #1
LEGEND Security chief executive Randy Chua will not be caught napping when the higher foreign worker levy kicks in fully come 2012.
With more than 100 work permit holders and two S Pass holders – mostly administrative and security officers from Malaysia – he expects the combined levies to increase his overheads by about $60,000 a year by 2012.
"I think increasing productivity through training and technology solutions will be helpful in reducing our dependence on manpower, but the security line is slightly different because you will always need a physical deterrence no matter what," he said.
However, Mr Chua is hoping to tap into some of the government grants such as the $2 billion National Productivity Fund to offset such costs and bring down his company's dependence on foreign workers.
He is also hoping to spruce up the image of the security industry by making it more professional so that more locals will be willing to take on such jobs.
So far, this has proved to be tough despite the high demand for such workers.
"We want to provide them with proper training, certifications and career progression so that they can put what they learn into practice and feel a sense of job satisfaction," Mr Chua said.
He started a training school about two years ago that trains about 60 supervisors every year. He hopes to increase the number of trainees.
Automation is also on the cards for the company. Mr Chua said he has formed partnerships with local research and development companies that develop sophisticated security equipment. He promotes them to clients.
One example is an intelligent camera, which can detect unusual behaviour such as a person leaving a backpack. Another is the installation of back-gate turnstiles that would allow residents to gain entry to their condominiums without the presence of a physical guard.
This type of equipment would reduce the company's manpower needs – thereby lowering levy costs, he said.
Firm may move some jobs abroad
CASE #2
MR STEVEN Koh (right), executive director of precision engineering company Armstrong Industrial, is not too concerned about the upcoming increases in foreign worker levies even though these workers make up a substantial part of his workforce.
Still, he recognises that some labour intensive functions may need to be moved to centres where labour is cheaper.
"We have been talking about productivity for many years, and even before the Government had asked us to, we have always set a yearly target of 5 per cent to 10 per cent productivity growth for the company," he said.
Apart from increasing the space allocated to production, the company is also looking at ways to use its machines more efficiently, Mr Koh said.
About 25 per cent of the company's workers are S Pass holders. However, Mr Koh is confident Armstrong will not be too adversely affected despite the S Pass levy going up to $150 and $250 by 2012 from its current single rate of $50.
"It is definitely going to increase our costs, but it is not a crisis...But we might have to stop our lower value and labour intensive work here and transfer some of these operations overseas to places like China," he said.
"This would allow Singapore to process the higher value and more capital intensive processes instead."
Mr Koh said Armstrong had expected the levy increase, and devoted about 3 per cent of its annual turnover every year to increase efficiency, such as through upgrading machines or training workers.
With the increase in levy, he expects to double the amount allocated to increase productivity to offset the levy cost in the long run and reduce dependence on foreign workers by half come 2012.
Since 1999, the company has been conducting its own research and development to improve its processes. Mr Koh said it will look towards tapping government grants to offset some of these costs.
"I think the important thing is to improve the quality of our work content here because Singaporeans are becoming more educated, and we either have to stop or transfer out lower value work if we hope to hire fewer foreigners."
Hiring for jobs locals shun may get harder, say bosses
By FRANCIS CHAN, ESTHER TEO
The Straits Times
24/02/2010
BUDGET 2010
Reactions
They also worry rise in foreign worker levy will increase labour costs
CHANGES to regulations surrounding foreign workers, particularly the move to raise levies, are causing a stir among companies.
Bosses fear the new Budget measures will increase labour costs and make it hard to find enough staff to undertake the kind of work Singaporeans shun.
The levies will be raised gradually over the next three years to boost productivity and reduce the reliance on foreign labour by businesses.
The Ministry of Manpower (MOM) released details yesterday on how the measures affect S Pass and Work Permit holders in specific industries such as manufacturing, marine, process and services.
Levies will increase by about an average of $100 for each Work Permit holder – except those in construction – over three years.
Rates for S Pass holders – workers with mid-level skills – will at least double from the current rate of $50 per month.
Companies will also have to contend with changes in levy tiers.
Under the existing system, companies which employ larger proportions of foreign staff have to pay higher levies categorised by tiers.
The latest changes announced yesterday force companies to gradually reduce their proportions of foreign staff if they want to continue enjoying a lower tiered rate.
Tai Hua Food Industries managing director Thomas Pek said the changes to levy rates and tiers for Work Permit holders will hurt the home-grown soya sauce manufacturer.
"If the Government decides to revise the levy tiers, then they should at least leave the levy rates alone and not revise both at the same time," said Mr Pek.
Like many others in labour-intensive industries, Mr Pek finds it hard to get locals to replace foreigners in key functions at his Jalan Besut plant.
"For example, the fermentation process requires workers to operate in a very hot environment, which no Singaporeans would want to do," he added.
The initial reaction of Mr Thomas Tan, chief executive of offshore oil and gas company Kim Heng Group, was that the levy increase was designed to discourage local companies from hiring foreigners.
"But very few Singaporeans want to work out in the field where it is hot and dirty, so I will need to rely on foreign labour," he said.
Companies in the service sector such as Legend Security Services also face similar issues.
"Even if we want to employ locals, it is difficult to get them to join us," said chief executive Randy Chua.
Most companies in similar predicaments seem resigned to the levy increases and tier changes.
But Finance Minister Tharman Shanmugaratnam said in his Budget speech on Monday that companies worried about the levy changes can turn to various government schemes for help.
These include the Productivity and Innovation Credit, the National Productivity Fund and training subsidies to help staff upgrade skills so companies can rely less on lower-skilled foreign workers.
The schemes can also help companies invest in improvements such as automating processes or training employees to lift productivity.
The Association of Process Industry (Aspri) said that while the Budget measures will impact the bottom line of its members, efforts are being made to help companies upgrade and stay competitive.
Aspri executive director Lim Jit Say said the trade association has been promoting technology innovation such as automation and giving members access to evaluation tests for their staff to ensure they hire workers with the appropriate skills.
But Mr Lim said that despite Aspri's efforts, there are still areas in the process industry where productivity improvements will be tough to implement.
"The process industry is very labour intensive, requiring thousands of mostly foreign workers, and some processes just need to be run by hand and cannot be automated," he said.
Tai Hua's Mr Pek shared Mr Lim's view that there was a limit to the level of productivity improvements that can be made.
"In the past, the fermentation process required some 21 workers," said Mr Pek. "We have since cut that down to just three foreign workers – how much more can I improve on that?"
Tru-Marine group managing director David Loke had a different take, saying the levy increase for the marine sector was "no big deal".
"I don't think the point now is to focus on cutting labour costs. Why not focus more on increasing sales?" said Mr Loke, whose company will continue to invest in technology enhancements.
"For example, we have been exploring how we can make use of aerospace technology to help enhance repair processes in the marine sector and that will go on, whether or not the Government decides to raise levies."
franchan@sph.com.sg
Additional reporting by Esther Teo
Security firm looks to tech and training
By ESTHER TEO
The Straits Times 24/02/2010
BUDGET 2010
Reactions
CASE #1
LEGEND Security chief executive Randy Chua will not be caught napping when the higher foreign worker levy kicks in fully come 2012.
With more than 100 work permit holders and two S Pass holders – mostly administrative and security officers from Malaysia – he expects the combined levies to increase his overheads by about $60,000 a year by 2012.
"I think increasing productivity through training and technology solutions will be helpful in reducing our dependence on manpower, but the security line is slightly different because you will always need a physical deterrence no matter what," he said.
However, Mr Chua is hoping to tap into some of the government grants such as the $2 billion National Productivity Fund to offset such costs and bring down his company's dependence on foreign workers.
He is also hoping to spruce up the image of the security industry by making it more professional so that more locals will be willing to take on such jobs.
So far, this has proved to be tough despite the high demand for such workers.
"We want to provide them with proper training, certifications and career progression so that they can put what they learn into practice and feel a sense of job satisfaction," Mr Chua said.
He started a training school about two years ago that trains about 60 supervisors every year. He hopes to increase the number of trainees.
Automation is also on the cards for the company. Mr Chua said he has formed partnerships with local research and development companies that develop sophisticated security equipment. He promotes them to clients.
One example is an intelligent camera, which can detect unusual behaviour such as a person leaving a backpack. Another is the installation of back-gate turnstiles that would allow residents to gain entry to their condominiums without the presence of a physical guard.
This type of equipment would reduce the company's manpower needs – thereby lowering levy costs, he said.
Firm may move some jobs abroad
CASE #2
MR STEVEN Koh (right), executive director of precision engineering company Armstrong Industrial, is not too concerned about the upcoming increases in foreign worker levies even though these workers make up a substantial part of his workforce.
Still, he recognises that some labour intensive functions may need to be moved to centres where labour is cheaper.
"We have been talking about productivity for many years, and even before the Government had asked us to, we have always set a yearly target of 5 per cent to 10 per cent productivity growth for the company," he said.
Apart from increasing the space allocated to production, the company is also looking at ways to use its machines more efficiently, Mr Koh said.
About 25 per cent of the company's workers are S Pass holders. However, Mr Koh is confident Armstrong will not be too adversely affected despite the S Pass levy going up to $150 and $250 by 2012 from its current single rate of $50.
"It is definitely going to increase our costs, but it is not a crisis...But we might have to stop our lower value and labour intensive work here and transfer some of these operations overseas to places like China," he said.
"This would allow Singapore to process the higher value and more capital intensive processes instead."
Mr Koh said Armstrong had expected the levy increase, and devoted about 3 per cent of its annual turnover every year to increase efficiency, such as through upgrading machines or training workers.
With the increase in levy, he expects to double the amount allocated to increase productivity to offset the levy cost in the long run and reduce dependence on foreign workers by half come 2012.
Since 1999, the company has been conducting its own research and development to improve its processes. Mr Koh said it will look towards tapping government grants to offset some of these costs.
"I think the important thing is to improve the quality of our work content here because Singaporeans are becoming more educated, and we either have to stop or transfer out lower value work if we hope to hire fewer foreigners."
MOM warns errant work agents
The following article was published in the Straits Times on 24 Feb 2010.
MOM warns errant work agents
By MELISSA SIM
The Straits Times
24/02/2010
It will act against those taking kickbacks or making false declarations in applications
THE Manpower Ministry (MOM) said it will come down hard on agents who take kickbacks or make false declarations in work pass applications with regard to "phantom workers".
Last year, 22 people were convicted of making false declarations and hiring phantom workers – local workers who are not actually hired by the company but paid CPF so that the company can inflate the number of foreign workers it hires – while six were convicted of taking kickbacks from workers.
The MOM said that it is investigating several other similar cases.
The ministry released the statement after the conviction of Ong Hock Beng yesterday, who was involved in one of the country's largest illegal labour syndicates that was busted last year.
He was jailed for 11 months, after being found guilty of failing to supervise his workers and making a false declaration to the MOM.
The syndicate was headed by work permit holder Shamsul Hoque Abdur Rahim, 40, who doubled as an employment agent.
Shamsul Hoque, who has since been jailed for 21 months, used the names of three companies owned by Singaporeans – including Ong – to bring in about 100 foreign workers from Bangladesh, India and China. He made false declarations with regard to the number of local workers in these companies to boost the number of foreign workers they were allowed to hire.
As for the workers, he either illegally deployed them, or allowed them to find their own jobs but demanded $350 to $400 from each per month in commission.
MOM said it had been working with the police for over a month before they arrested Shamsul Hoque, Ong, Sim Thiam Huat and Choo Yam Siah in April last year.
The ministry's prosecutor stated in court documents that such cases concern both the treatment of foreign employees as well as the livelihood of Singaporeans.
When employers use phantom workers, it may mean that a foreign worker can get a job, even though the quota for Singaporeans has not been met.
MOM said it will continue to pursue such cases aggressively.
For breaching the anti-kickback conditions under the Employment of Foreign Manpower Act, offenders can be fined a maximum of $5,000 and jailed for up to six months.
For making false statements in work pass applications, offenders can be fined a maximum of $15,000 and jailed for up to a year.
Anyone with specific information on such offences should contact MOM on 6438-5122 or e-mail mom_fmmd@mom.gov.sg
MOM warns errant work agents
By MELISSA SIM
The Straits Times
24/02/2010
It will act against those taking kickbacks or making false declarations in applications
THE Manpower Ministry (MOM) said it will come down hard on agents who take kickbacks or make false declarations in work pass applications with regard to "phantom workers".
Last year, 22 people were convicted of making false declarations and hiring phantom workers – local workers who are not actually hired by the company but paid CPF so that the company can inflate the number of foreign workers it hires – while six were convicted of taking kickbacks from workers.
The MOM said that it is investigating several other similar cases.
The ministry released the statement after the conviction of Ong Hock Beng yesterday, who was involved in one of the country's largest illegal labour syndicates that was busted last year.
He was jailed for 11 months, after being found guilty of failing to supervise his workers and making a false declaration to the MOM.
The syndicate was headed by work permit holder Shamsul Hoque Abdur Rahim, 40, who doubled as an employment agent.
Shamsul Hoque, who has since been jailed for 21 months, used the names of three companies owned by Singaporeans – including Ong – to bring in about 100 foreign workers from Bangladesh, India and China. He made false declarations with regard to the number of local workers in these companies to boost the number of foreign workers they were allowed to hire.
As for the workers, he either illegally deployed them, or allowed them to find their own jobs but demanded $350 to $400 from each per month in commission.
MOM said it had been working with the police for over a month before they arrested Shamsul Hoque, Ong, Sim Thiam Huat and Choo Yam Siah in April last year.
The ministry's prosecutor stated in court documents that such cases concern both the treatment of foreign employees as well as the livelihood of Singaporeans.
When employers use phantom workers, it may mean that a foreign worker can get a job, even though the quota for Singaporeans has not been met.
MOM said it will continue to pursue such cases aggressively.
For breaching the anti-kickback conditions under the Employment of Foreign Manpower Act, offenders can be fined a maximum of $5,000 and jailed for up to six months.
For making false statements in work pass applications, offenders can be fined a maximum of $15,000 and jailed for up to a year.
Anyone with specific information on such offences should contact MOM on 6438-5122 or e-mail mom_fmmd@mom.gov.sg
Construction jittery as levy hike is spelt out
The following article was first published in The Business Times on 24 Feb 2010.
Construction jittery as levy hike is spelt out
By UMA SHANKARI, VINCENT WEE
The Business Times
24/02/2010
Contractors count costs; other sectors say they can cope with new foreign worker levies
[SINGAPORE] AS the Ministry of Manpower (MOM) released more details on the planned increases in foreign worker levies, the construction industry said that it would be hit hard. Some contractors may try to pass on the costs.
The construction sector – which has been singled out for its low productivity numbers – will bear the brunt of the changes. The least impact will be felt by firms in the marine industry, which will see only slight increases in foreign worker levies as the sector has high productivity levels.
Foreign worker levies were also raised for the manufacturing, services and process (the building and maintenance of equipment in the petroleum, petrochemicals, specialty chemicals or pharmaceutical industries) sectors. But there is also no change in the dependency ratios for all industries.
Hiring workers on S passes will also be costlier.
The first round of hikes will take place in July this year, with subsequent increases until July 2012. Generally, the changes mean that more workers in each company will now be classified under the more expensive levy categories. The rates for most levy categories have also been bumped up.
MOM's announcement comes on the heels of Monday's Budget, when Finance Minister Tharman Shanmugaratnam said that Singapore is raising its foreign worker levies in a bid to get businesses to restructure and upgrade their operations and rely less on lower skilled foreign labour.
"If we make low-cost foreign workers too readily available, employers will not have sufficient incentive to upgrade their operations and upskill their workers," he said.
On the ground, firms in labour-intensive industries such as construction, hospitality, manufacturing and shipping voiced their apprehension at the impact on their bottom lines.
Companies in the construction sector will see a 25 per cent cut in the man-year entitlement (MYE), which refers to the total number of foreign workers a main contractor is entitled to employ based on the value of projects and contracts the company has been awarded.
MOM will also phase out unskilled work permit holders in the sector from July 2011. Existing work permit holders would only be reclassified as "basic skilled" if they possess a Skills Evaluation Certificate. A "higher skilled" tier for work permit holders with the relevant experience and qualifications will also be introduced.
Simon Lee, executive director of industry body Singapore Contractors Association Limited, said that the levy increases will affect contractors' cashflow.
For ongoing projects, contractors would have underestimated their costs when they tendered as they were unaware of the coming levy hikes and could now face difficulties.
Mr Lee added that the public sector should also set the example when it comes to compensation in such cases.
But for future projects, at least two contractors BT spoke to said that they would pass on the increased costs brought on by the levy hikes.
"When we tender (for projects), we will need to factor in all these extra costs," said Ong Pang Aik, managing director of Lian Beng Group. "The levy increases need to be put into the project costs, and so construction costs will go up."
He also added that it would be difficult to increase the productivity of workers in his sector as the nature of the job is labour intensive, which means that firms cannot boost productivity by using more automation, for example.
"We need manual labour, we can't move to machinery," Mr Ong said. Lian Beng employs about 800-1,000 work permit holders.
But companies in other sectors mostly said that the hikes should be manageable as they are being implemented gradually over the next three years to give businesses time to adjust.
"We do not expect the increases in foreign worker levies to have a great impact on us as only 23 per cent of our total workforce is made up of foreign workers," said Kellvin Ong, general manager of Rendezvous Hotel Singapore. "The increase is manageable."
"While there will be some cost impact resulting from the increase in foreign workers' levy, we expect to be able to manage it well," said a Keppel Corp spokesman, declining to give actual numbers involved.
Sembcorp Marine has said that the cost impact would amount to some $7 million a year. It is believed that Keppel has a similar number of foreign workers among its staff and sub-contractors.
Gary Lim, group managing director of Rokko Holdings (an automated equipment and precision engineering firm) echoed those views. His company will not be badly hit as it is largely automated. And foreigners make up only a quarter of Rokko Holdings' workforce.
"Basically, we can live with it but I think that a lot of the more labour-intensive companies may find it hard to manage," Mr Lim said.
Asked if an increased foreign worker levy will spur increases in productivity, Rendezvous Hotel Singapore's Mr Ong said: "No, it will not, as the workloads are still the same."
– With additional reporting by Vincent Wee
Construction jittery as levy hike is spelt out
By UMA SHANKARI, VINCENT WEE
The Business Times
24/02/2010
Contractors count costs; other sectors say they can cope with new foreign worker levies
[SINGAPORE] AS the Ministry of Manpower (MOM) released more details on the planned increases in foreign worker levies, the construction industry said that it would be hit hard. Some contractors may try to pass on the costs.
The construction sector – which has been singled out for its low productivity numbers – will bear the brunt of the changes. The least impact will be felt by firms in the marine industry, which will see only slight increases in foreign worker levies as the sector has high productivity levels.
Foreign worker levies were also raised for the manufacturing, services and process (the building and maintenance of equipment in the petroleum, petrochemicals, specialty chemicals or pharmaceutical industries) sectors. But there is also no change in the dependency ratios for all industries.
Hiring workers on S passes will also be costlier.
The first round of hikes will take place in July this year, with subsequent increases until July 2012. Generally, the changes mean that more workers in each company will now be classified under the more expensive levy categories. The rates for most levy categories have also been bumped up.
MOM's announcement comes on the heels of Monday's Budget, when Finance Minister Tharman Shanmugaratnam said that Singapore is raising its foreign worker levies in a bid to get businesses to restructure and upgrade their operations and rely less on lower skilled foreign labour.
"If we make low-cost foreign workers too readily available, employers will not have sufficient incentive to upgrade their operations and upskill their workers," he said.
On the ground, firms in labour-intensive industries such as construction, hospitality, manufacturing and shipping voiced their apprehension at the impact on their bottom lines.
Companies in the construction sector will see a 25 per cent cut in the man-year entitlement (MYE), which refers to the total number of foreign workers a main contractor is entitled to employ based on the value of projects and contracts the company has been awarded.
MOM will also phase out unskilled work permit holders in the sector from July 2011. Existing work permit holders would only be reclassified as "basic skilled" if they possess a Skills Evaluation Certificate. A "higher skilled" tier for work permit holders with the relevant experience and qualifications will also be introduced.
Simon Lee, executive director of industry body Singapore Contractors Association Limited, said that the levy increases will affect contractors' cashflow.
For ongoing projects, contractors would have underestimated their costs when they tendered as they were unaware of the coming levy hikes and could now face difficulties.
Mr Lee added that the public sector should also set the example when it comes to compensation in such cases.
But for future projects, at least two contractors BT spoke to said that they would pass on the increased costs brought on by the levy hikes.
"When we tender (for projects), we will need to factor in all these extra costs," said Ong Pang Aik, managing director of Lian Beng Group. "The levy increases need to be put into the project costs, and so construction costs will go up."
He also added that it would be difficult to increase the productivity of workers in his sector as the nature of the job is labour intensive, which means that firms cannot boost productivity by using more automation, for example.
"We need manual labour, we can't move to machinery," Mr Ong said. Lian Beng employs about 800-1,000 work permit holders.
But companies in other sectors mostly said that the hikes should be manageable as they are being implemented gradually over the next three years to give businesses time to adjust.
"We do not expect the increases in foreign worker levies to have a great impact on us as only 23 per cent of our total workforce is made up of foreign workers," said Kellvin Ong, general manager of Rendezvous Hotel Singapore. "The increase is manageable."
"While there will be some cost impact resulting from the increase in foreign workers' levy, we expect to be able to manage it well," said a Keppel Corp spokesman, declining to give actual numbers involved.
Sembcorp Marine has said that the cost impact would amount to some $7 million a year. It is believed that Keppel has a similar number of foreign workers among its staff and sub-contractors.
Gary Lim, group managing director of Rokko Holdings (an automated equipment and precision engineering firm) echoed those views. His company will not be badly hit as it is largely automated. And foreigners make up only a quarter of Rokko Holdings' workforce.
"Basically, we can live with it but I think that a lot of the more labour-intensive companies may find it hard to manage," Mr Lim said.
Asked if an increased foreign worker levy will spur increases in productivity, Rendezvous Hotel Singapore's Mr Ong said: "No, it will not, as the workloads are still the same."
– With additional reporting by Vincent Wee
More adjustments to foreign worker levy
The following article wa published in the Straits Times on 24 Feb 2010.
More adjustments to foreign worker levy
By KOR KIAN BENG, ZAKIR HUSSAIN, FRANCIS CHAN
The Straits Times
24/02/2010
Rate goes up for skilled, unskilled alike, and tier system will be altered
FROM July 1, the foreign worker levy will go up every six months for three years. But that is not the only change that will take place.
The Government is also tightening another part of the foreign worker levy scheme: How much employers are charged according to the proportion of foreigners on their payroll, and whether they are skilled or unskilled.
At present, those with a lower proportion of foreigners pay a lower levy, and those with a higher proportion pay considerably more.
This tiered system can be found in two sectors: Manufacturing and services.
In manufacturing, the levy is in three broad tiers: The lowest for employers with up to 40 per cent foreigners, a middle band of those with 40 per cent to 55 per cent, and a top band of those with 55 per cent to 65 per cent.
This current system will be changed in two ways, the Ministry of Manpower (MOM) said yesterday, one day after Finance Minister Tharman Shanmugaratnam announced the move to change the levies.
One, the Government will raise the levy for both skilled and unskilled workers. Two, it will change the tiers, so that the higher levy kicks in sooner.
For example, a manufacturing company now pays a $150 monthly levy for a skilled foreign worker and $240 for an unskilled worker when they form up to 40 per cent of its total workforce.
This basic tier will be tightened to 35 per cent on July 1, when the corresponding levies will be raised to $160 and $260.
However, there is no change in the maximum proportion of foreign workers that companies can hire in all sectors.
As for S Pass holders, employers will face a two-tier system from July 1 in place of the current single rate levy of $50 a month for employing these mid-level skilled foreigners earning at least $1,800 a month.
These changes, said MOM, are aimed at getting companies to reduce their demand for foreign labour, turn to better-skilled local and foreign workers and to invest in boosting productivity.
Economists say the higher levies could be a disincentive and indirectly nudge companies to hire more locals.
Barclays Capital economist Leong Wai Ho said: "The higher costs will prompt employers to think more carefully about the next man they hire, whether he should be a local or a foreigner."
But he said the levy changes have to be complemented with skills upgrading and job redesign efforts, especially in sectors where Singaporeans lack the skills or which they shun. He cited the electronics, marine and construction sectors.
Labour economist Shandre Thangavelu said the gradual phasing in of the changes gives companies time to adjust.
That the changes are not uniform also recognises that different sectors will continue to need foreign labour as few locals want to work in them, he said.
The construction sector, where productivity levels are about half those in Australia and one-third those in Japan, is set to be most affected by the changes.
Its levy increases will exceed those in manufacturing and services, where the increase over three years totals $100 on average for each work permit holder.
Other changes in construction MOM announced include the phasing out of unskilled foreign workers, who make up less than 1 per cent of the 245,000 foreign workers in the industry.
From July next year, foreign workers will be classified as Basic Skilled and Higher Skilled if they have two and four years of experience respectively and relevant skills certification from the Building and Construction Authority. {SEE CORRECTION ABOVE}
In addition, the foreign worker quota allotted on a project basis will be cut gradually to reach 75 per cent by 2012. It will start with a 5 per cent cut this July. For S Pass holders, the levy rates will at least double from the current $50.
Foreign domestic worker levy rates remain unchanged.
MOM said yesterday it will step up monitoring and enforcement efforts against employers who try to recover the levy from their foreign workers.
Lucky Joint Construction managing director Yeow Kian Seng said that with the changes, he will have to find ways to make his 200 work permit holders and 50 S Pass holders work more efficiently. "I will need to think about how to train and increase their productivity to manage the increase in overheads," he said.
More adjustments to foreign worker levy
By KOR KIAN BENG, ZAKIR HUSSAIN, FRANCIS CHAN
The Straits Times
24/02/2010
Rate goes up for skilled, unskilled alike, and tier system will be altered
FROM July 1, the foreign worker levy will go up every six months for three years. But that is not the only change that will take place.
The Government is also tightening another part of the foreign worker levy scheme: How much employers are charged according to the proportion of foreigners on their payroll, and whether they are skilled or unskilled.
At present, those with a lower proportion of foreigners pay a lower levy, and those with a higher proportion pay considerably more.
This tiered system can be found in two sectors: Manufacturing and services.
In manufacturing, the levy is in three broad tiers: The lowest for employers with up to 40 per cent foreigners, a middle band of those with 40 per cent to 55 per cent, and a top band of those with 55 per cent to 65 per cent.
This current system will be changed in two ways, the Ministry of Manpower (MOM) said yesterday, one day after Finance Minister Tharman Shanmugaratnam announced the move to change the levies.
One, the Government will raise the levy for both skilled and unskilled workers. Two, it will change the tiers, so that the higher levy kicks in sooner.
For example, a manufacturing company now pays a $150 monthly levy for a skilled foreign worker and $240 for an unskilled worker when they form up to 40 per cent of its total workforce.
This basic tier will be tightened to 35 per cent on July 1, when the corresponding levies will be raised to $160 and $260.
However, there is no change in the maximum proportion of foreign workers that companies can hire in all sectors.
As for S Pass holders, employers will face a two-tier system from July 1 in place of the current single rate levy of $50 a month for employing these mid-level skilled foreigners earning at least $1,800 a month.
These changes, said MOM, are aimed at getting companies to reduce their demand for foreign labour, turn to better-skilled local and foreign workers and to invest in boosting productivity.
Economists say the higher levies could be a disincentive and indirectly nudge companies to hire more locals.
Barclays Capital economist Leong Wai Ho said: "The higher costs will prompt employers to think more carefully about the next man they hire, whether he should be a local or a foreigner."
But he said the levy changes have to be complemented with skills upgrading and job redesign efforts, especially in sectors where Singaporeans lack the skills or which they shun. He cited the electronics, marine and construction sectors.
Labour economist Shandre Thangavelu said the gradual phasing in of the changes gives companies time to adjust.
That the changes are not uniform also recognises that different sectors will continue to need foreign labour as few locals want to work in them, he said.
The construction sector, where productivity levels are about half those in Australia and one-third those in Japan, is set to be most affected by the changes.
Its levy increases will exceed those in manufacturing and services, where the increase over three years totals $100 on average for each work permit holder.
Other changes in construction MOM announced include the phasing out of unskilled foreign workers, who make up less than 1 per cent of the 245,000 foreign workers in the industry.
From July next year, foreign workers will be classified as Basic Skilled and Higher Skilled if they have two and four years of experience respectively and relevant skills certification from the Building and Construction Authority. {SEE CORRECTION ABOVE}
In addition, the foreign worker quota allotted on a project basis will be cut gradually to reach 75 per cent by 2012. It will start with a 5 per cent cut this July. For S Pass holders, the levy rates will at least double from the current $50.
Foreign domestic worker levy rates remain unchanged.
MOM said yesterday it will step up monitoring and enforcement efforts against employers who try to recover the levy from their foreign workers.
Lucky Joint Construction managing director Yeow Kian Seng said that with the changes, he will have to find ways to make his 200 work permit holders and 50 S Pass holders work more efficiently. "I will need to think about how to train and increase their productivity to manage the increase in overheads," he said.
Tuesday, February 23, 2010
Foreign worker levy to increase over 3 years
The following article was published in The Straits Times on 23 Feb 2010.
Foreign worker levy to increase over 3 years
By FRANCIS CHAN
The Straits Times
23/02/2010
BUDGET 2010
Foreign workers, bosses, property owners
Rise starts on July 1; foreign to local worker ratio unchanged
FOREIGN worker levies will be raised gradually over the next three years to complement the Government's efforts to lift productivity at firms.
Starting July 1, levy rates for most Work Permit holders will increase by between $10 and $30 per month. They range from $150 to $470 now.
Rates for S-Pass holders, which are workers with mid-level skills, will at least double from the current rate of $50 per month.
Finance Minister Tharman Shanmugaratnam, who announced the changes in his Budget statement yesterday, said the increase will give companies here a clear incentive to upgrade the productivity of their workers.
But he emphasised that the levy hike will be calibrated and carefully phased in to give companies sufficient time to adjust.
And the overall dependency ratio for all categories of foreign workers – which is the proportion of foreign workers a company can hire per local worker – will remain unchanged.
Including the modest increase in July, the total increase in average levies per Work Permit holder over three years will be about $100 for most companies in manufacturing and services, said Mr Tharman.
But he added that levy increases will be larger for companies in the construction sector, which had much scope for productivity improvements, he added.
Ministry of Manpower (MOM) figures show that as at December, there were about 856,000 work permit holders in Singapore. Of this, 196,000 are maids, which do not appear to be included in this round of levy increases.
Companies that hire higher-paid S-Pass holders, such as those in health care, IT and hospitality, will also be affected by the latest changes.
As at December, there were about 82,000 S-Pass holders in Singapore, typically earning a fixed monthly salary of at least $1,800.
Instead of the current single levy rate of $50 for S-Pass holders, there will be two new levy tiers – $100 and $120 – starting in July. A company's dependency ratio determines which tier will be applied.
The levies will rise further to reach $150 and $250, for the first and second tier respectively, by July 2012.
More details on the increases in levy rates will be released by MOM and the Ministry of National Development later this week, said the minister.
The Straits Times understands that more light will be shed by the two ministries on how the revised levy rates affect firms from different sectors based on the occupations of their foreign workers.
The latest move by the Government to tighten the flow of foreign labour comes in the wake of recommendations made by the Economic Strategies Committee (ESC) early this month.
The ESC suggested that limiting the supply of foreign labour by raising levies will drive companies here to redirect their focus on training workers and getting them to be more productive.
Mr Tharman said yesterday that firms worried about the increases can look to new government schemes like the Productivity and Innovation Credit, the National Productivity Fund and other training subsidies as incentives to upgrade their operations and rely less on lower-skilled foreign workers.
He added that besides providing financial support, the schemes can also help firms invest in improvements such as automating processes or training employees that will result in productivity gains that would benefit both businesses and workers.
Initial reactions to the changes by industry players were mixed, with some expressing concern over how the increase in levies may impact their bottom line.
Straits Construction general manager Kenneth Loo said that existing contracts for workers may have been fixed for the next few years, so the increase in levy will negatively impact earnings.
"The consolation for us is that at least the increase is going to be gradual," said Mr Loo.
The Singapore Manufacturers' Federation (SMa), which represents some 2,600 companies across 11 industries here, believes that enhancements in productivity could offset the foreign worker levy increases.
But it still expressed a hope that the first levy increase could be deferred to give its manufacturing members the necessary time to put in place productivity enhancements.
Foreign worker levy to increase over 3 years
By FRANCIS CHAN
The Straits Times
23/02/2010
BUDGET 2010
Foreign workers, bosses, property owners
Rise starts on July 1; foreign to local worker ratio unchanged
FOREIGN worker levies will be raised gradually over the next three years to complement the Government's efforts to lift productivity at firms.
Starting July 1, levy rates for most Work Permit holders will increase by between $10 and $30 per month. They range from $150 to $470 now.
Rates for S-Pass holders, which are workers with mid-level skills, will at least double from the current rate of $50 per month.
Finance Minister Tharman Shanmugaratnam, who announced the changes in his Budget statement yesterday, said the increase will give companies here a clear incentive to upgrade the productivity of their workers.
But he emphasised that the levy hike will be calibrated and carefully phased in to give companies sufficient time to adjust.
And the overall dependency ratio for all categories of foreign workers – which is the proportion of foreign workers a company can hire per local worker – will remain unchanged.
Including the modest increase in July, the total increase in average levies per Work Permit holder over three years will be about $100 for most companies in manufacturing and services, said Mr Tharman.
But he added that levy increases will be larger for companies in the construction sector, which had much scope for productivity improvements, he added.
Ministry of Manpower (MOM) figures show that as at December, there were about 856,000 work permit holders in Singapore. Of this, 196,000 are maids, which do not appear to be included in this round of levy increases.
Companies that hire higher-paid S-Pass holders, such as those in health care, IT and hospitality, will also be affected by the latest changes.
As at December, there were about 82,000 S-Pass holders in Singapore, typically earning a fixed monthly salary of at least $1,800.
Instead of the current single levy rate of $50 for S-Pass holders, there will be two new levy tiers – $100 and $120 – starting in July. A company's dependency ratio determines which tier will be applied.
The levies will rise further to reach $150 and $250, for the first and second tier respectively, by July 2012.
More details on the increases in levy rates will be released by MOM and the Ministry of National Development later this week, said the minister.
The Straits Times understands that more light will be shed by the two ministries on how the revised levy rates affect firms from different sectors based on the occupations of their foreign workers.
The latest move by the Government to tighten the flow of foreign labour comes in the wake of recommendations made by the Economic Strategies Committee (ESC) early this month.
The ESC suggested that limiting the supply of foreign labour by raising levies will drive companies here to redirect their focus on training workers and getting them to be more productive.
Mr Tharman said yesterday that firms worried about the increases can look to new government schemes like the Productivity and Innovation Credit, the National Productivity Fund and other training subsidies as incentives to upgrade their operations and rely less on lower-skilled foreign workers.
He added that besides providing financial support, the schemes can also help firms invest in improvements such as automating processes or training employees that will result in productivity gains that would benefit both businesses and workers.
Initial reactions to the changes by industry players were mixed, with some expressing concern over how the increase in levies may impact their bottom line.
Straits Construction general manager Kenneth Loo said that existing contracts for workers may have been fixed for the next few years, so the increase in levy will negatively impact earnings.
"The consolation for us is that at least the increase is going to be gradual," said Mr Loo.
The Singapore Manufacturers' Federation (SMa), which represents some 2,600 companies across 11 industries here, believes that enhancements in productivity could offset the foreign worker levy increases.
But it still expressed a hope that the first levy increase could be deferred to give its manufacturing members the necessary time to put in place productivity enhancements.
Monday, February 15, 2010
No job, no money, no reunion with family
This article was first published in the New Paper on 15 Feb 2010.
No job, no money, no reunion with family
Mon, Feb 15, 2010
The New Paper
By Tay Shi'An
Humanitarian Organisation for Migration Economicsis planning a simple Chinese New Year dinner for these China workers who are stuck in Singapore. -TNP
FOR the first time in his 46 years, migrant worker Zheng Peixin will not be spending Chinese New Year with his family.
The Dongbei native is stuck in Singapore because of a pay dispute with his employer - as are his fellow compatriots Mr Yang Shijun, 37, and Mr Xu Jingchun, 48.
All three Chinese nationals have been staying at the Humanitarian Organisation for Migration Economics (Home) shelter for between two weeks and two months, waiting for their cases to be resolved.
It's a bitter and frustrating time for them.
Showing The New Paper pictures of his wife and 12-year-old son, Mr Zheng said: "I feel so cang liang (Mandarin for desolate). I miss my son the most.
"If I'm working, it's still okay. I have no choice but to be away from my family. But now I have no work to do. I even have problems eating.
"I have no mood to celebrate Chinese New Year. We have no relatives here. Our only friends are those from work. But we have not made plans with them."
Mr Zheng came to Singapore a year ago to be a bus driver. It is not clear how much he was earning then.
The other two men arrived last year to be construction workers.
All three men have not told their families about their situation.
They said they have not been paid by their employers and have no savings.
Mr Yang from Anhui, who is married with a 10-year-old son, said he doesn't plan to call home for Chinese New Year.
He said: "My parents live with me. They are in their 80s. I want to tell them good news, not bad news. I'm scared if I call back, I will break down and tell them."
Added Mr Xu, who is also from Anhui and is married with two grown sons: "They will surely ask, how is work. How are we supposed to answer them?"
While methods of celebrating Chinese New Year differ in various regions of China, one thing remains the same: All three men said the most important thing about Chinese New Year is reunion.
Said Mr Zheng: "For Chinese New Year, you must go home. Some of my relatives work in Wuhan, Tianjin, Hebei ? they all go back."
For his family, more than 30 relatives spanning four generations would gather.
They would all chip in money and splash out 10,000 yuan ($2,000) on fireworks and firecrackers alone.
For Mr Yang, the misery of this Chinese New Year contrasts especially to his experience the first time he came to Singapore to work in construction. It is not clear how much he was paid then.
That was in 2001, when he came to work on the Chinese embassy in Singapore at Tanglin Road, which officially opened in May 2002.
Building work was carried out by a joint-venture company formed by a Hongkong-based construction company and a Chinese builder.
He recalled: "At that time, it was different. There were hundreds of us, so many Chinese."
The first year, they celebrated Chinese New Year in the Yishun dormitory they were staying in. The second year, celebrations were held on the grounds of the embassy before it officially opened and workers were given $150 hongbao.
All three men said that their wish for the Year of the Tiger is for their cases to be resolved as soon as possible.
Employment claims
A Ministry of Manpower (MOM) spokesman said that last year, about 3,700 foreign workers filed employment claims with the ministry.
More than 90 per cent of these cases were resolved through mediation within six weeks from case registration.
About 6 per cent of the cases were heard by the labour court, and about 95 per cent of these cases were resolved within two months from the first hearing.
Mr Jolovan Wham, Home's executive director, said the organisation is currently helping more than 20 Chinese workers, whose cases are ongoing.
Home is planning a simple Chinese New Year dinner next Thursday for these workers. It plans to spend between $1,000 to $2,000.
He said: "It's just a gesture to show them they are not alone, especially those in trouble, in disputes, who can't go back to China and so are missing out on Chinese New Year."
Said a grateful Mr Yang: "We must really thank Home. They treat us like family.
No job, no money, no reunion with family
Mon, Feb 15, 2010
The New Paper
By Tay Shi'An
Humanitarian Organisation for Migration Economicsis planning a simple Chinese New Year dinner for these China workers who are stuck in Singapore. -TNP
FOR the first time in his 46 years, migrant worker Zheng Peixin will not be spending Chinese New Year with his family.
The Dongbei native is stuck in Singapore because of a pay dispute with his employer - as are his fellow compatriots Mr Yang Shijun, 37, and Mr Xu Jingchun, 48.
All three Chinese nationals have been staying at the Humanitarian Organisation for Migration Economics (Home) shelter for between two weeks and two months, waiting for their cases to be resolved.
It's a bitter and frustrating time for them.
Showing The New Paper pictures of his wife and 12-year-old son, Mr Zheng said: "I feel so cang liang (Mandarin for desolate). I miss my son the most.
"If I'm working, it's still okay. I have no choice but to be away from my family. But now I have no work to do. I even have problems eating.
"I have no mood to celebrate Chinese New Year. We have no relatives here. Our only friends are those from work. But we have not made plans with them."
Mr Zheng came to Singapore a year ago to be a bus driver. It is not clear how much he was earning then.
The other two men arrived last year to be construction workers.
All three men have not told their families about their situation.
They said they have not been paid by their employers and have no savings.
Mr Yang from Anhui, who is married with a 10-year-old son, said he doesn't plan to call home for Chinese New Year.
He said: "My parents live with me. They are in their 80s. I want to tell them good news, not bad news. I'm scared if I call back, I will break down and tell them."
Added Mr Xu, who is also from Anhui and is married with two grown sons: "They will surely ask, how is work. How are we supposed to answer them?"
While methods of celebrating Chinese New Year differ in various regions of China, one thing remains the same: All three men said the most important thing about Chinese New Year is reunion.
Said Mr Zheng: "For Chinese New Year, you must go home. Some of my relatives work in Wuhan, Tianjin, Hebei ? they all go back."
For his family, more than 30 relatives spanning four generations would gather.
They would all chip in money and splash out 10,000 yuan ($2,000) on fireworks and firecrackers alone.
For Mr Yang, the misery of this Chinese New Year contrasts especially to his experience the first time he came to Singapore to work in construction. It is not clear how much he was paid then.
That was in 2001, when he came to work on the Chinese embassy in Singapore at Tanglin Road, which officially opened in May 2002.
Building work was carried out by a joint-venture company formed by a Hongkong-based construction company and a Chinese builder.
He recalled: "At that time, it was different. There were hundreds of us, so many Chinese."
The first year, they celebrated Chinese New Year in the Yishun dormitory they were staying in. The second year, celebrations were held on the grounds of the embassy before it officially opened and workers were given $150 hongbao.
All three men said that their wish for the Year of the Tiger is for their cases to be resolved as soon as possible.
Employment claims
A Ministry of Manpower (MOM) spokesman said that last year, about 3,700 foreign workers filed employment claims with the ministry.
More than 90 per cent of these cases were resolved through mediation within six weeks from case registration.
About 6 per cent of the cases were heard by the labour court, and about 95 per cent of these cases were resolved within two months from the first hearing.
Mr Jolovan Wham, Home's executive director, said the organisation is currently helping more than 20 Chinese workers, whose cases are ongoing.
Home is planning a simple Chinese New Year dinner next Thursday for these workers. It plans to spend between $1,000 to $2,000.
He said: "It's just a gesture to show them they are not alone, especially those in trouble, in disputes, who can't go back to China and so are missing out on Chinese New Year."
Said a grateful Mr Yang: "We must really thank Home. They treat us like family.
Monday, February 8, 2010
More caught running illegal dorms
The following article was published in the Straits Times on 8 Feb 2010.
More caught running illegal dorms
By MELISSA SIM, MOU ZONGXIAO
The Straits Times
08/02/2010
Private homes illegally converted to house foreign workers
MORE people were taken to task last year for illegally converting their private homes into dormitories, hostels and boarding houses as accommodation for foreign workers and students.
The Urban Redevelopment Authority (URA) investigated about 700 private residential properties and is still forcing boarders to vacate the premises of 140 owners. Overcrowding is common, making safety an issue.
The other 560 owners have since stopped taking in lodgers illegally.
In 2008, the URA investigated just 400 cases.
In particular, there was an 18 per cent increase in the number of unauthorised worker dormitories over the previous year, though figures were not available.
The illegal dormitories are being exposed as more people write in to the URA with their complaints, and tip-offs are provided by the public and other government agencies.
The URA said that private apartments and landed homes are meant for residential use and should not be converted into workers' dormitories, which need permission to operate.
Under the Planning Act, illegal conversion of premises can result in a maximum fine of $200,000 and a year in jail. If the offence continues after conviction, a fine of $10,000 a day may be imposed.
Despite URA efforts, checks by The Straits Times showed that illegal workers' dormitories are still prevalent, especially in Little India and Tiong Bahru.
Along Marne Road off Petain Road, The Straits Times found at least two terrace houses housing more than 10 workers each.
In Tiong Bahru, there were at least three such apartments. In other units, there were workers from China and Malaysia who refused entry to The Straits Times. But shoes outside the main door and the drying laundry were signs of the multiple occupants inside.
At three units, occupants said there were eight people living inside. One said the boss had obtained the flat for them.
One landlord, who wanted to be known only as Ms Huang, said she had rented her three-room unit in Kai Fook Mansion in Tiong Bahru Road to eight Malaysians at $1,700 a month.
She said she had nine tenants at first but was told by the URA in December that she could have only eight. Ms Huang said she had not made modifications to her flat.
Private homes as ad hoc accommodation have sprung up over the last few years because of a shortage of dormitories and boarding houses.
A single worker renting a room in one of these converted homes pays about $200 compared with $160 to $180 each month for a workers' dorm in Jurong.
In the middle of last year, the URA found that 140 units in Grangeford condominium in Leonie Hill had been subdivided into 600 units. The developer was taken to action to recover the units.
The Ministry of Manpower warned employers of foreign workers that they are responsible for the well-being of their workers, including providing acceptable accommodation while they are employed.
Employers who fail to provide acceptable accommodation for their foreign workers are in breach of the work permit conditions and may be fined up to $5,000 and jailed up to six months. Such employers could also be barred from hiring foreign workers in future.
Tiong Bahru residents interviewed said they were fine with foreign workers in their midst, but were concerned about the overcrowding in the walk-up apartments, which are about 800 sq ft to 1,000 sq ft and usually have two or three bedrooms.
Interior designer Jo Turner, 31, claimed that her ceiling sprang a leak because there were 10 workers sharing a toilet in the flat above hers.
Ms Turner, like advertising executive Eugene Yip, 38, was mostly worried about the workers cooking over an open flame. About a month and a half ago, unit 1P in Yong Siak Street, housing Chinese national workers, caught fire.
The Singapore Civil Defence Force said the fire was accidental and from an electrical source. This could have been caused by a short circuit or overloading of power outlets.
More caught running illegal dorms
By MELISSA SIM, MOU ZONGXIAO
The Straits Times
08/02/2010
Private homes illegally converted to house foreign workers
MORE people were taken to task last year for illegally converting their private homes into dormitories, hostels and boarding houses as accommodation for foreign workers and students.
The Urban Redevelopment Authority (URA) investigated about 700 private residential properties and is still forcing boarders to vacate the premises of 140 owners. Overcrowding is common, making safety an issue.
The other 560 owners have since stopped taking in lodgers illegally.
In 2008, the URA investigated just 400 cases.
In particular, there was an 18 per cent increase in the number of unauthorised worker dormitories over the previous year, though figures were not available.
The illegal dormitories are being exposed as more people write in to the URA with their complaints, and tip-offs are provided by the public and other government agencies.
The URA said that private apartments and landed homes are meant for residential use and should not be converted into workers' dormitories, which need permission to operate.
Under the Planning Act, illegal conversion of premises can result in a maximum fine of $200,000 and a year in jail. If the offence continues after conviction, a fine of $10,000 a day may be imposed.
Despite URA efforts, checks by The Straits Times showed that illegal workers' dormitories are still prevalent, especially in Little India and Tiong Bahru.
Along Marne Road off Petain Road, The Straits Times found at least two terrace houses housing more than 10 workers each.
In Tiong Bahru, there were at least three such apartments. In other units, there were workers from China and Malaysia who refused entry to The Straits Times. But shoes outside the main door and the drying laundry were signs of the multiple occupants inside.
At three units, occupants said there were eight people living inside. One said the boss had obtained the flat for them.
One landlord, who wanted to be known only as Ms Huang, said she had rented her three-room unit in Kai Fook Mansion in Tiong Bahru Road to eight Malaysians at $1,700 a month.
She said she had nine tenants at first but was told by the URA in December that she could have only eight. Ms Huang said she had not made modifications to her flat.
Private homes as ad hoc accommodation have sprung up over the last few years because of a shortage of dormitories and boarding houses.
A single worker renting a room in one of these converted homes pays about $200 compared with $160 to $180 each month for a workers' dorm in Jurong.
In the middle of last year, the URA found that 140 units in Grangeford condominium in Leonie Hill had been subdivided into 600 units. The developer was taken to action to recover the units.
The Ministry of Manpower warned employers of foreign workers that they are responsible for the well-being of their workers, including providing acceptable accommodation while they are employed.
Employers who fail to provide acceptable accommodation for their foreign workers are in breach of the work permit conditions and may be fined up to $5,000 and jailed up to six months. Such employers could also be barred from hiring foreign workers in future.
Tiong Bahru residents interviewed said they were fine with foreign workers in their midst, but were concerned about the overcrowding in the walk-up apartments, which are about 800 sq ft to 1,000 sq ft and usually have two or three bedrooms.
Interior designer Jo Turner, 31, claimed that her ceiling sprang a leak because there were 10 workers sharing a toilet in the flat above hers.
Ms Turner, like advertising executive Eugene Yip, 38, was mostly worried about the workers cooking over an open flame. About a month and a half ago, unit 1P in Yong Siak Street, housing Chinese national workers, caught fire.
The Singapore Civil Defence Force said the fire was accidental and from an electrical source. This could have been caused by a short circuit or overloading of power outlets.
Foreigners abroad 'are the real competition'
The following article was published in the Straits Times on 8 Feb 2010.
Foreigners abroad 'are the real competition'
By SUE-ANN CHIA
The Straits Times
08/02/2010
THE contentious issue of the competition posed by foreigners here for Singaporeans was given a fresh airing.
How can the Government further protect the "in-group" (citizens) against the growing "out-group" (foreigners), a resident asked Manpower Minister Gan Kim Yong at a dialogue yesterday.
They compete for the same scarce resources, such as health care, education, housing and jobs, the resident added.
In reply, Mr Gan said the line between the "in" and "out" groups should be drawn differently.
Everyone working and living here – be they citizens or foreigners – should be considered the in-group who are contributing to the country. They are fighting against the competition from the real out-group, who are those working outside Singapore, he added.
Relating a story, Mr Gan said a resident in his Choa Chu Kang constituency went to his Meet-the-People session, complaining she had lost her banking job owing to competition from foreigners.
After talking to her, he found out that the bank had relocated some operations to Vietnam, leading it to shed staff here.
"The competition came from Vietnamese working in Vietnam. She lost her job not because of foreigners in the bank, but foreigners in other countries," he said. "They are more competitive, have the same knowledge and skills, and the cost of operating in Vietnam is lower than in Singapore."
He added: "I will look at foreigners among us as the real in-group who are helping our companies to be competitive... Together, if we can keep the companies competitive, we can fight against the companies outside."
Mr Gan also explained that the Government intends to keep the foreign population steady at one-third of the workforce over the next decade.
"We cannot grow the foreign worker population indefinitely," he said, adding that maintaining that level is the sensible thing to do.
But foreign worker numbers will follow business cycles.
"If the economy is doing very well, we must allow it to expand a little bit, within some limits," he said. "As the economy comes down, we must allow the foreign worker population to come down."
Foreigners abroad 'are the real competition'
By SUE-ANN CHIA
The Straits Times
08/02/2010
THE contentious issue of the competition posed by foreigners here for Singaporeans was given a fresh airing.
How can the Government further protect the "in-group" (citizens) against the growing "out-group" (foreigners), a resident asked Manpower Minister Gan Kim Yong at a dialogue yesterday.
They compete for the same scarce resources, such as health care, education, housing and jobs, the resident added.
In reply, Mr Gan said the line between the "in" and "out" groups should be drawn differently.
Everyone working and living here – be they citizens or foreigners – should be considered the in-group who are contributing to the country. They are fighting against the competition from the real out-group, who are those working outside Singapore, he added.
Relating a story, Mr Gan said a resident in his Choa Chu Kang constituency went to his Meet-the-People session, complaining she had lost her banking job owing to competition from foreigners.
After talking to her, he found out that the bank had relocated some operations to Vietnam, leading it to shed staff here.
"The competition came from Vietnamese working in Vietnam. She lost her job not because of foreigners in the bank, but foreigners in other countries," he said. "They are more competitive, have the same knowledge and skills, and the cost of operating in Vietnam is lower than in Singapore."
He added: "I will look at foreigners among us as the real in-group who are helping our companies to be competitive... Together, if we can keep the companies competitive, we can fight against the companies outside."
Mr Gan also explained that the Government intends to keep the foreign population steady at one-third of the workforce over the next decade.
"We cannot grow the foreign worker population indefinitely," he said, adding that maintaining that level is the sensible thing to do.
But foreign worker numbers will follow business cycles.
"If the economy is doing very well, we must allow it to expand a little bit, within some limits," he said. "As the economy comes down, we must allow the foreign worker population to come down."
Sunday, February 7, 2010
"Thank you, foreign worker"
The following commentary was published in the Straits Times on 7 Feb 2010.
Thank you, foreign worker
By SUMIKO TAN
The Straits Times
07/02/2010
Why be angry at foreign workers in our midst when they are doing jobs that are unpopular but necessary?
For all the unhappiness that has been expressed about foreign workers in Singapore, one fact remains – life would be difficult without them.
Let's be honest here. Most foreign workers are doing the jobs that Singaporeans are loath to do, and there sure are many jobs Singaporeans don't want.
Be a maid and tend to the cooking, cleaning, looking after the baby and the invalid grandma and work the sort of hours most Singaporeans expect their maids to work? No, thanks.
Toil under the sun at a construction site and be transported around sitting at the back of lorries? Are you kidding?
Go from table to table at hawker centres to clean up the mountains of chicken, fish and pork-rib bones left behind by customers? No way.
Stand around, smile and act pleasant all day at a shop and answer the inane queries of customers? Only if desperate.
In fact, even jobs such as florists are shunned by Singaporeans. Why, you might wonder. How unpleasant can it be working with flowers and dreaming up beautiful designs?
Pretty unpleasant, according to Singaporeans, because a florist's job entails him having to stand on his feet for long periods – and Singaporeans don't like that.
Another reason Singaporeans prefer not to work as florists is that they are expected to put in lots of overtime during festive periods, said a report in The Straits Times last week.
Strange reason, isn't it? Wouldn't you think people would grab at the opportunity to work overtime as it translates into more money?
The truth is, there are many jobs that Singaporeans avoid but which have to be done if the economy is to be kept going. Employers have no choice but to give them to foreigners because Singaporeans don't want them.
It's strange how Singaporeans can train for hours under the sun to prepare for a triathlon, but ask them to take a job that involves physical labour and they will turn their noses up at it.
And it's not only physical labour they disdain. Jobs that dirty their hands or involve repetition and service are also unpopular.
Still, who can blame them? Most people would agree that it's far more comfortable working in an air-conditioned office than at a job where you get all hot and dusty. And if they can hold out for something like this, why bother to get their hands dirty in the meantime?
Others would even argue that it's a fallacy to say that Singaporeans don't like menial work.
Rather, they say, Singaporeans don't take up such jobs because they can't – wages for such jobs are so low they won't be able to support their families on them.
And the reason wages have been forced down? Because the Government has allowed in unskilled foreign workers in its desire to have a more competitive economy with low-cost workers.
Hence, the resentment at how foreign workers have come in to spoil the market.
But I wonder: How many Singaporeans would actually take up jobs as maids if wages were increased? Or construction workers, for that matter? Or painters or plumbers?
The difference between the foreign worker and Singaporeans is that the former looks at Singapore as an opportunity. It is a place he can make a living and send money home to his loved ones, benefiting from the strong Singapore dollar.
So even if the hours are long and living conditions hard – as they definitely are for the low-end foreign worker here – he ploughs on.
And if you are an employer, wouldn't you prefer a hardworking and motivated worker than one who shows a sour face?
In fact, I must say that my shopping experience has improved vastly ever since foreigners have taken on service-sector jobs.
At the petrol station I go to, the young man from China is always polite. His English isn't perfect but he makes up for it by being pleasant. He doesn't give the impression that he's unhappy in his job, which is invariably the vibe I get when I'm served by a Singaporean.
Nine out of 10 times when I'm served by a Filipino sales staff, the experience is also a happy one because he is cheerful.
At a boutique I used to go to, the salesgirl from China was super-enthusiastic about making a sale.
She'd pile me with clothes to try, wouldn't bat an eyelid if I asked for yet another size of a dress I liked, reassure me that I didn't look fat and scurry to get measuring tape and pins to help me alter a dress.
And after I was done shopping, she'd SMS and call me up whenever new stock arrived. I always ended up buying more than I should.
Some might find service like this overbearing, but give me an enthusiastic salesgirl than one I can tell wishes I'd leave her alone and walk out of the store.
This resentment against the foreign worker is not peculiar to Singapore, of course.
In Europe, for example, the opening up of the Eastern bloc countries to the European Union has caused similar resentment among locals.
But the fact is, the Poles and the Czechs are more hard-working and are simply happier to be earning the minimum wage than the locals, who turn their noses up at certain jobs and prefer getting drunk and being on the dole.
The Singaporeans who complain about foreigners are the ones with the dead-end jobs and low salaries. They're – understandably – unhappy with their lot and cannot see how their lives can improve. They are already working long hours and still have nothing to show for their effort.
So what can be done? Should levies for foreign workers be raised to lessen the dependency on them? But how would higher wages affect businesses? And, again, even if jobs in construction or shipbuilding were available, would Singaporeans want them?
The thing is, low-income earners in Singapore do have a choice. They can choose to be self-employed and to better their lot. Why aren't there more self-employed people here? It doesn't take long to learn how to be a tiler or a painter or a plumber, and they can make a pretty good living doing that, one would imagine.
The irritation with the foreign worker is as much social and cultural as it is economic.
The onslaught of foreigners has been sudden after all, happening over the last five years or so. And beyond supposedly taking away jobs, they are making their presence felt in the property market, in the sort of food sold at hawker centres, and even in schools where their children grab the top academic prizes.
The Singapore vs Foreign Worker divide is an issue that won't go away any time soon.
Meanwhile, though, I look at the thousands of maids, construction workers, toilet- and hawker-centre cleaners toiling in our midst and I can only say, thank you, Mr and Ms Foreign Worker.
Thank you, foreign worker
By SUMIKO TAN
The Straits Times
07/02/2010
Why be angry at foreign workers in our midst when they are doing jobs that are unpopular but necessary?
For all the unhappiness that has been expressed about foreign workers in Singapore, one fact remains – life would be difficult without them.
Let's be honest here. Most foreign workers are doing the jobs that Singaporeans are loath to do, and there sure are many jobs Singaporeans don't want.
Be a maid and tend to the cooking, cleaning, looking after the baby and the invalid grandma and work the sort of hours most Singaporeans expect their maids to work? No, thanks.
Toil under the sun at a construction site and be transported around sitting at the back of lorries? Are you kidding?
Go from table to table at hawker centres to clean up the mountains of chicken, fish and pork-rib bones left behind by customers? No way.
Stand around, smile and act pleasant all day at a shop and answer the inane queries of customers? Only if desperate.
In fact, even jobs such as florists are shunned by Singaporeans. Why, you might wonder. How unpleasant can it be working with flowers and dreaming up beautiful designs?
Pretty unpleasant, according to Singaporeans, because a florist's job entails him having to stand on his feet for long periods – and Singaporeans don't like that.
Another reason Singaporeans prefer not to work as florists is that they are expected to put in lots of overtime during festive periods, said a report in The Straits Times last week.
Strange reason, isn't it? Wouldn't you think people would grab at the opportunity to work overtime as it translates into more money?
The truth is, there are many jobs that Singaporeans avoid but which have to be done if the economy is to be kept going. Employers have no choice but to give them to foreigners because Singaporeans don't want them.
It's strange how Singaporeans can train for hours under the sun to prepare for a triathlon, but ask them to take a job that involves physical labour and they will turn their noses up at it.
And it's not only physical labour they disdain. Jobs that dirty their hands or involve repetition and service are also unpopular.
Still, who can blame them? Most people would agree that it's far more comfortable working in an air-conditioned office than at a job where you get all hot and dusty. And if they can hold out for something like this, why bother to get their hands dirty in the meantime?
Others would even argue that it's a fallacy to say that Singaporeans don't like menial work.
Rather, they say, Singaporeans don't take up such jobs because they can't – wages for such jobs are so low they won't be able to support their families on them.
And the reason wages have been forced down? Because the Government has allowed in unskilled foreign workers in its desire to have a more competitive economy with low-cost workers.
Hence, the resentment at how foreign workers have come in to spoil the market.
But I wonder: How many Singaporeans would actually take up jobs as maids if wages were increased? Or construction workers, for that matter? Or painters or plumbers?
The difference between the foreign worker and Singaporeans is that the former looks at Singapore as an opportunity. It is a place he can make a living and send money home to his loved ones, benefiting from the strong Singapore dollar.
So even if the hours are long and living conditions hard – as they definitely are for the low-end foreign worker here – he ploughs on.
And if you are an employer, wouldn't you prefer a hardworking and motivated worker than one who shows a sour face?
In fact, I must say that my shopping experience has improved vastly ever since foreigners have taken on service-sector jobs.
At the petrol station I go to, the young man from China is always polite. His English isn't perfect but he makes up for it by being pleasant. He doesn't give the impression that he's unhappy in his job, which is invariably the vibe I get when I'm served by a Singaporean.
Nine out of 10 times when I'm served by a Filipino sales staff, the experience is also a happy one because he is cheerful.
At a boutique I used to go to, the salesgirl from China was super-enthusiastic about making a sale.
She'd pile me with clothes to try, wouldn't bat an eyelid if I asked for yet another size of a dress I liked, reassure me that I didn't look fat and scurry to get measuring tape and pins to help me alter a dress.
And after I was done shopping, she'd SMS and call me up whenever new stock arrived. I always ended up buying more than I should.
Some might find service like this overbearing, but give me an enthusiastic salesgirl than one I can tell wishes I'd leave her alone and walk out of the store.
This resentment against the foreign worker is not peculiar to Singapore, of course.
In Europe, for example, the opening up of the Eastern bloc countries to the European Union has caused similar resentment among locals.
But the fact is, the Poles and the Czechs are more hard-working and are simply happier to be earning the minimum wage than the locals, who turn their noses up at certain jobs and prefer getting drunk and being on the dole.
The Singaporeans who complain about foreigners are the ones with the dead-end jobs and low salaries. They're – understandably – unhappy with their lot and cannot see how their lives can improve. They are already working long hours and still have nothing to show for their effort.
So what can be done? Should levies for foreign workers be raised to lessen the dependency on them? But how would higher wages affect businesses? And, again, even if jobs in construction or shipbuilding were available, would Singaporeans want them?
The thing is, low-income earners in Singapore do have a choice. They can choose to be self-employed and to better their lot. Why aren't there more self-employed people here? It doesn't take long to learn how to be a tiler or a painter or a plumber, and they can make a pretty good living doing that, one would imagine.
The irritation with the foreign worker is as much social and cultural as it is economic.
The onslaught of foreigners has been sudden after all, happening over the last five years or so. And beyond supposedly taking away jobs, they are making their presence felt in the property market, in the sort of food sold at hawker centres, and even in schools where their children grab the top academic prizes.
The Singapore vs Foreign Worker divide is an issue that won't go away any time soon.
Meanwhile, though, I look at the thousands of maids, construction workers, toilet- and hawker-centre cleaners toiling in our midst and I can only say, thank you, Mr and Ms Foreign Worker.
Saturday, February 6, 2010
Paradigm shift or pendulum swing? ESC recommendations on productivity
The following article was published in The Straits Times on 6 Feb 2010.
Paradigm shift or pendulum swing?
Clear the air on misconceptions
By ZAKIR HUSSAIN
The Straits Times
06/02/2010
ESC RECOMMENDATIONS ON PRODUCTIVITY
Productivity is back in vogue and older Singaporeans wonder why it was allowed to slide in the first place. Wasn't productivity the mantra in the 1980s? So what happened? What's different this time around? How will the Economic Strategies Committee proposals affect the worker and the businessman?
SINGAPORE'S labour force will grow by only 1 per cent to 2 per cent a year in the next 10 years, and further unlimited inflow of foreign workers is out of the question.
As a result, the country has no other option but to ensure that future economic growth is based on high productivity improvements each year.
This sounds like a recommendation from the Economic Strategies Committee (ESC) report this week. It is not.
Believe it or not, it comes from page 123 of the Report of the Economic Committee, published in 1986, which identified new directions for Singapore's economy.
Productivity – the ability to create valuable goods and services through the use of the country's human, capital and natural resources – has long been a concern for the Government.
It is not hard to see why. Over the decades, ministers have stressed that raising productivity is key to sustaining the country's economic growth and consequently the standard of living and prosperity of its people.
Gains in efficiency have translated into better wages and jobs for many.
But the changing nature of economic challenges as Singapore industrialised and entered the league of developed nations has meant that this message needs to be renewed – and adjusted – over time.
Productivity in the past
IN THE first 15 years after Independence – between 1966 and 1980 – the economy grew some 10 per cent a year on average.
New businesses and investments poured in, creating jobs for people.
But by the end of the 1970s, the nation's productivity was growing much slower than that of industrialising competitors Hong Kong, Taiwan and South Korea.
It had to buck up, or be left behind.
So when the Government drew up a 10-year plan for the following decade, improving productivity became a key plank if the economy was to keep growing at 8 per cent to 10 per cent a year.
To induce employers to optimise labour use, mechanise operations and shift to higher value-added economic activities, the National Wages Council recommended a higher than usual wage increase of nearly 20 per cent a year from 1979 to 1981.
Then Prime Minister Lee Kuan Yew said in 1979 he was concerned that workers here were not as proud of or as skilled in their jobs compared to the Japanese or the Germans.
In 1981, he met key Japanese employers in Singapore to discuss practices, work attitudes and productivity in Japan and what could be applied here.
A committee on productivity was soon formed, and it recommended that a productivity movement be launched to tackle the issue.
Thus began the national campaign to work better and smarter.
A National Productivity Council and a National Productivity Board were formed. The drive worked.
The productivity of Singapore's labour force averaged 4.7 per cent a year from 1981 to 1988, contributing 77 per cent to gross domestic product (GDP) growth.
This was greatly aided by new technology, which saw output grow rapidly. The workforce grew by just 1.4 per cent a year.
But the high-wage policy was partly to blame when the economy went into recession in 1985, prompting the formation of the Economic Committee.
The committee noted that productivity growth in other developed economies, Japan aside, had stagnated.
There was therefore a need to keep raising awareness of productivity as well as take a broader approach to it – by looking at improving training, management skills, and work attitudes.
In 1990, the productivity board – the forerunner of today's Spring Singapore – issued a report on the productivity challenge over the next 10 years.
It identified five broad areas where improvements would help lift efficiency: work attitudes, skills upgrading, labour-management cooperation, progressive management practices, and effective use of manpower.
The labour movement helped to raise awareness of these issues, and productivity gains were chalked up – albeit at a much slower 3 per cent a year in the 1990s.
These gains were, however, questioned by several pundits including American Nobel Prize-winning economist Paul Krugman.
In a 1994 article in Foreign Affairs magazine, he argued that Asia's economic miracle was a "myth", and said that Singapore's stunning growth of 8.5 per cent a year over 25 years was unsustainable: It was the result of increased investment and labour, not added efficiency.
He was criticised for overstating his case, but his point on total factor productivity – intangible productivity gains not accounted for by increased labour or investment – was noted.
Singapore Management University economist Hoon Hian Teck and Nanyang Technological University (NTU) economist Ho Kong Weng, however, found that from 1970 to 2004, total factor productivity growth contributed to over 60 per cent of the growth in the standard of living.
"Singapore's growth in standard of living benefited from the adoption of technology from abroad through our liberal policy towards multinational corporations that brought with them managerial expertise, technologies, and markets," Professor Hoon tells Insight.
Grow, grow, grow
THE rapid growth of Asian economies over the past decade saw Singapore going for a policy of maximising growth to ride on this rising tide.
Labour MP Josephine Teo feels the difficult start to the decade – the 1998 Asian financial crisis, the 2001 recession and the 2003 Sars crisis which set back the economy – resulted in a great sense of urgency to make up for lost time, and to grab every growth opportunity.
"It was the right thing to do after the series of crises and in hindsight, we might have pulled the brakes after a few years. But then came the opportunity to develop the integrated resorts and we went ahead," she says.
But in the last decade, productivity growth slipped to just 1 per cent.
What caused this slide? Did Singapore lose its focus on productivity?
NTU economist Choy Keen Meng believes policymakers and the people made a mistake in losing sight of the issue during the long boom years.
"When the economy was prospering and wages were rising year after year, policymakers and the public became complacent over time," he says.
At the same time, productivity gains from information technology diffused into work processes, masking slow improvement in other areas, he adds.
Another key factor, observers note, is the rising flow of foreign workers into Singapore as there was a shortage of local workers ready to fill the new jobs that were rapidly being created as a result of the Government's strategy to achieve growth at all costs.
The labour inflow grew faster than did capital stock, skills or technology – factors which determine productivity gains, or the rise in output per worker.
No doubt, GDP rose significantly, but problems lay beneath the surface.
Labour MP Halimah Yacob says that this focus on growing the economy "prevented us from delving deeper and asking searching questions much earlier about whether a labour input- based growth model was indeed sustainable".
The deputy secretary-general of the National Trades Union Congress (NTUC) feels the changing scope of agencies dealing with productivity and competing interests of economic agencies may also have hampered efforts to keep watch on productivity gains.
She noted that in the 1980s, the National Productivity Board was an agency everyone could relate to almost immediately, but this was subsequently changed to the Productivity and Standards Board in 1996, following a merger with the Singapore Institute of Standards and Industrial Research.
In 2002, another name change was effected, to Spring Singapore. "Spring" stands for standards, productivity and innovation for growth – and the change was to reflect the new focus on innovation-driven development.
"After a while, it became quite confusing as we are not quite sure which agency is really driving productivity growth in Singapore," says Madam Halimah.
"For example, who is keeping a watching brief on issues like foreign workers and whether the huge influx will have a bearing on productivity? Different agencies may have different needs," she adds.
"One agency may want more foreign workers for foreign investors while another dealing with small and medium-sized enterprises may also face pressures from their clients.
"But which agency will holistically assess these needs and balance them against the impact on other policies or on our long-term growth strategy?"
Acknowledging such concerns, the ESC this week called for a high-level national council to lead, coordinate and drive efforts to boost productivity and expand continuing education and training.
The council would make sure productivity remains at the forefront of the national agenda and work closely with unions and industry.
Prof Hoon, however, sees the decline in productivity in the last decade, especially in the past five years, as having to do with adjustments Singapore must make as it transits to a more services-based economy.
The hiring of workers in anticipation of the boom in tourist numbers with the opening of the two integrated resorts may also have dampened productivity growth figures, he notes.
In a 2008 paper exploring Singapore's declining productivity growth, Professor Neo Boon Siong and Ms Susan Chung of the Lee Kuan Yew School of Public Policy say overhiring during boom years, the shift towards more knowledge-based work and the lagging effect of technological investment could have contributed to this dip.
The pendulum swings back
THE shift of focus back to productivity gains, Prof Hoon believes, lies in the realisation that as an economy matures technologically, and more new jobs created are to be found in the services sector, it is simply far harder to increase productivity growth.
He points out that the experience of developed economies like Japan and the United States suggests the pace of productivity growth through automation and skills upgrading tends to be higher in manufacturing than in services.
For instance, using robots on the factory floor can expand output per worker in manufacturing considerably but a hairdresser in the services sector can serve only a limited number of customers in a day no matter how skilful she is.
The reality, however, is that ramping up productivity may well be the only way forward for growth.
As Mrs Josephine Teo, who co-chaired the ESC's sub-committee on inclusive growth, puts it: Only productivity growth can create the conditions for sustained and broad-based wage growth.
Mature economies have relied mostly, if not almost exclusively, on productivity increases to grow in the long run.
Some feel Singapore has postponed this transition by importing cheap foreign labour from abroad.
"Now it cannot continue to do this because the physical, social and political limits have been breached," says Dr Choy, referring to unhappiness over new migrants who are seen as competing with locals for jobs and housing.
How, then, can workers and businesses be more efficient?
Working smarter
THE ESC, in its report, called for a rise in productivity growth to 2 per cent to 3 per cent over the next 10 years.
It also wants improvements in productivity to account for two-thirds of GDP growth, up from the current one-fifth share.
This week, Senior Minister Goh Chok Tong suggested that businesses work on higher-end goods and services that are less dependent on low-end labour.
He noted that this strategy was similar to the high-wage policy in the late 1970s and early 1980s, but this time around, the ESC recommended raising the foreign worker levy to prod businesses into raising productivity.
But Mr Goh cautioned that Singapore should not move too hard on the levy lest a mild recession erupt and companies find themselves unable to cope.
The ESC has called for a national productivity fund to support investments in training and innovation, as well as a resource centre businesses can tap on.
What more can companies do?
The Asia Competitiveness Institute at the Lee Kuan Yew School of Public Policy, in a report last November, said companies have to change the way they do business.
They have to redesign work processes and provide products and services with higher value to customers to tackle the productivity conundrum.
The ESC says Singapore's productivity in manufacturing and services is 55 per cent to 65 per cent of that in the US and Japan. In retail, it is 75 per cent of that in Hong Kong and one-third that of the US. In construction, productivity is half that of the US and one-third that of Japan.
Mrs Teo believes that a more efficient services sector can contribute significantly to overall productivity growth, as the sector accounts for 70 per cent of GDP.
She also sees huge potential for Singapore to learn from countries like Japan, which has high productivity levels in construction with almost no foreign workers, as a result of better work processes.
She thinks a makeover in the sector, and other areas, could draw Singaporeans to jobs they now shun.
But what of the workers themselves – how can they be more efficient, skills upgrading aside?
Many have the misconception that productivity means having to do more tasks but with less pay and longer hours, even though higher productivity means doing more in the same span of time.
Madam Halimah says it is important for companies to engage workers on the matter, as was done two decades ago, and convince them that better productivity will translate to better wages.
"A highly skilled worker who is de-motivated and disengaged will not be a productive worker," she cautions.
She also feels an industry-by-industry analysis of productivity growth and the issues and obstacles they face will help tailor customised solutions to improve efficiency.
One thing is certain. At the end of the day, the focus on productivity must improve the quality of new jobs – not just any job but jobs that create decent wages and working conditions.
The circumstances have changed, but the core principles remain the same.
To cite the Economic Committee's report of 24 years ago: The country has no other option but to ensure future economic growth is based on high productivity improvements each year.
Paradigm shift or pendulum swing?
Clear the air on misconceptions
By ZAKIR HUSSAIN
The Straits Times
06/02/2010
ESC RECOMMENDATIONS ON PRODUCTIVITY
Productivity is back in vogue and older Singaporeans wonder why it was allowed to slide in the first place. Wasn't productivity the mantra in the 1980s? So what happened? What's different this time around? How will the Economic Strategies Committee proposals affect the worker and the businessman?
SINGAPORE'S labour force will grow by only 1 per cent to 2 per cent a year in the next 10 years, and further unlimited inflow of foreign workers is out of the question.
As a result, the country has no other option but to ensure that future economic growth is based on high productivity improvements each year.
This sounds like a recommendation from the Economic Strategies Committee (ESC) report this week. It is not.
Believe it or not, it comes from page 123 of the Report of the Economic Committee, published in 1986, which identified new directions for Singapore's economy.
Productivity – the ability to create valuable goods and services through the use of the country's human, capital and natural resources – has long been a concern for the Government.
It is not hard to see why. Over the decades, ministers have stressed that raising productivity is key to sustaining the country's economic growth and consequently the standard of living and prosperity of its people.
Gains in efficiency have translated into better wages and jobs for many.
But the changing nature of economic challenges as Singapore industrialised and entered the league of developed nations has meant that this message needs to be renewed – and adjusted – over time.
Productivity in the past
IN THE first 15 years after Independence – between 1966 and 1980 – the economy grew some 10 per cent a year on average.
New businesses and investments poured in, creating jobs for people.
But by the end of the 1970s, the nation's productivity was growing much slower than that of industrialising competitors Hong Kong, Taiwan and South Korea.
It had to buck up, or be left behind.
So when the Government drew up a 10-year plan for the following decade, improving productivity became a key plank if the economy was to keep growing at 8 per cent to 10 per cent a year.
To induce employers to optimise labour use, mechanise operations and shift to higher value-added economic activities, the National Wages Council recommended a higher than usual wage increase of nearly 20 per cent a year from 1979 to 1981.
Then Prime Minister Lee Kuan Yew said in 1979 he was concerned that workers here were not as proud of or as skilled in their jobs compared to the Japanese or the Germans.
In 1981, he met key Japanese employers in Singapore to discuss practices, work attitudes and productivity in Japan and what could be applied here.
A committee on productivity was soon formed, and it recommended that a productivity movement be launched to tackle the issue.
Thus began the national campaign to work better and smarter.
A National Productivity Council and a National Productivity Board were formed. The drive worked.
The productivity of Singapore's labour force averaged 4.7 per cent a year from 1981 to 1988, contributing 77 per cent to gross domestic product (GDP) growth.
This was greatly aided by new technology, which saw output grow rapidly. The workforce grew by just 1.4 per cent a year.
But the high-wage policy was partly to blame when the economy went into recession in 1985, prompting the formation of the Economic Committee.
The committee noted that productivity growth in other developed economies, Japan aside, had stagnated.
There was therefore a need to keep raising awareness of productivity as well as take a broader approach to it – by looking at improving training, management skills, and work attitudes.
In 1990, the productivity board – the forerunner of today's Spring Singapore – issued a report on the productivity challenge over the next 10 years.
It identified five broad areas where improvements would help lift efficiency: work attitudes, skills upgrading, labour-management cooperation, progressive management practices, and effective use of manpower.
The labour movement helped to raise awareness of these issues, and productivity gains were chalked up – albeit at a much slower 3 per cent a year in the 1990s.
These gains were, however, questioned by several pundits including American Nobel Prize-winning economist Paul Krugman.
In a 1994 article in Foreign Affairs magazine, he argued that Asia's economic miracle was a "myth", and said that Singapore's stunning growth of 8.5 per cent a year over 25 years was unsustainable: It was the result of increased investment and labour, not added efficiency.
He was criticised for overstating his case, but his point on total factor productivity – intangible productivity gains not accounted for by increased labour or investment – was noted.
Singapore Management University economist Hoon Hian Teck and Nanyang Technological University (NTU) economist Ho Kong Weng, however, found that from 1970 to 2004, total factor productivity growth contributed to over 60 per cent of the growth in the standard of living.
"Singapore's growth in standard of living benefited from the adoption of technology from abroad through our liberal policy towards multinational corporations that brought with them managerial expertise, technologies, and markets," Professor Hoon tells Insight.
Grow, grow, grow
THE rapid growth of Asian economies over the past decade saw Singapore going for a policy of maximising growth to ride on this rising tide.
Labour MP Josephine Teo feels the difficult start to the decade – the 1998 Asian financial crisis, the 2001 recession and the 2003 Sars crisis which set back the economy – resulted in a great sense of urgency to make up for lost time, and to grab every growth opportunity.
"It was the right thing to do after the series of crises and in hindsight, we might have pulled the brakes after a few years. But then came the opportunity to develop the integrated resorts and we went ahead," she says.
But in the last decade, productivity growth slipped to just 1 per cent.
What caused this slide? Did Singapore lose its focus on productivity?
NTU economist Choy Keen Meng believes policymakers and the people made a mistake in losing sight of the issue during the long boom years.
"When the economy was prospering and wages were rising year after year, policymakers and the public became complacent over time," he says.
At the same time, productivity gains from information technology diffused into work processes, masking slow improvement in other areas, he adds.
Another key factor, observers note, is the rising flow of foreign workers into Singapore as there was a shortage of local workers ready to fill the new jobs that were rapidly being created as a result of the Government's strategy to achieve growth at all costs.
The labour inflow grew faster than did capital stock, skills or technology – factors which determine productivity gains, or the rise in output per worker.
No doubt, GDP rose significantly, but problems lay beneath the surface.
Labour MP Halimah Yacob says that this focus on growing the economy "prevented us from delving deeper and asking searching questions much earlier about whether a labour input- based growth model was indeed sustainable".
The deputy secretary-general of the National Trades Union Congress (NTUC) feels the changing scope of agencies dealing with productivity and competing interests of economic agencies may also have hampered efforts to keep watch on productivity gains.
She noted that in the 1980s, the National Productivity Board was an agency everyone could relate to almost immediately, but this was subsequently changed to the Productivity and Standards Board in 1996, following a merger with the Singapore Institute of Standards and Industrial Research.
In 2002, another name change was effected, to Spring Singapore. "Spring" stands for standards, productivity and innovation for growth – and the change was to reflect the new focus on innovation-driven development.
"After a while, it became quite confusing as we are not quite sure which agency is really driving productivity growth in Singapore," says Madam Halimah.
"For example, who is keeping a watching brief on issues like foreign workers and whether the huge influx will have a bearing on productivity? Different agencies may have different needs," she adds.
"One agency may want more foreign workers for foreign investors while another dealing with small and medium-sized enterprises may also face pressures from their clients.
"But which agency will holistically assess these needs and balance them against the impact on other policies or on our long-term growth strategy?"
Acknowledging such concerns, the ESC this week called for a high-level national council to lead, coordinate and drive efforts to boost productivity and expand continuing education and training.
The council would make sure productivity remains at the forefront of the national agenda and work closely with unions and industry.
Prof Hoon, however, sees the decline in productivity in the last decade, especially in the past five years, as having to do with adjustments Singapore must make as it transits to a more services-based economy.
The hiring of workers in anticipation of the boom in tourist numbers with the opening of the two integrated resorts may also have dampened productivity growth figures, he notes.
In a 2008 paper exploring Singapore's declining productivity growth, Professor Neo Boon Siong and Ms Susan Chung of the Lee Kuan Yew School of Public Policy say overhiring during boom years, the shift towards more knowledge-based work and the lagging effect of technological investment could have contributed to this dip.
The pendulum swings back
THE shift of focus back to productivity gains, Prof Hoon believes, lies in the realisation that as an economy matures technologically, and more new jobs created are to be found in the services sector, it is simply far harder to increase productivity growth.
He points out that the experience of developed economies like Japan and the United States suggests the pace of productivity growth through automation and skills upgrading tends to be higher in manufacturing than in services.
For instance, using robots on the factory floor can expand output per worker in manufacturing considerably but a hairdresser in the services sector can serve only a limited number of customers in a day no matter how skilful she is.
The reality, however, is that ramping up productivity may well be the only way forward for growth.
As Mrs Josephine Teo, who co-chaired the ESC's sub-committee on inclusive growth, puts it: Only productivity growth can create the conditions for sustained and broad-based wage growth.
Mature economies have relied mostly, if not almost exclusively, on productivity increases to grow in the long run.
Some feel Singapore has postponed this transition by importing cheap foreign labour from abroad.
"Now it cannot continue to do this because the physical, social and political limits have been breached," says Dr Choy, referring to unhappiness over new migrants who are seen as competing with locals for jobs and housing.
How, then, can workers and businesses be more efficient?
Working smarter
THE ESC, in its report, called for a rise in productivity growth to 2 per cent to 3 per cent over the next 10 years.
It also wants improvements in productivity to account for two-thirds of GDP growth, up from the current one-fifth share.
This week, Senior Minister Goh Chok Tong suggested that businesses work on higher-end goods and services that are less dependent on low-end labour.
He noted that this strategy was similar to the high-wage policy in the late 1970s and early 1980s, but this time around, the ESC recommended raising the foreign worker levy to prod businesses into raising productivity.
But Mr Goh cautioned that Singapore should not move too hard on the levy lest a mild recession erupt and companies find themselves unable to cope.
The ESC has called for a national productivity fund to support investments in training and innovation, as well as a resource centre businesses can tap on.
What more can companies do?
The Asia Competitiveness Institute at the Lee Kuan Yew School of Public Policy, in a report last November, said companies have to change the way they do business.
They have to redesign work processes and provide products and services with higher value to customers to tackle the productivity conundrum.
The ESC says Singapore's productivity in manufacturing and services is 55 per cent to 65 per cent of that in the US and Japan. In retail, it is 75 per cent of that in Hong Kong and one-third that of the US. In construction, productivity is half that of the US and one-third that of Japan.
Mrs Teo believes that a more efficient services sector can contribute significantly to overall productivity growth, as the sector accounts for 70 per cent of GDP.
She also sees huge potential for Singapore to learn from countries like Japan, which has high productivity levels in construction with almost no foreign workers, as a result of better work processes.
She thinks a makeover in the sector, and other areas, could draw Singaporeans to jobs they now shun.
But what of the workers themselves – how can they be more efficient, skills upgrading aside?
Many have the misconception that productivity means having to do more tasks but with less pay and longer hours, even though higher productivity means doing more in the same span of time.
Madam Halimah says it is important for companies to engage workers on the matter, as was done two decades ago, and convince them that better productivity will translate to better wages.
"A highly skilled worker who is de-motivated and disengaged will not be a productive worker," she cautions.
She also feels an industry-by-industry analysis of productivity growth and the issues and obstacles they face will help tailor customised solutions to improve efficiency.
One thing is certain. At the end of the day, the focus on productivity must improve the quality of new jobs – not just any job but jobs that create decent wages and working conditions.
The circumstances have changed, but the core principles remain the same.
To cite the Economic Committee's report of 24 years ago: The country has no other option but to ensure future economic growth is based on high productivity improvements each year.
Foreign worker contracts
Foreign worker contracts
By Esther Ng
TODAY - Behind the Headlines
When I read the contracts of these foreign workers, the terms seemed so ridiculous I felt like laughing.
For instance, a fine of $100 if a worker raises his voice against his boss. Failure to surrender one’s passport to the employer cops a $500 penalty and, purportedly, a trip to the police station.
And if a worker should so much as complain to the authorities about his employer, he will have to pay all the latter’s legal, transport and administrative costs, which the contracts stated to be some $300 per day.
But these contracts are not enforceable. Anything that is less favourable than the Employment Act is null and void – which I did not know until I was working on this story. I suspect many people don’t, either, much less foreign workers.
That is why the Ministry of Manpower hands out booklets to foreign workers upon their arrival in Singapore. These booklets are in various languages such as Thai, Bengali and Mandarin, to name a few. There is also a hotline number for workers to report abuses.
But here’s a problem.
Employers and agents, in many cases, seize these leaflets and brochures at the first opportunity, according to civil society organisation Transient Workers Count Too, “in order to put one more obstacle in the way of a worker who believes he or she has been wronged from appealing for help”, said TWC2 president John Gee.
While MOM’s efforts are commendable, the desired outcome of educating workers of their rights may not have been reached.
As for withholding passports, a number of employers of foreign workers and of foreign domestic workers practise this.
Their reason? To prevent the worker or foreign domestic worker from running away.
But the law is very clear on this. Under the Passports Act 2007, administered by the Immigration and Checkpoints Authority, it is an “offence for a person to possess or control a foreign travel document that was not issued to him without reasonable excuse”.
But as the workers’ contracts suggest, some employers pay heed only when enforcement, rather than reason, is employed.
By Esther Ng
TODAY - Behind the Headlines
When I read the contracts of these foreign workers, the terms seemed so ridiculous I felt like laughing.
For instance, a fine of $100 if a worker raises his voice against his boss. Failure to surrender one’s passport to the employer cops a $500 penalty and, purportedly, a trip to the police station.
And if a worker should so much as complain to the authorities about his employer, he will have to pay all the latter’s legal, transport and administrative costs, which the contracts stated to be some $300 per day.
But these contracts are not enforceable. Anything that is less favourable than the Employment Act is null and void – which I did not know until I was working on this story. I suspect many people don’t, either, much less foreign workers.
That is why the Ministry of Manpower hands out booklets to foreign workers upon their arrival in Singapore. These booklets are in various languages such as Thai, Bengali and Mandarin, to name a few. There is also a hotline number for workers to report abuses.
But here’s a problem.
Employers and agents, in many cases, seize these leaflets and brochures at the first opportunity, according to civil society organisation Transient Workers Count Too, “in order to put one more obstacle in the way of a worker who believes he or she has been wronged from appealing for help”, said TWC2 president John Gee.
While MOM’s efforts are commendable, the desired outcome of educating workers of their rights may not have been reached.
As for withholding passports, a number of employers of foreign workers and of foreign domestic workers practise this.
Their reason? To prevent the worker or foreign domestic worker from running away.
But the law is very clear on this. Under the Passports Act 2007, administered by the Immigration and Checkpoints Authority, it is an “offence for a person to possess or control a foreign travel document that was not issued to him without reasonable excuse”.
But as the workers’ contracts suggest, some employers pay heed only when enforcement, rather than reason, is employed.
Friday, February 5, 2010
Safety regime extended to buyers of services
The following article was published in The Business Times on 5 Feb 2010.
Safety regime extended to buyers of services
By CHEN HUIFEN
The Business Times
05/02/2010
BUYERS of SME (small and medium-sized enterprise) services will no longer be able to discharge their responsibility on safety anymore, even if their jobs are outsourced to contractors, said Manpower Minister Gan Kim Yong.
Speaking at the opening of the bizSAFE Convention yesterday, Mr Gan explained that there is a need to reach out and engage more SMEs on meeting work safety standards, as these companies account for more than half of work fatalities each year.
"While work can be outsourced, the duties of occupiers and principals to ensure safe outcomes from work cannot be outsourced, especially in cases where the occupiers and principals are aware of the type of work being carried out and have the capacity and ability to control the work involved."
He cited a case where the principal, the contractor and subcontractor were all taken to task for a fatality caused by a fallen load from an excavator at a construction site. They were fined a total of $260,000, after investigations found that all parties were responsible for lapses in checks and maintenance.
Mr Gan called on buyers of SME services to ensure that their contractors and subcontractors adopt the national Workplace Safety and Health framework, which outlines a set of systems and processes that users have to put in place to prevent work accidents.
There are already 40 organisations, including shipyards, government agencies and town councils, that have made the implementation of risk management a contract requirement.
His ministry will also tighten safety controls at higher risk workplaces. From next month, new factories that handle highly flammable and hazardous substances will have to undergo inspection by the Ministry of Manpower within one month of factory registration.
They would also have to complete their first safety and health management system audit within two months of starting business operations. Checks on process hazard analysis for such factories will also be conducted. Existing factories in this group will have to renew their certificate of registration based on the new requirements.
Similarly, new construction worksites, shipyards, wafer fab, pharmaceutical and metal-working factories will also have to conduct a safety and health management system audit within two months of operations. But they no longer have to renew their certificate of registration, unless it is revoked, resulting in potential cost savings of some $1.7 million a year.
Safety regime extended to buyers of services
By CHEN HUIFEN
The Business Times
05/02/2010
BUYERS of SME (small and medium-sized enterprise) services will no longer be able to discharge their responsibility on safety anymore, even if their jobs are outsourced to contractors, said Manpower Minister Gan Kim Yong.
Speaking at the opening of the bizSAFE Convention yesterday, Mr Gan explained that there is a need to reach out and engage more SMEs on meeting work safety standards, as these companies account for more than half of work fatalities each year.
"While work can be outsourced, the duties of occupiers and principals to ensure safe outcomes from work cannot be outsourced, especially in cases where the occupiers and principals are aware of the type of work being carried out and have the capacity and ability to control the work involved."
He cited a case where the principal, the contractor and subcontractor were all taken to task for a fatality caused by a fallen load from an excavator at a construction site. They were fined a total of $260,000, after investigations found that all parties were responsible for lapses in checks and maintenance.
Mr Gan called on buyers of SME services to ensure that their contractors and subcontractors adopt the national Workplace Safety and Health framework, which outlines a set of systems and processes that users have to put in place to prevent work accidents.
There are already 40 organisations, including shipyards, government agencies and town councils, that have made the implementation of risk management a contract requirement.
His ministry will also tighten safety controls at higher risk workplaces. From next month, new factories that handle highly flammable and hazardous substances will have to undergo inspection by the Ministry of Manpower within one month of factory registration.
They would also have to complete their first safety and health management system audit within two months of starting business operations. Checks on process hazard analysis for such factories will also be conducted. Existing factories in this group will have to renew their certificate of registration based on the new requirements.
Similarly, new construction worksites, shipyards, wafer fab, pharmaceutical and metal-working factories will also have to conduct a safety and health management system audit within two months of operations. But they no longer have to renew their certificate of registration, unless it is revoked, resulting in potential cost savings of some $1.7 million a year.
Why raising foreign worker levy won't work
The following letter was published in the Straits Times on 5 Feb 2010.
Why raising foreign worker levy won't work
THE Economic Strategies Committee's proposal to increase foreign worker levies is likely to raise the financial burden on employers and workers without reducing our reliance on foreign labour to grow the economy.
Most migrant workers are in lowly paid jobs. One obstacle to improvement is that their pay is significantly lower than their cost of hire to employers.
Law-abiding employers provide accommodation, insure workers, look after their health, pay for a policy that will cover the bond and pay a levy that ranges from $265 a month for a maid to $470 a month for a construction worker.
The lowest-paid maids may actually receive wages smaller than their employers' levy payments.
Many employers argue against paying their workers more by pointing to these other expenses, particularly the levy, as the cost of the workers to them, regardless of how much the workers themselves see of the money employers pay out.
A levy increase will likely lead to a rise in cases of employers trying to deduct money from workers' wages on dubious pretexts and will certainly increase resistance to improving pay rates for workers.
Unless the levy increase is punitive, it is unlikely to discourage the employment of foreign workers, but will just be an increased tax on foreign labour employment.
In reality, the levy has become a tax increase.
Even so, how many Singaporeans will feel incentivised to accept the hours and conditions that prevail in sectors of high migrant labour employment at the wages likely to be on offer?
A better route is to work towards abolishing the levy and raising the pay of migrant workers, which would narrow the gap between local and foreign workers.
This means setting minimum pay conditions which is a way to give foreign workers significant pay increases at a bearable cost to employers.
The workers will feel more fairly rewarded and pay levels in some sectors might start to look a little more appealing to Singaporean workers.
John Gee
President
Transient Workers Count Too
Why raising foreign worker levy won't work
THE Economic Strategies Committee's proposal to increase foreign worker levies is likely to raise the financial burden on employers and workers without reducing our reliance on foreign labour to grow the economy.
Most migrant workers are in lowly paid jobs. One obstacle to improvement is that their pay is significantly lower than their cost of hire to employers.
Law-abiding employers provide accommodation, insure workers, look after their health, pay for a policy that will cover the bond and pay a levy that ranges from $265 a month for a maid to $470 a month for a construction worker.
The lowest-paid maids may actually receive wages smaller than their employers' levy payments.
Many employers argue against paying their workers more by pointing to these other expenses, particularly the levy, as the cost of the workers to them, regardless of how much the workers themselves see of the money employers pay out.
A levy increase will likely lead to a rise in cases of employers trying to deduct money from workers' wages on dubious pretexts and will certainly increase resistance to improving pay rates for workers.
Unless the levy increase is punitive, it is unlikely to discourage the employment of foreign workers, but will just be an increased tax on foreign labour employment.
In reality, the levy has become a tax increase.
Even so, how many Singaporeans will feel incentivised to accept the hours and conditions that prevail in sectors of high migrant labour employment at the wages likely to be on offer?
A better route is to work towards abolishing the levy and raising the pay of migrant workers, which would narrow the gap between local and foreign workers.
This means setting minimum pay conditions which is a way to give foreign workers significant pay increases at a bearable cost to employers.
The workers will feel more fairly rewarded and pay levels in some sectors might start to look a little more appealing to Singaporean workers.
John Gee
President
Transient Workers Count Too
Raised levies = decreased wages?
The following letter was published in TODAY on 5 Feb 2010.
Raised levies = decreased wages?
Letter from Jolovan Wham Humanitarian Organisation for Migration Economics (Home)
05:55 AM Feb 05, 2010
I REFER to 'Flexible approach to check foreign worker influx' and 'How to move up the ladder together'. (Feb 2).
Raising levies may not necessarily lead to employers reducing their dependence on foreign workers.
Many employers prefer foreign workers because they are willing to work longer hours and during weekends. They are also willing to accept lower salaries than the average local low wage worker.
When levies are raised, it is possible that the employer will pass the burden of this increased cost onto the foreign worker by decreasing wages and demanding kickbacks.
There is also a likelihood that the agent fees that workers pay may increase to manage this additional cost.
This problem is compounded by the reality that low wage foreign workers have little bargaining power to demand better working conditions. In such a situation, neither the employer nor the worker will benefit.
While we welcome the call by the Economic Strategies Committee to focus on enhancing the skills of all low wage workers, due consideration has to be given to the fact that the long hours they put in on weekdays and weekends make it difficult for them to upgrade and learn new skills when they barely have the time and energy to do so after a gruelling day at work.
If workers are to increase their productivity by acquiring new knowledge, employers have to take the lead by encouraging them to do so.
Emphasis has to be placed on providing incentives to employers for giving workers time off to invest in new skills and knowledge which increase productivity. Many companies choose instead to squeeze workers dry by insisting on working hours that exceed statutory limits.
Workers have to be viewed as individuals with potential to contribute, rather than as "cheap labour" that helps in cost cutting. Such an approach will ultimately benefit companies in the long run.
Raised levies = decreased wages?
Letter from Jolovan Wham Humanitarian Organisation for Migration Economics (Home)
05:55 AM Feb 05, 2010
I REFER to 'Flexible approach to check foreign worker influx' and 'How to move up the ladder together'. (Feb 2).
Raising levies may not necessarily lead to employers reducing their dependence on foreign workers.
Many employers prefer foreign workers because they are willing to work longer hours and during weekends. They are also willing to accept lower salaries than the average local low wage worker.
When levies are raised, it is possible that the employer will pass the burden of this increased cost onto the foreign worker by decreasing wages and demanding kickbacks.
There is also a likelihood that the agent fees that workers pay may increase to manage this additional cost.
This problem is compounded by the reality that low wage foreign workers have little bargaining power to demand better working conditions. In such a situation, neither the employer nor the worker will benefit.
While we welcome the call by the Economic Strategies Committee to focus on enhancing the skills of all low wage workers, due consideration has to be given to the fact that the long hours they put in on weekdays and weekends make it difficult for them to upgrade and learn new skills when they barely have the time and energy to do so after a gruelling day at work.
If workers are to increase their productivity by acquiring new knowledge, employers have to take the lead by encouraging them to do so.
Emphasis has to be placed on providing incentives to employers for giving workers time off to invest in new skills and knowledge which increase productivity. Many companies choose instead to squeeze workers dry by insisting on working hours that exceed statutory limits.
Workers have to be viewed as individuals with potential to contribute, rather than as "cheap labour" that helps in cost cutting. Such an approach will ultimately benefit companies in the long run.
Need to look beyond ratio and levies
The following article was published in the Business Times on 5 Feb 2010.
Need to look beyond ratio and levies
The Business Times
05/02/2010
VIEWS FROM THE TOP:Do the ESC's recommendations regarding foreign workers address all the key issues? What more can be done?
Victor Tay
Chief operating officer
Singapore Business Federation
FOREIGN workers provide a staple lifeline to Singapore businesses, especially in the construction, marine, process engineering sectors. Currently the government attempts to balance the foreign workers issue through the use of the foreign workers dependency ratio and through levies. However, we could look at total workers training hours as a dependency ratio as an alternative measure while recruiting foreign workers. This emphasis on training hours would spur employers to give value-add training for their staff, and in turn improve productivity.
Also, incentives should be given to companies focusing on continuous training to value-add their workers' productivity. Factors such as foreign workers training hours, renewal and staff promotion can be taken as credits to offset the foreign worker levies. Minister Lim Swee Say described foreign workers as wine which is good, but too much will be unhealthy.
Training and value-adding to the staff is analogous to the wine-crafting and barrel-oaking process. The ability to provide workers with quality training will mature them into vintage products.
Kenny 'the fish' Yap
Executive chairman & MD
Qian Hu
IN ORDER to build a team, we should treat all as team members regardless of whether they are foreigners or not. To raise the productivity of the whole team, we must upgrade all of the team members' skills. By this logic, only subsidising local workers training, as was done in the past, defeats the purpose of building a team. As far as the company is concerned, if you are good, you are good regardless of whether you are Singaporean or a foreigner. And if you are good, I have the duty to advance you. Period.
My experience tells me that the difference between Singaporeans and foreign workers is ATTITUDE. Most foreign workers are dead serious about working, whereas quite a few young Singaporeans, maybe due to their parent's wealth, force themselves to work. So while we can talk about increasing our productivity to 3-5 per cent, my gut feeling is, if we cannot find a way to change the working attitude of our young Singaporeans, it is going to be a tall order.
Maybe we should give incentives to young local workers who don't hop job, let's say, more than three times in 10 years.
We Singaporeans are the ones who should be blamed for low productivity, not foreigners. They will help us increase our productivity if we treat them fairly and give the good ones an equal opportunity to be trained and to excel.
Roland Mathys
CEO
Jurong Cement Ltd
I THINK the link between foreign workers and productivity is overdone in this whole discussion and needs a more differentiated view.
Let's start by understanding what productivity really means: Productivity is a ratio that measures the output (products, services) created in relation to the input (labour, machines, material) within a specific time frame.
Firstly, the direct connection made between low productivity and foreign workers implies that the latter is the cause of the low productivity and that, generally, foreign workers are unproductive. This generalisation is obviously incorrect. It is not the foreign workers per se that is the problem, but the way they are used and deployed. The impression that if we reduce foreign workers productivity will go up is not entirely correct and too narrow.
Secondly, as can be seen from the above definition, labour is just one component in the equation defining productivity, and there are other factors such as materials, equipment, processes, know-how, etc, that play their part in the overall productivity of an individual, a company or a whole country. Therefore the discussion should be widened to include all components.
David Leong
Managing director
PeopleWorldwide Consulting Pte Ltd
THE dilemma of having foreign workers is as vexing as not having them. Singapore needs these foreign workers to feed the economic boom and do jobs Singaporeans are not willing to do; yet there is a growing social pressure against them. The two main levers in managing the tap of the foreign workers flow are the imposition of dependency ratio and levies. These are old tools which did not significantly discourage the employment of the foreign workers. Despite the tiered levy formula, the rate of employment of foreign workers did not see any contraction year on year.
The impending increase in levy, in actuality, will not dampen the need for hiring foreign workers. Most of these workers are in the 3D trade – dirty, dangerous and debasing. Work at this stratum has no serious takers and the employers have inelastic demand for foreign workers notwithstanding how high the levy may be. This can be counter-productive as it will increase the real cost of operation without increasing any real output.
Saving jobs for Singaporeans should be focused at the middle section of the pyramid where there is space for productivity gains through up-skilling and training. The million-dollar question is where to set the base of the pyramid where the levy application can be considerate to these employers since they have an inelastic demand for foreign workers. Above that baseline of the pyramid, a tiered levy formula will apply at the middle section.
In the end, we need synergistic workforces and cooperation at the multiple hierarchies in the job pyramid structure. Singaporeans and foreign workers will form a workforce of peers working towards the prosperity of Singapore.
Andrea Ross
Managing director
Robert Walters Singapore
SINGAPORE is faced with a "chicken or the egg" scenario in terms of what will come first, productivity or higher income. The ESC report avers that when productivity is increased, salaries will increase correspondingly. While this may be the case, higher incomes, if not salaries, will be required in order to attract Singaporeans into industries such as construction, food and beverage, hospitality and tourism.
Taking the food and beverage industry as an example, in many other developed countries, "tips" are used as a way to acknowledge the receipt of good service. A financial incentive such as this not only supplements the employee's salary, but has the direct effect of improving the overall quality of service received. If such a tipping culture is actively encouraged across the F&B, hospitality and service sectors in Singapore, the overall compensation for service staff will be deemed more attractive, and may potentially encourage more Singaporeans to move into these industries. This may help reduce the reliance on foreign workers as well as improve the service levels within these industries.
Dhirendra Shantilal
Senior vice-president, Asia Pacific
Kelly Services
ORGANISATIONS will hire either local or foreign employees based on their talent and skill sets. However, beyond competencies and job experiences, employers may also need to consider how well foreigners can assimilate into both the work environment and country culture.
Whether Singapore is able to scale back on its reliance on foreign workers and see sustained growth in local employment will depend on how quickly Singaporeans can reskill or upskill themselves, and how they will utilise the resources, courses and schemes provided by the companies they work for, as well as the government.
For the complete list of views from CEOs, go to www.businesstimes.com.sg
Need to look beyond ratio and levies
The Business Times
05/02/2010
VIEWS FROM THE TOP:Do the ESC's recommendations regarding foreign workers address all the key issues? What more can be done?
Victor Tay
Chief operating officer
Singapore Business Federation
FOREIGN workers provide a staple lifeline to Singapore businesses, especially in the construction, marine, process engineering sectors. Currently the government attempts to balance the foreign workers issue through the use of the foreign workers dependency ratio and through levies. However, we could look at total workers training hours as a dependency ratio as an alternative measure while recruiting foreign workers. This emphasis on training hours would spur employers to give value-add training for their staff, and in turn improve productivity.
Also, incentives should be given to companies focusing on continuous training to value-add their workers' productivity. Factors such as foreign workers training hours, renewal and staff promotion can be taken as credits to offset the foreign worker levies. Minister Lim Swee Say described foreign workers as wine which is good, but too much will be unhealthy.
Training and value-adding to the staff is analogous to the wine-crafting and barrel-oaking process. The ability to provide workers with quality training will mature them into vintage products.
Kenny 'the fish' Yap
Executive chairman & MD
Qian Hu
IN ORDER to build a team, we should treat all as team members regardless of whether they are foreigners or not. To raise the productivity of the whole team, we must upgrade all of the team members' skills. By this logic, only subsidising local workers training, as was done in the past, defeats the purpose of building a team. As far as the company is concerned, if you are good, you are good regardless of whether you are Singaporean or a foreigner. And if you are good, I have the duty to advance you. Period.
My experience tells me that the difference between Singaporeans and foreign workers is ATTITUDE. Most foreign workers are dead serious about working, whereas quite a few young Singaporeans, maybe due to their parent's wealth, force themselves to work. So while we can talk about increasing our productivity to 3-5 per cent, my gut feeling is, if we cannot find a way to change the working attitude of our young Singaporeans, it is going to be a tall order.
Maybe we should give incentives to young local workers who don't hop job, let's say, more than three times in 10 years.
We Singaporeans are the ones who should be blamed for low productivity, not foreigners. They will help us increase our productivity if we treat them fairly and give the good ones an equal opportunity to be trained and to excel.
Roland Mathys
CEO
Jurong Cement Ltd
I THINK the link between foreign workers and productivity is overdone in this whole discussion and needs a more differentiated view.
Let's start by understanding what productivity really means: Productivity is a ratio that measures the output (products, services) created in relation to the input (labour, machines, material) within a specific time frame.
Firstly, the direct connection made between low productivity and foreign workers implies that the latter is the cause of the low productivity and that, generally, foreign workers are unproductive. This generalisation is obviously incorrect. It is not the foreign workers per se that is the problem, but the way they are used and deployed. The impression that if we reduce foreign workers productivity will go up is not entirely correct and too narrow.
Secondly, as can be seen from the above definition, labour is just one component in the equation defining productivity, and there are other factors such as materials, equipment, processes, know-how, etc, that play their part in the overall productivity of an individual, a company or a whole country. Therefore the discussion should be widened to include all components.
David Leong
Managing director
PeopleWorldwide Consulting Pte Ltd
THE dilemma of having foreign workers is as vexing as not having them. Singapore needs these foreign workers to feed the economic boom and do jobs Singaporeans are not willing to do; yet there is a growing social pressure against them. The two main levers in managing the tap of the foreign workers flow are the imposition of dependency ratio and levies. These are old tools which did not significantly discourage the employment of the foreign workers. Despite the tiered levy formula, the rate of employment of foreign workers did not see any contraction year on year.
The impending increase in levy, in actuality, will not dampen the need for hiring foreign workers. Most of these workers are in the 3D trade – dirty, dangerous and debasing. Work at this stratum has no serious takers and the employers have inelastic demand for foreign workers notwithstanding how high the levy may be. This can be counter-productive as it will increase the real cost of operation without increasing any real output.
Saving jobs for Singaporeans should be focused at the middle section of the pyramid where there is space for productivity gains through up-skilling and training. The million-dollar question is where to set the base of the pyramid where the levy application can be considerate to these employers since they have an inelastic demand for foreign workers. Above that baseline of the pyramid, a tiered levy formula will apply at the middle section.
In the end, we need synergistic workforces and cooperation at the multiple hierarchies in the job pyramid structure. Singaporeans and foreign workers will form a workforce of peers working towards the prosperity of Singapore.
Andrea Ross
Managing director
Robert Walters Singapore
SINGAPORE is faced with a "chicken or the egg" scenario in terms of what will come first, productivity or higher income. The ESC report avers that when productivity is increased, salaries will increase correspondingly. While this may be the case, higher incomes, if not salaries, will be required in order to attract Singaporeans into industries such as construction, food and beverage, hospitality and tourism.
Taking the food and beverage industry as an example, in many other developed countries, "tips" are used as a way to acknowledge the receipt of good service. A financial incentive such as this not only supplements the employee's salary, but has the direct effect of improving the overall quality of service received. If such a tipping culture is actively encouraged across the F&B, hospitality and service sectors in Singapore, the overall compensation for service staff will be deemed more attractive, and may potentially encourage more Singaporeans to move into these industries. This may help reduce the reliance on foreign workers as well as improve the service levels within these industries.
Dhirendra Shantilal
Senior vice-president, Asia Pacific
Kelly Services
ORGANISATIONS will hire either local or foreign employees based on their talent and skill sets. However, beyond competencies and job experiences, employers may also need to consider how well foreigners can assimilate into both the work environment and country culture.
Whether Singapore is able to scale back on its reliance on foreign workers and see sustained growth in local employment will depend on how quickly Singaporeans can reskill or upskill themselves, and how they will utilise the resources, courses and schemes provided by the companies they work for, as well as the government.
For the complete list of views from CEOs, go to www.businesstimes.com.sg
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