Wednesday 18 April 2012

Review of Employment Act this year

Make-up of workforce has changed, with more PMEs, contract workers
By Janice Heng & Toh Yong Chuan, The Straits Times, 18 Apr 2012

SINGAPORE'S more educated workforce, with a growing proportion of professionals, managers and executives (PMEs), has propelled the Manpower Ministry to undertake a review of the Employment Act this year.

Another driving force is the increase in outsourcing and the number of contract workers.

These two trends were identified by Minister of State for Manpower Tan Chuan-Jin when he announced the review yesterday.

'There is a need to ensure the Employment Act keeps up with the times,' he said at the ministry's annual Workplan Seminar for the current year.

Mr Tan, however, did not elaborate on how the Act might change.

Last reviewed in 2008, the Employment Act offers benefits such as salary protection, minimum employment terms and dispute resolution.

It generally covers employees with a basic monthly salary of no more than $2,000, and manual workers earning up to $4,500 a month, regardless of nationality. It does not cover senior managers and executives, seamen, domestic workers and government employees.

Junior managers and executives earning $4,500 and below enjoy salary protection only.

Unionists, academics and MPs interviewed want the Act to be extended to more groups of workers, especially PMEs, and strengthened in areas such as guaranteeing medical benefits.

PMEs now form 32 per cent of the workforce, compared to 27 per cent in 2001.

With almost 630,000 of them, there is a need to 'take a serious look' at whether more PMEs can be covered by the Act, said MP Patrick Tay, who is director of the National Trades Union Congress' (NTUC) PME unit.

Agreeing, Port Officers' Union president Benjamin Tang hoped PMEs could enjoy more than just salary protection. For instance, the law could specify minimum amounts of annual and medical leave for them as well, he said.

Business law professor Dennis Ong called for the Act to include workers engaged as independent contractors, not as employees.

They deserve protection too, as the issues they face 'are no less real' than those of employees, said the associate professor at Nanyang Business School.

Meanwhile, contract employees who are covered should be assured of the same benefits as full-time workers, said MP Zainudin Nordin, chairman of the Government Parliamentary Committee for Manpower.

Such employees form 12 per cent of the two million resident workforce. MPs like Madam Halimah Yacob, a former union leader who is now Minister of State for Community Development, Youth and Sports, had previously called for greater protection for such workers as well.

Beyond embracing more workers, Minister of State Tan also indicated the Act could be strengthened for the workers it already covers.

As the Government tries to raise the wages of low-wage workers, it should also look at how to protect them 'where the relationship with employers is less than balanced', he said.

He did not elaborate but one possibility is specifying minimum levels of health insurance or medical benefits, said Mr David Ang, executive director of the Singapore Human Resources Institute.

MP Zainal Sapari agreed.

The head of the NTUC unit for contract, casual and low-wage workers noted that employers are obliged to buy insurance for foreign workers but not for their local staff.

He added that local low-wage workers may not have enough in their Medisave accounts to be adequately protected.

The ministry, in its review of the Act, will work with its tripartite partners - labour and business - as well as other stakeholders and the public.

No timeline was given for the review, but a public consultation exercise will be held in the second half of the year.

Preliminary feedback can be sent to

Meanwhile, Singapore National Employers Federation president Stephen Lee said employers are seeking 'a delicate balance' between standards and workers' rights on one hand, and labour market flexibility and competitiveness on the other hand.

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