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Statement on Jobs Support Scheme payouts for outsourced sectors

Employment practices

Statement attributable to MOM and MOF spokespersons

  1. The Jobs Support Scheme (JSS) is a wage support intended to help employers retain their local employees. JSS payouts offset and protect local employees’ wages. Employers must act responsibly and fairly in retaining and remunerating employees, even during periods of reduced business activity.
  2. The Ministry of Manpower (MOM), in consultation with the Ministry of Finance (MOF), issued an advisory to labour suppliers on 26 May to categorically state that labour suppliers are expected to pass on the JSS payouts to their clients. Typically, labour suppliers function like an external recruitment arm of their clients. They are only responsible for providing manpower to their clients, and have no further responsibilities to provide professional management services to their clients. They will generally terminate the services of the employee at the client’s request and not take on the obligation of re-deploying the staff. As the key decisions on worker employment rests with the client, the JSS payouts should flow through to the clients to support local employment.   
  3. The situation is different with outsourced vendors who contract with the service buyers. Typically, service buyers do not have direct say over the employment and deployment of specific workers. As the key decision on worker employment rests with the outsourced vendor, the JSS payout should be retained by the vendors to support local employment. The tripartite partners, including relevant sector agencies and associations, have been publishing Tripartite Advisories (TAs) to guide service buyers and service providers on measures to adopt to ensure the sustainability of outsourced sectors in view of COVID-19. Providing the JSS to outsourced service providers helps them meet their obligations to workers, even when their businesses are affected. 
  4. Tripartite partners have advised outsourced sectors that service providers should be paid as per contract terms if there is no change in services required. Specifically, service buyers should not ask for reduced contract fees on the basis that their service providers are receiving wage support through the enhanced JSS as its provision is temporary in nature.
  5. We encourage service buyers and providers to focus on long-term interests rather than short-term gains and losses. If there is any significant change in services required, service buyers and providers should reach a mutually agreed revision to payments for services in view of the long-term contractual relationship. If feasible, Managing Agents may choose to extend a suitable fee rebate to their MCSTs on a goodwill basis.
  6. We would like to take this opportunity to reiterate the central focus of the Budget and the JSS in particular, i.e. protecting jobs and livelihoods, and everyone in the value chain is called to each do his part, even as the government focuses on providing timely support to businesses and workers.