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Committee of Supply (Speech 3) by Mr Hawazi Daipi, Senior Parliamentary Secretary for Manpower, 14 March 2013, 5:00 PM, Parliament

Mr Hawazi Daipi, Senior Parliamentary Secretary for Manpower, Parliament

Employment practices Workplace safety and health

INTRODUCTION

  1. Madam Chair, Ag Min Tan spoke about the need to restructure the economy to create quality growth that is inclusive. This involves sustained effort to up-skill our workforce to create more opportunities for Singaporeans, which MOS Dr Amy Khor touched on.
  2. During this national journey of economic restructuring, particular attention should be paid to the more vulnerable segments of our society. Uplifting lower-income Singaporeans is an important reason why we need to restructure in the first place.

    LOW WAGE WORKERS
  3. At the Budget Debate, Mr Lim Biow Chuan had shared his concerns regarding the living standards of low income workers. Just now, Mr Yeo Guat Kwang talked about enhancing our support for the lower-wage group of Singaporeans. The Government shares their concerns. As DPM Tharman emphasised in the Budget speech, the Government is working ever harder, through various means, to ensure a fair and inclusive society for all Singaporeans. You have heard over the last few days how the Government will do more for the low-income in the areas such as housing, healthcare and education. I will now elaborate on how MOM too will do more to help uplift our low-wage workers.
  4. Our strategy to raise wages at the lower end focuses on productivity as the primary lever to sustainably raise wages over the long term. Where productivity improvements do not translate well into wage increases, such as in the cleaning sector due to cheap sourcing, we take sector-specific measures to target these market failures.
  5. The Government will continue to enhance this strategy to give low-income Singaporeans a further leg up. The Workfare Income Supplement (WIS) is being significantly enhanced, with the maximum payout now at $3,500 and income cap extended to $1,900, to benefit about 30% of our citizen workforce. The increase in CPF contribution rates for low-wage workers will also help them save more for retirement, healthcare and housing.
  6. Earlier, Ag Min Tan also announced that, in the computation of foreign worker quota, local workers earning below $1,000, up from $850 currently, will be deemed as part-time workers. Two such part-time workers are counted as one full-time worker for purposes of applying the foreign worker dependency ratio ceiling. This will have a positive effect on raising wages at the low end. In addition, the new Wage Credit Scheme, which covers 7 in 10 Singaporean employees, will benefit low-wage workers as it supports the efforts of employers to restructure and share productivity gains through wage increases.

    REVIEW OF WORKFARE TRAINING SUPPORT SCHEME (WTS)
  7. DPM Tharman, in the Budget speech, had also announced that the Government will enhance the Workfare Training Support (WTS) scheme. Please let me elaborate on this.
  8. The WTS scheme was introduced in July 2010 as a three-year scheme with generous incentives to encourage older workers to train, improve their skills and earn more. Since its inception, more than 96,000 workers have benefited from the scheme.
  9. WTS funding has been effective in encouraging workers to upskill. When we studied the level of training participation, we found that workers who received WTS funding trained more than those who did not, by about 36%. And as MOS Khor mentioned earlier, a study by WDA found that workers who attended WSQ training are more likely to have higher wages than workers who did not. In addition, lower-wage workers aged 35 and above benefited more from WSQ training. In a nutshell, workers gain more through taking part in training opportunities given to them.
  10. Given its success, we will continue with WTS, and enhance it to support the training needs of older Singaporean workers. Let me highlight five key changes.
  11. First, in line with the changes for the WIS Scheme, the income cap for the WTS will be raised from $1,700 to $1,900 to benefit more Singaporean workers.
  12. Second, the funding structure will be simplified. At present, two tiers of funding at 90% or 95% are given, depending on the income level of the trainee. In response to feedback from employers that two-tier funding is confusing and administratively cumbersome, a single funding rate of 95% will apply. This will apply to both course fees and absentee payroll received by employers.
  13. Third, we recognise that there are lower-income Singaporeans who wish to undergo training but do not receive support from their employers. This group can already enjoy course fee subsidies under WTS. But we can do more to support them, and we will now provide them with training allowance (TA) since they have to forego earning an income while they train.
  14. Fourth, let me move on to the coverage of courses under WTS. The Ministry has received suggestions from both employers and employees to include good courses outside the WSQ framework under WTS, to cover some skills categories for which WSQ courses are not available. We have therefore extended WTS funding to cover more than 2,000 new Certifiable Skills Training courses, bringing total WTS-eligible courses to over 8,000. Newly included are courses such as the Foundation Certificate in Financial Management, Construction Trade Foremen Certificate, and Fundamentals Certificate in Early Childhood Care & Development.
  15. Finally, there are some lower-wage workers who need greater assistance as they lack fundamental skills. This hinders them when they want to go for further vocational skills training to earn better wages. Under the Workfare Skill-Up programme, such workers are currently able to take up basic workplace literacy courses. To make the programme even more comprehensive, we will now include numeracy training courses as an option in the programme.
  16. Taking into account these changes, we expect WTS to benefit about 60,000 older lower-wage Singaporeans every year, an increase of about 10%. Including someone like Ms Viki Wong. I’m happy to cite her as an example because she has really made progress in her career and is earning more and has become even more effective as a worker. In 2010, determined to train and upgrade to better provide for her family, Ms Wong attained the Advanced Certificate in Retail Supervision, receiving 95% course fee subsidy under WTS.
  17. With the skills that she picked up, Ms Wong managed, in three years, to rise from a retail assistant to the position of manager, with an increase in her wages from $1,500 to $1,800 a month.
  18. She has indicated a strong interest to go further and take up the WSQ Diploma in Retail Management. With her wage increase, she was initially concerned that she would no longer qualify for lower course fees under WTS. With the increase of the income cap to $1,900, the scheme will continue to benefit Ms Wong. Her course fees will only be $350, instead of $2,070 without WTS. She can also continue to benefit from the other components of WTS, such as the Training Commitment Award which can amount to as much as $400 a year.
  19. Madam, the Government is committed to make growth inclusive for individuals like Ms Wong by helping her grow her income. In all, the Government will set aside a budget of $200 million over three years for the revised WTS scheme.

    NEW LICENSING REGIME FOR CLEANING COMPANIES
  20. Madam Chair, both Mr Zainal Sapari and Mr Yeo Guat Kwang have called for the strengthening of the progressive wage model. Please let me address this.
  21. At last year's COS, I spoke about the problem of cheap sourcing in the cleaning sector, where service buyers award contracts mainly on the basis of price. As a result, improvements in productivity and standards do not translate well into improved wages for our cleaners. I laid out how the Government would target this problem. Since then, the Government has strengthened the employment-related criteria of the Clean Mark accreditation scheme, requiring that resident cleaners employed in accredited companies receive progressive wages that reflect the higher training, standards and productivity required of accredited companies. As MOS for Finance Mrs Josephine Teo mentioned on Monday, the Government is also buying only from accredited cleaning companies from 1 April 2013 onwards.
  22. Building on this, the Ministry for Environment and Water Resources announced on Tuesday that there will be a new licensing regime for all cleaning companies in 2014. The licensing requirements will include mandatory training courses. Cleaning companies will also need to provide their cleaners with written employment contracts that incorporate progressive wages recommended by the Tripartite Cluster for Cleaners. Unlike the accreditation scheme which was voluntary, the licensing regime is mandatory. Through this measure, we can be assured that all resident cleaners who are employed by cleaning service providers will benefit from progressive wages within the next few years.

    STRATEGIES TO RAISE WAGES AND REDUCE OVERTIME IN THE SECURITY INDUSTRY
  23. Let me turn to the security sector, which has another group of lower-wage workers that requires our attention. Similar to the cleaning sector, there is cheap sourcing and limited scope for collective bargaining. Yet, from the national security standpoint, it is imperative that the industry, including its security personnel, upgrades and becomes more professional. MOM and NTUC have been working hard with key stakeholders, such as the Ministry of Home Affairs, security agencies and buyers, on strategies to raise basic wages of our security officers and reduce the reliance on overtime.
  24. Specifically, similar to the approach we have taken for cleaning sector, a Security Tripartite Cluster (STC) will be formed. It will be a tripartite body, tasked to develop progressive wage models for the security industry, as well as a plan to raise basic wages and reduce overtime hours over the next few years.
  25. The Government will incorporate the progressive wage model for the security industry into its regulatory frameworks. Its adoption will be an important requirement in the grading exercise for security agencies.
  26. In addition, to recognize positive employment practices, security agencies that perform well in this area will be awarded a HR Quality Mark. The Government has already committed to buying from well-graded security agencies from 1 April 2013. Once the HR Quality Mark is ready, the Government will also procure only from security agencies that attain the Mark.
  27. MOM will also tighten the conditions that security agencies have to meet when they apply for approval to be exempted from overtime limits. Security agencies from time to time request for exemption from overtime limits for their workers. MOM will require that security agencies pay their security guards a certain basic wage before exemption is granted.
  28. To provide the industry with sufficient time to adjust, the STC will work out a roadmap to raise basic wages and reduce overtime hours permitted in the industry. More details will be announced by the STC when ready.
  29. These measures are an important step in improving standards in the security sector. Security officers will benefit. It is another example of how we tailor measures to uplift workers in selected sectors, to suit their unique circumstances, where special attention is necessary.
  30. With around 50,000 resident cleaners and around 20,000 resident security officers, we expect these sectoral measures to also have an impact not just at the sectoral level, but also on the employment terms of low-wage workers more broadly. We urge employers across all industries to take the cue from the good practices being put in place for cleaning and security, and upgrade their own practices where warranted.

    WSH OVERVIEW
  31. Madam Chair, let me turn to another area of MOM's work, that is Workplace Safety and Health. While we work together to create opportunities for our workforce to upgrade and benefit from inclusive growth, we must not forget the importance of fostering safe and healthy workplaces.
  32. We have made some progress in Workplace Safety and Health, or WSH. Last year, Singapore had 56 workplace fatalities, down from 61 in the preceding year. Our workplace fatality rate is at a new low of 2.1 fatalities per 100,000 workers.
  33. Nonetheless, there is a lot more to be done. One life lost is one too many. Some unfortunate incidents in the past year have served as a good reminder to all of us.
  34. Some of these accidents could have resulted in higher number of fatalities and injuries. They are a huge blow to the livelihoods of our workers and their families. Therefore, we must not be complacent. My ministry and the WSH Council will work with the industry to further improve WSH in Singapore. Let me elaborate.

    RISK MANAGEMENT FOR COMPANIES
  35. I agree with Mr Yeo Guat Kwang that all companies should implement risk management as it is the cornerstone of safe and healthy workplaces.
  36. The WSH Council introduced a Risk Management Code of Practice last year. It builds upon existing guidelines and is designed to help companies implement risk management effectively. I urge all companies to adopt this code and tap on assistance schemes such as the WSH Assist programme if they have not already done so.
  37. The WSH Council will continue to build up companies’ capabilities in risk management through the bizSAFE programme. I am glad to share the take-up is strong and more than 14,000 companies have benefitted from the programme thus far. I encourage more companies to do so.

    WORK AT HEIGHTS REGULATIONS
  38. Mr Seng Han Thong asked for an update on Work at Heights regulations. Work at Heights has consistently been a top contributor of workplace fatalities and injuries.
  39. We have made modest gains in this area. Fatalities resulting from falls at work fell by more than 30% from 26 cases in 2011 to 17 cases in 2012. The improvement is in part a result of the strong commitment by the industry, led by the WSH Council and the Work at Heights Taskforce.
  40. Unfortunately, while safety standards have improved, falls still contribute more than 30% of total workplace fatalities in 2012. This is still an area of major concern for us here in MOM and therefore, more needs to be done to raise standards.
  41. Last year, I shared that MOM was considering the introduction of a dedicated set of regulations to better regulate Work at Heights activities. We have consulted the industry extensively over the past year, incorporated key suggestions, and will enact the regulations in April this year.
  42. The regulations will consolidate the Work at Heights requirements that are currently stipulated in different legislations. The new Fall Prevention Plan and "Permit to Work" system for work above three metres will come into force in 2014. This gives the industry more time to comply with them. MOM and the WSH Council will also facilitate companies’ implementation of these requirements.

    ASBESTOS REGULATIONS
  43. I will now address Mr Yeo Guat Kwang's question on MOM's efforts in workplace health.
  44. Our national strategy for WSH, also known as WSH 2018, provides a roadmap to improve both the management of Workplace Safety and Workplace Health in Singapore.
  45. In 2010, we introduced various strategies to improve Workplace Health. Since then, targeted intervention programmes have been introduced to address established Workplace Health risks such as work involving excessive noise, confined spaces and hazardous substances and chemicals. One such area that MOM will focus on this year is work involving materials containing asbestos.
  46. Asbestos causes fatal diseases such as asbestosis and mesothelioma. According to the World Health Organisation estimates, about 100,000 people die every year from asbestos-related diseases worldwide.
  47. In Singapore, a total of 61 cases of work-related mesothelioma were confirmed from 1981 to 2012, a period of 30 to 31 years. These diseases can be prevented by limiting the exposure of workers to asbestos, which can occur when asbestos-containing materials are not identified and safely removed during renovation or demolition works.
  48. Last year, MOM inspected 36 buildings undergoing renovation and demolition. We found that about 30% of these buildings had asbestos-containing materials and inadequate measures were taken to prevent asbestos exposure. Therefore, this is an area we need to address.
  49. MOM will enhance the existing regulations on work involving asbestos-containing materials. They will require, where it is reasonably practicable to do so, that all asbestos be removed from the building before demolition or renovation is carried out. In addition, a licensing regime will be implemented for contractors carrying out asbestos removal works.
  50. We are currently consulting the industry on the regulations. We target to enact the regulations in the second half of this year. MOM will also step up our asbestos programme over the next two years to educate contractors and workers and strengthen capabilities within the industry to better manage work involving asbestos.
  51. More help will also be extended to workers who contract asbestos-related diseases. We will amend the Workers’ Fund to help these workers with their out-of-pocket medical expenses. More help will also be provided to the families of workers who are in financial need.
  52. As the Workers' Fund has limited funds, we are exploring avenues to sustain it. At the same time, I would like to emphasise that the Workers’ Fund does not remove the liability of employers to compensate workers for asbestos-related diseases.

    WORK INJURY COMPENSATION CLAIMS
  53. Mr Zainal Sapari has expressed two concerns regarding work injury compensation (or WIC) claims. The scenario painted by Mr Zainal Sapari, on the upkeep and maintenance of foreign workers during the claims process, is unacceptable and MOM will take action against such cases. Employers have a responsibility to provide acceptable accommodation under the Employment of Foreign Manpower Regulations. Those who fail to do so face a maximum fine of $10,000 and/or jail term of up to 12 months. Workers who face issues with their accommodation should approach MOM for assistance.
  54. Mr Zainal Sapari is also concerned that the presence of lawyers may result in delays to the WIC claim process. The claims process under WICA is generally simple and cases usually do not require a lawyer. Records show that about 3 in 4 cases did not involve lawyers.
  55. Nevertheless, we understand that there may be reasons why claimants choose to seek legal advice, for example when the dispute involves points of law such as whether the accident arose "out of and in the course of employment". This is different from the claim process under the Employment Act where the dispute is largely one of facts.
  56. However, additional parties, such as lawyers, might also delay the claims process. This ultimately delays workers' compensation. We leave it to workers to decide whether they want to engage a lawyer or not. But the fact remains that the process can be done very expeditiously and they essentially do not need a lawyer to file their claims.
  57. To better ensure that WIC proceedings remain expeditious, MOM introduced guidelines for party-to-party costs from 1 March this year. We also regularly educate claimants on the process to reduce the reliance on lawyers. MOM will impose costs on parties that unnecessarily delay the WIC proceedings.

    REPEAL OF THE FACTORIES (PERSONS-IN-CHARGE) & FACTORIES (CERTIFICATE OF COMPETENCY-EXAMINATIONS) REGULATIONS
  58. Mr Seng Han Thong also asked how MOM will ensure that businesses are not overwhelmed by too many safety regulations. Legislation is required in high risk work processes to ensure safety standards and to shape behaviour. Nonetheless, my ministry regularly reviews our regulations to ensure that requirements we place on industry are meaningful. This is especially when we see that the risk in the work process is low.
  59. One example is our Factories (Persons-in-Charge) & Factories (Certificate of Competency-Examinations) Regulations. Technological advancements have made Internal Combustion Engines and Steam Boilers much safer than they were when the licensing requirement was first introduced in 1960. Even without the licensing requirement, factories are still required under the WSH Act to ensure that operators of the machines are adequately trained.
  60. Given that the machines are now much safer, we do not need to continue to impose additional costs on business through licensing. MOM will discontinue the requirement for persons that operate Internal Combustion Engines and Steam Boilers to be licensed and repeal both regulations with effect from 18 Mar 2013.

    CONCLUSION
  61. Madam Chair, uplifting our low-wage workers and fostering safe and healthy workplaces are a crucial part of MOM’s work. MOM will continue to work with our stakeholders and partners to make work dignified and safe for the vulnerable segments of our workforce.