Speech by Mr Sam Tan, Minister of State for Manpower, at Committee of Supply 2018

Introduction

1. The Minister and Second Minister for Manpower spoke about the need to transform and grow, as well as to adapt and grow. In line with these efforts, I will focus on how we will better support older and low-wage workers. I will also talk about promoting an inclusive, safe and healthy workplace for all workers.
   
   Older Workers
2. Let me start with older workers.
3. The employment outcomes of our older workers have improved over the years. The employment rate of older residents aged 55 to 64 has increased from 64% in 2012 to 67% in 2017. Our older worker employment rate is higher than countries such as Australia, Korea, the US and the UK. In fact, compared to the 35 OECD countries, Singapore would be ranked among the top ten.
4. The unemployment rate for older residents has also remained low at below 3% over the last 5 years, comparable to the overall unemployment rate. This means that the vast majority of older residents in the labour force who want to find a job can find a job, and for those who need assistance to find a job, we will continue to help them through the Adapt and Grow initiative.
   
   Update
5. Last year, we took further steps to enhance the employability of our older workers.
6. First, we raised the re-employment age from 65 to 67 in July 2017. We are heartened to see that both employers and workers have embraced the re-employment concept and our older workers have benefitted. Since re-employment was introduced in 2012, over 98% of private sector local employees who wished to continue working were offered re-employment at age 62. Of those who were re-employed in the same job, 98% did not experience any cut in basic wages.
7. Second, we extended the Special Employment Credit scheme, or SEC, which provides wage support to employers who hire older workers. 93,000 employers who employed over 350,000 eligible older workers have benefitted since SEC was extended in 2017. And since 2011, over $3 billion of SEC has been paid.
8. While results are encouraging, we hope to do even better. Hence, one key priority is to ensure that both jobs and workplaces become more conducive for older workers.
   
   Redesigning Jobs
9. We agree with Dr Intan and Mr Chen Show Mao on the importance of job redesign. It can transform work processes for older workers, which Ms Jessica Tan has also brought up.
10. To encourage adoption of job redesign, we enhanced the WorkPro in 2016 to provide more generous funding of up to $300,000 per company, and to complement other capability development grants.
11. Since WorkPro’s enhancement, more than 650 companies have tapped on the funding support, benefitting more than 10,000 older workers aged 50 and above.
12. Through working with the companies, we learnt that job redesign not only makes older workers’ existing jobs easier, safer and smarter. It also helps to create new jobs and opportunities for them.
13. One example is Mdm Toh Kim Pong, a 69-year-old employee at Goodwood Park Hotel. In the past, 2 younger employees were needed to transport linen to the laundromat. To do this, they have to push trolleys manually, carrying up to 100kg of linen, up a steep slope and across an open-air carpark. Because of her age, this was a task that Mdm Toh could not do.
14. The hotel then decided to tap on WorkPro to introduce motorised trolleys and train older workers like Mdm Toh, to operate them.
15. As a result, Mdm Toh is now able to take on a new task previously too strenuous for her. This has also led to a wage increase for her.
16. I encourage more companies to make their jobs age-friendly through the WorkPro Job Redesign Grant, which is part of the LED Scheme mentioned by the Second Minister earlier. This will help support the growing pool of older Singaporean workers.
    
    Age-friendly Workplaces
17. Mr Chong Kee Hiong and Ms Cheryl Chan have asked about age-friendly workplace practices. Mr Patrick Tay and Ms Tin Pei Ling also surfaced the issue of ageism.
18. The tripartite partners share these concerns too and have been working hard and taking measures to address them. We all agree that what we should all do is to work towards a workplace culture where our older workers feel valued, and companies think about the needs of older workers when they put in place policies and practices.
19. In fact, employers are recognising the benefits of having age-friendly and inclusive workplace practices. According to a 2016 survey by the Tripartite Alliance for Fair and Progressive Employment Practices, or TAFEP, 7 in 10 employers are willing to redesign job scopes to accommodate older workers. Still, there is room for improvements.
20. I am happy to say that the tripartite partners have developed a Tripartite Standard on Age-friendly Workplace Practices. It will promote inclusive workplaces that meet the specific needs of older workers. More details will be shared, when the Standard is launched next month.
21. As we continue to encourage inclusive behaviour, we will also take action against discriminatory practices. There is no place for age discrimination in our workplaces. TAFEP looks into all age-discrimination complaints, and MOM will not hesitate to take enforcement action against errant employers who discriminate against older workers.
    
    Low-wage Workers
22. Let me now talk about our support for low-wage workers.
23. This Government pays particular attention to low-wage workers. We strive to uplift their wages, enhance their employment conditions, and improve their lives even as they work hard and make an honest living.
24. We do this in 2 ways. First, through broad-based efforts. Second, through additional support for specific sectors.
    
    Broad-based Efforts
25. The Workfare Income Supplement (WIS) scheme is a key pillar of our support for low-wage workers. As a permanent scheme, it helps low-wage workers build up their retirement savings and meet their daily needs as they work.
26. Since WIS started in 2007, $5.5 billion has been paid to about 830,000 recipients. Of which, $3.7 billion went to their CPF, for their retirement. $1.8 billion was given to them in cash, to supplement their income.
27. Besides supplementing their income, Workfare Training Support (WTS) gives them opportunities to up-skill and re-skill to improve their employability. Since 2010, more than 270,000 low-wage workers have tapped on WTS to upskill and reskill. More than $280 million was used to support such training efforts.
28. Mr Zainal Sapari pointed out that some of our low-wage workers remain vulnerable and may face unfavourable working conditions. We fully share his concerns.
29. MOM and CPF Board are aware of this. We have stepped up public education and enforcement efforts through the WorkRight initiative. WorkRight ensures that low-wage workers are aware of and not denied their employment rights. Today, 8 in 10 employers inspected were found to have complied with the Employment Act and CPF Act, an increase from 7 in 10 in 2012. We take firm actions, including prosecution, against errant employers. I urge Members to inform MOM if they come across workers who are denied their statutory rights.
    
    Progressive Wage Model (PWM)
30. For specific sectors, we also take a more targeted approach.
31. In particular, the tripartite partners have implemented mandatory Progressive Wage Model, or PWM, in the cleaning, security and landscaping sectors. Through the PWM, over 70,000 resident workers have benefitted from better wages and better career progression. Real wage growth of workers in PWM sectors have exceeded resident median income growth for the past 5 years. Workers in these sectors also now have clear progression pathways that commensurate with their skills and competencies.
32. Let me now share the progress in each of our PWM sectors in greater detail.
    
    Cleaning Sector
33. For the cleaning sector, the PWM was announced in 2012, and came into effect in 2014. We have seen positive results. From 2011 to 2016, the real median gross wages of full-time resident cleaners grew by about 5.7% per annum.
34. We enhanced the Cleaning PWM in December 2016 to increase their wages further. More than 41,000 cleaners can benefit from an increase in PWM basic wages, between 3.4% and 4.6% per annum, for 6 years, from July 2017. From 2020, cleaners will also enjoy a mandatory annual bonus equivalent to at least 2 weeks of monthly basic wages.
    
    Security Sector
35. Similarly, we have seen good progress for security officers. Since the PWM was announced in 2014 and implemented in 2016, the real median gross wage of full-time resident security guards grew by 6.4% per annum from 2011 to 2016.
36. The tripartite partners worked together to further enhance the security PWM in November 2017. Over 34,000 resident security officers can look forward to higher PWM basic wage increases each year, between 4.1% and to 5.7%, for six years, from 1 January 2019.
37. To transform the industry, the tripartite partners took a decisive step to improve the working hours of security officers. From 1 January 2021, MOM will no longer grant overtime exemption for the security industry. This will reduce their current overtime hours from as high as 95 hours a month, to not more than the statutory limit of 72 hours. To become more manpower-lean and productive, the industry is committed to adopt greater use of technology. With these measures in place, workers will stand to benefit from having higher wages and shorter working hours. This is something that we really want to do for our security workers to modernise the industry and also to professionalise their careers.
    
    Landscape Sector
38. For the landscape sector, the real median gross wage of full-time resident landscape maintenance workers has increased by 3% per annum from 2011 to 2016. We will continue to look at improving their wages.
39. With the cleaning and security PWM enhanced in 2016 and 2017 respectively, the tripartite partners will review and enhance the landscape PWM this year. More details will be announced by the Tripartite Cluster for Landscape Industry (TCL) after tripartite negotiations have concluded.
    
    Improving Lives of Low-wage Workers
40. Through our tripartite efforts, both our broad-based measures and sectoral efforts have improved the lives of our low-wage workers. The wages and employment conditions for low-wage workers across the board have improved over time.
41. Over the past 5 years from 2012 to 2017, the real income growth at the 20th percentile of full-time employed citizens grew by 4.3% per annum, faster than at the median of 3.9% per annum. Not only did their income increase, they also worked shorter hours. Resident low-wage workers worked fewer hours per week, from 49 hours in 2012 to 46 hours in 2017. There was also greater job stability for low-wage workers. More workers were placed on permanent contracts, and the number of casual on-call workers decreased.
42. Even so, the work does not stop for us. We will continue to work with the tripartite partners to support sustainable wage increases through the PWM, and raise employment standards through best sourcing.
    
    Wider Adoption of the PWM
43. Given the good progress in the three PWM sectors, we want to see further adoption of PWM in other sectors. The PWM can benefit workers beyond low-wage workers, to other rank-and-file workers as well. As a start, lift firms and unions are working with BCA to introduce a voluntary PWM for lift technicians. This is especially useful with a growing demand for lift technicians in Singapore. MOM will support them in this effort. More details will be announced by the industry when ready. MOM also stands ready to support tripartite partners to develop and adopt PWM voluntarily for other sectors.
    
    Raising Employment Standards through Best Sourcing
44. Second, the Government will further safeguard the basic employment rights of outsourced workers in the cleaning, security and landscape sectors.
45. Today, employment law criteria are already part of the professional accreditation and grading frameworks, for the cleaning and security sectors respectively. We will take a further step to introduce employment law criteria for the landscape sector. Starting this year, the National Parks Board (NParks) will introduce employment law criteria in the Landscape Company Register (LCR). Going forward, employers in all three of these outsourced sectors stand to lose their eligibility to bid for Government contracts, if they contravene employment-related offences.
46. Additionally, from January 2019, the Government will only procure from companies with consistent track records in their employment and professional standards. We will require cleaning, security and landscape companies to have two consecutive accreditation status, good grading and LCR status respectively. More details will be shared with the respective industries in the coming weeks.
47. This means that companies in these three PWM sectors must treat their workers fairly in order to qualify for government contracts.
48. Through this measure, the Government is taking the lead. The labour movement and the PWM tripartite committees led by Mr Zainal will urge more businesses to follow suit. I hope more businesses will heed the call and adopt similar best sourcing practices.
49. The tripartite partners will also continue to find ways to improve the employment conditions of workers in these PWM sectors. To this end, the PWM tripartite committees should study further measures, such as Mr Zainal Sapari’s proposal to mandate rest areas in these outsourced sectors.
50. Mr Zainal has also asked to compel employers to pay for outpatient treatment for low-wage workers. However, doing so may inadvertently affect the employability of workers with poorer health. This is a very vulnerable group of workers that the tripartite partners want to help, and we do not want to introduce something that may inadvertently impact their employment opportunities. Under our CPF system, employers are already required to contribute to their employees’ Medisave. At the same time, the Government makes additional Medisave contribution via schemes such as WIS. With our 3Ms (MediSave, MediShield Life and Medifund) and significant Government subsidies through schemes such as the Community Health Assist Scheme (CHAS), no Singaporean will be denied access to healthcare because of an inability to pay.
51. Mr Zainal also called for mandatory Annual Wage Supplement, or AWS, for low-wage workers. Under our existing Flexible and Performance-based wage systems, a worker’s total annual wage package is made up of 3 components: monthly fixed, monthly variable and annual variable, where the AWS is part of the annual variable component. This design of monthly fixed, monthly variable and annual variable components varies widely across industries, companies, and occupations. As such, the consensus of the tripartite partners is to give employers and unions the flexibility to negotiate their total annual wage package, including AWS, and not mandate the structure of wage payments.
52. I have spoken about our efforts to support older workers and low-wage workers. Our initiatives will particularly help the group of older low-wage workers. For example, they receive higher WIS payouts and benefit more from the PWM.
    
    An Inclusive Workplace for All
53. Besides supporting older and low-wage workers, we should ensure that our workplaces are inclusive for all. Not only should we make every worker a better worker, every job a better job, but we should also make every workplace a better workplace.
54. A better and more inclusive workplace, has no room for discrimination, on account of gender, race or mental condition. And I thank Dr Intan, Mr Muhamad Faisal and Associate Professor Daniel Goh, for raising this point.
55. To this end, all employers should embrace fair and merit-based employment as stipulated in the Tripartite Guidelines on Fair Employment Practices. MOM will also take appropriate enforcement actions against employers found to have engaged in unfair employment practices.
56. At the same time, we should make our workplace more accommodating towards persons with disabilities, as pointed out by Ms Kuik Shiao-Yin. The government support employers in this aspect. For example, the Open Door Programme (ODP) provides funding support to employers who hire persons with disabilities and re-design jobs for them.
    
    Foreign Workers
57. Mr Melvin Yong, Mr Kok Heng Leun, and Mr Louis Ng asked about protections and measures in place for our migrant workforce, including electronic payment of salary, employment contract, and recruitment practices.
58. We are fully committed to protecting the well-being of our foreign workers.
59. There are laws and policies for areas including salary payment and local employment agency fees. By law, foreign workers are to be issued the Key Employment Terms (KETs) within 14 days of arrival. The KETs state clearly the employment terms including working hours, leave benefits and the salary amount. It is an offence under the law for employers to reduce the salary from what is stated in the In-Principle Approval (IPA) letter without the worker’s written consent. To limit financial burden on workers, local employment agencies are also prohibited from charging foreign workers recruitment fees more than one month of their salary per year of service.
60. We also ensure that foreign workers know their rights and responsibilities, and assist them when they need help. We work with our partners, for example the Migrant Workers Centre (MWC), to educate both workers and employers on the benefits of salary e-payment. The MWC also assists foreign workers with valid salary claims to seek employment.
    
    Workplace Safety and Health
61. Finally, Mr Melvin Yong has spoken on Workplace Safety and Health.
62. Ten years ago, we set ourselves a “WSH 2018” target of reducing the workplace fatal injury rate from 2.8 per 100,000 workers in 2008 to 1.8 by 2018.
63. I am happy to report that we have made significant progress thanks to efforts from tripartite partners, WSH Council, WSH professionals, and workers. Our workplace fatality rate dropped to 1.2 last year - the lowest rate recorded for the whole workforce.
64. But we should not be complacent. We are still lagging behind other countries with a workplace fatality rate of less than 1.
65. We can do more. Over the next ten years, we must aspire to provide our workers with workplaces that are among the safest and healthiest in the world.
    
    Formation of WSH2028 Tripartite Strategy Committee
66. To do so, we need new breakthroughs in our strategy. We should chart out a comprehensive plan for WSH development over the next 10 years.
67. To do this, I am pleased to announce that we will convene a new WSH2028 Tripartite Strategy Committee or WSH2028 Committee in short. The committee will comprise leaders from industry, unions and key players in the WSH landscape and consult widely. It will be chaired by Mr John Ng, CEO of Singapore LNG Corporation and a WSH Council member.
    
    Broad Areas of Study
68. Mr Melvin Yong has given good ideas on how to improve our WSH performance, such as near-miss reporting, appointing WSH representatives, and others. The WSH2028 Committee will study these suggestions.
69. While the WSH2028 Committee will formulate specific recommendations, I will sketch out broad areas that the Committee will study.
70. First, we will find ways to strengthen WSH ownership among companies and workers. This means being self-motivated to improve WSH. The Committee will study how we can influence everyone from C-suite executives to rank-and-file workers to being more committed to WSH.
71. Second, we should increase integration of workplace safety with workplace health as part of Total WSH. Improving both workplace safety and workplace health is important because they reinforce each other. We will study further ways to help companies detect and reduce both safety and health risks.
72. Third, we need to deepen WSH capabilities of companies and workers, such as by raising competencies of WSH professionals, and improving quality of WSH training providers.
73. Fourth, we want to strengthen partnerships with different stakeholders to promote and reinforce positive WSH behaviour. This includes having insurers price premiums more accurately based on claims history of companies, technology companies providing solutions to detect risky work situations, and hospitals reintegrating injured workers as part of the Return-to-Work programme.
74. Lastly, the Committee will review the regulatory regime to ensure that it remains effective without excessive burden on compliant companies. The Committee will consider ideas such as differentiating our enforcement approach based on firms’ past track records.
75. The WSH2028 Committee will start work in April and intends to complete its report in a year’s time.
    
    Conclusion
76. Mr Chairman, I have outlined the key efforts of MOM in supporting older and low-wage workers, and promoting inclusive, safe and healthy workplaces. Through our tripartite efforts, we have made encouraging progress in these areas.
77. There is more work to be done. We will press on with our efforts to make Singapore a great workplace for our workers.
    
    Thank you.