Committee of Supply – Head S (Ministry of Manpower)

Singaporean Core and Singaporeans First

Mr Zainudin Nordin (Bishan-Toa Payoh): Madam, I beg to move, "That the total sum to be allocated for Head S of the Estimates be reduced by $100".

Madam, as we chart an inclusive quality growth for Singaporean workers, I would like to bring forth some fundamental principles which I believe need to be discussed together. At the onset, the Government must remain committed to fostering an inclusive society.

May I suggest three areas of focus that are Singaporean-centric? First, we must make sure that our low-wage workers will share in the progress of our economy. Second, there are economically-inactive Singaporeans who wish to return to the workforce and the Government should come up with ideas on now we can help them ease their way back into the workplace so businesses can tap on much needed workers. Third, our professionals, managers and executives (PMEs) must remain competitive and employable as the overall skills and educational profile of Singaporeans have improved while, at the same time, our foreign manpower policies are more accommodating at the professional level.

I call upon our Government to moderate Singapore's foreign worker growth while ensuring sustainability. We had noted that the Government has committed to slowing the pace in the White Paper discussion. The question is how the Government can implement this in the best interest of Singaporeans, given that foreign workers do play a complementary role in supporting our economic development.

But I think, Madam, we should not go to the extreme of zero growth of foreign workers, like what was suggested in some circles. I believe that there are two important aspects to consider when moderating the increase in the number of foreign workers. First would be to ensure that the foreign workers we do bring in at the different levels will be of better quality, so as to raise the quality and productivity of our workforce. The other would be to assist companies in moving up the productivity ladder and contribute to quality growth and good jobs for Singaporeans. This would be a key area of concern which the Government has to address.

Madam, we also hear "loud voices" from Singapore professionals who are concerned about their career prospects and aspirations. In my view, as the Government moderates the increase in foreign worker numbers, our local PMEs will still need to distinguish themselves from the competition. It is good that the education and the skills profile of our locals have been improving over the years and we will expect them to be occupying the high-skilled jobs in the future. But still, Madam, the Government needs to articulate the specific plans it has about how Singaporeans will be able to gain access to higher-paying jobs.

During the debate on the Budget Statement last week, this House had endorsed a very far-reaching set of planning parameters, among which was that we projected that two-thirds of Singaporeans will, in 2030, be engaged in white collar jobs. This is a commendable vision, as it will mean that the majority of Singaporeans be engaged in high quality, and higher paying jobs.

But logically, in the interim, while we go to a step, many steps must be taken to make Singaporeans employees of choice among employers. What steps must be taken today to make sure that Singaporeans have the correct skill set, attitudes and aptitudes to take on these jobs of the future? How can we enhance our education and training regimes to help Singaporeans upskill and regularly reskill themselves, so that they will be attractive as talents for both local and foreign companies operating here, as also expatriates that may be posted overseas?

Madam, I have long argued that even as we invite foreign companies to invest in Singapore, and offer them incentives to do so, we must also ensure that there is a system for such companies to transfer their skills and know-how to Singaporeans, so that, over time, more Singaporeans will hold key roles within such companies. Please do not think that this is an impossible task, because a number of very reputable companies have already made this transition.

Take the example of Starhub. When it started in 2000, it had a foreign national as its CEO. It has taken 13 years but, recently, a Singaporean, Mr Tan Tong Hai, is named its CEO. I note that many of the key staff in Starhub are also Singaporeans. This is a good example of technology and expertise transfer, and opportunities for locals to move up the corporate ladder. Another example is one of our colleagues here, Ms Jessica Tan, who was Managing Director of Microsoft Singapore, until last year. I am happy to say that she was given even higher responsibilities, when she was promoted to look after the Asia Pacific region last year. Congratulations to Ms Jessica Tan! We need more examples, and more examples of Ms Jessica Tan and Mr Tan Tong Hai.

The point I am making, Madam, is that it is not impossible to develop and groom talent to take over roles from foreigners. We could call this "localisation" of management. I urge the Government to consider including the transfer of leadership among the criteria for companies to receive investment incentives. Such measures, when applied seriously, and monitored regularly, will go a long way towards removing the perception that there is a glass ceiling for our local talent within foreign companies. Further, in monitoring such transfer of skills, we can also learn where Singaporeans are lacking, whether in terms of education, skills or even networks, so that we can help bridge these gaps, through appropriate interventions.

Madam, looking at the low-wage workers, we have supported them through the Workfare schemes. But since the last major review in 2010, how can we also enhance, not only the numbers, but also provide them better ways to move up so that they can improve their opportunities to improve their condition and employability? Would there be other new initiatives to strengthen Workfare? We must ensure that our low-wage workers are not left behind in this positive.

We also know, Madam, that the current tight labour market, the economically-inactive or stay-home mothers and elders would also be a valuable alternative pool of labour that companies could use. We need an inclusive workplace to encourage more of these Singaporeans to return to the workforce. May I know what are the plans by the Government to show that they would be interested to help these people who are inactive to come back and transit into the economy.

So, Madam, I would like to reiterate the point I made last week for us to consider that, in every policy, we hold Singaporeans at the core of whatever we do. They, above all, must benefit from the quality inclusive growth that we envisioned.

Rethinking Employment and Wage Paradigms

Mr Laurence Lien (Nominated Member): Mdm Chair, in recent times, wage increases have lagged cost increases for many Singaporeans. This is extremely worrying.

I analysed MOM's statistics and found, disturbingly, that gross real median wages across the common occupations listed fell in all nine occupation categories from 2007 to 2011. In fact, gross real median wages also fell in every occupation category from 2000 to 2011 except for two – managers and professionals. Last year, real median gross monthly income, excluding employer CPF, also fell by 1.9% from 2011 to 2012.

Hence, we need to focus on the adequacy of wage increases not just for the low income, but also for a broader group of Singaporeans. The question then is how to do this sustainably.

We already know jobs need to be restructured. Technology, work redesign, economies of scale, cross-training and skills upgrading, can all help to improve value created and productivity.

What I believe is most fundamental, is we need more engaged employees. The level of job engagement in Singapore is very low. A 2012 Accenture survey showed that Singapore ranks the second lowest globally in terms of career satisfaction, with 76% of respondents dissatisfied with their jobs. A 2012 Hay Group global study also showed that 52% of employees in Singapore intended to leave their employers within five years, higher than the global average of 44%.

We seem trapped in a vicious circle. Employees are assumed to lack loyalty and, hence, little is invested by employers in developing and paying them adequately. They become less engaged and loyal. Employers invest even less in them, and they indeed resign, go on to another job, and the cycle repeats.

How do we turn this around? One critical way is for employers to have a mindset shift towards employee ownership and engagement. They must increase the stake that employees have in their company. More employers can develop and consider employee share ownership schemes to reward loyal, contributing employees. They should also consider profit-sharing or gain sharing. The Government can consider ways to incentivise such schemes.

But quite apart from extrinsic rewards, many employers must overhaul their human resource systems, and MOM must place much more emphasis on upgrading HR practices throughout the nation. Employers need to leverage and grow the strengths and assets from within their workers, and empower them to make their companies more dynamic.

2.15 pm

Enlightened employers must step forward and lead others. Top employers awards in Singapore tend to focus on the large companies. It is time to highlight good SMEs as role models. We also need stronger industry associations that lead in the upgrading of practices in their sector.

Special attention has to be paid to those occupations with persistently low productivity and wages, like cleaners, labourers and service workers. Many of these workers are discouraged and have low self-esteem. We need comprehensive plans to build up their self-esteem, working with social workers, for example, so that the low-wage workers stay competitive and constantly upgrade.

All in, all employers must treat employees as more than just a unit of production and tap into the intrinsic motivation of workers so that they see their work as more than just a job. They would care about doing the right thing more, be more loyal and collaborative, and they will also then become much more creative, enterprising and productive.

Productivity for Better Wages and Jobs

Mr Christopher de Souza: The Government's introduction of the Wage Credit Scheme is an encouraging step towards motivating companies to pay higher wages to Singaporean workers.

One of the essential benefits to be reaped from the scheme is the Government's pledge to co-fund 40% of wage increases up to $4,000 given to Singaporean employees, in a bid to provide support for employers to raise their local employees' wages while incentivising them to share productivity gains with their employees. The Wage Credits are estimated to cost approximately $3.6 billion over the three years.

Since the Government is investing this large pool of money to give both companies and workers a leg up, how can we ensure that the companies actually utilise this opportunity to reach the maximum returns or to reap the maximum returns? The projected Wage Credit Scheme needs to achieve its aim of encouraging employers to share the fruits of productivity gains.

If the goals of this scheme are actualised, it would smoothen our companies' transition into higher value, less labour-intensive operations, while advancing the skills of our Singaporean workforce. Higher wages could result – and this must be encouraged.

Therefore, I would like to ask if the Government would be able to share its vision as to how the productivity incentive schemes, coupled with the Wage Credits scheme, would achieve the goal of higher wages and advanced skills for our Singaporean workforce.

Professionals, Managers and Executives (PMEs)

Mr Patrick Tay Teck Guan (Nee Soon): Madam, during the Budget debate, my fellow labour Members have touched on the needs of various groups of workers, and myself touched on the challenges confronting Professionals, Managers and Executives (PMEs). Our collective message was to value every worker, and my message was to value every PME. I submit that we need to look beyond what the Budget provides and into existing laws, guidelines, policies and programmes to ensure we stay relevant and to cater to this growing population of PMEs in Singapore to ensure they stay future-ready and are future-proof.

From a policy perspective, I am glad that MOM has taken on my suggestion and is seriously looking into labour market testing, tightening the Employment Pass and S Pass framework. And all these are laudable steps towards advancing the interests of our local PMEs. I hope to hear from the Minister how long he targets this analysis of labour market testing to complete.

For young PMEs, they are often caught between choosing the job of their passion or meeting their financial needs and paying off their study loans. Regardless of the choice they make, they are often at the mercy of the terms and conditions of their prospective employers. If they choose their passion, there could be insufficient good employment opportunities. Even in jobs they seek for a living, they may sometimes be coerced to accept contract work and exploited on inferior terms compared to their peers. My fellow Labour Member Mr Alex Yam has also shared on this issue in this House. There is a lack of mentoring programmes that will guide young PMEs to make wise career choices suiting their strengths and potential. WDA's Caliberlink has been doing some of this work but I foresee a serious need to further enhance the capabilities from a systemic level to map and mentor young PMEs towards fulfilling their life and career aspirations.

For female PMEs, there is some work-life enhancement through the WOW! fund to encourage employers and ease our female PMEs to manage their careers and take care of their families. However, we can do more in this. I have mentioned in my speeches that if women are not able to handle both important aspects well to their expectations, they would always be compelled to give up their careers for the sake of their families. Yet, we also do not do anything for stay-at-home moms to recognise their contributions towards their families and our society. I would like to repeat my call again for stay-at-home moms to be given top-ups in their Medisave and Special Accounts.

As for flexible work arrangements, I would like to join labour Nominated Member of Parliament Ms Mary Liew and several others in this House to repeat my call again for it to be legislated so that employees have the right to request for such arrangements. In examining the contributions of female PMEs, they should not be judged by face time in the office but measured in actual work outcomes. For our female PMEs, the decision to have a family is a difficult one. The measures that we have introduced in the Marriage and Parenthood package have been useful to a certain extent. To augment, we need to look at re-designing the way we work, childcare and living arrangements such that it will not be a mad rush from one point to the other, and that employers have a stake in their employees' families' well-being.

Mature PMEs aged 40 and above are often the most vulnerable segment in any downturn or company restructuring. If they lose their jobs, they are often unable to start afresh with the same salary should they go into a new industry or join another new company. They are also often saddled with housing mortgages, financial commitments, supporting their children's education and looking after their parents and their in-laws. We have seen an increase in the relative percentage and number of PMEs being retrenched in the past few years and they mostly fall into the mature category. What can MOM do better to look after the interests and welfare of these mature PMEs to be affected in such restructuring exercises as they have the most to lose? We should take action to provide mature PMEs greater confidence in their future by providing training and post-graduate support to them should they be keen to further their knowledge and professionalism.

I, therefore, urge MOM to seriously look at second skilling all PMEs, especially those mature PMEs, so that they can weather any financial storm. The second skill can be in any area of the PMEs' passion and interest. For example, a banker may have strong events management or counselling abilities. In the event of a downturn and layoff, he or she can then take up work outside of the banking environment and work in an events company or even join the social service sector to put his or her counselling skills to good use and also make a living. Second skilling, coupled with a full-fledged career placement service, would be a great boon to PMEs, especially mature PMEs. Most importantly, employers must change their mindsets about the hiring of mature PMEs, and I hope the Civil Service will also lead the way in this.

The number of freelance PMEs or professional freelancers is also on the rise and was last recorded at about 170,000. They also represent another major vulnerable group of PMEs as they do not have the traditional support of employers in benefits such as medical coverage, work injury insurance, union representation and so on. As independent contractors, they are subject to the terms imposed on them by the buyers of their services. It is often a "Big Fish versus Small Fish" scenario as the freelance professional is often battling it out alone and may not have the deepest of pockets. Often, their only economically viable recourse is through the Small Claims Tribunal but there are its limitations and constraints.

I have outreached and engaged many freelance professionals and they share that seeking timely payment for the services they have rendered is often a challenge. Unlike unionised employees, they are not able to seek the help of a union to represent them in these cases. I would, therefore, like to call upon MOM to look into their plight and to see how the interests, welfare and work conditions of freelance professionals can be better looked after. This can be in the form of specialised dispute resolution mechanisms to relevant guidelines to set minimum standards for operators or businesses to comply with in the engaging of freelancers. We could possibly pilot with certain industries with larger numbers of freelancers, such as the creative industry which has more than 30,000 in the profession.

Other than late or non-payments, contract terms severely unfavourable to them, such as the surrender of complete intellectual property rights to their concept, idea, photo, design, script or score, are often another challenge that freelancers have to bear. By the same token, they have shared about the lack of insurance coverage in the event of an injury sustained in the course of work. I would like to urge that service buyers be made to provide work injury insurance for these freelance professionals as part of their contracts. Until such time this is done, I urge buyers of services and those who contract freelancers to do work to cover them with work injury insurance so that they are protected when carrying out work as part of the contract.

Singapore's workforce demographic profile and median wages have changed and risen over the years. In my maiden speech in this House in 2011, I urged the Government to look into a review of our labour legislation, in particular the Employment Act, to better protect this growing number of PMEs. For a start, I asked specifically to look at increasing the scope of coverage of our Employment Act to cover this growing populace of PMEs. I repeated that call again during Budget and COS last year, and I am glad and thankful to the Minister for Manpower for acting on that request and announcing that his Ministry will review the Employment Act during his Ministry's Workplan Seminar on 17 April last year.

NTUC has since consulted our unions and leaders and then shared our wish list for the various amendments it sought. Our leaders agreed that more protection for PMEs should be availed through the Employment Act. PMEs, like rank-and-file workers, are these days subject to termination and dismissal and have little recourse, save for civil suits, whose costs may far outweigh the benefits. In the same vein, there is also a need to revise the laws to protect the vulnerable groups of workers and also review provisions in the Act to stay current and relevant with a changing employment landscape and rising wages.

As such, we pushed for the need to raise the non-workmen salary levels, currently set at $2,000 within the Act, to keep pace with the rising salaries of the workforce. For low-wage workers, we advocated for the mandatory provision of payslips and employment contracts. In the wish list, we also asked for greater protection of outsourced workers and those on short contract terms, and recognition of medical certificates from Traditional Chinese Medicine physicians. In view of shorter employment periods and terms these days, we advocated for the reduction of the three-year time bar to qualify for payment of retrenchment benefits.

Finally, I also asked for the upward revision of the maximum amount of claims under the priority of debts provision in section 328 of the Companies Act as that amount has remained unchanged despite rising median salaries since 20 years ago.

Our current labour laws allow the formation of two types of unions, namely, the executive union and the rank-and-file union. Executive unions cover and it can represent PMEs. Besides collective representation of rank-and-file workers, rank-and-file unions currently can individually represent junior executives for limited areas like retrenchment, breach of contract, victimisation and unfair dismissal. In fact, last year, UWEEI, a rank-and-file union, actually represented 35 PMEs individually when they took up their PME members' case to the Industrial Arbitration Court in relation to payment of their retrenchment benefits.

It is, therefore, important for NTUC and our Unions to be able to stretch the scope of representation, as well as in the Collective Agreement, to allow even more PMEs in their workplaces to be covered. This will be both in terms of collective representation as well as areas of limited representation. At the same time, we should also see how we can augment the current tripartite mediation process, including the areas of dispute which has been catered for PMEs. The Industrial Relations Act should be reviewed to facilitate and augment our current efforts to enable unions to individually and collectively represent even more PMEs. I urge employers, including MOM, to help facilitate this as NTUC presses full steam ahead on our outreach and advocacy for PMEs.

The Chairman: Mr Chen Show Mao is not here. Mr David Ong.

Manpower for the Future

Mr David Ong: Madam, after MOM's slew of new measures leading to a further tightening as well as an increase in foreign workers' levy, there is no ambiguity in the minds of businessmen of the end of liberal foreign labour policy. Thus, the competition for labour, both local and foreign, would get even more severe.

At our restructured hospitals and Specialist Outpatient Clinics, it is already a common sight of long waiting time and frustrated patients. The scenario in the service industries is not pretty either. Many restaurants are either operating at sub-par, or closing branches because of labour shortage. Many in the construction industry are sharing similar stories of a slowdown in the bid for new projects. In my mind, this could be the singular cause of many delays in the completion of the HDB's Lift Upgrading Programmes.

I believe a lesson we have learnt is the need to build infrastructure ahead of demand. Our transport delivery system would not improve in the immediate foreseeable future, what with the proposed addition of another 800 buses on the road if we do not have enough bus captains and drivers to operate them. The Government has also announced a slew of infrastructure projects, including ramping up of new homes, doubling our rail network, more pre-schools, hospitals and polyclinics. All these will place an acute strain on manpower, further intensifying competition for labour in an already very tight labour situation.

I know we cannot have our cake and eat it too when it comes to labour policies and economic restructuring, but what is being done to ensure that these public projects do not fall behind schedule? Ultimately, the cost and hassle from delays in public infrastructure will adversely affect the everyday lives of Singaporeans.

2.30 pm

Is the Government's projection of manpower realistic in meeting such expansionary plans? What can the Government do to help companies working on public infrastructure projects as well as those providing essential services cope? Can DRC be reviewed for these companies? Can MOM also review manpower regulations that require the presence of dedicated personnel to perform very specific job functions? Currently, workplace safety officers, health officers and environmental control officers are not allowed to multi-task. MOM can take the lead to review regulations for optimal deployment and utilisation of resources that can contribute to manpower efficiency and higher productivity.

In a tight labour market, can MOM also do more to review its retirement age and re-employ senior workers? MOM should also do more to tap on our latent workforce, in particular, our 450,000 economically-inactive women.

Madam, increasing levy does not seem like the best possible solution to a tough problem. Increasing levy would only lead to companies passing the buck to the consumers, attributing to higher cost of living and inflation. I urge MOM to consider finding more creative methods of increasing local participation in the workforce, rather than the age-old method of increasing levy.

Encouraging Hiring of Locals

Mr Gerald Giam Yean Song: Madam, when Singapore ramped up its industrialisation in the 1960s, one key reason for attracting MNCs, in addition to driving growth and creating jobs, was for these companies to transfer managerial and technical skills to Singaporeans. Subsequent decades saw many companies transitioned from expatriate to local leadership and many Singaporeans rose up the ranks.

However, with the influx of foreign skilled workers in the past decade, we have seen a reversal of progress in this area. Many private sector companies now have their professional and managerial ranks filled with foreigners, although many of them would be classified as locals because they had obtained Singapore PR or citizenship. Even the junior professional positions are often staffed by foreigners when our local graduates should have no problem meeting the job requirements. The Tripartite Alliance for Fair Employment Practices (TAFEP) has said that half of the employment-related complaints they received last year were to do with alleged discrimination against locals. Many Singaporeans have also expressed frustration at the enclaves of employees of the same country found in some companies.

The cause of the problem may not lie with human resource managers and recruiters, but with the hiring managers who are often foreign middle managers. They will only prefer recruiting fellow countrymen to work under them. If TAFEP is to be effective in tackling this problem, it will need to reach out beyond the HR department and educate these middle managers to hire based on merit, rather than nationality.

A mindset change is needed in the way many of our companies recruit and promote talent. Foreign talent is not automatically better than local talent. I call on the Government to take more robust steps to address these concerns and ensure that Singaporeans do not lose out unfairly to foreigners, and we can build a stronger Singaporean Core at all our companies.

Wage Levies – Effective or Inflationary?

Ms Tan Su Shan (Nominated Member): Madam, the hikes in the foreign worker levies were first introduced in 2010. To date, despite four consecutive hikes, the numbers of foreign workers have continued to climb. The inflow of foreign workers has increased every year since the Global Financial Crisis. The net change rose from 33,000 in 2008/2009 to 85,000 in 2011/2012. In other words, even the pace of the acceleration has picked up over the last four years in spite of these hikes in levies. So, this begs the question – how effective are these policies or are they merely going to cause yet more wage-push inflation? It is also not easy for policy makers to accurately gauge what exactly is the inflationary impact of these hikes. It depends on several factors, as they hit different industries differently and depends on the dependency and the DRC.

How much is then passed onto the consumer remains a business decision. But it is telling that our CPI figures remain relatively high. If we do not have the clarity on the inflationary impact of these hikes, what is the risk of policy overshoots?

The other issue to address is policy uncertainty. Whilst it is clear that this Budget has made it not negotiable for companies to restructure, relocate and to be weaned off their reliance on cheap foreign labour, the pace of the change appears pretty fast. Whilst the need for stronger measures on manpower and productivity is acceptable to most, it is another thing to expect they will produce the right outcomes the Government wishes for.

Assoc Prof Randolph Tan from SIM calls it "Singapore walking on a tightrope on foreign workers". This is not a bad analogy. He says there is no guarantee that too sharp a fall in reliance on foreign manpower will not impair a generation of jobs. Well, let us hope that we are not walking too fast on this manpower tightrope and let us hope we do not fall off!

Dependency Ratio Ceiling

Mr Gan Thiam Poh: Madam, we must attract better foreign investments to secure good quality jobs and better wages for Singaporeans. I would like to ask the Acting Minister for Manpower how the Government ensures that the dependency ratio ceiling (DRC) does not undermine the employment opportunities for Singaporeans, particularly in respect to the S Pass policy. I suggest that we need to base the foreign worker quota policy upon the wages of the Singaporean workers, instead of the number employed. Would the Ministry be reviewing the existing DRC criteria for the DRC to be tied to the wages of Singaporeans at not less than $2,500 for S Pass quota and $1,500 for WP quota respectively? I hope MOM can continue to review the foreign worker levy and complement it with the foreign worker quota. A suggestion is to base the foreign worker quota policy upon the wages of the Singaporean workers, instead of the number employed. This may better serve the needs of both Singaporeans and businesses.

Levies

On my second cut, Madam, the foreign worker levy changes aim to shift businesses to productivity-driven growth and ensure Singaporeans remain our workforce core. I would like to ask the Acting Minister if there is a more direct way for employees to benefit from the increased foreign worker levies collected without additional cost to the employers. For instance, a top-up to the Medisave Account for all Singaporeans above 40 years old will help to alleviate their anxiety over medical costs in the long run. Moreover, the foreign worker levy increases have an impact on domestic inflation which affects many Singaporeans.

_Job Flexibility for Productivity Initiative & WCS and Productivity _

Mr Teo Siong Seng (Nominated Member): ( In Mandarin ) : [Please refer to Vernacular Speech on Pg xx.] Mdm Speaker, fellow Members of Parliament, good afternoon! Firstly, allow me to declare that I am the President of the Singapore Chinese Chamber of Commerce and Industry. My speech today will focus on three main points. Firstly, I would like to bring forward two appeals from the businesses to MOM. Secondly, besides wages, local enterprises could retain staff through their corporate culture and strengthening of bonding within the company. Thirdly, I would urge everyone to be more tolerant and accepting of the transformations in the industry, especially within the services sector.

Let me touch upon the first point. In this year's Budget, MOM has expanded the scope of the Job Flexibility Scheme for Productivity to the entire services sector. Businessmen were cheered by this news. However, businessmen hope that this policy would be further liberalised, and be extended not only from within a company but across different companies and subsidiaries within the same group. Take the food and beverage industry as an example. Foreign workers employed as cooks may not be suited to wait on tables or take orders in the same restaurant. However, another restaurant within the same group may face a shortage of cooks. If MOM could allow foreign workers to be redeployed to work in the same type of job within the same group, this could really address the manpower shortage, and go a long way towards improving work efficiency.

The other appeal from the business community is on work pass renewal, which also happens to be a collective wish. Employers hope that when it comes to work pass renewals, MOM could exercise more flexibility in allowing employers to decide on retaining the more experienced and competent of the foreign workers on their payroll. Currently, the work pass renewal criteria are not transparent enough, and companies are relegated to being passive and resigned. With the reduction in foreign worker quota, if only the employer could be given the prerogative to decide on which worker to retain, it would really help the company to drive up its productivity. Hence, we hope that MOM would proceed to discuss with employers on a feasible way to assess work pass renewal criteria, and allow employers to exercise more rights to decide on retaining their foreign workers or letting them go.

Secondly, apart from wages and the job nature, corporate culture and strong company bonding are also key factors for workers to consider whether they wish to remain on the job. In this area, it is worth learning from the example of the Jumbo Group of Restaurants, a household name in the F&B industry.

On the first day of the Lunar New Year, the Jumbo Group's Chui Huay Lim Teochew Restaurant opened for business. Every single employee reported to work as usual, and this is a clear example of bonding. For the past 20 years, during the hectic period of the Lunar New Year, Jumbo's CEO Mr Ang Kiam Meng and his family members would personally help out in the restaurants to work as a team with every employee, gather for the reunion dinner, distribute red packets and celebrate the new year. This is not just a gesture of support from the employer towards their work, but a kind of respect and appreciation for the employees. We should not underestimate the influence of corporate culture and bonding. On the first day of every Lunar New Year, the SCCCI's Secretariat staff invariably turn up for work; although there is no overtime pay, everyone is dressed in their new year best. Through coming together to organise the Lunar New Year gathering, it also strengthens the bonding and togetherness among members and staff.

My third point: at this juncture of economic restructuring, the business model will change; similarly, customers and the whole society need to undergo a gradual mindset change. While enterprises are trying their very best to maintain service standards, customers should also empathise with the difficulties of manpower shortage, and be prepared to adapt to new business models. If greater respect is accorded to all workers, especially for blue-collar and frontline staff, there would be more people willing to take up these jobs, and Singaporeans could then enjoy better service standards.

Mindset change requires the support of the entire community. Last year, in one of my Parliament speeches, I urged the community to adopt an inclusive approach in respecting workers of every industry, and to change their attitude towards blue-collar workers. I have also pointed out that in Japan and South Korea, customers would voluntarily clear up their table after meals. This is an excellent example. This year, I would like to urge local customers to adopt the same inclusive and tolerant approach in accepting changes in the F&B industry and make greater efforts in adopting the self-service concept wherever possible. For example, everyone should do their part to lessen the work of cleaners at hawker centres. This type of education has to start in schools; Primary and Secondary school students should learn to respect the importance of each worker, and understand that every type of job can produce champions. In this respect, I totally agree with Minister Lim Swee Say's statement last week that the tripartite cooperation amongst the Government, employers and employees could lead the way to ensure that all enterprises and workers work together in this way to pursue the dream of creating a better Singapore, and to create a nation that knows how to cherish, care for and respect each and every worker.

If the bosses, workers, customers, the community and the Government can work together in this way, I am confident that the local services sector would overcome this period of economic restructuring.

Continuing Education and Training (CET)

Mr Ong Teng Koon (Sembawang): Madam, it is critical that the Government extends its support for Continuing Education and Training (CET) to facilitate workers, especially older workers who are 45 years and above, to acquire the skill sets to remain as productive stakeholders in the restructured economy. With skills getting obsolete ever so quickly on the back of globalisation, providing continuing education must be emphasised just as much as pre-employment education. To this end, I welcome the Government's initiatives, such as Workfare Training Support and the $500 million topping up of the Lifelong Learning Endowment Fund.

However, I hope that the Government can do more. First, I hope that the Ministry can consider an annual spending target on CET equivalent to a certain percentage of GDP, similar to how MOE targets its spending on pre-employment education. Second, I hope CET can offer vocational courses with more rigour, for example, Diplomas in Mechanical or Aerospace Engineering via modular courses at our ITE or Polytechnics. Third, I hope enrolment to CET programmes will consider job experience and existing skills and not just be solely based on prior academic qualifications. Fourth, I hope MOE can work closely with MOM and industry associations to identify possible ways of collaboration and to bring about more awareness of these programmes.

Tracking CET Wastages

Ms Sylvia Lim (Aljunied): Madam, the Workforce Skills Qualification (WSQ) framework aims to professionalise industry sectors and improve labour mobility into and within these sectors. WSQ is also meant to be "a powerful business tool for employers to access and maintain a skilled workforce." Given these highly industry-centric goals, it is important to track if those trained are contributing to the industries they are trained for or at least using their skills for the economy.

Currently, the Approved Training Organisations (ATOs) are required to conduct post-course evaluations using Kirkpatrick's four-level evaluation. I also note that the Institute for Adult Learning has issued a note to practitioners in 2011 on the need to monitor and evaluate CET activities to ensure accountability for tax dollars spent. How is the Workforce Development Agency tracking whether those trained are contributing to the industries or to the economy generally? If so, what does the data show and are there areas to review to minimise resource wastage?

The Acting Minister for Manpower (Mr Tan Chuan-Jin): Madam, with your permission, may I ask the Clerks to distribute handouts to Members.

The Chairman: Yes, please [ Handouts were distributed to hon Members ].

Mr Tan Chuan-Jin: Let me begin by thanking Members in this House and members of the public for the many thoughtful comments on Singapore's increasingly complex manpower landscape. The issues at hand do not have straightforward answers and they also cannot be taken lightly because there is very real impact on the lives of all Singaporeans.

2.45 pm

I have always believed that we should see how best to tap on the broader public to shape some of our policies. The further upstream we go, the more space we have to do this. In both my portfolios here in MOM and in MND, I have found that it is quite possible to incorporate as many of the public's perspectives into our policy-making as possible. In the process, it is important that we therefore come up with policies which will be very much people-focused and have the interest of the people at heart; to make sure that the theoretical understanding or the understanding of policies can be translated in practical ways, in very real ways that impact people's lives.

The "Our Singapore Conversation" (OSC) process is one way through which the Government can proactively do this. We have found that useful. What seems clear from the OSC is that Singaporeans have a number of issues and questions they are concerned about.

First, can my children and I look forward to the future with Hope? Secondly, will I see more Heart in our policies? Thirdly, will I still be honestly able to call Singapore Home as we look at the future?

I think all of us must be sure that the answer for each question is an unequivocal "Yes". This must be the focus of this Government. In this year's Budget, throughout this Committee of Supply (COS) debates, and our execution of policy, our various Ministries aim to ensure that Singaporeans can look forward to the future with Hope and with many opportunities for them and their children. At the Heart of all our policies, it has to be people-focused, and that Singapore will continue to be the best Home for all Singaporeans. My Ministry will do likewise.

To start, let me provide an update on our overall labour market and unemployment situation. We all know that it is not possible to have zero unemployment. But even if we did have 1% unemployment in Singapore, that represents 18,000 Singaporeans who will be unemployed and their families will be affected in the process. So, we must always look out for those who are affected. We are fortunate in Singapore that we do actually have fairly low unemployment.

In 2012, our economy grew by 1.3%; but jobs growth was 4%, outstripping GDP growth by a considerable amount. It is not surprising that we ended up with negative productivity growth of 2.6%. To put it another way, we had a net increase of some 59,000 locals joining the workforce last year. Our economy generated 130,000 jobs. The balance was filled by foreigners, amounting to about 70,000.

One way to look at this data is that we can afford to be more manpower-efficient; in fact, we must be more manpower-efficient. To be sure, this is a happier problem than having too few jobs. We had a very low citizen unemployment rate of 3% in 2012. In the US, it is about 8.1%; in the EU countries, an average of about 10%. In East Asia, slightly better – in Taiwan, it is 4.2%; Japan, 4.3%; and Hong Kong, 3.3%. We must not take our low unemployment rates for granted.

Going forward, as we restructure our economy, this is what will happen. We will see higher frictional unemployment as Singaporeans transit from one workplace to another. This is even more difficult sometimes when they transit from one sector to another, which is why it is very important for us to pay attention to how to help our unemployed transit from sector to sector.

So, what is it that we need to focus our minds on presently? It is about improving the quality of jobs, not the quantity of jobs. In September 2010, for example, less than 20% of job vacancies required only Primary education and below. In 2011 and 2012, 25% of jobs required this. This is contrary to the profile of the education levels of our workforce. So, what it means is this: we need to intervene and we need to force the market to restructure, to become more manpower-efficient and to reduce the demand for low-skilled workers. Besides our lower wage workers, there are also specific segments of the workforce that we really need to pay attention to – some Members have shared your concerns and I agree. We need to watch out for mature PMEs, young tertiary graduates entering the workforce, and those who are economically inactive and wish to return to work.

Let me recap: what is the labour market telling us within the context of the current economic restructuring? There are two key points to note.

First, I think we are in a good position to intensify our economic restructuring process and to reduce our reliance on foreign labour. We can afford to and will forgo some level of economic growth in pursuit of more economically sustainable productivity growth, and still be assured at the same time of good job opportunities for Singaporeans. There will be frictional unemployment which is something we can deal with through re-training and so on; but I think we are in a good position.

Secondly, we are also aware that in certain sectors, the local workers are short in supply, especially in rank-and-file jobs. Therefore, it is not just reducing the dependence on foreign labour. We should seek to also restructure ourselves to be a manpower-leaner economy. There are several industries – and we have talked about it several times in the Chamber – which have low productivity levels by global standards, and there is a need to push them to reduce labour intensity by tightening on the foreign workforce front. That said, we are aware that there will be – as I have mentioned earlier – structural unemployment, which is why we need to continue to up-skill and retrain Singaporeans to make sure they remain competitive and employable in the workforce.

Against this backdrop, we must focus on sustaining and developing the Singaporean Core in a comprehensive way. I would like to thank Mr Zainudin Nordin, Mr Patrick Tay, Ms Foo Mee Har, Er Dr Lee Bee Wah and Mr Liang Eng Hwa for raising this at previous Parliamentary sittings and this COS. We will really need to put in place a multi-pronged approach.

Mdm Chair, let me start by sketching out my Ministry's view on how we can develop and sustain a strong Singaporean Core in the workforce. We believe that one good way to do so is through the generation of better jobs and the development of better workplaces for our people. Why?

Studies have shown that employees who are happier at their jobs tend to be more productive and motivated. This is something that the Member Mr Laurence Lien talked about earlier and I fully concur with that. This means a few things. First, it means that we need to work hard at creating jobs that help Singaporeans fulfil their aspirations.

That is only one part of the story, and this part is important: the employers. They must develop more progressive workplaces through better leadership and HR practices. Why? Because this will enable Singaporeans to be, not only fairly rewarded and to be able to balance work-life priorities if they so choose, but to be also better engaged, to be better looked after. Motivated employees are better employees. Mr Laurence Lien spoke about this earlier, and this is something that we should emphasise. While we can promote it, it is something that is also difficult to legislate. Often times, the employers are asking, "What is the Government doing to incentivise me to do that?" This is where we will do as much as we can to encourage good, positive practices – some through incentives, others through promotional means. This is where, as a society, all of us must play a part. This is about good management, and employers must seek to take this on board.

Singaporeans themselves also have to play their part. When we upgrade our skills to remain relevant and competitive, it is not for their own sake, because we do operate in an increasingly globalised and competitive environment. It is not something that we can run away from. This will also improve our own employability and enables us to be able to provide for our families. This, in turn, keeps our economy vibrant, attractive; and in turn, helps to generate even better jobs, better prospects for Singaporeans, and particularly, for our children, for the future.

It is a virtuous cycle you can see that could work towards sustaining and strengthening better jobs and workplaces so that we can all, together, create a better Singapore for Singaporeans. Conceptually, we understand that.

How do we operationalise this and make it work? Well, as part of the Quality Growth Programme, we will put in place new initiatives and strengthen existing programmes to support both employers and employees in different ways. Taken together, these measures form the multi-pronged approach towards developing and sustaining a strong Singaporean Core in our workforce.

Let me begin with employees. Firstly, we will help our people remain competitive and employable. This will enable them to look after their own families and to have a stable base to pursue their various aspirations. Hence, we will continue to make substantial investments in up-skilling and training for Singaporeans. This would include better CET facilities and programmes, having avenues, such as Caliberlink, for PMEs to enhance their employability and introducing an individual learning portfolio to encourage Singaporeans to take greater ownership over their personal development. We believe that this is a strong competitive edge that we have in Singapore.

Second, we will support Singaporeans in balancing work-life priorities by helping to restructure the work environment. We will consolidate schemes that promote flexible work arrangements and the hiring of older workers and Back-to-Work-Locals under a stronger programme called "WorkPro". It is a one-stop shop, and not only pulling it all together, but strengthening it at the same time. We want to help both Singaporeans, and employers, manage work and family commitments in a more holistic manner.

The Public Service will take active steps and we will lead the way. Our Tripartite Committee on Work-Life Strategy will also seek to champion best practices and we will actively seek to gather good practices, ideas, so that we can think about how to implement it. This is where I would say this: individuals have to make their own choices about their own work-life priorities. And importantly, this is one space where employers play a very big part.

Third, we will look after our low-wage workers by fostering inclusive growth, boosting their retirement adequacy and helping to uplift their incomes. This is a recurrent theme, and this is something that all of us in this House share a concern about. Apart from incorporating the Progressive Wage Model for the security and cleaning industries, we will enhance Workfare, particularly the Workfare Income Supplement and Training Support schemes, and we will also revise upwards CPF contribution rates for low-wage workers.

Four, apart from incentives, we will provide better protection for our workers. We will extend employment protection for more of the resident workforce, including PMEs, to reflect the changing workforce profile. We will raise employment standards while giving employers flexibility in implementation. In addition, we will also enhance existing work safety regulations and programmes so that people can work with greater ease of mind.

Finally, we will take a firm stand against employment discrimination. MOM will take strong action against cases of non-compliance with the Tripartite Guidelines on Fair Employment Practices. We will also look at how best to ensure fair consideration for Singaporeans in employers' hiring practices. I will come back to this in greater detail later.

In sum, how are we helping Singaporeans? We will provide our people with the best chance and fullest support to up-skill and develop in their careers, at the various stages of their lives. At the same time, we will promote and support work-life priorities of Singaporeans. We will strengthen employment protection for Singaporeans and ensure fair opportunities for our people. We will tackle employment discrimination; and, we will ensure that we move up together as one country and as one nation. We must ensure that vulnerable groups in our society are not left behind.

To this end, the WDA will work closely with strategic partners, like the SCORE, MSF, National Council of Social Services, to facilitate the skills training conversion, return and integration of special worker groups like ex-offenders, persons-with-disabilities and out-of-school youths through initiatives, such as Project Phoenix and the Open Door Fund. This is one area which we need to pay attention to, and we need to reach out to all the different Singaporeans in our society.

My colleagues and I will elaborate on what we are doing for each of these areas. Minister of State Dr Amy Khor will elaborate on our strategy to develop a strong Singaporean Core from the training and work-life perspectives. Senior Parliamentary Secretary Mr Hawazi Daipi will focus on how we are fostering greater inclusive growth and making workplaces healthier and safer. I will elaborate later on how we are providing more workers with greater protection and our efforts to cultivate fair employment practices for Singaporeans thereafter.

Mdm Chair, let me now turn to the other important stakeholder – our employers. Employers are important because many of them are Singaporeans themselves. They create jobs, they create opportunities for all Singaporeans. They also help keep Singapore going in many ways. In this restructuring process, we know that it is very painful and it is extremely challenging. But make no mistake. We want our employers, especially our SMEs, to succeed. It is only when employers succeed that we can have better jobs, and that they can focus on creating better workplaces for Singaporeans.

However, employers – and I think they know this – need to also adapt to a manpower-leaner environment, and the Government is fully committed to helping them along with this transition, especially SMEs. The Government has set aside $5.9 billion to support companies through the Quality Growth Programme. This would include schemes we have talked about in this House, such as Wage Credit Scheme, the Productivity and Innovation Credit (PIC) Bonus.

As part of the Programme, MTI has also released plans to encourage SMEs to develop Collaborative Industry Projects, with $90 million made available. Taken together with other measures, this is a substantive effort that we are putting out.

3.00 pm

At this juncture, I would like to reiterate two things. First, foreign manpower tightening is an adaptive, not arbitrary, process that evolves to raise the quality profile of our foreign workforce. As Members know, we started the tightening in 2010 after the Government had accepted the Economic Strategies Committee's recommendations. We have taken deliberate and progressive steps. Yes, it may seem like many steps before people begin to respond, but it was deliberate. We try to keep it as progressive as possible to raise the quality profile of our foreign workforce and, at the same time, help businesses reduce their reliance on low-cost foreign labour.

Second, ours is a targeted rather than a blunt "one-size-fits-all" approach, to raise productivity levels of different sectors. For example, we do make a distinction between the manufacturing and the services sectors. On the whole, the manufacturing sector has seen decent productivity growth. We have a tighter system on the services sector as we face more challenges on the productivity front – low productivity and very high foreign worker dependence. Even within services, we looked at it and retained some level of flexibility. For example, in Healthcare, which is essential for the well-being of Singaporeans, it is our social responsibility to make sure that we cater for the expanding needs of an ageing population. In addition, we also treat construction, marine and process differently. These three sectors find it more difficult to attract locals, and construction serves important domestic needs.

The business community has been asking for greater clarity on when the "Great Foreign Workforce Tightening" exercise will end. Let me highlight the three factors that the Government will be monitoring while we manage the pace of this tightening.

Firstly, we are watching very closely the growth rate of our foreign workforce. We want to slow the growth of the foreign workforce significantly in this decade, so that the proportion does not increase significantly beyond the one-third ratio that we adopted in 2010. Last year, our foreign workforce grew by about 67,000, excluding foreign domestic workers. This is still too large, and we have tightened our policies to bring it down further. We will be watching the numbers closely this year, sector by sector.

Secondly, we studied the productivity growth of our overall economy, and looked at specific sectors, to see how they are lagging behind international standards. As outlined in the report of the Economic Strategies Committee, we hope to achieve a productivity growth rate of about 2% to 3% per annum on average this decade. We know that it is not easy, but it is something that we should strive for and work towards. What is very clear is that we do need to wean ourselves off this heavy reliance on manpower-driven growth and to raise the quality profile of the foreign workforce.

Thirdly, we continue to track the real wage growth of Singaporeans at all levels. This is something that all of us are concerned about and we should track this closely. Our foreign workforce is meant to complement, not meant to substitute, our local workforce. We are also mindful that while there are benefits that come with it, there are also disamenities. We are mindful that the presence of a large pool of foreign workers who have lower reservation wages than locals could have a depressive effect on wages. By keeping the labour market tight and trying to raise the cost of hiring foreign workers, that is one approach amongst several, to try to make sure that the wage growth of Singaporeans would also improve over time. If we are not able to meet these targets, then we will continue the tightening and restructuring approach.

Mdm Chair, the major further tightening of our foreign workforce polices via adjustments to levies and DRCs have been announced earlier. There are some additional measures that I would like to mention here.

We will tighten the EntrePass criteria to raise the quality bar for foreign entrepreneurs intending to set up businesses here. These changes will come into effect from 1 September 2013. More details will be found on the MOM website.

For the services sector, there are measures to cut the DRC and increase levies, but it just represents one half of the policy. The aim is to increase productivity in this sector. The other half, and equally important, is that we will allow services companies to more flexibly deploy their foreign workers, and to encourage them at the same time to retain and train their experienced work permit holders.

We have received feedback from businesses about extending the Jobs Flexibility Scheme to the rest of the services sector. The pilot run in the Hotel industry has worked out rather well. This is a good idea. We hear their calls and we agree that we should extend the Jobs Flexibility Scheme for the rest of the services sector.

We will work with the Singapore National Employers Federation (SNEF) and the National Trades Union Congress (NTUC) on a set of tripartite guidelines. It is important to set out our expectations, even as we allow for this flexibility of how companies can utilise job flexibility in a responsible way, so that there is no exploitation of workers, and also at the same time, to make sure that where there are productivity gains, there is fair sharing of these gains. We will finalise the guidelines with NTUC and SNEF over the next few months, and aim for this policy to be implemented on 1 July 2013.

Third, we will also introduce a market-based skills framework for the services sector. What this means is that Work Permit holders who have worked in Singapore for four years or more, and who earn at least $1,600 a month, can qualify to become skilled Work Permit holders. This new framework is to supplement the current skills pathways in the services sector. What this aims to do is to encourage employers to retain their Work Permit holders, train them up, so that they are more skilled. Some have also settled down in Singapore, more comfortable, more familiar with the environment. This increases productivity. In the process, they are also able to command higher salaries and be better workers. This is important, rather than churning. We are all aware of how certain sectors do practise churning and, through the EMFA measures, I will be looking at clamping down on that. It is in the companies' interest to look at upskilling their workers and keeping them here for as long as they can.

Put together, the Job Flexibility Scheme and market-based skills framework will also allow services companies to do more, to do better and, importantly, with fewer workers. I would like to tell Singaporeans that they also have a part to play, in particular, to support businesses by adapting our consumer behaviour and expectations, such as the returning of trays and perhaps of more self-service processes, in some of these sectors. That is something that we expect would happen, and I think Singaporeans can play a part in supporting that.

Currently, a company needs to have the requisite number of full-time local workers under our Dependency Ratio framework to qualify for the employment of foreign workers. We want to ensure that the local workers are employed meaningfully, rather than being employed on token salaries just to allow employers access to foreign workers. We increased it from $650 to $850 last year and we will now adopt a threshold of increasing it from $850 to $1,000. This will take effect from July this year.

I would like to thank Mr Gan Thiam Poh and Mr Teo Siong Seng for their thoughtful suggestions on how we can improve our foreign manpower policies further. We have been receiving feedback and this is something that we will continue to work with the different stakeholders, both the public and the companies, in our regular review of schemes. It will not remain static.

I would also like to acknowledge the concerns of many Members, particularly Mr David Ong and Ms Tan Su Shan, about the unintended consequences of our foreign manpower tightening in terms of potential delays to public project works and inflationary pressures. I think with every policy, there will always be various consequences. This is something that we will have to watch carefully. We are mindful of that and we thank Members for the reminder.

Mdm Chair, I would like to reiterate that our approach to moderating foreign manpower growth is adaptive and is meant to be flexible. The aim is to raise the quality profile of the foreign workforce and we need to help businesses restructure. The pace of our tightening will be guided by indicators I mentioned earlier, such as overall foreign workforce growth, productivity growth and, importantly, the real wage growth of Singaporeans.

Apart from the tightening that has been announced, there are also further measures to raise the quality bar for foreign entrepreneurs, allow employers to optimise the deployment of their foreign manpower and to retain those who are more experienced. This is something that the market has been calling for for some time. We will also ensure that the vulnerable groups of our society cannot be left behind, even as we pursue quality growth.

On better protection for workers, with regard to the Employment Act – Mr Zainudin Nordin and Mr Patrick Tay had asked about this. They asked how we can better protect our low-wage workers and accord more protection to the increasing number of PMEs. The character of our labour force is changing, and employment norms are also evolving. Hence, we do need to update our employment legislation to ensure that our workplace standards and practices remain relevant and effective.

Since April last year, we have received quite encouraging responses from the public when we called for ideas and suggestions on the Employment Act review. The suggestions have been debated carefully between employers, unions and the Government. I will outline today the key outcomes of this tripartite consultation, and release the details in a factsheet which I will distribute to Members. I would like to thank all the Members who have given their views and, in many ways. Many of their ideas have been incorporated, and Members have played an active role in shaping the Employment Act that will make a difference to all Singaporeans.

Essentially, we will better protect our workers while at the same time providing employers' flexibility in implementing these changes. Let me outline the key points.

Better protection for workers. We will cover more workers on working hours related protection by raising the salary threshold of non-workmen from $2,000 to $2,500 in line with the general increase in salary levels. What does this mean? Approximately 150,000 more workers will now be eligible for over-time payment should they be asked to work over-time.

Today, junior PMEs earning up to $4,500 receive only salary-related protection under the Employment Act. In view of the rising number of PME jobs in our economy, our laws should provide these same junior PMEs with employment protection beyond just basic salary claims. We have, therefore, decided to extend the general provisions of the Employment Act, such as protection against unfair dismissal and sick leave benefits, to these PMEs. This will benefit approximately 300,000 PMEs.

Taken together, about 450,000 or close to half a million workers would receive better protection with the changes that I have just mentioned.

But the enhancements to employment protection will also have to be balanced by allowing employers some flexibility to implement these changes and to stay competitive because, if they are not able to do that, they will have an impact on our Singaporean workers.

A proposal that has received wide public support is on legislating mandatory pay-slips and salary records for all employees. Some Members have also raised this and we are supportive. We will allow some time for the very small companies who will find it difficult to adjust. We will give them more time to adjust.

Another pertains to PMEs. Even as we extend unfair dismissal protection to them, we will set a one-year qualifying service period before they are eligible to seek redress. This is to give employers a reasonable time to assess the suitability of their employees.

There are quite a few other specific issues, such as caps on over-time payments and qualifying periods for retrenchment benefits. This is where we begin to understand that we do need to strike a balance between protecting workers and addressing employers' concerns which ultimately affect the employability of the Singapore workforce. We believe that the final outcome that we have is a balanced one.

We will also give the Government more teeth to ensure compliance of our laws. This includes enhancing the penalties for failure to pay salary as well as other measures to facilitate investigations and enforcement.

Mr Patrick Tay also asked about Industrial Relations Act. We share his view that the Act should be updated to reflect the changing workforce profile and workplace norms. We are in the process of discussing with our tripartite partners to review the Act.

There were other issues that, while important, are inherently more tricky. One of the areas which I am also very concerned about is the employer-employee dispute resolution mechanisms for contractual disputes, many of which are non-statutory in nature. I have received many emails on these issues which, sometimes, are difficult for me to move forward on. I spoke about this recently and this is something that we would explore to set up.

A second area, which is echoed by Mr Patrick Tay and is something that is particularly important for us to watch out for, is the group of workers in non-traditional work arrangements, especially contract workers, freelancers and self-employed persons. These are complex issues. We realise that we do need more time to study and deal with them. We will look at it in Phase 2 of the Employment Act review that will begin later this year. Given our long history of trust and constructive engagement between the unions, employers and the Government – we have seen this clearly in the course of the Employment Act review – I am sure that we will be able to work out something that is practical and useful, so that we can move forward, so that it is not only better for employees, but also better for employers and, ultimately, better for Singapore.

Mdm Chair, I began by observing that from the OSC and from the various feedback we have received from Singaporeans that there are concerns. Can we provide hope and opportunities for the future? Can we ensure that our people must remain at the heart of all our policies? Can we ensure that our people can feel proud to call Singapore their home? I believe we can.

It is not just the Government. This is where all of us play a part. Employers should develop more progressive workplaces through better HR practices. As I mentioned in many of our HR events and so on, it is not just the HR managers. This is a function and responsibility of leaders and the CEOs of companies.

Even as we encourage dedication and good performance, we should also try to enable Singaporeans at all levels to achieve the work-life harmony they so choose.

3.15 pm

As Singaporeans, as individuals, all of us have to do our part as well. Upgrading of skills is important. We are putting aside facilities, programmes, funding support. We must take that step to move forward. I believe it is a competitive edge that we provide, and our commitment is to support the process so that Singaporeans do step forward to take up the training. I think this will be something that is useful in keeping our edge and in keeping Singaporeans employable.

With all these different efforts – Government, people, businesses, working hand in hand – I think we can build a better workforce and we can nurture better workplaces, at the same time, generate better jobs and opportunities for our people and, ultimately, build a better Singapore for all Singaporeans.

Promote Pro-family Employment Practices

Ms Foo Mee Har (West Coast): Madam, pro-family employment practices are critical in creating a more conducive environment for marriage and parenthood. Forty-one percent of employers in both the private and public sectors claim to provide flexi-work options, with as many as 95% of public agencies offering flexi-work hours and 100% offering part-time employment.

Yet, the take-up rates are abysmally low. For example, 1.4% of Division 1 and only 0.6% of non-Division 1 public officers work part-time. Whilst many Singaporeans yearn for better work-life balance, they fear that their requests for flexi-work hours would cast doubt on their commitment to work and possibly curtail their career advancement.

Madam, much more needs to be done to change the mindsets of both the employers and employees, and the level of trust between them. I would like to ask the Minister whether there are plans in place to accelerate the know-how of companies, especially SMEs, to implement work-life balance strategies, bolstered by incentives to do so. How can the Minister help employers understand that sensible work-life policies make good business sense and help companies gain access to a wider pool of talent?

The experience of other countries and our own suggests that many fundamental changes will not occur naturally. Instead, they may result only with determined and sustained Government interventions, regulations and provisions.

I would like to ask the Minister to consider following the footsteps of many other countries in making the integration of work and family a national concern, and not leave it to the best efforts of individual companies or the occasional campaign or promotion by different Government agencies.

The large majority of industrialised countries, such as the UK and Australia, have statutory regulations that make it easier for individual employees to request for flexi-work to balance their care-giver responsibilities. I urge the Minister to embed pro-family employment practices as an integral part of the Tripartite Guidelines on Fair Employment Practices. I recognise whilst not all jobs are suited for flexi-work arrangements, I would like to ask the Minister to consider legislation in the future to give employees, both men and women, the right to ask for flexi-work and have their requests seriously considered by their employers.

Madam, I have spoken on this topic on numerous occasions, starting from my maiden speech in this House. I hope that I will have better luck this time with my appeal, as I firmly believe that Singapore can make much more progress in institutionalising pro-family employment practices, with the Government taking the lead.

The Chairman: Ms Jessica Tan, you have two cuts. Please take them together.

Employment Opportunities

Ms Jessica Tan Soon Neo (East Coast): Madam, with the growing number of PMEs in Singapore, access to quality jobs is important. The current sentiment is that foreign talent compete with Singaporeans for quality jobs, especially PME jobs. While we must address this, we must be careful to balance foreign and local talent as they are both complementary in developing and growing quality jobs and opportunities for Singaporeans.

While we must ensure a level-playing field for Singaporeans, we need to also pay attention to ensuring that Singaporeans are ready to take these jobs and are ready to succeed in these jobs. While I agree that we cannot legislate HR practices, I would encourage MOM to take a more active role in building up the HR competencies in this country and to work closely with employers, both local and foreign, to build up HR practices that will enable Singaporeans to grow, develop and progress in organisations and professions.

I would like to say that the opportunities provided to me throughout my commercial career were due to my competencies. I must admit that if I looked back, my employers had provided me the opportunities, both to do well in the jobs that I was doing and at the same time, to build my career opportunities. That is important. They were serious about ensuring quality jobs and, more importantly, success and progressions for Singaporeans in good quality PME jobs here in Singapore.

Madam, I want to point out that we must also recognise the threat from globalisation. While we are worried about foreign talent competing with talent in Singapore, our Singapore talent are mobile and have opportunities outside of Singapore. If we do not see and help prepare for good job prospects and success for Singaporeans in these jobs, our strong Singapore talents will leave Singapore and go to other markets where there are more attractive job opportunities and where these markets develop them.

Flexible Work Arrangements

Madam, I have personally benefited from flexible work arrangements throughout my commercial career. In more than over 20 years of experience in the industry, I have also seen many women who have been able to stay in the workforce and continue their career because of flexible work arrangements which have enabled them to balance their responsibilities.

Flexible work arrangements are not just about attracting more women to the workforce. It is also for both men and women, young and old, able or disabled, that can benefit from these work arrangements. I do want to emphasise that it is not just about providing flexible work arrangements. There is a whole mindset shift from equating the number of hours we spend on a job to how we look at performance and how we look at whether an employee is performing or succeeding in a job. This is a fundamental shift if we are looking at providing flexible work arrangements that we need to pay attention to and ensure that that is done because, if we do not do that, then what just happens is jobs get provided, you do not really have work-life balance.

There is also a belief that work-life balance with flexible work arrangements are to benefit employees only. I think we need to rethink this because employers do benefit as well because what we have seen as we are aligning work structures and practices with the needs of employees to reduce the stress of workers, they become more committed to the job, they do better in their job. So, employers and organisations benefit from that. I can also say to the Minister for Transport that a side benefit is that flexible work arrangements might also ease the load on the traffic.

Can MOM share the progress of companies in Singapore in offering flexible work arrangements? How extensive have these been and how successful have we been able to enable our workforce in Singapore to participate in flexible work arrangements? What help is given to organisations to be effective in offering flexible work arrangements?

Work-life Balance

Ms Lee Li Lian (Punggol East): The Government has been promoting work-life harmony for more than a decade. The Tripartite Committee on Work-Life Strategy was set up in 2000, under the Singapore National Employers Federation (SNEF). Other schemes include the Work-Life Works! Fund and the Flexi-Works! In total, over 1,200 companies have participated in these schemes. However, it is unclear whether these initiatives have made significant impact on the working environment.

A study by MSF found that only 23% of workplaces offer flexible working hours. It found that work-life harmony has not improved in the past six years. The research clearly shows that we need to re-focus our efforts.

I would like to reiterate my call for an independent commission to look into work-life balance practices for a more family-friendly Singapore. What I am proposing is to make the family a central, not secondary objective. While a balance must be struck, current efforts focus more on how to achieve productivity, over and above how to support families achieve better balance in their lives. Please do not get me wrong, I am not saying that productivity is not important but both approach are equally essential and that is why a better balance must be struck.

We must move away from the mindset that flexible work practices would negatively affect productivity. The MSF study found that those who scored higher on work-life harmony were more likely to be engaged and productive in the workplace, have better physical and mental health, and reported better family relationships and desire for more children. A better family life is the cornerstone to a motivated and productive worker, and a healthier economy.

Madam, this House has on many occasions reiterated that the declining TFR poses a serious population problem for Singapore. If we are committed to reversing this trend, we must make the fostering of a conducive family environment a priority when we look at work-life balance.

Flexi-work Arrangement and PMEs

Ms Mary Liew (Nominated Member): Madam, I have spoken and raised some issues during my recent Budget speech. Can the Minister comment on:

One, legislating the rights of employees to request for flexible work arrangements;

Two, extending maternity leave from four to six months; and

Three, granting additional incentives to encourage and assist women to return to work?

Aside from the issues concerning women, today my concern is also for PMEs. Two-thirds of Singaporeans will hold PME jobs by 2030. This translates to 1.25 million Singaporeans, compared to 850,000 today.

Madam, Singaporean PMEs are most concerned about the Employment Pass issued, which had increased over the years from 99,200 in December 2007 to 173,800 in December 2012. During the recent Budget announcement, I was heartened to hear that the Government will be exploring into new industries that would create jobs for our workers, such as robot operators and material scientists, and are investing in the emerging space and satellite industry through a S$90 million Satellite Industry Development Fund. However, the question on Singaporeans' minds is, will there be another influx of foreign talents to support these industries?

My question to the Minister is how do we balance this influx with the current promise to reduce or maintain the number of Employment Passes being issued?

Secondly, there is a growing number of Singaporeans losing their jobs to foreigners and who have expressed being intimidated and bullied. This is also a result of foreign talents hiring their fellow countrymen.

Madam, Mr Wong is one such Singaporean among many who has suffered the emotional trauma of redundancy shams, orchestrated by foreign talent to benefit another foreign talent. He was with a multinational logistics company for two-and-a-half years and was terminated in 2011 from a Senior Manager position. Mr Wong was bullied and humiliated before his colleagues and subordinates, and terminated without valid reasons. Today, Mr Wong has recovered, thankfully, and is now actively promoting an anti-workplace bullying movement, encouraging employers to put in place policies that will protect Singaporean employees.

Workplace bullying is amongst the issues that Singaporean PMEs do face at work, just like in Mr Wong's case. A recent Zaobao article cited, from TAFEP, complaints of an increase in hiring discrimination in workplaces and also reported more cases of foreign managers hiring their own fellow countrymen and not Singaporeans.

Legislating against workplace bullying, Madam, could be a step too far to start with. However, I would like to ask the Minister to look into setting up platforms for the grievances of PMEs, to be heard and documented, as many are doing so, in vain, on social media. We must further establish guidelines to hold employers accountable should an unreasonable number of cases within the organisation rise.

I am glad that the Government has tightened the eligibility for Employment Passes and I am also glad to hear the Acting Minister reassuring us just now that our people will remain at the heart of our policies. I would like to join hon Member Mr Patrick Tay to call upon the Minister to institutionalise a labour market test for PMEs similar to the practice in Hong Kong, Australia and others. Can the Minister enlighten us on the timeframe?

Family Care Leave

Mr Muhamad Faisal Bin Abdul Manap (Aljunied): Madam, many pro-family policies and workplace initiatives have been rolled out over the last two years to strengthen family ties and foster a more conducive environment for the family. This includes Paternity Leave and Extended Childcare Leave introduced by this Government through the Marriage and Parenthood Package. These measures are certainly a welcome relief for many working families.

3.30 pm

As a society, it is important to have in place a support system to nurture the young in our society and prepare them to undertake the leadership of this nation in the future. It is also essential to provide our older generation who have contributed so much to Singapore's nation building, sufficient care in their retired years. At the same time, our disabled must also be able to lead a dignified life in Singapore with support from the state, wherever possible.

Madam, there have been many improvements made to prepare our society for an ageing population. Facilities have been enhanced to enable the disabled to travel far more easily within our urban environment. Much has been done but much remains to be done, especially with regard to the care that these groups receive from their own family. Family is often the first line of support, and it is important for us to enhance the family unit and strengthen the support given to the elderly and the disabled within the family unit. This is particularly critical for many lower income families.

With the above in mind, I would like to propose to the Ministry to introduce a Family Care Leave applicable, in particular, to caregivers of the elderly, the disabled and individuals with chronic illnesses, such as stroke and kidney disease. Madam, I would like the Ministry to look into the possibility of implementing the Family Care Leave in employment contracts.

Flexi and Part-time Work for Mothers

Mr Christopher de Souza: Younger Singaporean couples can be further encouraged to start families of their own when there are flexi- and part-time work arrangements in place to facilitate the balancing of their work and family commitments.

This also means that companies that are supportive and sensitive to the needs of employees who are mothers or fathers will, in turn, be best placed to recruit and retain them, in particular, mothers returning to work after spending time with the children.

We should encourage and incentivise employers to provide part-time or flexible working arrangements for our working mothers or mothers considering returning to work. The child benefits; the parents benefit from more flexibility; and the company benefits from greater staff loyalty. Let us do more for our working mothers who are Singaporeans with flexi- and part-time work arrangements.

Flexi-work and Pro-family Work Environment

Dr Intan Azura Mokhtar: Madam, we recognise that the number of women in the workforce has shown gains over the past decade. Currently, about three-quarters of women of child-bearing age are working. However, like other Members in this House, such as the hon Members Ms Irene Ng and Ms Foo Mee Har, I believe that if the Ministry were to institute or even legislate specific measures, even more women will join and stay in the workforce.

First, there are women who choose to stay home to take care of their children and family. However, they do some freelance work for extra income. Currently, there is little Government support for freelance work or work from home. I would like to urge the Ministry to help set up some form of support or union group for freelance workers, to help them be recognised for the work they do, especially for stay-at-home-mothers, so that they can benefit from schemes, such as CFAC or KiFAS, for instance.

Second, there are women who stop working as they feel that their employers are not supportive of them dividing their time between work and family. I would like to urge the Ministry to help employers institute a pro-family work environment and legislating flexi-work arrangements, especially for working mothers. For instance, women can do part of their work away from the office or can report to work at earlier or later times and consequently leave the office earlier or later. Finally, may I implore the Ministry to legislate that at least one nursing room be provided at every office building? Employers who are able to provide measures such as these ought to be recognised and commended.

Recognise and Promote Fair Employment

Mr Alex Yam: Mdm Chair, we often take that carrot-and-stick approach to policy but, to manpower, the stick often appears far bigger and heavier than the carrot. The impressions are often stark, number of labour court cases up, the number of complaints on discrimination up, number of cases sent for arbitration also up, number of labour disputes, number of strikes went up – up by one. Stronger legislation, bigger penalties also up.

Perhaps it is helpful at times for us to consider that a bigger carrot may also prove beneficial. The humble carrot is high in beta-carotene which metabolises into Vitamin A. Vitamin A, as we know, helps vision, and vision is perhaps what we need in promoting a fair employment climate.

Madam, allow me to quote three quick examples of companies with good employment practices. Company A is a restaurant. I met the owner recently and she shared with me that the climate was tough. Yet, every worker I saw was motivated. I asked the secret and they said they were passionate about what they do and they were loyal to their employer who looked after them even in bad times. Company B is in the supply industry. I met them recently and they care for their older workers even beyond retirement, providing medical insurance coverage for them and checking up on them regularly. Company C is a hotel, consistently voted as one of the most outstanding employers. One staff I spoke to last week said she was honoured to work for a company who cares deeply for employees and makes them feel part of the family.

Madam, recognising the good that companies do can be more effective than a big stick. We all need good vision and to have a better work environment and as well as better productivity. As for a big stick, as we say in the military, "Do anything you want, just don't get caught". This is especially so for our young job entrants. I asked for a fair deal for young job entrants in my Budget speech. In this area, I ask for a set of recommendations of fair employment guide for them so that they can spot good employers and work for them. Vitamin A also helps with night vision, and so it is all not just gloom and doom.

Raising of Re-employment Age Band

The Senior Minister of State, Prime Minister's Office (Mr Heng Chee How): Madam, the way I look at it, the manpower strategy to support this economic transformation will come in three parts. One part will deal with the tightening of foreign manpower, another part to improve the productivity and, then, the third part would be to activate the less used segments of our local population to be in the workforce. Within that, the older workforce is very important. Why? Because many of them are already working and ageing together with the company, so they know the work of the company and they are adding value as it is.

With the passing of the re-employment law last year, we are already seeing increased improvement in the employment rate for older workers. Yet, at the same time, when we look at the introduction of the re-employment law, it is not something that you could just pass in this House and then it becomes law and then it works automatically. There is a lot of planning; there is a lot of experimentation and learning-by-doing to be done and much coordination to be achieved amongst the tripartite partners. It was for this reason that I called, over the past few months, including in this House on a number of occasions, for the Ministry to look at further extending the top limit age for re-employment beyond the current 65 to 67, as would be allowed for under current law.

And I believe that if we start this process of discussion amongst the tripartite partners earlier rather than later, that will actually put us in a better state to correctly extend and make full use of the expertise and experience of this group of valuable workers, namely, the older workers within our workforce. And this serves the needs of both companies who are facing a labour crunch now as well as to meet the aspirations of our older workers to continue to contribute. I urge the Ministry to consider this and I will be grateful if the Ministry could comment on my suggestion today.

The Minister of State for Manpower (Dr Amy Khor Lean Suan): Mdm Chair, Deputy Prime Minister Tharman Shanmugaratnam and Acting Minister Tan Chuan-Jin spoke about the need to restructure our economy. As we restructure our economy, some jobs may be lost despite our best efforts, but new, higher value-add jobs will be created. To seize these better jobs, Singaporeans have to equip themselves with the necessary skills.

As part of our efforts to develop a Singaporean Core, we will continue to improve our Continuing Education and Training (CET) system to help Singaporeans up-skill and re-skill, so that they remain relevant and competitive. At the same time, we will ensure that growth is inclusive, and that more Singaporeans can benefit from it.

As Mr Ong Teng Koon rightly pointed out, we need to continuously invest in CET for Singaporeans. In 2010, the Government committed to invest $2.5 billion over five years in CET to improve the coverage and the quality of our CET programmes and infrastructure, and upgrade our CET professionals. With our workforce working longer and with more rapid change in the global economy, we will need to expand CET funding over time to help our workers stay ahead of the curve. This ensures that our CET infrastructure and programmes remain relevant and accessible to all Singaporeans.

Many Members have asked about the outcomes of our CET programmes. This is an area which the Manpower Ministry pays close attention to. To ensure that workers and companies achieve desired outcomes from these investments, WDA has been conducting annual surveys on the impact of CET Workforce Skills Qualification (WSQ) training since 2009.

The 2012 survey findings indicate that an increasing proportion of both workers and employers find WSQ training beneficial. Ninety-four percent of trainees indicated that they were able to apply the skills they learnt, and 92% reported better work performance. The feedback from employers was likewise very encouraging. Ninety-five percent of employers found that WSQ training helped their workers perform better at work, and 74% indicated that it led to productivity improvement.

In a separate longitudinal study, WDA also found out that workers who underwent WSQ training received higher wage increases, compared to workers without WSQ training. Although the results are encouraging, this is the first time we have conducted such a study. WDA will continue to closely monitor the outcomes of the WSQ training, so that we can further improve our CET system.

I agree with Ms Sylvia Lim that we must minimise wastage in CET funding and I would like to assure her that WDA has put in place rigorous measures to mitigate this. Higher funding is provided to training which demonstrates stronger outcomes like job placements, wage increments and improved performance. Individuals who seek training assistance at the various CET touch points also have to undergo an assessment of their needs and suitability for training before being placed on courses. This will match training programmes to each individual's training needs. We also require co-payment for training to ensure that the individuals and the companies take training seriously. All these measures help to ensure that the majority of WSQ trainees pursue a career in that particular sector after training.

WDA also actively tracks the job placement outcomes of the trainees. We note that most of the self-initiated trainees do find employment in the industry for which they are trained.

With your permission, Madam, may I display an image of Mr Jason Chua on the screen? [ A slide was shown to hon Members ]. Mr Chua was a supervisor when he was sponsored by his employer, Gain City, to attend the WSQ Diploma in Retail Management on a part-time basis from 2007 to 2008. The programme was co-funded by WDA. Through the programme, Mr Chua gained new competencies like marketing strategies and management skills, which also strengthened his confidence.

Through a combination of his continued hard work and newfound knowledge, he was promoted a year later to Assistant Manager, receiving a 20% salary increase. In 2011, Jason was further promoted to head a new department as Product Manager and tasked to grow Gain City's IT brands. He received a further salary increase of 25%. Nearly two years on, Gain City has enjoyed a 30% growth in its IT business and Jason continues to excel in his role. Jason Chua is not an isolated case.

Madam, the survey findings which I shared earlier, as well as positive stories like Jason's, clearly demonstrate the benefits and positive outcomes of CET. We will continue to do more to encourage workers and employers to participate in training and get them to embrace a lifelong learning culture.

Ms Jessica Tan and Mr Patrick Tay spoke about the challenges faced by PMEs. Indeed, we recognise that PMEs, the fastest-growing segment of our workforce, have diverse development needs and are a group we need to pay close attention to.

Acting Minister Tan has touched on our multi-pronged strategy to create quality jobs for PMEs and help Singaporeans take on these jobs. I shall elaborate on how we will further enhance our CET and employment facilitation efforts for both workers and companies, which are two very important thrusts in our overall strategy.

3.45 pm

Our Institutes of Higher Learning (IHLs) prepare students for work by imparting to them the skills relevant to industry needs, while developing their character. But once they step into the workforce, they will need to constantly adapt, upgrade and re-skill in order to remain relevant in the fast-paced global economy. To help them, we have provided many pathways for Singaporeans to upgrade and, where necessary, to re-skill and move into growing industries.

Our national WSQ system is competency-based and covers more than 30 sectors. An Industry Skills and Training Council (ISTC), comprising key players in the industry, is also established for each WSQ framework to ensure that the courses are relevant and meet industry needs.

Two years ago, we introduced the Skills Training for Excellence Programme (STEP) targeted at PMEs to help them deepen their skills and expertise. STEP offers a wide range of courses tailored to the needs of PMEs in different sectors. There are now more than 830 courses under STEP, and over 65,000 PMEs have benefited from STEP. About 80 STEP scholarships have also been awarded in various sectors, such as Retail, Aerospace, Healthcare and Built Environment, to develop a PME talent core for these sectors.

In the last two years, we have also strengthened employment facilitation services for PMEs. In 2011, we established CaliberLink, a one-stop service point to provide PMEs with training advisory and employment assistance. To date, CaliberLink has helped more than 3,500 PMEs through its training and career consultation services, networking events and workshops. Of these, about 1,300 were provided with career coaching services, and eventually over 400 were placed. This is comparable to industry performance, and we will continue to do more for PMEs, such as improving our online facilitation services.

Mdm Chairperson, I would like to share the success story of a Singaporean who has gone through CaliberLink. Having worked 22 years in the information and communications technology (ICT) sector, Mr Frank Ou took the bold step of starting his own fishing business in 2010. However, things were not to be and the 51-year-old's business venture folded a year later. While some would have become despondent, Frank was determined to quickly get back on his feet. Through CaliberLink's assistance, Frank secured an executive position in the Real Estate and Facilities Management sector. He also completed a Property Executive Conversion Programme, funded by WDA, which gave him the necessary skills for the new job.

In today's economy and workplace, PMEs have no choice but to regularly upgrade and re-skill to progress as well as to remain relevant. Therefore, my Ministry and WDA will be introducing additional assistance for PMEs this year.

First, WDA will expand the PME-level programmes that it funds, to include more areas, such as industry practitioner seminars, master classes, capability transfer and mentorship programmes. Second, we will expand upgrading pathways for PMEs through WSQ-aligned applied degree programmes. Besides graduating with a degree, students can also receive relevant WSQ certifications, which add value in terms of employer and industry recognition. Pilot sectors that will be covered include Workplace Safety and Health, Business Management and Aerospace.

Mdm Chairperson, I have shared on how we will enhance CET support for PMEs. At the same time, we will ensure that our CET system continues to be accessible and affordable, meeting the needs of our rank-and-file workers, while remaining relevant to industry. In addition, we will enhance the Workfare Training Support (WTS) scheme to provide even stronger support for our lower-income workers to upgrade their skills. Senior Parliamentary Secretary Hawazi will elaborate on the enhancements to the WTS scheme.

Mdm Chairperson, an important component of our CET system is the Place-and-Train (PnT) programme. Under the Place-and-Train programme, workers are first hired by employers before they undergo skills training required for the job. During the training period, workers are paid their salaries, with WDA co-funding both the salary and training costs. Place-and-Train is targeted and leads to good employment outcomes. This year, we will increase our funding support for Place-and-Train, and we hope that more employers will come on board. Employers who hire Singaporeans on the Place-and-Train programme will receive higher funding of 70% of the employee's salary, capped at $2,000 per month, which is a significant increase over the current cap of $1,400 per month.

Mr Laurence Lien rightly pointed out that with economic restructuring, there will be the inevitable displacement in the labour market. But alongside this negative outcome are positive results. Higher value-added jobs will also be created in the process. We will step up efforts to help Singaporeans upgrade and re-skill, so that they can seize these new opportunities. WDA's move to enhance its Place-and-Train programme and step up employment facilitation efforts will also provide more support for displaced workers.

Mr Ong Teng Koon asked how we can better facilitate CET for our older workers. I would like to assure him that the WSQ system is developed with the needs of adult learners in mind. It focuses on the ability to demonstrate skills and knowledge acquired, which older workers are more receptive to compared to academic-based learning and assessment. Alternative entry requirements, besides formal PET qualifications, for course enrolment, are also particularly useful for our older workers who may not have the formal educational qualifications but are actually no less able. In addition, training courses are broken down into modules to allow workers to embark on the training at a pace which is suitable for them, taking only the modules they need, or to gradually work towards the full qualifications.

Mdm Chairperson, there are two core objectives of our CET framework. First, to provide employees with the right skills and knowledge to meet current and future needs. Second, to entrench a culture of continuous learning and training. The two are self-reinforcing. Mr Patrick Tay asked if more can be done to guide young PMEs to make wise career choices and second skilling our mature PMEs. I agree with Mr Tay that, in addition to our current CET programme, we should explore ways to empower individuals to better take charge and make informed decisions on their own training and career development.

In this regard, WDA will be developing an Individual Learning Portfolio (ILP). The ILP, to be introduced in stages over the next three years, will be an interactive online service that gives individuals access to a range of information and tools. This includes labour market information and self-help profiling tools. It also serves as a one-stop repository of an individual's education, training, skills and work achievements. And it will have different features, catering to those who are already in the workforce or preparing to enter it.

What this means is that individuals will be able to better plan for their own learning and career development. The ILP will also enable employers to post jobs and search for potential employees with the best skills match for their vacancies.

Besides providing individuals with more CET assistance, we will also do more to help companies upgrade and develop their workforce. The three-year Transition Support Package has been introduced in Budget 2013. This will help companies restructure and share the productivity gains with their employees through higher wages. Companies also need to invest in training to improve the skills of their workers, in order to be more productive.

One example of an SME that benefited from the Government's training support is Kim Ann Engineering, which provides specialty metals and services for customers in industries, such as Precision Engineering and Oil and Gas. Last year, the company signed up for the Operations Management Innovation (OMNI) programme introduced by WDA and conducted by the Singapore Institute of Manufacturing Technology (SIMTech).

With knowledge acquired from the programme, Mr Jonathan Kok, the Division Manager for operations, was able to identify gaps and solutions to improve the company's operational processes. Through these improvements, the company has tripled its machining production output, which translates to a projected increase in sales of more than $400,000 over three years. Workers also enjoyed the benefits of increased productivity through bigger performance bonuses. Indeed, Kim Ann Engineering intends to send more of its employees for similar training programmes.

Last year, we enhanced the training support for SME-sponsored local employees by raising course fee subsidies and absentee payroll. While companies find this useful, they have also provided feedback on areas where they need more help, including more support for in-house training customised to their needs.

This year, WDA will introduce the new Enterprise Training Support (ETS) scheme to provide a holistic HR and training package for companies to develop their employees and raise productivity. Mr Laurence Lien and Ms Jessica Tan may be pleased to note that companies, like Kim Ann Engineering, can tap on grants under the ETS scheme to develop their own company training plans and career progression pathways for employees that are linked to training roadmaps. To address companies' need for more customised training, the scheme will also fund both WSQ and non-WSQ training, including structured on-the-job training.

Companies can also tap on the ETS scheme to benchmark their compensation and benefits to market rates. This will encourage competitive job remuneration for Singaporeans, and help companies to better attract and retain local talent. This is particularly useful for SMEs, many of whom lack HR expertise. We will invest $20 million in the ETS scheme over two years. We expect SMEs to form 70% of the companies that will benefit from this scheme and, if the response is good, WDA will be more than happy to further expand the scheme.

Mdm Chairperson, as we ensure that our CET programmes remain relevant to both workers and employers, we are also expanding our CET infrastructure to meet the training demands of our workforce. The two national CET campuses will be ready in the second half of this year as planned. They will feature integrated facilities designed with adult learners in mind. Workers can look forward to more exciting training opportunities and comprehensive career services all under one roof.

Our labour market will remain tight, and this will place upward pressure on wages as companies seek to hire and retain employees. To be sustainable in the longer term, wage increases need to be supported by productivity gains. Therefore, I strongly urge companies to make full use of the various productivity and training incentives that the Government has put in place, and to share their gains with their employees.

As we continue to evolve our CET system to help Singaporeans excel and achieve their work aspirations, we will also continue to seek public feedback on how best to do so through the next phase of Our Singapore Conversation (OSC).

Through Our Singapore Conversation (OSC) sessions, we have received strong feedback from Singaporeans about their desire for a more fulfilling pace of life, while being engaged at work, to pursue their personal aspirations and cope with family needs. We have just heard from Members like Ms Foo Mee Har, Mr Christopher de Souza and Dr Intan Azura, all of whom have also called for greater support for flexible work arrangements and for more employers to adopt pro-family practices.

I agree with them, and this is something that we have been working on for quite some time now. Good work-life harmony contributes positively to personal and family outcomes and is an increasingly important priority for Singaporeans. Flexible work arrangements enable employees who require them to better manage their career and personal aspirations, and remain engaged and productive. Businesses which offer flexible work arrangements will thus benefit from better staff attraction and retention, which is a key competitive advantage in today's tight labour market.

Ms Jessica Tan asked about the progress of companies in offering flexible work arrangements. An increasing proportion of establishments offer at least one form of flexible work arrangements. The proportion rose from 25% in 2007 to 41% in 2012.

There is also significant progress in the labour force participation and employment of our female and older residents. Our labour force participation rate for female residents aged 15 and above increased from 54.2% in 2007 to 57.7% in 2012. The employment rate of our older residents aged 55 to 64 has also increased from 56.2% in 2007 to 64% in 2012, which is just 1% shy of our target of 65% in 2015.

4.00 pm

Today, the Government, together with employer groups and unions, plays an active role in promoting work-life harmony and flexible work arrangements, and these efforts are coordinated by the Tripartite Committee (TriCom) on Work-Life Strategy, which is led by Senior Parliamentary Secretary Hawazi.

Over the past two years, the TriCom has been reaching out to both employers and employees regularly to influence mindset change and foster workplace cultures that support flexible work arrangements. This is done through platforms like the biennial Work-Life Conference, which attracted over 400 participants in 2011.

As an exemplary employer recognised at the Work-Life Excellence Award last year, Rajah & Tann LLP, which is a local law firm, has shown that even amidst our tight labour market, the firm was able to meaningfully support flexible work arrangements to meet their employees' work-life needs. Employees could work from home, on staggered hours or even work three to four days a week. All these helped the company achieve a low attrition rate of 1.3% in 2011. I, therefore, urge companies to do the same, if not better, to attract and retain talent.

In addition, the TriCom works with agencies like IDA, to promote specific flexible work arrangements, such as home-based and mobile-work arrangements.

To support companies in implementing work-life strategies, we launched the WoW! Fund in 2004. Since its inception, the WoW! Fund has benefited some 860 employers and their employees.

Ms Foo Mee Har, Mr Patrick Tay and Ms Mary Liew suggested that we put in place legislation on the right to ask for flexible work arrangements. The PAP Women's Wing and NTUC have earlier made similar suggestions through their reports. Ms Lee Li Lian proposed that we set up an independent commission to oversee work-life balance issues.

In countries like the UK, a "Right to Request" legislation, alongside institutions to administer it, formalises the process for eligible employees to request for flexible work arrangements, such as part-time work or telecommuting. Such an approach towards improving work-life harmony and helping individuals cope with their work and personal needs has its pros and cons. We have been studying this approach and several others.

The success of such legislation is, in many ways, dependent on the existence of complementary conditions to support it, such as the attitude of the employers and the co-workers towards flexible work arrangements which was alluded to by Ms Jessica Tan earlier on. A recent survey by NTUC showed that seven in 10 employees felt that their employers were not supportive of flexible work arrangements, while six in 10 employees said that their colleagues were not supportive.

Furthermore, as highlighted by the Association for Small and Medium Enterprises (ASME), many of our SMEs still need guidance on how to implement flexible work arrangements. The success of flexible work arrangements depends largely on the companies' ability to manage those on flexible work arrangements. Yahoo! and Best Buy, which recently made the headlines as they cut back on work-from-home arrangements for their employees, are cases in point.

These are all possible reasons to explain why the inclination to request for flexibility by employees remains low in some countries, like Australia, even with the introduction of the Right to Request legislation in these countries.

We need to be cautious about legislating flexi-work which will introduce rigidity into the labour market, and impose additional compliance costs on businesses at a time when they are already facing significant pressures to restructure. Hence, we think that it may not be desirable for the Government to use the law to prescribe flexible work arrangements at this point.

The Government, however, remains a very strong advocate of flexi-work arrangements. Deputy Prime Minister Teo shared that 95% of our public agencies, including MOM, CPF and WDA, already offer flexible work arrangements. We will intensify our efforts and work through the Tricom and the Employer Alliance to support and incentivise companies to implement work-life strategies. We will encourage positive behaviour through education and promotion, and create the conditions for sustainable work-life strategies. We will continue to keep an open mind about legislating flexi-work and consult stakeholders widely on this issue.

Mr Faisal Manap and Ms Mary Liew both spoke about introducing additional leave to help workers, such as caregivers of elderly persons and mothers, better manage the demands of work.

As part of the recently announced Marriage and Parenthood Package this year, we enhanced existing family-related leave schemes and introduced new ones, such as paternity leave and shared parental leave. These measures aim to help working couples better balance work and family commitments. And as pointed out by Ms Foo Mee Har and Mr Christopher de Souza, such pro-family employment practices will also help parents, especially mothers, return to the workforce.

These schemes will take effect on 1 May this year. Let us give our businesses some time to adjust and adapt to these new schemes, before deciding whether further refinements are merited.

We are mindful of the need to strike a balance between promoting work-life harmony and not to overly impose too many obligations on employers that may increase cost pressures and, ultimately, affect workers' employability. We will, nonetheless, continue to promote and encourage employers to adopt pro-family work practices.

Besides creating workplaces with a pro-family culture, we also want to help all Singaporeans, especially our mature workers, work for as long as they want and are able to. We also want to help those who wish to return to work find suitable jobs. This will enable employers to tap on this group of people as a valuable source of manpower. Mr Zainudin Nordin and Mr Gerald Giam have spoken on this earlier.

In 2005, we introduced ADVANTAGE! to help employers hire and retain older workers. The scheme helps employers redesign jobs to match older workers' abilities. It was later enhanced to help prepare employers for re-employment. Close to $57 million has been disbursed under ADVANTAGE! since its inception. Around 3,500 companies and 25,000 older workers have benefited from the scheme.

SIS'88, a sugar distributor in Singapore, tapped on ADVANTAGE! last year to automate its sugar distribution system, which made the work safer and less physically demanding. This allowed its older employees, such as Mr Mohd Amir bin Mohd Yusof, aged 62, to be more productive by controlling the equipment and operations remotely through a centralised control system. Such improvements in work processes have also made it easier for SIS to re-employ its older workers.

I agree with Mr Alex Yam that it is important for us to recognise employers that go the extra mile to improve their HR practices to recruit and retain their employees, especially the older workers. Today, we recognise these employers through the biennial TAFEP Exemplary Employer Awards. And we hope that this would inspire organisations to do better.

I also agree with Mr Heng Chee How and Mr David Ong on the need to continue our efforts on the re-employment front. Since the re-employment legislation came into effect in January last year, results have been positive. Based on the preliminary findings from our survey, 98% of our local employees who turned 62 in the year ending June last year were offered employment beyond 62. The number of re-employment disputes lodged with MOM has been low, averaging less than three cases a month. Overall, the employment rate of older residents reached a new high of 64% last year, as I noted earlier. This is comparable to or even higher than some advanced economies, such as the US and the UK. We will continue to monitor the implementation to ensure that it is in line with the intent of the re-employment legislation.

For the next phase of work, Mr Heng Chee How will be pleased to note that we will work with the Tripartite Committee (Tricom) on Employability of Older Workers to conduct a deeper study on the impact of re-employment, identify an appropriate timeframe to further raise the re-employment age, and find other ways to enhance employment opportunities for our older workers.

Besides older workers, we have also been encouraging locals to return to work through Flexi-Works! introduced in 2007. The scheme encourages employers to hire back-to-work locals on flexible work arrangements by defraying the costs involved. Since 2007, more than 3,500 locals have been placed into jobs at more than 300 companies.

IQKidz, an education company delivering enrichment programmes to schools, is a beneficiary of Flexi-Works!. Through the scheme, IQKidz has been able to retain and attract locals, like Ms Rina Khoo, in today's tight labour market. Rina, a 48-year-old teaching pre-schoolers in art, enjoys the flexi-time work arrangement that allows her to pursue evening courses for self-improvement as well as balance family responsibilities. IQKidz has also managed to hire several back-to-work locals with young children as teachers, by deploying them flexibly in terms of location and working hours.

Our efforts to improve work-life harmony and bring more locals into the workforce started sometime ago. Against the backdrop of our ageing local workforce, older workers and back-to-work women will play an increasingly important role in the workforce.

Madam, several Members have suggested ideas, such as a Back-to-Work Employment Credit Scheme and a New Hire Wage Credit scheme. I would like to thank them for these suggestions. We agree that more can be done, and have, in fact, been reviewing our schemes with feedback from the public and our tripartite partners. One important feedback is that there are perhaps too many assistance schemes, and that we should make it easier for employers to tap on these schemes. Also, companies have highlighted that they need more support in terms of implementing work-life strategies and hiring and retaining older workers.

Hence, we will consolidate and enhance the WoW! Fund, ADVANTAGE!, and Flexi-Works!, into a one-stop programme called "WorkPro" – to build Progressive Workplaces. First, WorkPro will help employers to improve work-life harmony and better attract and retain locals. Second, it will help companies tap on back-to-work locals and older workers by supporting job-redesign, on-the-job training, recruitment, and retention efforts. We will set aside a budget of $170 million over three years to help our workers and employers on this front. We also expect SMEs to form 70% of the companies that will benefit from WorkPro.

Madam, allow me to elaborate on the different kinds of support that WorkPro will provide. First, WorkPro will promote work-life harmony. As part of the enhanced Marriage and Parenthood Package announced earlier this year, we are committing $100 million to encourage more employers to implement flexible work arrangements through the Work-Life Grant. Employers with no or minimal flexible work arrangements can receive up to $40,000 to implement work-life strategies through the developmental programme, which will be open to applications for three years. This is double the amount that the WoW! Fund provided.

Employers that have already implemented flexible work arrangements can also apply for additional financial incentives of up to $120,000 over three years, or up to $40,000 per year, if at least 30% of their employees benefit from flexible work arrangements.

We hope that these will motivate more employers to implement and sustain the use of flexible work arrangements.

Apart from improving work-life harmony, WorkPro will also provide holistic support to help employers hire and retain back-to-work locals and mature workers. First, a new $20,000 Age Management Grant will be provided to help employers improve their age management capabilities, such as putting in place performance management systems and making the workplace more ergonomic.

4.15 pm

Second, companies will receive more support to redesign jobs, up to $300,000 per company. This is $60,000 higher than the combined job-redesign grants that employers enjoyed previously under ADVANTAGE! and Flexi-Works!. Employers who do not have the know-how in job redesign can also tap on the grant to seek professional advice.

Third, WorkPro will provide companies on board the programme a New Hire Retention Incentive scheme of up to $2,000 for each newly-hired back-to-work local or mature worker earning below $4,500. This is to encourage employers to recruit and retain this segment of workers.

Fourth, we recognise that those who have not been working for some time might need more on-the-job training (OJT) initially to prepare them for work. Therefore, WorkPro will provide employers with an OJT Training Allowance equivalent to one month's salary, capped at $2,000 per worker, for each back-to-work local hired and trained.

Finally, to incentivise back-to-work locals to stay on the job, those earning less than $4,500 will also receive a retention bonus of up to $1,200 each under WorkPro if they remain employed with the company over a year. There are some similarities as well as differences between WorkPro and some of the suggestions from Members of this House, but we share a common aim and that is to promote work-life harmony and offer more support to bring older workers and the economically inactives back to work.

Mdm Chair, the most wonderful schemes on paper will not be effective if people find them too confusing to tap on. This is why we have combined our grants into a single WorkPro with just one application process. So, if you were confused earlier, it is okay, because all you need to do is to apply at one agency, and this is to make it easier for companies to apply for them. Companies can approach NTUC and SNEF, who will assess applicants' needs and provide advice on the relevant interventions and grants. SMEs can also find out more about WorkPro and the ETS at the SME Centres run by SPRING.

Mdm Chair, let me sum up. We will continue to help Singaporeans develop and maximise their full potential. We believe that every Singaporean who is able and wants a job should be given the opportunity to do so. Over the years, the Government has put in place a comprehensive package of assistance, and will continue to review and improve our various programmes. As we do our part to ensure that support is available for employers who need help, companies also need to take responsibility to build up their capabilities in adapting to the changing workforce. Workers, too, need to take ownership of their own training and career plans by proactively improving their skills. Ultimately, we hope that these efforts will help all Singaporeans progress into better jobs, earn higher wages, and fulfil their aspirations.

The Chairman: Order. I propose to take the break now.

Thereupon Mdm Speaker left the Chair of the Committee and took the Chair of the House.

Mdm Speaker: Order. I suspend the Sitting and will resume the Chair of the House at 4.40 pm.

Sitting accordingly suspended

at 4.19 pm until 4.40 pm.

Sitting resumed at 4.40 pm

[Mdm Speaker in the Chair] [Mdm Speaker in the Chair]: Debate in Committee of Supply resumed.

[Mdm Speaker in the Chair]

Head S (cont) –

CPF Life and the Retirees

Mr Seng Han Thong (Ang Mo Kio): Madam, in Mandarin, please. ( In Mandarin ) : [Please refer to Vernacular Speech on Pg xxxx.] In the past, when one reached 55, one would go to CPF Board and collect an umbrella, a souvenir from the Board. It means to say that you are now a retiree. Thus, when old friends meet, they always ask, "Have you collected the umbrella?"

"Collecting the umbrella," also means that one has collected the lifelong savings minus the Minimum Sum with the Board. Indeed, many stories begin from collecting the umbrella. We read in the newspapers about how our seniors lost their small fortunes. Some fell into the trap of "love"; some were cheated; some invested wrongly.

Then came CPF LIFE in 2009. In the beginning, it had 12 plans. It has now been streamlined to two plans only. As this has become a compulsory scheme from this year for those who reach 55, may I ask the Minister to update us, of all the seniors, how many have opted for the CPF LIFE Standard Plan, and how many opted for the CPF LIFE Basic Plan? For members who are now drawing from the LIFE, what is the average monthly amount?

Some retirees opine that the sum is not enough for their daily expenses and ask for a higher sum. Some seniors ask to use CPF LIFE for other purposes. It shows that some seniors do not understand the purpose and mechanism of CPF LIFE. They ask us to write to CPF Board on their behalf. Usually, they will receive a letter from the Board telling them why their money is meant for old age and cannot be withdrawn for that purpose but, frankly speaking, they disregard the explanations in the letter.

I would suggest the Board take a more member-centric approach by engaging them through face-to face-explanation. In this aspect, the Board may invite active seniors as volunteers. The old can communicate with the old better and they can also serve as a feedback channel so that CPF LIFE can be a Better Life.

The Chairman: Mr Low Thia Khiang. You have two cuts, you can take them together.

CPF Minimum Sum

Mr Low Thia Khiang (Aljunied): Thank you, Madam. The Minimum Sum amount was set at $80,000 in 2003 and targeted to reach $120,000 by 2015. In order to maintain a Minimum Sum amount value at 2003 dollars, the sum is adjusted yearly for inflation.

In 2012, due to high movement in the Consumer Price Index (CPI), the increase in 2013 was supposed to be $12,000, but MOM decided to moderate the increase. Although the Government decided not to factor in the full increase based on the CPI and, instead, to spread the increase over the next few years and to shift the target of reaching Minimum Sum to 2015, the Minimum Sum now looks to be a moving target. To most Singaporeans, we wonder what would be the eventual amount for the Minimum Sum when we reach our time to retire.

I am of the view that it is timely to review the Minimum Sum and to establish a reasonable yearly adjustment rate that is not only based on increase in CPI. The CPI may not be the best indicator for the computation of inflation for the CPF Minimum Sum as components, such as imputed rental and private road transport, are not as relevant to retirees for their retirement needs.

There is anxiety among middle, low- and lower income wage earners that the amount of money they can withdraw from their own CPF savings at the age of 55 will decrease with the ever corresponding increase in the Minimum Sum.

Use of CPF for Home Financing

Madam, I move now to my next cut. Madam, current CPF members are allowed to use their Ordinary Account (OA) to service their housing mortgage loan up to the valuation limit (VL) of the property. CPF members below age 55 who have reached the VL in using the CPF OA must set aside half of the prevailing Minimum Sum in their OA and Special Account before they are allowed to continue using their CPF money to finance their mortgage loans.

I have come across cases where CPF members' OA balance was sufficient, or more than sufficient, to make full redemption of their outstanding CPF mortgage loan balances and free themselves from the financial burden of servicing their home mortgage. Unfortunately, they were not allowed to do so because of the Minimum Sum requirement.

4.45 pm

If these CPF members were allowed to make the full or partial redemption of the mortgage loans using their available CPF OA balances, they would save a considerable sum on their mortgage interest. The loan value determined by the CPF is the lower of the purchase price or the valuation price of a HDB flat at the time of purchase. For many of these CPF members, the valuation price of their flat was low relative to today's HDB flat price. Hence, there is little for such CPF members in using their CPF OA balances exceeding the market value of the flat since it was capped at the lower of purchase price of valuation at the time of purchase.

Also, most of them would continue to work beyond the age of 55 and could continue to contribute to their Retirement Account savings. I urge the Minister to consider allowing such CPF members to continue using their CPF OA balances to make full or partial redemption of their mortgage loans.

CPF – Retirement Account

Ms Lee Li Lian: CPF members who have reached 55 years old will see a portion of their Ordinary Account and Special Account savings transferred to their Retirement Account to meet the Minimum Sum. Funds from the Retirement Account can only be used to pay for these individuals' housing mortgages after setting aside their Minimum Sum cash component.

I come across such cases every week during my MPS, where residents above 55 years are unable to pay their housing loans through their Retirement Account because they have insufficient funds left over and above the Minimum Sum, and they struggle to find additional funds to pay off their housing loan instalments.

One such resident, Mr Ang, had about $20,000 transferred from his CPF OA to his Retirement Account when he turned 55 last year. His monthly instalment for his housing loan is $700. He appealed to CPF to allow him to use the funds in his Retirement Account to pay for the instalments but was rejected. This leaves him with the only option of forking out cash for the instalments. This is a heavy burden for him whose take-home pay is less than $2,000. On top of that, he needs to finance his children's tertiary education.

In a written answer to a PQ filed in 2011, Minister Khaw Boon Wan said that there are about 1,250 HDB flat lessees who are aged 55 and above, and are in mortgage arrears for three months or more.

It is important to set aside sufficient funds for retirement. However, at the same time, we must acknowledge that there are immediate financial concerns that warrant exceptions to present rules. I urge the Minister to consider allowing CPF members to use their Retirement Account to continue to pay for their outstanding loan, even if they do not meet the Minimum Sum so as not to create sudden additional financial burden to them. We can look at this easing of the restriction specifically for repayments of existing loans by taking a minimum number of years back, and not for more recent purchases.

The Chairman: Mr Muhamad Faisal Bin Abdul Manap is not here. Mr Yeo Guat Kwang.

Progressive Wage

Mr Yeo Guat Kwang (Ang Mo Kio): Mdm Chair, as Singapore will go through a period of slower economic and job growth over the medium and longer term in the next 10 to 20 years, the Labour Movement identified three challenges and necessary mindsets to overcome such challenges.

First, improving productivity and innovation to sustain economic and job growth for Singaporeans.

Second, sustaining real growth in our median wage – which has grown 17% in the last five years – and, more importantly, helping our low-wage workers to grow wages in higher percentage terms than the median wage growth through accepting the wage increases which can only come about and be sustained with upgrading of skills and productivity and taking on heavier responsibilities, in terms of career advancement.

Third, ensuring employers are able to attract, retain and value every worker so that businesses are able to grow and ensure a better job security for all of us.

This is why the Labour Movement introduced the Progressive Wage Model (PWM). PWM is a four-in-one model of skills, productivity, career development and wages. All four components must go hand-in-hand to achieve the three outcomes: achieve economic growth and job growth that I mentioned; increase the real wages, particularly for low-wage workers; and ensuring businesses are able to compete so that we have better job security.

In 2012, NTUC unveiled the PWM for eight sectors, namely, healthcare, cleaning, pre-school education, hotels, retail, F&B, marine engineering, as well as transport.

Madam, through the cluster approach, we are able to collectively engage the tripartite partners more effectively to build a Singaporean Core workforce and also speed up inclusive growth for all workers. In the next two to three years, the PWM aims to benefit about 100,000 workers in these clusters.

Besides the F&B and hotel examples that I mentioned in my speech last week, in the healthcare sector, NUH also did a job redesign for Patient Service Associates (PSAs). So, through the job re-design, NUH created a structured career pathway which will provide career development and professional growth opportunities for these workers. More importantly, under the new structure, employees without degree qualifications can be promoted into these higher grades based on performance and earn up to a salary of $5,200.

In the cleaning sector, there are also about 70,000 cleaners in total. About 50,000, or about 70%, are Singaporeans. If the Tripartite Cluster for Cleaning (TCC) broadens our outreach, most of the 50,000 Singaporean workers would benefit from the PWM. I hope that MOM would consider establishing same sector-based cluster approach and platform like the TCC for all low-wage sectors and not just for the cleaning sector.

Lastly, from the Labour Movement's point of view, the new Wage Credit Scheme (WCS) will be helpful in our efforts for PWM and sustainable wage increases. I would like to ask MOM whether the Ministry has plans to support the Labour Movement to do more together, to ensure that we give employers and employees effective ways to skill-up and build progressive wages.

( In Mandarin ) : [Please refer to Vernacular Speech on Pg xxxx.] Cost of living is going up. Hence, we need to improve workers' wages in a sustainable manner. I hope MOM can more actively encourage employers to adopt the Progressive Wage Model advocated by NTUC, so that workers from all the sectors, especially low-income workers, can enjoy better bonus, better starting salary, sustainable and sizeable salary increases and better career prospects. The Progressive Wage Model has already been adopted in the healthcare, cleaning and service sectors, and progress can be seen. The tripartite partners should step up their efforts to allow more workers to benefit from the model. Let us all work together towards the Progressive Wage Model.

Fair Employment for Low-wage Workers

Mr Png Eng Huat (Hougang): Mdm Chair, low-wage workers, especially those with little education and qualifications, need help beyond Government funded top-ups, training and retraining. They need to know their basic rights as contract, hourly-rated or part-time workers. More importantly, they need Government intervention to ensure they will have a fair chance of making a decent wage to support their families.

Some of these workers earn only $5 an hour and work on contractual or daily-rated basis, that is, no work, no money. Many will not be given medical benefits as well.

At my second MPS, right after I was elected, an elderly man waited hours to share with me about his experience as a low-wage worker. He works as a security guard and earns a basic salary of $700 a month. From the look on his face, one could easily tell he had a hard life. He just turned 63 this year and I believe the enhanced WIS, as announced in Budget 2013, will bring some relief to him.

Over the past nine months, I met more low-wage workers and even had a good look at some of their pay slips. From the way some of their salaries are structured, these workers will need to clock a lot of over-time work if they want to take home more than $1,000 a month.

The salary structure of these workers comprises a low basic pay and a host of generous allowances for transport, attendance and so on. What seemed to be generous turned out to work against them when they did overtime work. Most of them will find out on pay day that the stipulated 1.5 times overtime pay is based on the low basic salary and not the total pay package. Technically, these workers are paid less per hour for working overtime. Financially, these low-wage workers are better off taking on two jobs than doing overtime work. These workers cannot seek redress except to resign as such employment terms are legal.

How is the Ministry going to uplift the salaries of these low-wage workers when the incentive to earn more money through overtime work just does not make sense? Perhaps, the Ministry can look into changing the computation of overtime pay for salaries below a certain threshold to comprise all allowances.

I believe if low-wage workers have the resolve to move up the social ladder by working harder and longer, they should be adequately compensated.

Wage Credits for Low-wage Workers

Mr Christopher de Souza: The Government's introduction of the Wage Credit Scheme and its pledge to co-fund 40% of wage increases given to Singaporean employees up to $4,000 is encouraging, especially as we shift to productivity, rather than an overly labour-driven trajectory of growth. How can we ensure that the companies actually utilise this opportunity, together with the productivity incentives, to reap maximum returns?

In sum, it would be helpful if the Government could clarify and flesh out the details as to how this Wage Credit Scheme, coupled with the Productivity Incentives, would translate into a formula to (i) upgrade and equip Singaporean workers with advanced skills and (ii) thereafter, pay Singaporean workers higher.

Workers Gaining from Wage Credit Scheme

Mr Heng Chee How: Mdm Chair, the coming three years are a critical period for the economy to transform and for companies to also transform themselves to raise productivity. In the light of that, the Wage Credit Scheme was introduced to assist the companies because of the tight labour market and the cost of transformation. They would get a subsidy of up to 40% of the increase in total wage for workers earning up to $4,000. The key thing is not to use the coming three years with this money just as a wage subsidy for three years, but to ensure that the companies transform themselves so that future springs of income for the workers would look even brighter.

In this regard, for the unionised sector, we would certainly be working through the unions and the unionised companies to ensure that the spirit of the WCS is properly implemented. For the non-unionised sector, I am not so sure. I think there will be a need for much clearer guidance. In the light of this, I would suggest that tripartite guidelines be drawn up so as to guide everybody because time is of the essence and we do not want to come back a year later only to find out that people do not know what to do and not much was done because of a lack of clarity. I would also suggest that in the coming meeting of the National Wages Council, that a reminder be sent in its report to urge all companies and unions and workers to look at the proper spirit of this WCS and to combine their efforts to make it work in a timely manner.

Workmen Injury Compensation Claims

Mr Zainal Sapari (Pasir Ris-Punggol): Mdm Chair, employers are expected to ensure the upkeep and maintenance of workers who file claims under the Work Injury Compensation Act (WICA). I would like to suggest for MOM to provide greater clarity on the responsibility of employers on the upkeep and maintenance of these injured foreign workers. There were reported cases by NGO activists where foreign workers filing claims under WICA due to serious leg or back injuries were given accommodation which required the workers to climb up many flights of steps, causing further strain on their body and worsening their injuries. If alerted to such a situation, MOM must be vested with the authority to demand that the employers provide housing arrangements that cater to the basic welfare of the injured foreign workers filing WICA claims. Punitive actions must be taken against those employers that neglect the welfare of these injured foreign workers.

Madam, I am also concerned on the involvement of lawyers who represent the workers filing claims under WICA. I would like to propose that MOM should not allow lawyers for WICA claims under the Labour Court, as is the practice or the norm in all other cases heard in the Labour Court. Too often, involvement of lawyers is detrimental to the workers filing the claim because the case can drag on for very long. I believe that the process of work injury claims would be made much more productive without getting lawyers involved in the Labour Court. Workers who want to engage lawyers must do so in the Civil Court.

A Safer and Healthier Workplace for All

Mr Yeo Guat Kwang: Madam, the Labour Movement's Workplace Safety and Health (WSH) vision is: every worker will be able to return home safe and sound at the end of every work day. Through our active collaborations with all our tripartite partners, we hope to be effective in inculcating safety culture and mindset in all our workplaces to be able to say "no" to all the risks at work.

Now that the Workplace Safety and Health (WSH) Act covers all workplaces, we must ensure that this is an Act that has teeth, as well as also at the same time ensuring that all the workplaces are equipped to maintain their WSH capability.

I urge MOM to roll out more incentives and training programmes to support unions and companies to achieve their WSH targets and monitor that these are sustainable. I wish to know how would MOM ensure that all companies are WSH-ready and put in place risk management frameworks so as to make our workplaces safer.

5.00 pm

In addition, addressing workplace health is just as important as addressing workplace safety. I would like MOM to update the House on what the Ministry will do to address workplace health this year?

Work at Heights

Mr Seng Han Thong: Madam, MOM has announced that the Work at Heights Regulations will likely be introduced this year. Could the Minister give an update on the progress of this? While some amount of legislation is necessary to raise safety standards, feedback from the ground is that businesses could be overwhelmed if too many rigid rules are in place. In fact, their comment in Hokkien is: "chin giam chin jia lat" or "very stringent, very tough".

As new regulations are introduced to elevate safety standards in priority areas, I urge the Ministry to continue to review the existing regulations to ensure that they remain relevant to all stakeholders.

The Senior Parliamentary Secretary to the Acting Minister for Manpower (Mr Hawazi Daipi): Mdm Chair, Acting Minister Mr Tan Chuan-Jin spoke about the need to restructure the economy to create quality growth that is inclusive. This involves sustained efforts to upskill our workforce to create more opportunities for Singaporeans, which the Minister of State Dr Amy Khor touched on.

During this national journey of economic restructuring, particular attention should be paid to the more vulnerable segments of our society. Madam, uplifting lower income Singaporeans is an important reason why we need to restructure in the first place.

At the Budget Debate, Mr Lim Biow Chuan had shared his concerns regarding the living standards of low-income workers. Just now, Mr Png Eng Huattalked about enhancing our support for the low-wage group of Singaporeans. The Government shares their concerns.

As the Deputy Prime Minister Mr Tharman Shanmugaratnam emphasised in the Budget Speech, the Government is working even harder, through various means, to ensure a fair and inclusive society for all Singaporeans. Members have heard over the last few days how the Government will do more for the low-income in 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.

Our strategy is to raise wages at the lower end; and it 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.

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.

Earlier, Acting Minister 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 seven in 10 Singaporean workers, will benefit low-wage workers as it supports the efforts of employers to restructure and share productivity gains through wage increases.

In the Budget Speech, Deputy Prime Minister Tharman Shanmugaratnam had also announced that the Government will enhance the Workfare Training Support (WTS) scheme. Please let me elaborate on this.

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.

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%. As Minister of State Dr Amy 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, low-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.

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.

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.

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 the 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.

Third, we recognise that there are low-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 allowances (TAs) since they have to forgo earning an income while they train.

Fourth, change. 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 the total WTS-eligible courses to over 8,000. Newly included are courses, such as Foundation Certificate in Financial Management, Construction Trade Foremen Certificate, and Fundamentals Certificate in Early Childhood Care and Development.

Finally, there are some low-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.

Taking into account these changes, we expect WTS to benefit about 60,000 older low-wage Singaporeans every year, an increase of about 10%, including someone like Ms Viki Wong. I am happy to cite her as an example because she has really made progress in her career, 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.

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.

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 the 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 other components of WTS, such as the Training Commitment Award which can amount to as much as $400 a year.

Madam, the Government is committed to make growth inclusive for individuals like Ms Viki 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.

Mdm 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.

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 for the Clean Mark accreditation scheme, requiring that resident cleaners employed in accredited companies receive progressive wages that reflect the higher training, standards, as well as productivity, required of accredited companies. As the Minister of State for Finance Mrs Josephine Teo mentioned last Monday, the Government is also buying only from accredited cleaning companies from 1 April 2013 onwards.

Building on this, the Ministry of the 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. I think this will address some of the issues that Mr Png raised earlier.

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, upgrade and become 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 the basic wages of our security officers and reduce the reliance on overtime.

Specifically, similar to the approach we have taken for the 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.

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 upgrading exercise for security agencies.

In addition, to recognise 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 this year. Once the HR Quality Mark is ready, the Government will also procure only from security agencies that attain the Mark.

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.

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 STC when ready.

5.15 pm

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.

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.

Madam, 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.

We have made some progress in Workplace Safety and Health (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. 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.

Some of these accidents could have resulted in a 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. The Ministry of Manpower and the WSH Council will work with the industry to further improve WSH in Singapore. Let me elaborate.

I agree with Mr Yeo Guat Kwang that all companies should implement risk management as it is the cornerstone of safe and healthy workplaces. 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. The WSH Council will continue to build up companies' capabilities in risk management through the bizSAFE programme. I am glad to share that the take-up is strong and more than 14,000 companies have benefited from the programme thus far. And I encourage more companies to do so.

Mr Seng Han Thong asked for an update on the Work at Heights regulations. Work at Heights has consistently been a top contributor to workplace fatalities and injuries. 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.

Unfortunately, while safety standards have improved, falls still contribute more than 30% of total workplace fatalities in 2012. So, this is still an area of major concern for us in MOM. Therefore, more needs to be done to raise standards.

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. The regulations will consolidate the Work at Heights requirements that are currently stipulated in different legislation. 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.

I will now address Mr Yeo Guat Kwang's question on MOM's efforts in workplace health. 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. 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. Asbestos causes fatal diseases such as asbestosis and mesothelioma. According to World Health Organization estimates, about 100,000 people die every year from asbestos-related diseases worldwide.

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.

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.

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. 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.

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. 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.

Madam, Mr Zainal Sapari has expressed two concerns regarding work injury compensation (WIC) claims. The scenario painted by Mr Zainal Sapari on the upkeep and maintenance of foreign workers during the claim 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.

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 three in four cases did not involve lawyers. Nonetheless, 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 work". This is different from the claim process under the Employment Act where the dispute is largely one of facts.

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.

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.

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. Nevertheless, MOM 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.

One example is our Factories (Persons-in-Charge) and 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.

Given that 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 March this year.

Madam, 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.

Claims for Non-payment of Salary

Mr Zainal Sapari: Madam, many workers, especially low-wage workers, who do not get their salaries paid by their employers face an uphill task and may have to overcome many hurdles in trying to claim their salary. When a worker lodges a complaint to the Ministry, the employer might not turn up or might not settle the matter even if it was promised before. The worker will then have to return to MOM and file the claim under the Labour Court and wait for a notice to be served on the employers and for a Court hearing date to be fixed. If the employer says he is willing to pay up, the hearing may be postponed and, if the employer fails to do so, then there is a further delay.

When there is still no payment made, it is then left to the worker to proceed to the civil court and this process may take yet another four to eight weeks. In the meantime, the worker is still owed his dues and he may feel like he has reached a dead end. This leads to great frustration for the worker.

I would like to ask the Ministry what steps will be taken to give greater protection to such workers. Can the procedure be simplified and expedited for the worker to claim arrears? If the claim is clear-cut and there is no dispute from the employer, I would like to suggest that the Ministry take on the administrative power to enforce the payment.

For cases where the judgment is passed by the Labour Court, could MOM enforce it instead of having the worker finding his own means and ways of resolving it? Otherwise, many may just give up and not claim their salary arrears, causing errant employers to be emboldened and, possibly, leading to a repeat of such acts.

5.30 pm

Keeping Tripartism Relevant

Asst Prof Tan Kheng Boon Eugene (Nominated Member): Madam, during and in the aftermath of the SMRT bus strike last December, the language of "interests", such as industrial peace, competitiveness and jobs, was dominant in the public discourse.

This is not surprising because it is often the "bottom line" that motivates people to do things.

On the other hand, the language of ideals and rights was missing, seemingly irrelevant. But ideals of fairness, rights and justice matter immensely in trust- and confidence-building.

It is trite to say that industrial peace is not pre-ordained. But if one tripartite partner perceives that it is always giving in or having to bend backwards for the larger good, then all bets are off that tripartite trust can be maintained. Once that trust is lost, regaining it is an arduous task.

Last December's SMRT bus strike was a rude awakening to all industrial relations stakeholders.

Tripartite partners collaborate and seek consensus through aggregating and aligning their individual interests towards national objectives even as they represent and advocate for the broad interests of their respective stakeholders. It is crucial, therefore, that tripartism must evolve with the changing industrial landscape here.

With foreigners comprising one-third of our regular workforce, the bulk of whom are on transient work permits, there is a need to reach out to all workers regardless of nationality.

It is also time that we also examine and reflect on our attitudes and mindsets towards foreign workers in Singapore. As a society, have we accorded them the dignity due to them? Have we also paid lip service to the role of unions in protecting workers' rights? About 27% of local workers are union members but only 11% of foreign workers are unionised. Are workers in Singapore, regardless of nationality, adequately represented in the workplace?

The SMRT strike also demonstrates the need for unions to keep tabs on developments affecting the majority non-unionised workers since what affects them will invariably affect the minority unionised workers.

Any collective agreement is of limited efficacy if most employees in that sector or industry are not unionised. As the SMRT strike so vividly demonstrated, the actions of a segment of the transport workers in one company had repercussions on the entire transport sector and on tripartism.

Can union memberships be made more attractive, especially to foreign workers? Can the Government consider requiring companies to pay the union subscriptions, especially of their foreign employees?

More importantly, can unions convince workers that being unionised is to their individual and collective advantage? This is particularly so when many of the foreign workers here are on transient work permits and have very limited bargaining power.

Some Singaporeans were affronted by the brazen action of the mainland Chinese bus drivers. But we should not fear strikes that are legitimate and legal.

Strikes are the ultimate action that workers can take to protect their rights and interests. The right to strike must be real and not apparent.

The abiding concern with competitiveness means that a premium is placed on harmony at the workplace. Given the asymmetric power relationship at the workplace, workers tend to bear a disproportionate burden doing the heavy lifting for the high principle of tripartism and industrial peace.

Some edginess, contention and dissent in industrial relations may well be the "new normal" in industrial relations in the years ahead. Tripartite partners would be kept on their toes and not take the workers and industrial peace for granted.

I would also like to ask MOM whether legislation could be introduced to enable sanctions against any employer which treats their employees poorly. Perhaps, it is time to impose legal liability on employers if they fall short of minimum standards in employment relations.

Social Safety Net of Self-employed

Mr Seng Han Thong: Madam, when I chaired a dialogue session on this Budget, one resident commented that, as a self-employed, he worried about the adequacy of his social safety net. The number of self-employed Singaporeans is increasing over the years and cuts across many sectors, especially those employed as contract-for-service to small time businessmen. Many of them have seen the need to strengthen their social safety net, especially when they get older.

While we have built up social safety nets for the more organised and company-based self-employed groups like the taxi-drivers who now enjoy the Drive-As-You-Save scheme, many other self-employed groups, such as hawkers, tour guides, property agents, freelance designers and so on, only have the Medisave and their personal insurance, if they do buy one, as a safety net.

As salaried workers may enjoy the wage credit programme of salary increases, may I propose that the self-employed groups will have their additional top-up in the form of Medisave if they make additional contribution on top of the legislative requirement?

Foreign Manpower Management

Mr Yeo Guat Kwang: Madam, I wish to repeat my call on the tripartite partners to focus on quality, not quantity, in managing our foreign workforce. Madam, as we aim to reduce our dependency on foreign manpower, we need to look for sustainable high-quality foreign workers. I believe that we need to secure foreign workers with the right technical skills, as well as the social adaptability. As such, I would like to renew my call for MOM to seriously consider implementing skills certification and upgrading as a criterion for work pass renewal for foreign workers who are already here and, if possible, to extend this criterion to new applications subsequently.

Employers must value every worker and play their part to ensure that the qualifications, training and skills required for local workers are the same as that required for foreign workers as well. I believe a better-skilled, better-qualified foreign worker naturally will translate to a more adaptable, more easily integrated and more productive worker.

Madam, many of the stressed foreign workers are unwilling to come forward because they are afraid that they will be sent home after the case is resolved when they come to the Migrant Workers Centre (MWC), and they will not have the opportunity to carry on working in Singapore. That is their concern. Recently, the MWC has assisted a number of foreign workers who were involved in salary arrears cases. And upon our appeal, they were granted for Change of Employer (COE) scheme on a case-by-case basis. Such a scheme is actually currently already in place for foreign domestic workers (FWDs). I would like to again advocate and call upon MOM to consider making this COE scheme accessible to all foreign workers and not just FDWs.

Madam, the foreign workers also need a good place to rest and sleep, too. I would like MOM to review the current supply and ensure that dormitory supply is adequate. The Government also needs to look into the provision of sanitary and hygienic environments, as well as amenities, within all these dormitories.

Madam, I mentioned in my speech last week that the approach taken by many companies which were involved with NTUC in the Customer-Centric Initiative (CCI) and Inclusive Growth Programme (IGP) scheme like the Hans Restaurant chain towards manpower issues is positive and a good example. We need to get more employers in the services sector to do the same. However, as the management of Hans said, while the measures were very effective, they need to put in a lot, a lot of efforts. So, the Government needs to give recognition and help these companies, particularly the SMEs, which already see the benefits of our schemes and are making concrete moves. We must help them. I would like to urge MOM to consider granting short-term DRC flexibility to companies which have already embarked on the relevant schemes with the NTUC, e2i, SPRING, STB and WDA as they are transcending to reduce their dependence on foreign workers.

( In Mandarin ) : [Please refer to Vernacular Speech on Pg xxxx.] Similar to quitting smoking, companies need certain time to reduce their dependency on foreign workers. During the past one year, NTUC has done experiments with some companies to increase productivity and reduce their dependency on foreign workers. It is best that MOM could give more flexibility and adjustment time to companies which have actively participated in the productivity and job-redesign movement to reduce their dependency on foreign workers, as advocated by NTUC, e2i, SPRING and STB.

Fair Employment Practices

Mr Gan Thiam Poh: I understand the Tripartite Alliance for Fair Employment Practices promote the adoption of fair, responsible and merit-based employment practices among employers, employees and the general public.

I wish to ask the Minister whether there is a need to set up an agency to monitor fair employment recruitment practices so as to add more bite to potential discrimination against Singaporean PMETs in the workplace.

Dr Chia Shi-Lu (Tanjong Pagar): Madam, I would like to renew my call and support calls that have already been made by fellow Members like Mr Patrick Tay and Ms Foo Mee Har that we relook at labour market testing to ensure that PME job opportunities for Singaporeans are suitably safeguarded.

I think we all recognise that there are fair employment practice guidelines in place. Unions are working hard with employers to advance such fair hiring practices but I believe that some degree of legislating, mandating that companies consider Singaporean citizens first for PME positions should be enacted. The priority should be to ensure jobs for Singaporean workers and to get them into these positions, while guaranteeing that businesses can obtain the skilled employees they need when they are unable to do so in the domestic employment market.

Many developed countries have enacted legislation to this end, but, as mentioned in my speech last week, this has not led to significant drops in either workplace vibrancy or its competitiveness, and has not resulted in these countries being labelled as either closed or anti-foreigner.

The USA has one of the most comprehensive systems of market testing, with explicit guidelines on the type and number of advertisements, the provision of additional steps like the use of employee referral programmes, and very well-defined time intervals for the entire recruitment procedure. The UK uses the Codes of Practice and a Points-Based Tier System, and also employs a Resident Labour Market Test. Hong Kong has a more liberal employment policy for foreigners, but still has a general policy in this regard. Australia has recently streamlined its 457 visa process and done away with labour market testing, but the overall intent of the reform is to strengthen the citizen-first approach and prevent abuses of the system.

I would propose that MOM study the various measures being used internationally and develop a system which is fair to both employers and employees, and I would support a system which includes some manner of statutory declaration by employers that they have exhausted all reasonable avenues to recruit a Singaporean citizen, before applying to employ a foreigner under an Employment Pass or even an S Pass.

If such a system is applied in a sensitive, calibrated manner and on a sectoral basis, it would not adversely affect the autonomy or competitiveness of businesses, and will nudge them towards a reduced reliance on foreign employees and encourage companies to invest more in local talent development. This, I believe, will ultimately leave them in a more robust position.

Singaporean Core PMETs

Er Dr Lee Bee Wah (Nee Soon): Madam, as we continue opening our doors to foreigners, we must ensure that PMET jobs go to Singaporeans first. Companies in countries like the US and Australia often adopt policies that prioritise local talents over foreign talents. American companies have to prove that they are unable to hire American citizens before they can recruit foreigners. Australian companies are highly selective with their recruitment criteria, and would only accept foreigners who possess skills and qualifications on their skill occupation list. It is high time we reviewed our foreign work pass procedure and provide employment only to foreigners who can fulfil the needs of our employment industry where locals cannot.

Once a foreign PMET is hired, there should be skills transfer to the locals and there should be a wind-off period so that local PMETs can take over the jobs. A concrete national policy must be drawn up to make employers legally obliged to hire Singaporeans first, especially for attractive PMET jobs, such as those in the banks. This would reduce bias brought about by foreign employees in a recruiting position, hiring their fellow countrymen and shifting their own village to Singapore. Perhaps, our e2i can play a greater role. That means, for those companies which have job vacancies, they should go to e2i first. Only when e2i cannot help them to fill the vacancies, then they are allowed to take in foreigners. In that situation, e2i is a place to help our locals to get their jobs and also the place to help the companies to fill their positions.

I once received a very long email from my friend in NUS who told me that his young daughter, after working for some time in the bank, decided to quit because she was surrounded by foreigners. She went to Europe to look for a job. After some time, she was not successful and went to America and, this time, she also could not get to work in America. It was not because there were no jobs but she could not get the permit to work in America.

By putting locals first, we tap on and expand existing potential and bring only the best into our nation. With skills transfer, the Singaporean Core PMET workforce can be assured and they do not have to leave to search for greener pasture overseas.

5.45 pm

Mr Tan Chuan-Jin: Madam, in my opening speech, I said that developing the Singaporean Core in the workforce requires a multi-pronged approach. One important aspect of this approach is to take a firm stand against discriminatory practices.

I would like to thank, firstly, many out there who have written in to me personally, to my Ministry and to many of my colleagues, to share insights, observations and many very thoughtful suggestions about how we should deal with the issue of fair employment practices. In particular, I also want to recognise the work of my colleagues, Ms Foo Mee Har, Mr Patrick Tay and Mr Liang Eng Hwa who have been actively championing these concerns and having long conversations with me on what the concerns are out there and what we should do about them.

Today, I would like to deal squarely with the concerns that Singaporeans have on nationality discrimination and the impact of foreign labour on their jobs. Let us start from a sense-making perspective. I have been tracking this, getting feedback and also looking at possible solutions. I first spoke about nationality discrimination about a year-and-a-half ago. We started studying how other countries dealt with hiring practices. We began analysing and investigating the range of complaints that we received. We also started adjusting our Employment Pass (EP) framework – January 2012 – as a first step towards levelling the playing field. We will do more and I will explain how we will address the concerns systematically.

Let me, first, describe the issue at hand. Singaporeans understand. From the many emails I have received and from the many conversations, it is quite clear that Singaporeans understand that we do need to be open to the world. Our survival, our very existence, depend on it. As a people, we are warm, open-hearted and welcoming. That is who we are.

Our people also recognise that we need foreign labour at various levels. They do recognise that tapping the global pool of talent and manpower benefits us because it actually creates good jobs and opportunities for Singaporeans. It allows us to be competitive and to strengthen Singapore.

But the main concern that Singaporeans have is whether we have enough safeguards for our people, meaning that even as we recognise the benefits, we understand that we have concerns about whether the safeguards are in place.

Mr Yeo Guat Kwang, Dr Chia Shi-Lu, Er Dr Lee Bee Wah and Mr Gan Thiam Poh have voiced concerns over whether our work pass framework allows Singaporeans to compete fairly with foreign professionals for good PMET jobs, particularly at the EP level. They have also made some good suggestions on how we can level the playing field further, and on how we can ensure that Singaporeans are not overlooked or, worse still, discriminated against in our own workplaces.

We have Singaporeans informing us that the governments of other countries have stricter policies about hiring foreigners. We must remember that we are in Singapore actually creating more jobs than there are Singaporeans to fill them. The situation in other countries is exactly the reverse. As I highlighted earlier, our unemployment is fairly low, at 3%. PME unemployment is actually even lower than that. Be that as it may, to those who are unemployed, to those who are displaced, it does not matter that it is 3%, it does not matter that it is 2%. As far as the individual is concerned, it is 100%.

Let me try to organise the sense of frustration that we sense out there into three categories. First, the "hiring-own-kind", or the unfair hiring practices. We have heard anecdotes of how, in certain cases, heads of business units or HR managers have a preference for candidates they are familiar with, or of the same nationality, for reasons that are irrelevant to job performance and irrespective of whether they are more competent than other candidates.

We have also heard of situations where Singaporeans were retrenched or made to resign in the name of downsizing, only to realise later that their positions were given to foreigners, who were, coincidentally, from the same countries as the business heads.

Let me be quite blunt. Would these practices not sound discriminatory? Would any respectable, progressive company endorse these practices? If this is indeed because they care only about choosing familiar candidates and not about hiring the best man for the job, then I will say that such practices have no place in Singapore's workplaces. Discrimination will not, and cannot, be tolerated.

Stating this principle does not mean that it is easy to implement. We all recognise that proving discrimination is sometimes difficult. It is not always possible to discern whether such hiring practices are legitimately based on the objective requirements of the job or motivated by personal connections. We all know how 关系 works. But I know that Singaporeans perceive some outcomes to be against the principles of meritocracy and fairness and I fully understand why you feel angry in the process.

5.50 pm

Mr Tan Chuan-Jin: Second, business heads or HR managers may not be paying enough attention to local talent. In the name of efficiency, or sometimes meritocracy, some managers will want an employee in as fast as possible, whether Singaporean or foreign. It may, therefore, be more expedient for them to rely on recommendations from others or a ready stock of foreign candidates supplied by headhunters.

In fact, one CEO we met told us that it was simply more convenient for him to mount an overseas recruitment exercise in a particular country to get all the skilled manpower he needs, than to invest in a detailed and time-consuming recruitment search for potential candidates within the local job market.

Third, qualified foreign candidates who come in at lower level employment passes (EPs), and even at the S Pass level, compete directly with our fresh university and diploma graduates and with mid-level PMET Singaporeans. In some cases, firms may prefer the foreign candidate following a purely merit-based assessment, as he may be as qualified but perhaps willing to work for a lower wage compared to a Singaporean. Such foreign candidates could include talented graduates from developed countries looking for better opportunities in Asia. Is this meritocratic? Yes. Should we just take a hands-off laissez faire attitude when faced with this situation? There is a real impact as it can deprive our young of the opportunities they need to learn on-the-job and to progress to more senior positions later on. I do not think we can just ignore the situation.

What do we do? Before you talk about solutions, let me state clearly our guiding philosophy and thinking. In everything that we do as a Government, it must benefit our people, both for the present, and for the future.

What do we want to achieve? We want good jobs, wages and opportunities for our people. We want a system that is fair, and we want to be able to develop and nurture the talents and abilities of our Singaporean Core to the fullest potential.

In this respect, we know that by being open, by being competitive, we are able to generate good jobs and opportunities for our people. We remain open to free movement, both of manpower and other resources, because if we are closed off, we will be worse off. And a number of Members in this House at various occasions have highlighted this because they are concerned that if you overdo this, it can have a detrimental impact. Many Singaporeans understand that. And they are not asking for us to be closed off. They are asking for an appropriate balance, they are asking for fairness.

At the same time, it is only fair and reasonable that foreign firms and foreigners working here bear a responsibility to the local communities. In a sense, this is somewhat of a social compact. We do not require global firms to give preferential treatment to locals, but they must be fair to Singaporeans. There must be equal opportunities for our people, whether at hiring or in advancement. There has to be a level playing field.

Having articulated the thinking, how do we translate it into something that works? Now, this is a complex issue that cannot just depend on one silver bullet to solve all the problems. We will take a systems approach that will comprise structural as well as process-based adjustments. In essence, this is what we will do.

In terms of structure, we will adjust our work pass framework. In fact, the changes made to the EP framework in January last year were aimed at addressing some of these concerns. What we did was to tier the qualifying salary criteria to account for experience. If Members recall, where previously it was $2,800, it was raised to $3,000. It was not just an entry level at $3,000. We tier it at different levels, meaning, if you were to come in at an older age with more experience, you will not qualify for EP only at $3,000. It would have to be higher because you need to pay for an appropriate level. The intent was really to level the playing field so that more experienced foreigners do not undercut our own PMEs.

We have since seen the numbers of EPs drop by about 1,600 last year. This is the first time the EP numbers have dropped since 2003. Some have been converted to the S Passes instead because a lot of them were clustering at about $3,000, But now, they will be subject to DRC ratios and levies. This formulation, I think, works and it has an impact. As you are aware, we will now apply this same tiering concept to our S Pass. Over and above that, I will make further adjustments to the EP framework, especially to the Q1 segment later this year. We are working on the details. I believe that the purpose of this is to better help our junior to mid-level PMEs. The Q1 segment, I think, needs adjustment.

Now, in terms of process, we expect all employers doing business in Singapore to comply with the Tripartite Guidelines on Fair Employment Practices. Now, if there are issues, MOM will step in to investigate and we will not hesitate to curtail work pass privileges.

At the same time, we will also explore a practical, workable process where Singaporeans are given fair opportunities in the hiring process. We will deepen the efforts with companies to develop a local pipeline for Singaporean talents. This will be a consideration as companies are brought in to Singapore. It is a combination of structural and process adjustments that we are taking as a systemic approach towards dealing with this issue.

Now, let me explain how these changes will address the three categories of concern that I mentioned earlier.

Firstly, the "hiring-own-kind" type of problem. Now, on this issue, we do not, and will not, tolerate this in Singapore. There are a number of "live" cases that MOM is handling presently.

Let me use one of them to illustrate. A discriminatory online job advertisement was recently put up. I was tempted to mention the company but I would not. It is a very prominent company. It said it only wanted to recruit people of a certain nationality. I personally went through the advertisement a few times. I could see no reason why the company had to recruit someone of that particular nationality. This is completely unacceptable. So, we informed the company to remove their advertisement immediately, which they did. We suspended their Work Pass privileges. They remain suspended. We asked to see their senior management. In fact, a few of them flew in from overseas to meet my colleagues. We are setting out clear expectations on the part of the company to address the situation and to make amends. Their Work Pass privileges will remain suspended until we are satisfied the remedial actions will be taken.

In other instances, depending on the complaint and nature of alleged discriminatory practices, of which we receive from time to time, TAFEP will investigate, TAFEP will speak to the company and, if they find that there are issues of concern, they will escalate the matter up to MOM. In the same vein, we may also suspend Work Pass privileges as we investigate, and this will include interviewing the employees to understand whether, from their perspective, discriminatory practices are taking place. We will build up a profile of the various companies.

What else can we do? Well, sometimes, it is a matter of the management of companies being more aware and putting in place responsible HR practices. In fact, today, on various occasions, we have talked about how employers should be more responsible; we should have more enlightened HR practices.

Well, for example, Deputy Prime Minister Tharman and myself have met up with the senior management of a number of financial institutions on a few occasions to stress the point that the financial industry players should make a more concerted effort to develop a local talent pipeline. These sessions actually have been productive and quite useful. The management, to be quite frank, have been quite honest to reflect that they need to be more mindful of the need to ensure that discriminatory hiring practices are not entrenched in their industry. Some were quite candid. They recognised that they had actually not paid enough attention to how hiring was done and that unhealthy enclaves had been formed. Others acknowledged that they would need to be conscious of diversity and clustering in their make-up.

I would like to acknowledge Mr Gerald Giam for his comments. We are clearly thinking along the same lines. TAFEP and MOM have been engaging not just the HR managers but the firm's management to remind them of their obligations to attract and develop Singaporeans on merit. When complaints are lodged against firms, TAFEP engages them and ensures that all those involved in the hiring process, including the line managers, are trained in the methods of fair recruitment and selection. The response has been positive.

What we will do is to step up on this front and we will take administrative measures. We will also begin to build up a profile to understand the various companies. A lot will also depend on complaints and feedback provided by the employees working in these companies. What this tells us from a management perspective is that the firms must manage their companies sensibly. A lot of it comes from sensible management, sensible engagement, explaining to people, and being conscious about what you are doing, and being conscious about what your various line managers are doing. A lot of them are not paying attention to their line managers.

6.00 pm

Secondly, it is undue haste in the recruitment process. This second issue is really about taking the shortest route in the recruitment process. And we need to ensure that firms surely must give fair consideration to Singaporeans in their hiring practices. When we received the feedback about how that company went on this massive recruitment exercise, it actually sounds quite appalling but, unfortunately, this is sometimes what happens. And when we pointed it out, I hope that it registered with that particular company. Certainly, we will make sure that they have noted that.

We have been studying the Work Pass framework. A number of Members here have also shared your perspectives – Mr Yeo Guat Kwang, Dr Chia Shi-Lu and Er Dr Lee Bee Wah – and have made various suggestions about how we should incorporate the best features and adapt them to our needs, like how employers ought to show proof that they have searched for local candidates, by requiring them to advertise job vacancies to locals, before a foreigner can be hired. All this sounds reasonable, but when we studied the systems, going behind the scene, talking to the businesses, talking to the Government officials, things are not always what they appear to be on the surface.

Our preliminary research in the case of implementing such measures effectively while still providing for employers' genuine need for talent, is actually not so straightforward. I just cite two examples.

Hong Kong has a General Employment Policy (GEP) which allows local employers to recruit foreign professionals not readily available in Hong Kong to meet their manpower needs, subject to a set of criteria. But when you look at the data and applications, actually most of the applications put up by employers all ended up being approved anyway.

In the US, while they do have requirements to ensure US citizens are recruited first before foreigners, they also take a balanced approach. For the H1B visa, which is meant for foreign professionals, this requirement does not apply to every employer. Instead, it applies only to higher risk employers who hire many H1B workers or have submitted false applications. I think, with every system, there are pluses but there are also realities that perhaps would surface when you look at it closer. But I would say this − there is a sense that these approaches serve as useful markers, as a signal, even if they do not adequately address the underlying concerns effectively. They may also actually be complicated to design and that is why we are looking at it internally to study further to see how best to come up with a system that would make sense for us. The design of each country's Work Pass, as you can see, actually differs, and a lot of it is due to the different local circumstances. But it is something that we believe we can look at and something that we will work on in adapting a particular system that would make sense for us.

I would build on an interesting idea floated by Er Dr Lee Bee Wah. I do not know why she only talked about e2i because we also have CaliberLink. Could we consider, perhaps, having employers examine CaliberLink, e2i's pool of PMEs and unemployed Singaporeans looking for jobs? In fact, we are helping companies doing the matching. We are doing that with SMEs as well. Can we enhance that before Employment Passes are awarded? Or, in fact, earlier, we talked about the Individual Learning Portfolio, where Dr Amy Khor talked about how we are planning to develop this – how you put in your database, how you put in your skills. And because it is all IT-based, you can actually weave it into a system where that actually also becomes part of that landscape. So, I think there are exciting possibilities. I do not think it will necessarily solve everything, which is why it is one part of a larger solution set. MOM will consult closely with stakeholders in the coming months to further explore and develop a practical framework that best meets our circumstances and needs.

The third issue is about more Singaporean PMEs joining the workforce. This is where we are concerned about people coming in and then substituting Singaporeans because they are lower cost professionals, they could work longer hours, and their main purpose really is to earn an income, remit it back home and eventually go back. MOM will adjust the eligibility criteria at the Employment Pass level, and we will continually review this as more Singaporeans become tertiary graduates and we have more PMEs entering the workforce. As we have highlighted, the profile is shifting. Come 2030 or so, we will eventually have two-thirds of our workforce who are PMEs. Correspondingly, we also need to manage our EP numbers. The EP numbers have dropped since we restructured. As I mentioned earlier, the EP framework was restructured to raise and incorporate a tiered series of qualifying salary thresholds. What we are going to do is to also transit and establish this same structure for the S Pass. Given the larger proportion of Singaporeans who will enter the workforce as PMEs in the near future, we will make adjustments, as I mentioned earlier, to the EP framework, particularly the Q1 sector. So, the intent is to level the playing field for our juniors to mid-level PMEs. Our adjustments at the S Pass framework level, in particular, will help our Polytechnic graduates.

We will not pursue an approach that requires companies to choose a Singaporean regardless of merit. What we do need is to ensure that companies are fair in assessing all potential candidates for jobs, and both to deter and punish any form of discriminatory or biased decision-making on the part of individuals. This is only fair because we provide a safe pro-business environment and companies must surely provide a level playing field for all prospective recruits and employees.

The companies here, both local and foreign, have an important role to play in an environment where we nurture Singaporeans' capabilities and to enable their professional growth. We are investing heavily in education and continual training. So, tap on this. It is our competitive advantage. As an example, MTI and MOE launched the Singapore Industry Scholarship, partnered with companies with strong HR practices and who believe in growing their talent. Enlightened CEOs must aim to grow the Singaporeans in their firms.

The Government has a responsibility to Singaporeans, and businesses have a responsibility to the community they are located in. This, in some sense, is a virtuous cycle of trust. This social compact should be developed and should be strengthened going forward.

As we refine our approach, we must bear in mind that there is no foolproof way to eliminate bias. We will require a combination of different measures, including making our existing Work Pass framework more robust and relying on whistleblowers within companies to obtain evidence and report discriminatory employment practices. Above all, we must set clear social norms and take a systems-approach to ensure that Singaporeans are given a fair consideration at our workplaces.

I am moving on to some of other cuts. Mr Christopher de Souza and Mr Teo Siong Seng asked how the Wage Credit Scheme, announced by the Deputy Prime Minister in his Budget Statement, ties in with our productivity schemes to move Singaporeans into better jobs and better wages. Mr Heng Chee How also raised the issue of whether the Wage Credit Scheme would really raise the wages of workers beyond what the companies would have offered in the first place.

My sense is this. Actually many businesses, including SMEs, will, in all likelihood, have to raise wages, given the tight labour market we are in. Demand is very strong; supply is tight. Productivity, however, may not go up as quickly – and I think we acknowledge that. It will take some time, and it may not go up as quickly as the pressures to increase wages. In such situations, we do not want companies to hold wage increases back, or to pass on wage increases to consumers simply by increasing prices. So, the Wage Credit Scheme was designed and intended to help businesses avoid doing either. Providing companies with an interim buffer so that they can better manage rising wage costs over this period of economic restructuring would also allow them to free up resources to invest in and to focus on improving productivity rather than half the time worrying about managing their bottom lines. I think having this assistance in managing cost would help companies because they will feel the pressure to raise wages. It is only with productivity improvements that companies will be able to continue paying higher wages in the long run.

Mr Heng also suggested that the National Wages Council include in this year's guidelines a reminder to companies to take the Wage Credit Scheme into account when contemplating wage increases. In the coming months, the Government will be working closely with the unions and employer groups to ensure that the scheme is well-understood. We hope that in doing so, more firms will be able to benefit from the significant level of support provided by the scheme.

Now, let me turn to addressing some of the questions raised on the CPF. Mr Seng Han Thong has asked for an update on CPF LIFE. We expect about 34,000 members, or slightly more than half of those turning 55 this year, to be automatically included into CPF LIFE. It is a little early to tell whether members prefer the Standard or Basic Plan, as they are given six months to choose their plan. It is similarly too early to work out what their actual payout levels will be. But we know that the median Retirement Account balance for active members turning 55 in 2013 is projected to be about $90,000. This would correspond to a payout of about $800 for a male member on the Standard plan, or a $700 payout for females.

Mr Seng also asked how we are reaching out to older members. About 83,000 older members have already joined CPF LIFE since the scheme was made available to them on an opt-in basis in 2009. This is already equivalent to and possibly more than the total number of private annuities in force today. The numbers are not bad, but we do need to reach out, as expressed by Mr Seng. Through various channels, we will continue our efforts to raise awareness among older members and their children that CPF LIFE is an option they may wish to consider.

Mr Seng also asked what more could be done to help self-employed persons (SEPs) save up for their own healthcare and retirement needs. The enhancements to the WIS, announced at Budget 2013, benefit self-employed persons, too. The maximum WIS payouts for low-income SEPs will be increased by 25% to 50%, just like for employees. We will also be giving 10% of WIS payout to SEPs in cash instead of paying it entirely into their Medisave accounts. The larger WIS quantum, together with the increase in Medisave contribution rates for low-income SEPs, will give SEPs more cash-in-hand for their daily expenses while boosting their long-term healthcare adequacy.

Mr Low Thia Khiang asked whether we could adjust the Minimum Sum yearly by a more reasonable rate that is not only based on the CPI. It is important that the Minimum Sum preserves its value so that basic retirement needs for each successive cohort can be met and will not be eroded with inflation. Hence, we will not be able to completely delink the Minimum Sum increases from inflation.

Mr Low suggests excluding imputed rental and private road transportation from the inflation measures used – in other words, just focus on core inflation which, as he shared, does not affect the elderly as much. Indeed, having an understanding of this difference is important. We are always captured by the headline numbers for inflation but, actually, core inflation is a useful reference point. I would suggest, not just for the elderly but actually for a number of Singaporeans, the core inflation is really the figure that matters. When we were considering how to moderate the Minimum Sum increase last year, we explored using core inflation to adjust the Minimum Sum instead. We actually studied the historical trends and found that headline inflation and core inflation rates did not differ significantly for much of the past decade. In fact, in some years, core inflation was higher than headline inflation. This is why we decided to stick to using headline inflation, but to moderate the increase in the Minimum Sum by spreading out the remaining real Minimum Sum increases to reach the target Minimum Sum in 2015 instead of 2013.

Several Members touched on various rules concerning the use of CPF for housing. Mr Low Thia Khiang has asked for a review of the Valuation Limit (VL) policy. The VL aims to prevent excessive use of CPF savings for housing. As Mr Low has described, members who reach the VL may face difficulties in financing their homes. In fact, I have faced the same situation myself – not for myself, but from my residents who come to see me. Mr Yee Jenn Jong and Mr Gan Thiam Poh raised this in Parliament last year. Several other Members, including Er Dr Lee Bee Wah and Mr Masagos Zulkifli, had also approached MOM directly to ask for a review. Therefore, we have started a review of the VL policy. Meanwhile, on a case-by-case basis, we have allowed members some flexibility to use CPF beyond the VL where the case merits. The review is underway and, when ready, we will announce the outcome of it.

Ms Lee Li Lian asked that members be allowed to use their Retirement Account (RA) savings to pay outstanding housing loans. Today, members can already use the part of their RA which is above half of the Minimum Sum for housing. On a case-by-case basis, we have granted concessions for needy elderly members to tap on even more RA savings for their housing needs. Ms Lee mentioned a particular case. We have checked. With regard to that particular member, we actually have not rejected him. We are in the process of asking the individual to provide us more information to evaluate whether his case warrants merit.

Madam, I will now briefly address other concerns raised by Members on better protection for our workers, an issue which I had covered earlier in my first speech. Mr Seng Han Thong asked about better protection for our self-employed Singaporeans. Indeed, this is something that we are concerned about and we will address it in Phase 2 of the Employment Act review because, as mentioned, it is a complex landscape. We recognise, however, that there may be workers who are engaged as freelancers or self-employed persons when the relationship is really one of employer-employee. As a result, these workers do not enjoy protection as an employee under our labour laws. So, it is important for us to look at this under Phase 2 of the Employment Act review. We will continue to raise awareness of compliance with the Employment Act and CPF Act under the WorkRight campaign to ensure that the employment rights for such workers are protected. And I do ask Members of this House to support that campaign because, as a result of greater awareness, we have found that people are stepping forward. I think low-wage Singaporeans in particular, and perhaps Singaporeans with lower education, may not be familiar with their rights and it is important for their rights to be respected and enforced.

6.15 pm

Mr Yeo Guat Kwang suggested better protection of our foreign workers. I would like to stress that the Employment Act is nationality-blind. The enhancements to the Employment Act apply both to local and foreign workers. As Members are aware, we also made changes to the Employment of Foreign Manpower Act (EFMA) last year. We will be doing more to protect workers in Phase 2 of both the Employment Act and the Employment of Foreign Manpower Act (EFMA) reviews, with a view to achieve an equitable balance of rights and responsibilities between employers and workers.

Mr Zainal Sapari asked what the Ministry can do to make it easier for workers to make claims for non-payment of salaries. We will be reviewing penalties for salary non-payment as part of the Employment Act review to send a clear signal that employers must not fail to pay their workers' salaries in the first place. I fully share Mr Zainal Sapari's concern for some of these workers. Any delay has a major impact on the quality of life of these Singaporeans. Our plans to make it mandatory for employers to provide pay-slips, as suggested by Mr Yeo Guat Kwang, will help in facilitating the resolution of such salary disputes. I would like to re-assure everyone again that MOM is committed to improving our processes, including through our EFMA and Employment Act reviews, to ensure that the employment rights of all our workers are protected.

Lastly, I would like to emphasise on the importance of continued strong tripartite cooperation in our current landscape. Strong tripartite cooperation has always been a hallmark of Singapore. It is something that I have come to realise. I did not need to pay much attention to it previously. It is something quite unique and, increasingly, many countries view this quite positively. They find it fascinating that we are able to establish something like that. It is something that we should not take for granted and we should strengthen it. It has contributed to general industrial harmony, stable jobs for our workers and, in turn, our attractiveness as a business and investment location, which ultimately benefits Singaporeans. Asst Prof Eugene Tan is right when he pointed out that the SMRT strike in December last year is a reminder that we cannot take tripartism for granted.

Asst Prof Tan asked whether legalisation could be introduced to enable sanctions against any employer who treats his employees poorly. The Employment Act already stipulates basic employment standards. The Government's role is to ensure that these basic employment standards are upheld. We will all agree that it is difficult and it is perhaps not even possible or desirable that we use regulations and the law to prescribe management practices. I fully recognise, as I mentioned in this House earlier today, that we have talked about enlightened management, positive management, how you engage, how do you have good communications with your staff, do we mandate that? Do we legislate that? Companies need to level up and understand that it is a fundamental requirement of building any great organisation.

Disputes occur fairly frequently. We have seen the cases. For some of them, we are not able to proceed because it is a dispute between employer and employee, which is why we are exploring whether to establish another set-up to deal with these non-statutory violations. The first avenue in resolving these disputes must surely come from within the companies, rather than running straightaway to regulations and law.

While legal strikes are a legitimate course of action for unions to negotiate for pay and other benefits, I think we must continue to make sure that that is a last resort, and that there are adequate avenues for consultation, negotiation and dispute conciliation so workers need not resort only to industrial action. Also, we need to ensure that our unions remain relevant.

Asst Prof Tan suggested that the Government consider requiring companies to pay the unions subscriptions, especially for their foreign employees. Union membership should be driven by unions who would then be motivated to offer attractive services to their members to stay relevant.

We understand that there are companies, for example, Resorts World Sentosa, that do pay for union membership on behalf of all their rank-and-file members as fringe benefits. Unions can negotiate for this for their workers. In the wake of the SMRT strike, the National Transport Workers' Union has been reaching out to SMRT employees. I understand that it has been successful in recruiting more union members, many of whom are foreign workers. I also understand that NTUC has set itself the ambitious goal of being one-million strong by 2015, and is actively innovating to reach out to more workers, including by setting up social enterprises that provide a wide range of benefits to union members.

Given the very strong commitment by our tripartite partners, I am convinced and confident that we will be able to reinforce the relationship and the foundation that we have built up over the years. By doing so, I think we will equip ourselves to handle the new challenges that invariably will happen in our changing landscape and workplace norms. This is where it is important to highlight that companies do play a very important part. It is not just about unions, not just about workers. Employers play a critical role in this.

In conclusion, my Ministry, along with the whole of Government, is committed to making things better for all Singaporeans. On our part, we will do what we can to create better jobs, better wages and opportunities for our people. This allows us to have a stable base upon which individuals can reach out and meet their various aspirations. We also aim to develop better workplaces where people can find work-life meaningful.

Can we and our children look to the future with hope? Will our policies be able to touch the lives of our people meaningfully? Would we still be proud to call Singapore home? I believe so. It can only happen if we all walk this journey together – the Government, our people, businesses. We cannot, only when there are issues and concerns, turn to and expect the Government to give better hand-outs, better incentives, better regulations.

We all have a part to play. No solution can just come from the Government alone. As Members can see, many of these solutions require a mindset shift, a new mandate and mindset shift. Can we legislate for that? Sometimes, it would be counter-productive. This is where it is important for us to build up mutual trust and respect. And this has to be earned, not just by what we say, but by what we do on all fronts.

This Budget is just one step amongst many towards building a Better Singapore for all Singaporeans.

The Chairman: We do have time for clarifications. Ms Foo Mee Har.

Ms Foo Mee Har: Sir, many Members, including the Minister of State herself, spoke about the benefits of better work-life balance. I would like to ask the Minister questions in two areas. First, given the low support level by employers, as the Minister of State shared just now, what can be done to change this mindset? To ensure more prevalence of pro-family employment practices, how can the Government agencies lead the way in this area? I would also like to ask the Minister about the new scheme called WorkPro. Have we set any targets to make sure that we will really make progress in this area?

The second set of questions is about legislation. The Minister of State said that legislation is not appropriate at this stage. Does the Minister regard the integration of work and family as a national concern? Therefore, is it something that the Government should do something about, and that deserves strong Government intervention and championship, or something that would be rather better left to the best efforts of individual companies? If you do not think that we are ready for legislation, would you even consider putting pro-family employment practices as part of tripartite guidelines for fair employment? Would that be something the Minister would consider if it is not legislation?

I would like to ask a last question. Under what circumstances would the Minister consider legislation?

Mr Tan Chuan-Jin: I thank the Member for her various clarifications. It revolves around a central theme. I am a very big supporter and I do believe that it is important to focus on our family, to focus on the ability of all of us to balance our various work-life priorities.

Individuals have different requirements. It is very hard to mandate and expect every single one to follow a particular guideline. We are at different stages of our life. We have different priorities. Some of us are married, some of us are singles, some of us may have children and families and are driven, but we have different priorities in life.

What we want to be able to do is to provide a range of options where people can choose. Can you legislate that? There are things that we can do, which is why WorkPro is put in place, largely to bring in the various schemes to make it easier for implementation and to strengthen it. You can incentivise. Even in the whole process of incentivising companies, it is something that we can work on to raise awareness and for more companies to embrace it. And we can put in place measures, practices and so on.

But culture – that is really the heart of it. How do you bring about culture? Can you legislate? If you have legislation, will it mean that suddenly the mindset will change? I am not sure whether it does that, which is why legislation is not something that we are looking at at the moment. We have been looking at this issue for some time. We have a tripartite committee on this. It is important for this tripartite committee to stand up. I do intend for it to take a much more active role, bring in champions in the industry, people in society who feel strongly about it and see how we, on a promotional basis, celebrate this.

There are many companies who are good examples of this. We have the Work Life Award. I think we need to elevate the attention of some of these companies, celebrate and challenge other companies to follow suit.

The Government, in terms of the Civil Service, certainly takes this very seriously. As a result of preparing for this, we went round checking with the various agencies. I am quite surprised that we do have a lot of measures, and the take-up rate is not bad. A lot of it also depends on individuals. The long and short of it is this. It is an important area. We do not believe that it is something you can force and legislate, but it does need everyone to play a part. Individuals must choose. We need to bring it up as part of our conversation a lot more. Individuals will begin to reflect about what they really want and what they really desire and make those choices. When they want to make those choices, are those choices available? That is why some of these schemes are there and that is where a promotional role is something that we ought to be looking at at this stage.

Would I rule out legislation? No. I think we should leave everything on the table. These are all tools, in terms of solving a problem. Right now, we think that a number of these measures, a number of these steps, are in the right direction. We should wholeheartedly support them and go along those lines. And as we go along, let us pick up ideas and let us see how to reinforce them. I hope that this is something that can succeed. We are always looking at rankings but I do not think that is one ranking in terms of number of hours worked a week that we should be right at the top.

The Chairman: There are many Members who are seeking clarifications. I would like to give every Member the opportunity to raise clarifications. For that to happen, I urge every Member to keep your clarifications short and succinct. Mr Zainudin Nordin.

Mr Zainudin Nordin: Sir, just two points of clarification. First, the Acting Minister mentioned about facing squarely the issues of complaints on problems faced by PMEs on discrimination. I would just like to know how we can manage this expectation of solving the problem of discrimination so that we do not give too high an expectation to a point where people think that every single complaint is a discrimination problem.

The second clarification is I wanted to ask the Minister of State how we can further enhance the WSQ scheme to ensure that it becomes a measurement for employers when they are looking for Singaporean workers. When workers go through upgrading in the WSQ programmes, sometimes their complaint is that our employers do not even recognise those programmes. This is from feedback. I hope that we can further enhance WSQ to ensure that skills are more recognised than what it is today.

Mr Tan Chuan-Jin: I thank Mr Zainudin for his clarification. I think it is a very relevant one. We have been looking at this issue of discrimination for some time. We also realise that discrimination – whether on nationality or other forms of discrimination – is one of those areas that we know it is difficult to prove. That is where managing expectations is something that is of concern. We cannot ignore this issue because it is something that exists. There are perceptions. There are concerns.

We also realise that when we take in complaints, not just on this issue but on a range of issues, sometimes there will be personal differences. People might be passed over, they are disgruntled, they feel that it is because of discrimination rather than individual differences. We see a range of different issues. But there is enough evidence that some of it, and, at some level, there is genuine concern.

The Member's concern about managing expectation I think is a real one. We do intend to follow up on the various complaints. We will look at it. We also build up a data bank to understand the various profiles of the company. We will look at the compositions within the companies and there will be sometimes patterns emerging with regard to particular companies. Obviously, that would suggest and may point to particular trends and whether some companies may seem to have a certain culture and that warrants us going in a bit deeper, and digging deeper to see whether there are such practices.

I hope that that has a salutary effect on the companies. Addressing these issues squarely is helpful. Companies do need to pay attention to these things. What we have found is that some companies are not paying attention, and at the senior management level.

But if we realise this and we shine a torchlight on this front, and people start playing ball and being much more sensitive to this issue, this will go a very long way.

6.30 pm

We will put in the effort to manage this. It will be a system approach. It is not just about dealing with it on its own but the entire framework. We believe this is a balance, and could be an effective way to deal with it. It will not solve every problem; there will still be individuals who feel frustrated. What we hope to do is to deal with it squarely so that Singaporeans do have a fair deal.

The Chairman: I would also appreciate Acting Minister's succinct responses. Minister of State Dr Amy Khor.

Dr Amy Khor Lean Suan: A clarification. I will try and make it succinct. First of all, the WSQ system, which is competency based, has got an Industry Skills and Training Council that is set up for every one of the WSQ frameworks. It is aligned to international practices. Earlier, I shared that from the WDA surveys, we have found that even employers recognise that workers perform better with WSQ training and productivity has improved. Some 74% have said that. That is recognition of the usefulness of WSQ training. WDA will continue to do its part to promote the WSQ courses to the employers, and ensuring the usefulness of such courses.

The Chairman: Ms Sylvia Lim.

Ms Sylvia Lim: Thank you, Sir, two clarifications for the Minister of State concerning tracking of CET outcomes. I understand that WDA releases fact sheets that tell us about feedback from trainees as well as companies on the usefulness of training; but the findings that have been released are aggregated across the 18 sectors. I would like to ask whether the Ministry can release sector-specific findings so that there can be better accountability of the training outcomes by sector.

Secondly, it was also stated that WDA tracks staff retention post-WSQ training, but I did not see any findings being released on that. Could the Minister of State share with us whether there are any particular sectors which are facing more retention issues than others, post-WSQ training?

Dr Amy Khor Lean Suan: Regarding the second clarification, I understand that Ms Sylvia Lim is concerned, for instance, about the security sector. WDA tracks post-training attrition. For the security sector, based on the information given, post-training, there is really quite a high take-up. A majority of them do go into the sector; but some of them may be doing it on a part-time, ad hoc basis, instead of full time. They will do it during peak season, like during F1, as a second job to top up their income. Having said that, there are some sectors like security, for instance, where attrition may be an issue, simply because of the conditions of the sector – long hours, low wages, shift work and so on. This is something that cannot be resolved with training; so, we are looking at it by discussing with stakeholders.

Senior Parliamentary Secretary Mr Hawazi Daipi has shared our plans as to why we are going to improve the sector in terms of wages. There are some of these sectors that we are tracking and working on. Regarding the Member's request about breaking down the data further, let me take it back to WDA.

Mr Yeo Guat Kwang: Mr Chairman, may I ask the Ministry whether they will seriously consider the Labour Movement's call to adopt skills certification as a criterion for the renewal of work passes? Secondly, on my call for the Change of Employer scheme to be extended to all foreign workers, would the Ministry consider this as well?

Thirdly, for the supply of dormitories, can the Ministry assure us that there will be sufficient dormitories so that the foreign workers will not go into the HDB so much?

Last but not least, on workplace safety and health, I would like to get the Senior Parliamentary Secretary to assure us that with more and more regulations that have been introduced lately, are we moving away from the original intention of the new Workplace Safety and Health Act, to make it more proactive? Or are we still re-acting and introducing more regulations with penalty?

Mr Tan Chuan-Jin: If I could request the Member to repeat the second question.

Mr Yeo Guat Kwang: With regard to the Change of Employer scheme to be extended to all foreign workers, at the current moment, it is only applicable to foreign domestic workers.

Mr Tan Chuan-Jin: The first question on skills certification for Work Pass renewals is something that I think we can look at. At the moment, we have looked at the progressive skills framework where we incentivise companies, particularly in the services sector, to look at keeping their workers for a longer period, and tied to that would be a certain salary level and upskilling.

The second point is again something that we could consider, but not at the moment.

Third one, in terms of dormitories, we are making sure that we will build as fast as we can, as many as we can, to make sure that accommodation can be provided for. That is something that we are looking at holistically, going forward. It is an area that we are mindful of. We understand the concerns in certain areas, and it is something that we will try to deal with.

Asst Prof Tan Kheng Boon Eugene: I am very encouraged by the Minister's assurance on trying to stamp out discrimination. Education is also needed because there is a lot of ignorance about what amounts to discriminatory practices. I hope the Minister would also pay attention to taxpayer-funded institutions. That is where the sting of discrimination is felt even stronger. Much as I am encouraged by the Minister's response, I find it hard to square with the response given by the Senior Minister of State for Education Ms Indranee Rajah yesterday with regard to a level playing field in the University sector.

Mr Tan Chuan-Jin: I would agree that education is important. Dealing with this issue squarely, putting it forward for us to talk about, to raise awareness amongst employers, is important. With regard to the Member's second question, perhaps, let us defer back to Senior Minister of State Ms Indranee Rajah.

Mr Hawazi Daipi: I would like to address the question by Mr Yeo Guat Kwang. It would always be a combination of both enforcement as well as building capacity in the industry. Our approach has always been consultative, building the capability of industry and making sure that companies, as well as workers, take ownership of their own safety and health at workplaces. We will continue to do this. However, where we see persistent and stubborn problems, like falls from heights, which form 30% of fatalities last year, we will have to take further and stronger action.

Ms Jessica Tan Soon Neo: Chairman, I would like to ask the Minister of State regarding the ETS scheme. She mentioned about holistic CET and HR solutioning. That is great. Can I understand if this is a broad programme? Is it sector based? How do companies access this programme?

Dr Amy Khor Lean Suan: The Enterprise Training Support (ETS) scheme is for all sectors. It is open to all companies. There are particular sectors that WDA is very keen to encourage to take up this scheme. Basically, it aims to develop the capability of a company in terms of their HR capability, Training Roadmap for their staff, as well as HR policies in terms of compensation benefits and so on, to benchmark these to the market so as to ensure that they pay competitive rates and then they can recruit and retain workers. It is for all companies, but there are certain sectors that the WDA would like to target. We think that it would be most useful for SMEs, and therefore the forecast that probably 70% of the companies that take up this scheme will be SMEs.

Ms Lee Li Lian: I would like to thank the Minister for his response. The appeal I was referring to was, according to the resident, the first appeal where he went down to the CPF Board personally to appeal for the use of his RA. That was the appeal that I was referring to. I am glad to know from the Minister that the letter that I had written on his behalf is under review. For the past one month, I had written a couple of letters on the same issue. I hope that they will also be looked into as well.

Mr Tan Chuan-Jin: We will look at all letters fairly. Certainly, we have criteria that we apply; and where we can accede, we will accede.

Mr Zainal Sapari: I would like to thank MOM for supporting NTUC's efforts in helping low-wage workers. NTUC has started work on the Progressive Wage Model for the security industry, and NTUC is very keen to start work as part of the tripartite security committee. Could Senior Parliamentary Secretary Hawazi share when this Committee will be formed to start its work?

Mr Hawazi Daipi: Thank you, Sir. The STC, which is co-chaired by NTUC and SNEF, comprises NTUC, MOM, MHA, WDA, employers' association as well as service buyers. I understand they will meet for the first time later this month or in April. Their focus will be to develop the Progressive Wage Model for the security sector as well as a roadmap towards it and, at the same time, find ways to reduce overtime among the security officers.

Mr Gerald Giam Yean Song: Sir, I am glad to know that MOM is taking steps to address discrimination against Singaporeans. I just have four quick questions: One is, when did MOM start curtailing Work Pass privileges for this type of violations? Secondly, how many companies have had their Work Pass privileges curtailed because of unfair employment practices? Third, what is the range of privileges that can be curtailed? And, fourthly, how will MOM rectify situations where there are already enclaves that have been formed in some companies as a result of these unfair hiring practices?

Mr Tan Chuan-Jin: I would like to thank the Member for his questions. With regard to the curtailing of Work Pass privileges, what we are looking at is for companies who are bringing in employees, whether on EP, S Pass or even at Work Permit level. This is a privilege that was provided for and there are certain criteria that need to be fulfilled. If we deem companies to be carrying out practices which we find not acceptable, we will suspend those privileges and we will have to decide whether to accede to them or not. That, essentially, is how we see ourselves applying it.

In terms of the numbers, this is something we have started to apply. We are in the process of investigating the various companies. In the process of investigations, we will not approve of their Work Pass applications should there be any. A lot will depend on the particular case. There will be different levels of severity, different levels of cooperation by the companies concerned. We are also building up a database to understand the profile of the different companies; and, thereby, hopefully, we will be a lot sharper in the way we apply ourselves through that. This is something that is new and, this is something that will be part of the overall landscape. The main change that we started previously was frameworks. The EP framework worked fairly. Therefore, we are evolving that space.

In terms of existing enclaves, this is something that we will take up on a case-by-case basis. One of the things we realise when we deal with different sectors, we have found there are sometimes reasons why particular enclaves may be formed. There may be sectors where not many Singaporeans who may be keen about. Some may argue that it might be the wage levels. For some, it is because of the work conditions.

One of the insights that we gathered about certain sectors is that in terms of shift work – and these are for white collar jobs, PME jobs – Singaporeans are not necessarily very keen on some of these sectors, for example. Another insight that we received from another sector was when they talked about developing Singaporean talent, interestingly, Singaporeans were not so keen to be deployed overseas. They are shifting to sending Singaporeans when they are a little younger, perhaps before they have children and so on. As a result of that, that has had some impact on the way they assess the individuals in terms of their progression and movement. We will find that it may vary but where there are concerns, we will look into it, we will investigate and we will deal with the management or we will deal with the specific companies. It depends on the particular situation. But it is a fair concern.

Mr Christopher de Souza: Chairman, my clarification really is, on the one hand, we have a good engine with the Wage Credit Scheme; and on the other hand, we have another engine which is the productivity incentives. I did raise in my cut how we could synergise the two for the benefit of Singapore companies and Singaporean workers. Therefore, would MOM and its officers consider organising roadshows to SMEs and to the companies where they can show the synergy between these two engines for the sake of higher wages and advanced skills for Singaporean workers?

6.45 pm

Mr Tan Chuan-Jin: In terms of our focus on restructuring the economy − the emphasis on productivity and the emphasis that we are placing in terms of working with companies, particularly SMEs, and especially the smaller SMEs which do not have the resource and perhaps the bandwidth to really understand what is available out there − I would stay that this is something that the Government would put in the effort. I do not think it is just MOM; it is also MTI, and certainly a lot of the front-line agencies, as explained by colleagues during MTI's COS, on how we are actually setting up one-stop shops to advise and help particularly SMEs on how best to evolve the way they operate, and how do we tap on the resources available to assist them in their whole transition period. So, whether in terms of road shows, clinics or information being put out to everybody, we will explore all various means in order to reach out and help our companies transit.

The Chairman: Before I call the next two Members, I note that Mr Dhinakaran and Mr Yee Jenn Jong have been raising their hands very diligently. The reason I did not call you earlier is because you did not raise any cuts under this Head and, therefore, I am giving all the other Members the first right. I will come to you, Mr Yee Jenn Jong.

Mr Yee Jenn Jong (Non-Constituency Member): Thank you, Mr Chairman. Just a quick clarification from the Acting Minister. The Acting Minister has said in his speech that the foreign workers will not go significantly above one-third of the total workforce. But during the tea break, I took the Population White Paper and I did some quick calculations. I found that the foreign worker workforce could grow to around 45% by 2030 and it is not difficult to understand this if you look at chart 3.4 of the White Paper, where the foreign workforce growth is growing much faster than the local workforce for the next 17 years. So, my question is: how long can we keep foreign workers to one-third of the total workforce?

Mr Tan Chuan-Jin: I thank Mr Yee for the question and the opportunity to clarify. When we are looking at the ESC's recommendations, I think we are looking at keeping to about a third where we can, and we are really looking at this decade. For the following decade, the dynamics are a bit different. So, for this decade, depending on how it unfolds, with the measures taking place, we would aim to hover at or around one-third if we can. I think we can probably manage to do that but it will be painful. But beyond that, of course, as you all know, by 2020, our own domestic labour force growth will basically end up at about zero. So, whatever growth we have thereafter will largely be foreign labour growth. What happens in the following decade? A lot depends on productivity. A lot depends on where we are in terms of restructuring efforts which is why this phase is particularly important. So, it is really about one-third for this decade until about 2020.

Mr R Dhinakaran (Nominated Member): Thank you, Sir. We understand basically the restrictions of the foreign manpower in Singapore through the dependency ratio ceiling (DRC), increase in the levy, etc. But in the service sector, the quota is going to be reduced from DRC 45 to 40. Especially for the retail sector, it is really not able to use the full quota of the DRC. The reason is —

The Chairman: You might want to come to the clarification quickly.

Mr R Dhinakaran: As per the MOM guidelines, we are allowed to recruit only from certain countries like Malaysia, China and other Asian countries, especially Hong Kong, Macau, South Korea and Taiwan. You know that for these countries, you cannot recruit anybody with a Work Permit, except China. We are not able to get workers and we have tried all the sources. Though there is a quota, we are not able to use it. Therefore, I would like to ask the Minister whether he could consider other Asian countries to be included so that we can recruit from countries like the Philippines, Vietnam, Myanmar, or some English-speaking countries like Sri Lanka, India, or somewhere else?

Mr Tan Chuan-Jin: I thank the Member for the question. It is a recurring request by every sector because every sector believes that it has slightly unique considerations and that these should be provided. It becomes a dilemma because if we accede to one or the other, you basically will unfold a lot of measures that are being put in place. But a very quick point is this: in terms of source, it is something that we will always relook at but there are various considerations. One is that, if you recruit from certain countries, you might even have a greater wage depressive effect because for some of these countries, because of where they are, the wage expectation might be lower and that actually would also have an impact. And in some of these countries, if we allow the sources to be opened and for the head space to be taken up, what it means is that you suddenly will have a surge of foreign manpower coming into those sectors and that actually might also undo some of the efforts to restructure as well. So, those are the dilemmas that we are trying to balance, but we do take the feedback, and it is something that we will continue to look at. We will look at the various sources but, at this point in time, the answer is a "no".

Ms Jessica Tan Soon Neo: The Acting Minister talked a bit about companies having to build up the load, the Singapore core as well. So, rather than taking the punitive or the investigative approach when there is a complaint, is MOM willing to work proactively with companies, local and foreign, to proactively build up that pipeline and that Singapore core for that next generation of progression of local talent?

Mr Tan Chuan-Jin: The short answer is "yes", but probably there will be lead agencies, not so much MOM. In fact, we have lead agencies in MTI that look after the different sectors and they are essentially the champions working with the different companies, and that is where the close working relationship will take place in terms of working with them. In fact, that is already happening. MAS, for example, works extensively with the finance industry to make sure that there are very comprehensive programmes to groom local Singaporeans in these banks so that when they are able to move up, and when senior positions are available, they are there and ready for it to happen. We have seen that happening in some sectors and we hope to see this in other sectors, and certainly that is something that EDB is looking at in terms of working closely with all the various industries coming in. That should be, I think, a criterion or at least certainly an important consideration when we look at working with companies who are investing in Singapore.

The Chairman: Last clarification. Ms Low Yen Ling.

Ms Low Yen Ling (Chua Chu Kang): Thank you, Mr Chairman. I would like to ask the Acting Minister whether MOM will consider setting up a dedicated agency to champion the needs and the interest of the mature PMEs or at least set up a special unit within CalibreLink to champion the interest of mature PMEs. The reason I say this is, as we all know, for mature PMEs, for example, 40 years and above, if they lose their jobs for various reasons, it is generally a bit more difficult for them to re-enter the workforce even at a reduced pay. So, it is quite necessary for a dedicated unit to really look at their profile and needs, for example, and also work with relevant Ministries and agencies to ring-fence certain jobs in nascent sectors for them. For example, now that we are growing the social services sector, childcare and healthcare sectors, a dedicated unit can take a more focused approach to ring-fence certain jobs for the mature PMEs.

Mr Tan Chuan-Jin: When we look at the different sectors that are affected in the economy, older Singaporeans are certainly one area that we are concerned about. Perhaps, to put it in context, I mentioned earlier that unemployment levels for PMEs at all ages are lower than their counterparts, the non-PMEs. But having said that, when you look at age, older Singaporeans do tend to have slightly higher unemployment than their younger counterparts. Between the PMEs and non-PMEs, one of the trends that you are finding – perhaps, it is too early to establish it as a trend but I suspect that is likely to be the case – and, as highlighted by Ms Low, is that for older PMEs who lose their jobs, their ability to get back into employment is rather difficult and it is a function of age, it is a function of skills and various factors. Certainly, CalibreLink and e2i are looking at working with Singaporeans of all ages. But it is something that Ms Low has been actively advocating, and I would look at that seriously because I think there are probably peculiar dynamics involved in that and it is one area that we really should see how to help not just older PMEs, but really all Singaporeans. And where there are enough grounds for us to have distinctive approaches and it warrants a set-up, I think that is something that we could well entertain.

The Chairman: Hon Member Mr Zainudin Nordin, would you like to withdraw your amendment?

Mr Zainudin Nordin: Thank you, Mr Chairman. Sir, first allow me to thank Acting Minister Tan Chuan-Jin, Minister of State Dr Amy Khor and Senior Parliamentary Secretary Hawazi Daipi for their answers and patience in attending to all our concerns and feedback.

Sir, we need to be fully aware of our workers who are facing real challenges in this current economic climate and they will be likely affected by the restructuring of our economy. Our workers are at the heart of our economy and they should be treated with a caring heart. I am reassured by the focus of the Ministry of Manpower on our Singapore core, from low-wage workers to PMEs. This is very important, Sir. With that, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The sum of $1,228,156,700 for Head S ordered to stand part of the Main Estimates.

The sum of $39,682,300 for Head S ordered to stand part of the Development Estimates.