EMPLOYMENT AGENCIES (AMENDMENT) BILL

EMPLOYMENT AGENCIES (AMENDMENT) BILL: Order for Second Reading read.

5.40 pm

The Minister of State for Manpower (Mr Lee Yi Shyan): Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, the Employment Agencies (Amendment) Bill seeks to strengthen the regulatory framework of the employment agency (EA) industry. The outcome will be an EA industry that is better qualified, more professional and effective in matching employers and workers.

As intermediaries that link job seekers and employers, EAs play a critical role in the smooth and efficient functioning of the labour market. A well-functioning EA industry helps match employers with workers with the right skills, ultimately raising the productivity of our workforce. It will also support Singapore’s vision of being a centre of talent with fair and responsible recruitment practices.

For our EA industry to be effective, we need a regulatory framework that is relevant to today’s labour market requirements. My Ministry had therefore embarked on a review of the EA regulatory framework to ensure its robustness and accountability of all stakeholders. Today, I am pleased to present the outcome of the review in the form of this Bill.

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_Changing EA landscape
_
Sir, the current version of the Employment Agencies Act was last amended in 1984. Since then, our workforce has grown in size and mix. Correspondingly, the number of licensed EAs has also increased by more than seven-fold to over 2,500 last year to meet labour market demands.

Where many EAs have conducted themselves professionally, some have been found to be wanting. Malpractices have unfortunately also become more widespread. In 2010 alone, my Ministry took enforcement actions against 147 licensed EAs. The number of complaints we received against licensed and unlicensed EAs in the last few years has also risen. The need for stronger regulations to tackle errant and unlicensed EAs has therefore become a key consideration in our review.

Sir, this Amendment Bill is the result of many rounds of consultations and refinements with key stakeholders such as EAs themselves, employers, workers and non-Government organisations.

The enhanced regulatory framework achieves four objectives. Firstly, to weed out unlicensed and errant EAs that give a bad name to the industry.

Secondly, the new framework will hold all stakeholders involved in conducting EA-related work to higher professional standards and accountability.

Thirdly, we will update the provisions and processes to ensure their relevance.

Finally, we will enhance the flexibility of the EA regulatory framework.

I will first explain who the Employment Agencies Act is intended to cover.

Clause 5 clarifies that we wish to regulate all EA-related activities conducted

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in Singapore, regardless of whether they are for job placements in Singapore or outside Singapore, whether the activity is conducted by locals or foreigners, or on a long-term or short-term basis, or whether for gain or otherwise.

I would like to assure the House that it is not the intention of my Ministry to penalise persons who make casual recommendations to link job seekers to employers. The new provisions are deliberately kept broad to ensure that all types of EA-related activities that may give rise to malpractices are covered. For instance, there are foreigners who earn extra money by regularly linking up acquaintances from their hometown with various employers in Singapore. They are, in effect, conducting EA-related work and should be held to the same level of accountability that other EAs are held to, in order to protect the interests of job seekers who seek their help. Yet, it may be difficult to prove whether the foreign workers conducting EA-related work had benefited in cash or in kind. It is thus important to ensure that the Act covers and regulates these activities.

Clause 4 empowers the Minister to exempt individual entities, certain classes of persons or EAs from the provisions of the Act. This exemption list will include activities or entities which we clearly do not intend to regulate, such as web-based job portals and job bulletin boards as they are not usually actively involved in the actual placement work.

Sir, the Government takes unlicensed EA activities seriously. They undermine the regulatory framework by competing with licensed law-abiding EAs. They also tend to exploit the vulnerable workers from developing countries by charging them exorbitant fees and may not give them the promised jobs in return.

The current penalties pale in comparison to the potential profits from

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illegal or errant EA activities. The existing maximum penalty for first-time offenders under the Act is $5,000. But foreign workers, as you know, are willing to pay agency fees of between $3,000 and $10,000 in order to land a job in Singapore. They did so, perhaps, by selling land or taking up loans to pay these fees. Moreover, licensed EAs would have to furnish a security deposit of up to $60,000 and the same requirement is not there for unlicensed EAs. Therefore, all these add to strong incentives for unlicensed EAs to remain unlicensed.

To stem the supply of unlicensed agencies, we will raise the penalties for unlicensed agencies to ensure that they are commensurate with the potential gains from malpractices. The most significant increase in the maximum penalties under the Act will be for operating an unlicensed EA in section 6. The first offence will warrant a fine of up to $80,000 and/or up to two years of imprisonment, and subsequent offences are liable for penalties of up to twice that amount. In addition to raising the penalties for operating an unlicensed EA, we will also hold an unlicensed agency accountable for the same offences as a licensed agency under the Act.

To stem the demand for unlicensed EAs, the new section 22A introduces a new offence for persons who engage unlicensed EAs. We will require individuals to exercise due diligence in checking whether the EA they intend to engage is licensed, via an EA directory on our Ministry's website. The requirement is not an onerous one. However, my Ministry will be reasonable in dealing with employers who have limited access to the Internet, such as elderly persons hiring foreigh domestic workers (FDWs).

The new section 22B introduces another offence prohibiting licensed EAs from making applications on behalf of EAs which are disallowed from making such

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applications. We are aware that some licensed EAs allowed unlicensed EAs to thrive by submitting work pass applications on their behalf to the Ministry of Manpower (MOM) since their access to the work pass application system is only granted to EAs that are licensed. Licensed EAs should only make applications on behalf of employers or job seekers. Should they need to make applications on behalf of other EAs, they must verify that other EAs are similarly licensed and allowed to make such applications.

To allow for a more calibrated action, depending on the gravity of offences, the Bill expands the range of enforcement actions. Whereas MOM's enforcement options are currently limited to only prosecutions or licence revocations, under the new framework, MOM will also have the discretion to compound offences or suspend licences of errant players. Meanwhile, to ensure sufficient deterrence against malpractices, amendments to sections 18, 19 and 20 will enhance the range of MOM's investigatory powers. These are largely based on similar powers granted to MOM under the Employment of Foreign Manpower Act.

Increasing professionalism and accountability of industry stakeholders

Sir, apart from weeding out unlicensed and errant agencies, we will enhance the professionalism and accountability of EA key appointment holders and personnel. These new features will raise the entry barrier and build confidence in the industry. It will benefit legitimate EAs in the long run.

The new section 7(4) allows the Commissioner for Employment Agencies to debar any person or company deemed unsuitable from obtaining a licence. In addition, the new section 22C prohibits

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certain classes of persons, such as those with criminal records, from conducting specific EA work as defined in clause 2. Persons intending to assume key appointment positions such as partners, chief executive officers and directors, or other positions involving management or administration of EA work, will be held to even higher standards.

In addition, clause 12 requires all individuals who wish to engage in any specified EA work to be suitably certified by attending and passing the course identified by MOM. The EA these individuals are affiliated with must also issue them with registration cards in accordance with MOM's specifications. These requirements will give employers and job seekers the assurance that their EAs and their personnel are properly qualified and equipped to help them. To clarify, it is not our intention to require all EA staff, including drivers or cleaners, to be certified and registered. My Ministry will put up guidelines on the kinds of staff who need to be certified and registered.

Currently, it is the licensee who takes all responsibility for malpractices committed under the EA's name. To further increase the accountability of industry stakeholders, the new sections 28A and 28B will also allow MOM to take punitive actions against individuals other than the licensee to task for the malpractices they have committed.

Sir, the next change I will talk about will only affect the subsidiary legislation and is thus not reflected in this Bill. Currently, EAs that place FDWs must be accredited in order to renew their EA licence after one year of operation. Mandatory accreditation entails meeting certain service standards. To raise minimum service standards in the industry, MOM will incorporate into the subsidiary legislation some of the minimum service standards, such as being explicit about the agency's dispute

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resolution mechanism and using standard service agreements. The subsidiary legislation will apply to other types of EAs, not just those placing FDWs.

With certain minimum service standards enforced by MOM, accreditation will cease to be mandatory. However, I would like to encourage progressive EAs to adopt standards and best practices beyond the minimum standards in the legislation. Towards this end, MOM will be working with the industry to develop a new voluntary trustmark scheme to recognise agencies that pursue higher level of service excellence.

Updating provisions and process

Our new framework will also be updated to ensure that it is relevant in today's context. We will create a new office of Commissioner for Employment Agencies, assisted by Deputy and Assistant Commissioners, to assume the responsibility for the overall administration of the EA Act. Currently, the Commissioner for Labour appointed under the Employment Act has this responsibility. Introducing this new office under section 3 will ensure clearer accountability of the functions and powers conferred on the Commissioners under the various Acts. At the same time, we have reviewed the caps under the subsidiary legislation on fees that EAs can charge employers and jobseekers. We will remove the fee cap for employers as it is not necessary. There are many EAs willing to supply them labour and employers are free to make contracts that protect their interests. We will retain and update the cap on fees charged to workers, in order to protect vulnerable rank-and-file workers who have relatively weak bargaining power. In the case of foreign workers from rural villages, they also suffer from information asymmetry and often have no say in choosing their Singapore EA.

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We will update the fee cap for workers to take into consideration the need to be fair to EAs for the services rendered, and to workers with respect to their income. A worker can be charged a fee not exceeding one month of his salary for each year of the duration of the approved Work Pass or employment contract, whichever is shorter, subject to a maximum of two months' salary. The fee cap will cover all fees paid to Singapore EAs, including fees paid to Singapore EAs via overseas agents. However, the fee cap will not apply to fees paid for costs incurred overseas, such as the cost of the air ticket to Singapore. Certain costs, such as the cost of training and medical check-ups conducted in Singapore, must continue to be borne by the employer as mandated in the existing legislation.

MOM will also introduce a new fee refund mechanism under the subsidiary legislation for workers whose contracts are terminated by their employers within six months of commencement. The refund will not apply if the worker absconds or voluntarily terminates the contract and aims to encourage EAs to be more careful in matching the right worker to the right employer.

Introducing a more flexible framework

To recognise the diverse range of EAs in the industry today, the new framework adopts a risk-based approach. A single approach to regulating headhunters that place only white collar workers, to those that place lower-skilled Work Permit holders, is inadequate. We are amending section 29 to empower the Minister for Manpower to vary the security deposits required of EAs. This will enable us to vary the security deposits required based on the risk profile of agency. The risk profile of an EA will be assessed on a combination of factors, including its placement volume, the types of workers placed and its track record.

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The amended section 29 also allows the Minister to impose different licensing requirements on different EAs, depending on their profile. Executive search firms which have generally been problem-free will be regulated with a lighter touch. As such, EAs placing only workers both locals or Employment Pass holders, earning monthly salaries of more than $7,000 will qualify for a Select Licence which is subject to only basic licensing requirements. EAs that do not wish to limit the type of workers they place may apply for a Comprehensive Licence instead.

Transitional arrangement

Sir, the new regulatory framework will be implemented on 1st April 2011. We have measures catered to help existing EAs transit to the new framework, which includes allowing EAs up to 2014 to certify all their EA personnel. We will carry out a series of public communications initiatives over the next few months to help the key industry stakeholders fully understand the new regulatory framework and be prepared for the transition.

Sir, this new regulatory framework is an opportunity to improve the experience and labour market outcomes for all stakeholders – employers, workers and the EAs. Vulnerable rank-and-file workers, including foreign workers, will enjoy greater protection against the unethical practices of unlicensed and errant players. They will also benefit from measures such as the updated fee caps and the new fee refund mechanism. Employers will benefit from the greater certainty and transparency in the recruitment process. The new regulatory recruitment framework will facilitate labour market efficiency and raise the standard of recruitment practices in Singapore. This will in turn entrench Singapore's global position as a choice

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destination for experienced and skilled workers.

Finally, by enhancing the professionalism and accountability of the industry, the stricter licensing, registration and certification requirements will instil greater confidence in the industry and boost its reputation.

I recently met the Managing Director of an EA called PeopleWorldWide Consulting. They bring in many foreign workers for the manufacturing and services sectors.

They shared that they put all their foreign workers through a three to seven-day training programme. They also have a robust process to ensure that these workers do not pay more than the amount that was agreed between PeopleWorldWide Consulting and the overseas EAs, then promised to the workers. We would like to applaud their efforts and look forward to seeing more such progressive EAs.

I hope the industry stakeholders, who had a large part to play in the development of these proposals, will continue to give my Ministry their support. Together, we can ensure that the new regulatory framework achieves its objectives and full potential.

Sir, I beg to move.

Question proposed.

6.01 pm

Mdm Halimah Yacob: Mr Deputy Speaker, Sir, I rise in support of this Bill.

Employment agencies have to be tightly and carefully regulated because, unlike other businesses, they deal with the import of human beings. Although the Act applies to the recruitment and placement of foreigners and locals alike, we all know that most of the abuses involve foreign workers. Just as we have

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established a reputation as the country with the number one airport and seaport, we should also aim to be a country ranked as number one in the treatment of our foreign workers. Although it is true that most of the employment agencies abide by the rules and act fairly when bringing in foreign workers, the few that behaved badly and had their stories of ill treatment splashed in the media caused considerable damage to our reputation, and the worry is that this number is increasing, judging from the complaints against employment agencies that have more than doubled since 2006.

Hence, this tighter regulatory framework and the stiffer penalties are necessary and timely as this business has attracted many new players because of the huge demand for foreign workers over the last few years. Complaints of abuses include excessive fees, false promises of jobs that do not materialise or of poorer quality than that promised, ill treatment and abuse, poor accommodation, premature termination of contracts and illegal withholding of passports. The number of unlicensed operators has also increased and they could operate outside the ambit of the law with impunity which they cannot do now under this new law.

I most certainly welcome the new broader definition of what amounts to employment agency work or work related to it. The current situation is too restrictive and allows some types of employment agency-related work to be excluded and therefore unregulated. I also welcome the caps on fees to be charged to foreign workers by employment agents. This will remove one key element of oppression as many of these foreign workers who come here to work are prepared to pay an arm and a leg thinking that our streets are paved in gold.

Sir, I have, however, a few points to raise on this Bill. The first point is on the sending countries' obligations because I

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feel that no matter what we do, we will achieve only limited success if the governments where the workers come from do not also take strong and effective steps to regulate and monitor their own employment agencies to prevent exploitation and abuse. The foreign workers, who land on our shores, are already so heavily indebted even before they leave their country. Many had to pay thousands of dollars to their own agents back home even before they set foot in Singapore. So we may tighten the laws, we put caps on the fees by our employment agencies, but if nothing is done back home and their own agents can charge as much as they like, then the whole system of oppression is continued and that would also undermine the effectiveness of our law. I think we should make a strong point to the sending countries that they, too, have a part to play to discipline and control their own employment agencies to prevent the abuses of their own citizens. Perhaps, we should suggest to them that they should also have a strong licensing and regulatory framework for their employment agencies, which should also be effectively enforced.

My second point is on the law’s intent to prevent employment agencies from charging excessive fees, and to prevent them from transferring employers’ obligations for costs such as medical and training to the foreign worker. This is a good move and I do notice that there are companies, employment agencies that actually advertise to potential clients that they can get foreign workers for actually almost free. And this is quite prevalent when it comes to the foreign domestic workers where they literally promised the employers that they can get a foreign domestic worker for free, which is really not free because it is the foreign domestic worker herself who has to absorb the cost which otherwise the employer has to pay. This is certainly a good move but I notice, however, that there is no mention of fee caps or restriction on transfer fees.

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Employment agencies currently charge a transfer fee whenever a foreign worker is transferred to another employer, especially for foreign domestic workers, and this can be equally painful for the workers. In many cases, when an employer rejects a foreign domestic worker, it need not be because she is a poor worker but because of a poor fit between the employer’s requirements and the foreign domestic worker supplied by the agency. If this is the case, it is not fair to penalise the foreign domestic worker for every transfer that takes place. In fact, it is the employment agency that has failed in their obligations to both the worker and the employer by failing to provide a proper fit between the job and the worker supplied, and they should be the one that should bear the cost and not the worker.

My third point is on the misrepresentation and false promises that employment agencies frequently indulge in. Some of the malpractices that we see involve situations where the workers are promised jobs which do not materialise or are not the kinds of jobs that they were promised or they are offered much lower pay than promised. Sometimes, this happens due to a delay in the commencement of a project or because the employers overestimate the demand for workers. Whatever the reason, the worker ends up being underemployed or working much lesser hours with lesser earnings than promised. How would this new law prevent or address such abuses and how could the worker seek redress?

My fourth point is on the forfeiture of the security deposit when foreign workers abscond. Employers of foreign domestic workers, in particular, find this requirement very onerous especially when their maids run away not because of abuse but for other reasons. I had a case where the foreign domestic worker was with the

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family for only two weeks before she disappeared, but the family was required to look for her or show that they had made efforts to do so, otherwise their deposit would be forfeited. So they even had to put an advertisement in the newspaper looking for their runaway maid. We cannot assume that in all cases where a foreign domestic worker runs away, it is because of abuse. So, I do ask that the Ministry exercises flexibility in such cases and not to pin the blame automatically on the employers.

My fifth point is on the importance of having standard contracts. I welcome the move to introduce measures to make all charges by employment agencies to the foreign worker transparent, as this would prevent employment agents from charging excessive or other kinds of fees which is really not something that they had informed the worker before he comes here. This would also minimise under-the-table arrangements where errant companies also participate in bogus foreign worker employment schemes in order for them to benefit from the exorbitant fees extracted from the foreign worker.

However, frequently, complaints arise over other issues such as the kind of work, promised salary and other employment terms agreed to. In such situations, without any written records, it is difficult for the foreign worker to substantiate his claim. And it is not just the foreign worker, it is also in the interest of the company employing the foreign worker to have a standard contract. In case the company is being complained against, at least it can say that these were terms agreed upon which the foreign worker knew before he comes and, therefore, he should not say that he has been promised something different. Sometimes, we find that the employment contract that the worker signed in the home country is different from the one given to him in Singapore, which is usually, of course, much more inferior.

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The same principle of transparency, in my view, should also apply to prevent abuse and to ensure that employment agencies are responsible for the promises that they made to the foreign workers in their home countries. Could the Ministry consider making it compulsory for all employment agencies to provide a standard contract and to stick to it when the worker reaches our shores? I know some forms of it exist but I am not quite sure how pervasive it is and how effectively it is being enforced when it comes to the employment of foreign workers.

My final point, Sir, is on the timeline. The efforts to upgrade the professionalism and standards in the industry through the new licensing requirements as well as the obligations imposed on the key office holders and other personnel to undergo training are welcome. I think this is really needed in this industry as sometimes it is a little like a cowboy town and anybody can come in. There are almost very low entry barriers. Over time, this would help to weed out the serious and responsible players from operators who are entering the market only to make a quick buck. However, the timeline for introducing the new changes is 2014, which appears to be much too long. Is there some way that these changes can be introduced faster?

Sir, in conclusion, this is a very important Bill as it provides a stronger regulatory framework to help raise the standards of professionalism among employment agencies, enhance the protection for foreign workers working in Singapore and it would, of course, thereby enhance our reputation. But the law alone will not achieve the intended results as we also need the industry players themselves to make a concerted effort to weed out the errant among them, consistently pushing for higher performance standards and achieving greater confidence among the public. The industry can do a lot more to spruce up

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their own image instead of waiting for the Government to move. We also need the sending countries to assume greater responsibility over their own workers by imposing standards and taking action against errant agencies in their own countries. Unfortunately, of course, we know that this remains a big gap and there is very little that we can do, and also in terms of how the Bill can address that problem. But it will have an impact on the regulatory scheme that we are trying to create – a new one, a more effective one – and I hope that this is an issue that the Government will continue to raise with other governments that are primarily the governments sending the foreign workers to our country.

On this note, Sir, I support the Bill. It is a Bill that is timely, necessary, relevant and it will provide much better protection for foreign workers brought to Singapore.

6.12 pm

Ms Audrey Wong Wai Yen (Nominated Member): Mr Deputy Speaker, thank you for the opportunity to speak on this Bill which is a most welcome piece of legislation and is particularly relevant for EAs placing foreign workers.

With Singapore's pronounced need for foreign labour, new business opportunities have opened up and I am afraid that these also mean more room for unscrupulous business practices on the part of some of the EAs as well. These are practices that have little regard for the rights and welfare of foreign workers who are all too often perceived as little more than cogs in a machine and, thus, not accorded the dignity that all workers deserve.

The amended Bill introduces legislation to strengthen the regulatory framework for employment agencies. I applaud the compulsory licensing of EAs and their employees, stricter criteria for key appointment holders in these agencies,

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stiffer penalties for infringements, and I am also pleased to see the creation of a new Commissioner of Employment Agencies which certainly will enhance MOM's capacity and power to investigate and to act against errant practices.

In the past few years, more Singaporeans have become aware of some of the questionable business practices of some EAs, such as the problem of kickbacks with the courts' prosecution of offenders having received lots of media exposure. Other questionable practices include agencies that flout the rule on fee caps. There is anecdotal evidence that suggests that many agencies do not comply with existing rules. For instance, on 22nd March 2010, The New Paper reported two cases of workers who paid agents' fees of $7,000 and $9,600 respectively to come to Singapore to work but were not placed in jobs.

I would like to thank the Minister of State, Mr Lee, for clarifying some of my questions on the new revision of fee caps. I have some other questions: firstly, what are the penalties for EAs that do not comply with the fee caps? I hope that he can reiterate the penalties under the existing laws.

Secondly, I would like to ask if the Ministry will be introducing regulations requiring agents to itemise the fees that they charge workers and to declare the fees that they are charging workers in the Work Permit applications and how the Ministry intends to police these declarations.

Thirdly, will there be regulation on transfer fees as well? The transfer fee is an issue that has been bugging a lot of employers as well as foreign domestic workers.

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Fourthly, I also note that there is currently no regulation over the fees that might be charged by agencies operating in the foreign workers' homelands who might be recruiting these workers and sending them to Singapore to be placed by partner agents in Singapore, that is, the Singapore EAs.

This is actually one of the gaps that has affected a lot of foreign workers and, I believe, this is a long-standing issue. So I hope that the Ministry will continue to look into this matter and will perhaps, as Mdm Halimah has also suggested, also dialogue with the partner Ministries in those countries that send their foreign workers to Singapore. I hope that the Ministry will also continue to monitor all the fee mechanisms and all the fees that are being charged by the EAs in order to ensure that workers continue to be fairly treated and that they are not unduly exploited. I think that where business is concerned, a lot of companies will find different ways and means to earn extra income and to get around the rules, and I hope that the Ministry will continue to be vigilant to some of these practices.

Finally, I would welcome further legislation to tighten other aspects of the recruitment of foreign labour, such as the requirement for standard service contracts. Currently, this is something that is recommended and, I think, a lot of agencies, especially those that place FDWs, have been attempting to use those standard service contracts. But there are still gaps in the application of this, and I certainly hope that the Ministry will encourage more agencies to adopt standard service contracts and if that does not work, perhaps at some future point to consider legislation.

On that note, I would like to conclude by expressing my support for this Amendment Bill.

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6.17 pm

Mr Ang Mong Seng: ( In Mandarin ): [For vernacular speech, please refer to Appendix A.] Mr Deputy Speaker, Sir, currently we have 12,000 Work Permit holders in Singapore. They come from different countries and have different cultural background and living habits. We allow these foreign workers here because they can supplement our labour force and they can also make a living and support their family back home. They have contributed to our economic growth and we have the responsibility to take care of them.

The import of these workers into Singapore is currently handled by employment agencies whose standards vary greatly. The lack of supervision has led to many complaints and disagreement. I would like to ask the Minster of State how many of these employment agencies are licensed right now and how many are operating without a licence.

I heard that some agencies "outsource" their work to unlicensed ones. These illegal employment agencies may not be familiar with our local labour laws and regulations regarding hiring foreign workers. They imported some illegal foreign workers into Singapore and caused many unhappy incidents and social problems. I wish to ask the Minister of State if MOM has taken any measures to prevent such activities by the illegal employment agencies.

MOM often draft new regulations. I would like to ask the Minister of State if MOM provides regular training courses for the management and staff of the employment agencies so they are familiar with the new rules and regulations. Are there any regular tests to ensure that these agencies are clear about the rules on employing foreign workers so that they are able to provide the correct information?

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Under the Bill, MOM is empowered to appoint a Commissioner and a Deputy Commissioner to supervise the employment agencies. I would like to ask whether the Commissioner's Office is an independent organisation or is under the purview of MOM.

In one of my recent Meet-the-People Sessions (MPS), a resident brought his relative to see me to complain about her employment agency. The agency promised to bring her child to Singapore to study and at the same time apply for her a Work Permit to work here as a study mum. After she arrived in Singapore, she found out she could not work here as her Work Permit application was declined by MOM. She was very angry and accused the Singapore Government of misleading her. I explained to her that it was the employment agency that did not tell her the truth and had misled her. There was no promise from any Government agencies. Only after my explanation did she realise that the employment agency provided her the wrong information. The incident involved two Ministries, MOM and MOE. I think the two Ministries should consider setting up a channel to step up collaboration to prevent more study mums from believing that they can work in Singapore just because their children are studying here. I hope the Minister of State can consider the above suggestion.

I support the Employment Agencies (Amendment) Bill.

6.21 pm

Mr Calvin Cheng (Nominated Member): Mr Deputy Speaker, Sir, I rise in support of the Bill.

Employment agencies, in particular agencies that deal with low-wage foreign migrant workers, deal with some of the most vulnerable workers around, and tighter legislation would mean that they are not abused.

*Cols. 2347-2348.

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Recently, I have had a chance to talk to volunteers from groups who help migrant workers, and have come to be acquainted with the terrible plights that these migrant workers are subjected to. Many come here with heavy debts from fees they paid to agents; some are stranded when they lose their jobs, or are injured and because of their lack of education, their poverty and their inability to communicate in English, many are left helpless and unable to fend for themselves. We must not ignore the role that errant employment agencies play in this.

Sir, before I go on to discuss what I feel is the single largest cause of abuse in the employment of migrant workers, I would like to first touch on some minor details that the amendment to this Act can improve on. Firstly, I notice that we are only holding directors and key appointment holders of employment agencies responsible for the actions of errant agencies – I feel we should also include shareholders. After all, shareholders have a financial interest in these agencies, and stand to gain from profits that are made from these agencies. They should also be held responsible for the actions of their companies and in the case when a licence is revoked, anybody who has ever held shares in an errant employment agency should be subject to more scrutiny if this person were to be involved in a new agency. Sir, an employment agency deals directly with human lives and, in the case of foreign migrant workers, some of the most vulnerable and needy human lives around. It is not amiss to expect higher standards from these companies. In this light, I would also like to call for higher capitalisation of employment agencies, who deal with foreign workers, to make sure that there are fewer fly-by-night operators who can roll up their shutters and liquidate overnight. My

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discussions with these volunteer organisations have also led me to believe that, anecdotally, the agencies and agents most likely to be errant in their behaviour are the one or two men shops who put up the bare minimum to get an employment agency licence. This needs to be reviewed. We also need to ensure that errant agencies are less likely to get away with compounded fines. Sir, we are not dealing with traffic offences here. These agencies deal with human lives, fragile human lives, and we cannot allow a light rap of the knuckle as the rule rather than the exception.

Sir, I now turn to what I feel is the biggest root cause of many of the abuses by employment agencies as well as the employment of migrant workers in general. This is the collection of agency fees from migrant workers in order to find them jobs in Singapore.

Sir, many migrant workers, in order to escape poverty in their home countries and in search of a better livelihood, pay thousands of dollars, sometimes amounting to more than six months of their potential wages, in order to come to our shores. They thus come laden with debt, toil for months on end, living a hand-to-mouth existence, before they even have a chance of making any money to remit back to their families.

Sir, the collection of these large agent fees have become a lucrative industry in itself, subject to much abuse, and it is my opinion that our system currently abets it. Firstly, we have the in-principle approval system for Work Permits. This allows the worker to come to Singapore with the promise of a potential job waiting for the would-be migrant worker. Of course, the lowly-educated migrant worker who at most times cannot even read English does not even know that! As far as he thinks, he is able to leave his home country, come to Singapore, and the provision of this in-principle approval is sufficient for

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the overseas agent – sometimes in Singapore as well – to claim success in placing him in a job and demand a huge agency fee before he is allowed to come to Singapore. What the migrant worker does not know is that all he has is the precarious promise of a job, subject to conditions and what makes it worse is that our system currently makes it too easy for these in-principle approvals to be cancelled. A check on the MOM website shows that in-principle approvals and an application for a Work Permit can be cancelled with a couple of clicks of the mouse. The poor migrant worker is thus left stranded with thousands of dollars of debt, with no job and in a strange country with no money even to buy a ticket to get back home.

Of course, if one is a legitimate company, one is not going to cancel Work Permit applications frivolously. The problem arises when unscrupulous companies abuse the system to make a quick buck. As mentioned, the collection of agency fees is such a lucrative industry that agencies can offer companies a kickback in order to issue in-principle approval Work Permits that the agent can then "sell" – and then they split the agency fees with the potential employer. When the worker arrives, a worker that the company presumably does not need a couple of clicks of the mouse is all it takes to cancel the Work Permit application.

The worst abusers of this system are potentially Singaporean companies set up to employ workers not for themselves, but to supply to other people. These companies have no business of their own other than to hire foreign workers whom they can then outsource to other companies that need them on an ad hoc basis. Again, they potentially stand to gain a lot from fees that they split with employment agencies. The problem is compounded by the fact that these companies do not technically hire the

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workers for themselves and are thus more likely to shut down, leaving the workers stranded. These companies also doubly exploit migrant workers by supplying them at high prices but paying the workers only a low wage. In a way, these companies are also acting as agents, except that they hire the workers directly and pay the workers a wage, however measly or irregularly. I sincerely hope that the Ministry of Manpower can look into such companies more carefully.

I thus feel that the Ministry of Manpower needs to close as many loopholes as possible to ensure that Singapore plays no part in what is admittedly an international problem. Firstly, we can consider following the examples such as Japan and Australia where agencies are not allowed to collect fees from employees except under certain exceptional circumstances. Instead, they should collect the fees from the employers. Admittedly, this only solves part of the problem given that many of the most abusive agents are not Singaporean or operating in Singapore but in the migrant workers’ home countries. But, at the very least, it will ensure that Singapore registered agencies are not complicit in any potential abuse.

Secondly, even though this amendment to the Act has made it an offence for agents to split fees with the employers, we need to punish the employers too. This is especially if the agents are foreign-based and we have no jurisdiction over them. In this case, we have to go after the companies themselves who have no business in making money off the collection of fees from their migrant workers. Employers found trading in Work Permit applications, in-principle or otherwise, must also be dealt with harshly.

Thirdly, we need to make it harder for companies to apply for and cancel in-principle Work Permit applications. It is

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utterly irresponsible and morally reprehensible to promise a poverty-stricken, vulnerable and semi-literate human being a job, make him travel thousands of miles to a foreign country, and then frivolously cancel his Work Permit application. In my opinion, short of failing a medical test, or under extremely exceptional circumstances such as the worker misrepresenting his qualifications, the employer who applied for the in-principle Work Permit must be compelled to hire the worker, and for a reasonable amount of time. Cancellation cannot be simply done with a few clicks of the mouse.

Finally, we should consider making agencies more responsible for the migrant workers they bring into Singapore. After all, they are the ones who "sell" the opportunity of work to the migrant workers, convincing them to come to Singapore and making money in the process. In monitoring these agencies, MOM needs to make sure that these agencies do not misrepresent job opportunities to migrant workers, or force them to take up jobs they do not want. They should have a moral and legal responsibility not to place them with companies they know to have problems, whether financial or ethical. These agencies are dealing with human lives, and more needs to be done to ensure that they do so with utmost responsibility and care.

Mr Deputy Speaker, Sir, with our economy booming, we will see many new migrant workers coming to our shores to do jobs we Singaporeans may not want to do. As a developed country, it is our responsibility to ensure that these workers, these people are treated fairly and humanely.

With that, I support the Bill.

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6.30 pm

Mr Yeo Guat Kwang (Aljunied): Mr Deputy Speaker, Sir, I welcome this amendment of the Bill.

Our country is a choice destination of migrant workers from around the region. Our foreign manpower indeed has made vast contributions to our country’s economic success over the years. It is thus important that we continue to enhance and update our laws as a safeguard for all our workers, both local and foreign workers.

As the Chairman of the SNEF-NTUC Bipartite Migrant Workers Centre, I have on many occasions come across workers with horror stories to relate, almost always stemming from having been made to pay exorbitant agency fees to come to Singapore, only to find that they are short-changed on the conditions promised to them once they have arrived.

Sir, while it is often rationalised that much of the migrant worker challenges and problems we see are the result of the malpractices of the unregulated overseas employment agents, I feel it is imperative that we ensure our own house is in order first before we are able to look at others and suggest changes. This Employment Agencies (Amendment) Act certainly helps to rectify some existing malpractices and one of such malpractices pertains to agency fee-charging. It is commonplace for almost all or many of the local agents to collect hefty fees from the workers after they arrive in Singapore. Depending on the agreement made at the source country, these fees might include the local agent’s fees, the overseas agent’s fees and, in some cases, some form of kickback to the employers for hiring the workers. The proposed amendment mandating transparency in the charges to the workers imposed by our local agents will, hopefully, prevent them from fulfilling

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such a function of collectors of these fees.

Sir, I believe that we need to secure competent migrant workers with the right skills and the adaptability to co-exist harmoniously with their local colleagues in and out of the workplace. Only then will we be able to continue our emphasis on productivity and continuous improvement and inclusive growth to build a bigger pie of the economy for all to share. This productivity has been elusive under the present conditions as migrant workers labour under the stress of repaying huge debts, poor working conditions and treatment under the hands of profiteers. Many have no channel to voice their problems. Worse still, due to potential profit from the per head migrant worker placement formula, we believe that the overall skills profile of the migrant workers entering our country is prevented from making "leaps and bounds" increments.

Sir, to keep pace with the evolving practices of the employment agencies (EAs) and foreign manpower recruitment industry, the Government should consider making employment agencies responsible for ensuring the skill set and the competencies of the workers they intend to bring in as well. In addition, while all EA staff would be required to hold a registration card, it is equally important for employers to be given the right to verify it upon request. EA staff should not decline such document to be checked by the employers. We also propose for a certain database of all licensed EAs and registered EA staff to be set up for employers to have access to such information readily.

I would also like to highlight that the foreign domestic workers (FDWs) should be responsible for their own loans with the EA, instead of the employers paying the FDWs' loan upfront to the EA and have the FDWs repay the employers on a monthly basis. It should be emphasised that the FDW is under the employment of

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the employer, therefore, the FDW’s salary should be given to the FDW by the employer and have the FDW repay the EA monthly upon work commencement. I think we need a standardised loan repayment system to be set up where the FDW signs a GIRO form authorising the monthly deduction from the FDW’s bank account as repayment to the EA, instead of getting the employers to do so. Making FDWs responsible for their own loans would deter FDWs from terminating their employment irresponsibly and prevent the EA from transferring FDWs frivolously. It must also be ensured that the employers do pay the domestic workers their monthly salaries and not withhold salary payments and payments to the EA unless it is justified.

The Consumers Association of Singapore also support the move to develop the existing mandatory accreditation scheme into a new voluntary trust-mark scheme that would help employers identify better EAs from the rest. We hope the Ministry will look into our proposal to grant accredited agencies incentives for them to abide by higher standards of professionalism. Incentives to be bundled with the accreditation status could be: a reduced amount to the security bond and establishing an express lane for the Work Permit applications. Such incentives would encourage EAs to attain accreditation and employers' recognition.

Sir, I have mentioned that we look forward to seeing the changes brought about by these amendments in improving the well-being and the quality of the migrant workers in Singapore. However, traditionally, errant agents and employers have been able to respond to changes in the law swiftly and very creatively. Take the kickback regulations introduced in recent years, for example. Many of the workers coming to see us continue to complain of salary deductions by their employers for items which, according to

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what they are told, fall squarely under the regulatory definition of "kickbacks". This is not unexpected, given the high profit potential available to errant practitioners and their need to protect their "golden goose".

Just like the Chinese saying, "上有政策，下有对策；道高一尺，魔高一丈". Sir, I urge the authorities to step up enforcements and intelligence efforts, especially immediately after the changes, and to react to any shifts in the industry practices with speed and force. Sir, with the proposed amendment, I think it is also timely that we should loudly request our counterpart in the "labour-sending countries" to also act swiftly to do more to address the malpractices of the employment agencies over there and address all these migrant workers' problems at source.

Sir, with that, I support the Bill.

6.37 pm

Mr Lee Yi Shyan: Sir, I would like to thank all Members who have spoken so passionately in support of the Bill. Their comments and suggestions also showed that they have great insights into the workings of the industry and the many loopholes and pitfalls that currently exist in the industry. I want to assure the Members that the Ministry is committed to remove these loopholes through this Amendment Bill. Let me now respond to some of the specific issues that have been raised.

Mr Ang Mong Seng was concerned about the number of unlicensed EAs in Singapore. There are currently about 2,500 licensed EAs in Singapore. We are unable to track the activities and numbers of unlicensed EAs. But the number of complaints against unlicensed EAs has been increasing. The new EA regulatory

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framework intends to weed out unlicensed EAs, firstly, by increasing the maximum penalties for operating without licence from $5,000 to $80,000. Unlicensed EAs will also face a maximum imprisonment term of two years and they will be held accountable for any other offences committed under the EA Act. In other words, not only are they liable for fine and imprisonment for operating without a valid licence, they will be treated as if they were a licensed EA and therefore liable for further penalties for other offences they commit.

Secondly, to stem the demand for unlicensed EAs, we will make it an offence for employers to engage unlicensed EAs and for licensed EAs to submit applications on behalf of unlicensed EAs. These new offences, likewise, will carry a heavy maximum penalty.

Mr Calvin Cheng raised concerns about fly-by-night EAs and suggested that the shareholders be held accountable under the Act. Under the new regulatory framework, the new security deposit requirement of $60,000 will be applied to all new EAs. So, in other words, you cannot be fly-by-night unless you have $60,000 of security deposit to start the business. If we find shareholders involved in EA malpractice, we will also take action against them, both for committing the offence and for failing to register as a person conducting EA work.

Mr Cheng and Ms Audrey Wong also expressed concern about the fee burden on workers. EAs that breach the fee cap will face a maximum fine of $5,000 per worker charged, in excess of the fee cap. So, if an EA charges 10 workers more than what is allowed, the maximum fine would be $50,000. For subsequent offences, EAs will face the maximum penalty of $5,000, or six months imprisonment, or both for each worker charged in excess of the fee cap. To

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better enforce the updated fee cap, my Ministry will conduct proactive audits on EAs and require them to issue receipts to workers they place. We will also ensure that the foreign worker is made aware of the important information before he or she arrives in Singapore.

On Mdm Halimah Yacob's suggestion that there be greater transparency on the employment terms of workers, my Ministry is examining how to include certain details in the in-principle approval letter that MOM issues to foreign workers before their arrival in Singapore. This could include information on the workers' basic monthly salaries and the fees paid to the Singapore employment agencies. This will ensure that all foreign workers, not just those who go through an EA, would be provided with such information. More details will be announced at a later stage.

We recognise that a large part of the fees paid by the foreign workers is paid to the overseas EAs, as many Members have observed. It will be difficult to police fees collected by Singapore EAs via their overseas counterparts. Nonetheless, we leverage on existing networks with source country Embassies and continue to work with them to improve the regulation of cross-border recruitment activities.

Both Ms Audrey Wong and Mdm Halimah Yacob raised questions about the transfer fees typically charged to foreign domestic workers (FDWs). These transfer fees will also be covered under the fee cap and the refund mechanism. To illustrate, under the new regulation, the fee that a foreign domestic worker on a two-year Work Permit can pay the Singapore EA is capped at two months' worth of her salary. If she is terminated by her first employer within six months, she will receive a refund of half the fees paid. If the EA helps arrange a transfer to a different employer, her agency fee will again be capped at one month's worth of

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salary per year of the new Work Permit duration. We agree with Mdm Halimah and Mr Yeo Guat Kwang that EAs should match employers with the right workers and with the right skills. We hope that the new fee refund mechanism will encourage EAs to do so.

Mdm Halimah also asked how workers will be protected against EAs who promise them employment terms and conditions that do not materialise. My Ministry already has the power to revoke the licences of EAs that act in a manner detrimental to the interests of their clients, which include workers. In future, their directors or managers would be disqualified from working in the EA industry. In addition, the EAs would have to refund the workers half of the agency fees collected from them if they are terminated within the first six months.

Some Members raised issues related to employment scams. Mr Ang Mong Seng touched on the point related to study mothers. To clarify, study mothers are allowed to work in Singapore as long as they fulfil certain criteria and abide by certain conditions. As this is not a matter concerning the regulation of local employment agencies, we will continue to work with Embassies of the relevant source countries to convey these messages to the citizens interested in sending their children to Singapore to study.

Mr Calvin Cheng also spoke at length on the employment scams by employers. We are aware of such errant practices and have prosecuted employers for collecting kickbacks. We have also penalised employers for setting up shell companies, hiring phantom workers or illegally deploying their workers to other employers. We actively monitor and investigate employers who frequently cancel in-principle approvals. While our efforts on these fronts to tackle employment scams have been significant,

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some of them are beyond the ambit of this Bill.

Mdm Halimah raised the concerns that employers should also enjoy fair treatment especially when my Ministry considers forfeiting the security bond posted by employers of foreign domestic workers. I would like to assure her that my Ministry does not treat lightly the decision to forfeit security bonds of employers and does so only in egregious cases. The security bond conditions were amended recently such that employers may recover half of the security bond if he provides evidence that he has made reasonable efforts to locate workers such as lodging a missing person report with the Police.

There are already existing measures to protect the interests of foreign domestic worker employers. For instance, EAs are required to check and provide the employment history of prospective hires from MOM's records.

To further protect the interests of foreign domestic worker employers, my Ministry will require all licensed EAs placing foreign domestic workers to use a standard service agreement. This agreement will spell out the obligations of EAs and employers in different scenarios. We have also enhanced the interactive employment agency directory on MOM's website to give employers the information they need to choose the appropriate EA, such as the EAs' foreign domestic worker placement success record and names of their registered staff. This is also in line with Mr Yeo Guat Kwang's suggestion for a central database of all licensed EAs and registered EA personnel to be set up. Together, these measures seek to facilitate more informed choices and better matching of workers and employers.

Mr Yeo Guat Kwang also suggested putting in place a system to allow EAs to

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deduct the agency fees from the foreign domestic workers' monthly salaries without involving their employers. My Ministry will consider his suggestion separately.

Mr Ang Mong Seng asked for more details on the new Commissioner for EAs. The new Commissioner for EAs will be a public officer within the Ministry who is appointed by the Minister. The Minister will also appoint the Assistants and the Deputies who will also be public officers within the Ministry to aid in the administration of the Act. These new appointments will be timely especially since the amended EA Act will require the appointed Commissioner to take on greater responsibilities and powers.

Mr Yeo Guat Kwang also proposed providing certain incentives for EAs to attain the new voluntary trustmark in future when it is available. We will seriously consider what incentives may be needed in the development of this new trustmark scheme.

Let me now touch on the transition plan of the new framework. Mr Ang Mong Seng raised a valid point about keeping EAs updated on any policy changes. We have planned a series of public communications initiatives to key stakeholders over the next few months. The new certification requirement for all EA personnel will also help ensure they fully understand the new EA regulatory framework. Sometime in the future, my Ministry is open to conducting refresher courses for all EA personnel to keep them abreast of more recent developments in the regulatory framework.

Mdm Halimah voiced concerns that the timeline given for the existing EAs to transit onto the new regulatory framework is too long. I would like to assure her that most of the new changes will be implemented within the first year from the time the new Act comes into force. EAs

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will be given three months to register all their existing personnel and up to one year to move onto the new licensing regime. Those EAs personnel registered during the three months will be given a grace period of up to three years to be certified, in other words, to take courses and to be certified. This allows EAs to have sufficient time to make the necessary arrangements and schedule their staff for certification courses. However, we strongly encourage all EAs to certify their EA personnel at the earliest opportunity and we will ensure that the appointed training provider is able to meet market demand for training places. We are committed to ensure a smooth transition process for all existing EAs.

As suggested by Mr Yeo Guat Kwang, we will monitor the situation on the ground once the new regulatory framework is put in place to ensure that the recruitment landscape in Singapore moves in the right direction. Mr Yeo Guat Kwang made a remark in Mandarin, "上有政策,下有对策；道高一尺， 魔高一丈". I would respond to his remark with "人力部的立场是：严阵以待，绳之以法。除害扶弱，从不手软。"

Sir, I believe I have addressed all Members' concerns and queries. Let me conclude by first thanking Members for their strong and passionate support. We are also grateful for all the key stakeholders who so willingly participated in the series of consultations we conducted and gave us constructive feedback and suggestions. Having gone through many rounds of refinements, I am confident that the amendments will help

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us move in the right direction. However, as Ms Audrey Wong, Mdm Halimah Yacob and Mr Yeo Guat Kwang have rightly pointed out, there is only so much the Singapore Government can do. We also need the governments of the respective source countries to play their part in regulating their EAs to stem the abuses and malpractices that start at home. Together, we can make the new regulatory framework succeed and reap the intended benefits.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. – [Mr Lee Yi Shyan].

Bill considered in Committee.

Mr Lee Yi Shyan:

The Chairman: The citation year "2010" will be changed to "2011", as indicated in the Order Paper Supplement.

Clauses 1 to 27 inclusive ordered to stand part of the Bill.

Bill reported without amendment; read a Third time and passed.