EMPLOYMENT AGENCIES (Licensing)

Mr Heng Chiang Meng asked the Minister for Labour if he will give the reasons for the licensing of employment agencies and the minimum standards required for such licences.

Dr Lee Boon Yang: Mr Speaker, Sir, employment agencies play an important role in the labour recruitment process, especially in the recruitment of foreign workers. Many employers, including employers of foreign domestic workers, depend on employment agencies to undertake the recruitment of foreign workers on their behalf. The licensing of employment agencies is to ensure that persons who provide such service understand and comply with the terms and conditions for the entry of foreigners to work in Singapore under the Work Permit Scheme. Licensing employment agencies is also a means of ensuring that agencies do not conduct their business in a manner likely to be detrimental to their clients, who may include Singaporeans seeking job placement assistance.

Sir, a person wishing to operate an employment agency in Singapore can apply to my Ministry. In assessing the application, we will consider the applicant's educational background and other criteria. Prospective employment agents should have a minimum education of five "O" levels, or suitable working experience in recruitment and placement work. They should be the registered proprietor or partner, as well as the manager of the employment agency if it is a firm, or a shareholder and director if it is an incorporated company. They must also undertake to work full-time in the proposed agency. In addition, the proposed employment agency must be located in commercial premises. Successful applicants are required to furnish a security bond of $20,000 to ensure that they comply with the Employment Agencies Act, rules, and licence conditions.

Mr Heng Chiang Meng: Sir, firstly, does this mean that those with higher education are considered less likely to be detrimental to their clients than those with lower educational status? Has the Minister not heard of the saying that a smarter crooked person making a smarter crook?

Secondly, does this mean that education is now so important that those less educated but with an entrepreneurial bent are denied of an opportunity of venturing into this business? In addition to this, what about those who are late developers, with 10 to 20 years of working experience, although they may not directly be relevant? Also, may I know what other businesses the Government now wishes to control in this manner, ie, based on education?

Thirdly, may I also ask the Minister why a person without the necessary educational qualifications, but with adequate capital and can employ others with the appropriate educational qualifications in its management team, should be denied a licence? Does this not imply that, based solely on educational status, such a person is considered to be more likely to be detrimental to their clients' interest? Surely those with lesser educational status should reject such an implication.

Dr Lee Boon Yang: Sir, the requirement to have a basic educational qualification in order to qualify for an employment agency licence is simply to ensure that those who want to operate the business of employment agencies are able to fully understand the requirements under the Employment of Foreign Workers Act, the Employment Agencies Act and the various regulations governing the operation of such employment agencies. It is not so much a measure of who is more responsible: whether the man with five "O" levels will be more responsible than a man with less than five "O" levels? It is to ensure that, having given this man a licence to conduct a certain business, we should be reassured that the man is able to understand all that is required for him to conduct this business by way of regulations which do change from time to time. The conditions that are required before he can bring in foreign workers from Singapore change from time to time and we do send out notifications to various employers. So the requirement of five "O" levels is in no way an onerous requirement considering that the vast majority of Singaporeans today, and particularly the young Singaporeans, would have this requirement. Furthermore, there is also, as I said in my main answer, a provision to cater for those who lack the educational qualification. If they have the actual working experience in recruitment and placement work, we will consider this experience in support of their application for the employment agency licence.

Is education more important than the entrepreneurial spirit or ability of the applicant? That is not for us to judge. What we are concerned with is that, having given the licence to the man, we are assured that the man is able to understand the terms and conditions that we attach to the licence and will operate the business in such a way as not to contravene the terms and conditions of the licence and will look after the interest of his clients, both the foreign workers and Singaporeans, who are seeking his service.

Can a man who lacks the educational qualification apply for the licence and then employ others who will do the job for him? Many employment agencies are sole proprietor-type of business. We want to hold somebody responsible. From time to time, we have so many complaints about an employment agency not fulfilling its duties and responsibilities to its customers. There are constant conflicts between customers and employment agencies. So we want to ensure that the man to whom we give the licence, the man who puts the $20,000 security bond with us, is the man in full control of the business. Only then can we in fact forfeit the bond. That he is the man we have given the licence to, he is in control of the business, and he runs the business. If something goes wrong, and if he is found to have cheated a client, we forfeit the bond. But if the licence is given to Mr Tan who employs a Mr Ng who meets the educational qualification, then he may well argue that the mistake was made by Mr Ng and we should not forfeit his bond. So I think in that sense we will enter into a very complicated argument with the licensee. We have decided that all licensees should be directly in charge of the business. You run the business and we give you the licence. If you meet our criteria we give you the licence.

The question of whether Government is going to license other businesses or not is irrelevant to this discussion.

Mr Heng Chiang Meng: Sir, based on what the Minister said about the regulations and the complaints, may I ask whether he considers those with lesser educational qualifications less responsible, in the sense that they cannot take responsibility for their businesses?

On the question of responsibility, may I also ask whether the Prime Minister, though first among equals in the Cabinet, is also responsible for the whole Government regardless of what his other Ministers or Ministries may do, although he may not actually be doing the work himself?

Finally, Sir, may I ask, with such regulations, would a man such as the late Goh Tjoei Kok be able to start a bank called the Tat Lee Bank, because he had only a few years of Hokkien education in Fujian before coming to Singapore?

Dr Lee Boon Yang: Mr Speaker, let us not deviate from the discussion at hand, ie, whether we should license employment agents, ie, people who want to get into the business of offering job placement service or assistance to Singaporeans who need to recruit foreign workers. The question is whether setting a minimum educational criterion is relevant. As I have explained, it is relevant in the sense that many of these employment agents have to operate their business to meet the requirements of the customers and they have to understand the legal framework under which they operate, and the legal framework is not something that is fixed permanently. It does change from time to time. Regulations do change from time to time. Procedures for applications do change from time to time. We are even moving into the area of computerised applications. So the people who want to run this business on a personal basis as a licensee have to have the ability to make these changes. It is only fair that we set a minimum educational criterion.

I do not think this requirement, let me reiterate, is an onerous requirement. Many people who apply for these licences do in fact meet the educational criterion. In fact, there is no difficulty with those who want to set up such a business. There are many people who meet the criteria by way of education and actual working experiences. If, in fact, the Member thinks that he has a specific case and he wants to argue the case, my Ministry is prepared to meet with him to discuss the specific case that he has in mind. If that person can show us that although he cannot meet our educational criterion, he has the relevant working experience, we will be more than happy to accommodate him, as I have said earlier on in my answer.

Mr Heng Chiang Meng: Sir, with your indulgence, one last question. I will take up the Minister's offer. But I would like the Minister to say whether he agrees that such a policy actually condemns a person without the necessary educational qualification, without even giving the person a chance to show whether he can do the job or not.

Dr Lee Boon Yang: Sir, I do not use such strong words as to condemn people. I think it is the Member himself who tries to condemn others. But let me say once again that we are not passing such a judgment on the ability of those who have no five "O" levels. All we are saying is that if you do not have the educational qualification, show us that you have the working experience. If you do not have that, then maybe somebody else is more suitable for running this particular business. I do not see that as being an onerous requirement. We have to safeguard the interest of Singaporeans who are seeking such service. We have to safeguard the interest of foreigners who are depending on these employment agents to place them with suitable employers. Employment agents are also in discussion with foreign government authorities. If the Member had been reading the Straits Times, he would have known that in the last few days the Singapore employment agents have been in discussion with the Philippine Government authorities to negotiate certain terms and conditions for bringing in foreign domestic workers from the Philippines. If a person is not able to conduct such negotiations, I think he is not going to serve the customer well.

Mr Cheo Chai Chen (Nee Soon Central): Sir, can the Minister tell this House, up to date, how many licences have been issued to these employment agencies?

Dr Lee Boon Yang: Sir, I do not have the exact number of how many employment agents there are in Singapore, but I think the numbers are quite large. What I do know is that in the last three years, of those who applied, at least a third of them have got their applications approved.