CONTRACT WORKERS

Mdm Halimah Yacob asked the Minister for Manpower, with the increasing use of contracts for services in engaging workers when they are obviously employees, what more can his Ministry do to prevent employers from denying such workers their benefits under the Employment Act and the Central Provident Fund Act.

The Minister of State for Manpower (Dr Ng Eng Hen) (for the Minister for Manpower): Mr Speaker, Sir, let me answer the Member by briefly sketching the scope of contract workers.

Contract workers fall into two broad categories. One where contract workers are supplied to a company by an employment agency or manpower supplier. Such contract workers, including part-timers, temporary staff have an employee-employer relationship with the agency or manpower supplier. They are covered by the Employment Act and other legislation such as the CPF Act and Workmen's Compensation Act. Hence, their employment terms and benefits are protected by these laws. The second group of contract workers are those engaged on contract for service such as a plumber, painter or private tutor to do a specific task for an agreed fee. Persons under a contract for service are independent contractors with no employer-employee relationship with the service user. Hence, they are not covered by labour laws as the end users of the services have no obligation to provide welfare and benefits to them.

If a person is indeed engaged as an employee and is not given the benefits as stipulated in the labour laws such as CPF contribution or statutory benefits in the Employment Act, the person should approach the Ministry of Manpower for advice and assistance.

My Ministry recently conducted a study on more than 2,000 contract workers employed by 14 labour suppliers or agencies and deployed to work at clients' premises. The study revealed that the majority of the labour suppliers and agencies do provide benefits under the Employment Act for their contract workers. Only a very small number of labour suppliers failed to provide the statutory benefits such as sick leave and hospitalisation leave. The study also revealed that the labour suppliers and employment agencies had paid CPF contributions for their contract employees. My Ministry will continue to conduct checks on companies and labour suppliers to ensure that contract employees are provided with the benefits under the Employment Act and their CPF contributions are duly paid.

Mdm Halimah Yacob (Jurong): Sir, I would like to ask the Minister what is the assessment of the Ministry of Manpower as to the extent of the problem. I think the real issue here is that people are being employed on a contract for service when actually they are employees. The Minister has mentioned that a survey was done among 2,000 employment agencies. I would like to know what is the extent of the problem in the Ministry's assessment and whether he foresees that this will be an increasing problem, bearing in mind that there are now many more people employed as contract workers.

My second question is: what measures are being taken to educate people, both the employers as well as the workers on their rights and obligations under the law?

Dr Ng Eng Hen: Mr Speaker, Sir, as I mentioned, the extent of the problem is not large from our survey. With regard to the question on what we intend to do in terms of extending the protection for those who are employed on contract for service, when indeed they should be employed for contract on service, let me just state that any person who feels he is not given the benefits, regardless of the terms of the contract, should approach the Ministry. There are clear guidelines where a worker would be entitled to benefits, in the sense that he would be employed under a contract of service. My Ministry has provided conciliation services before, and this has been quite successful.

On the second question of what the Ministry would do to inform both employers and workers of their obligations and duties, we have done this together with the unions. In terms of informing workers of their rights, the Ministry will continue to work with the unions to inform them of their rights under the Employment Act and the benefits due to them.