EMPLOYMENT OF CONTRACT WORKERS (Trends)

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EMPLOYMENT OF CONTRACT WORKERS:

(Trends): The following Question stood in the name of Mdm Ho Geok Choo -

8. To ask the Minister for Manpower (a) how prevalent is the trend of employing contract workers in the various sectors; (b) if any study has been done to find out why employers are turning to contract employment; and (c ) if this trend is a result of the high cost of hiring full-time employees.

Dr Amy Khor Lean Suan (Hong Kah): Question No. 8, Sir.

The Minister of State for Manpower (Mr Gan Kim Yong) (for the Minister for Manpower): Mr Speaker, Sir, the number of workers employed on short term contracts of less than one year rose from 59,400 in 2001 to 100,900 in 2004. Their share of employment has correspondingly increased from 2.9% in 2001 to 4.9% in 2004. Around four out of every 100 workers in a manufacturing sector were on short term contracts. The services sector had a slightly higher proportion - about five out of every 100 workers - mainly in the retail trade, restaurants, businesses, and transport and supporting services.

Industry feedback suggests that companies hire contract

workers for two main reasons. Firstly, with more volatile business environment and conditions and shorter product cycles, some companies prefer to keep only their core workforce and engage contract workers to undertake the non-core activities. This provides greater flexibility in managing their manpower resources and enables them to avoid retrenching excess workers when they face a severe business downturn. Companies may also turn to contract workers with specific skill sets not available within the company, for short-term project work or consultancies.

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Secondly, some companies may have engaged contract workers to cut cost as they do not have to provide comprehensive staff benefits linked to permanent employment. Contract workers, however, like permanent full-time employees, are protected by employment laws, such as the Employment Act and the CPF Act.

Mdm Halimah Yacob (Jurong): Two supplementary questions, Sir. Firstly, I would like to ask the Minister of State whether there is an increasing trend of contract workers not being paid CPF and whether he can provide statistics on how many contract and non-contract workers had not been paid CPF last year. Secondly, Sir, I would like to request that MOM collect statistics of contract workers who are employed for more than one year contract, as currently statistics are collected only for those employed for a year or less than a year. But this may not give us an accurate picture of the situation.

Mr Gan Kim Yong: Mr Speaker, I do not have at hand the specific numbers of contract and non-contract workers not paid CPF. But for such cases, when they surface, MOM will investigate thoroughly. And for employers who have violated the CPF Act, we will take the necessary legal action against them to ensure that workers' interests are protected. As for statistics for contract workers that are beyond one year, we will consider the possibility and cost involved.