Tag Archives: Labour

Answered: Are foreign workers exploited in Singapore?

Passport to exploitation?The question of whether or not foreign workers in Singapore suffer systemic abuses continues to attract government denials and rebuttals, but to many observers the answer has long been settled with an obvious and resounding yes. In recent years Singapore has twice been rocked by apparently disgruntled workers, firstly with the SMRT bus drivers strike, and secondly the Little India riots. The plight of SMRT’s Chinese drivers was well documented in the months after they refused to work, but as the government continues to deny such realities in the wake of last year’s riots, it seems clear that crucial lessons have not been learned. As long as such problems go ignored, denied and unresolved, relations between foreign workers and locals are likely to be volatile.

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To: Tan Chuan-Jin RE: Stamp out unlawful employment practices.

For the second time in two weeks, I have today emailed (acting) Minister of Manpower Tan Chuan-Jin. Foreign workers in Singapore deserve to be protected by our laws, and the unwillingness of the Ministry to enforce the law is troubling.


I wrote to you not long ago to express my concern regarding unlawful employment practices by one Shan Jian Xin Construction.  Most troubling in that case was the apparent unwillingness of your Ministry to take steps in ensuring the enforcement of the Employment Act.  Despite the above mentioned case reaching an ad-hoc settlement with some degree of satisfaction on both sides, the underlying problem remains.  Unlawful employment practices are widespread in Singapore and the inability or unwillingness of your Ministry to enforce the Employment Act is troubling.

Today I write to you regarding the case of Straits Construction Pte Ltd.  It has been widely reported in online media that Straits Construction is employing staff on contracts that are blatantly illegal within the terms of the Employment Act.  Firstly, that company seeks to contract out of the requirement to pay employees a higher salary for work done on Sundays and public holidays.  Secondly, that company seeks to contract out of the requirement to pay salaries within seven days of the end of the salary period.  Both terms are apparently unlawful with reference to the Employment Act which your Ministry is empowered to uphold, yet it appears that your Ministry is unwilling or unable to act.

Parliament has specifically empowered you and your team with powers of investigation and enforcement.  You should use those powers to show that unlawful practices will not be tolerated in Singapore, to show that Singapore is a rule of law nation, and to show those foreign workers upon whom we depend to build our homes and infrastructure, that they enjoy the protections of our legal system.  Anything less than this is a failure, and faces bringing Singapore into disrepute.  Qatar has recently been the subject of international condemnation for the exploitative treatment of foreign workers – yet from non-payment of wages, squalid living conditions to confiscation of identification documents, many of the problems reported there are apparently widespread in Singapore.  The major substantial difference between Qatar and Singapore appears to be that international attention is focussed on Qatar as it prepares to host the 2022 football World Cup, but this is not a fact that your Ministry should rely on in neglecting to enforce the Employment Act.  One day the attention of the international media may fall on Singapore, and your Ministry’s failure to uphold the law will reflect badly not just on yourself, but on the nation as a whole.

Most importantly though, you should ensure the protection of migrant workers from exploitative and unlawful employment practices because it is the only dignified way to treat our fellow human beings, who want nothing more than an opportunity to work hard and earn an honest salary for themselves and their families.

For the purposes of advocacy, I will be releasing this letter to the online media.

Best Regards
Andy Wong


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To: Tan Chuan-Jin RE: Shan Jian Xin Construction

I today sent the below mail to (acting) Minister of Manpower Tan Chuan-Jin. Foreign workers in Singapore deserve to be protected by our laws, and Ministers or others empowered to enforce that protection should ensure that they do so.


Singaporeans depend on foreign workers to build our homes, roads, hospitals and more. This dependency can only be satisfied as long as foreign workers are happy to come here, and have trust that the regulatory and legal system here will effectively protect them from exploitation and other unlawful practices. The recently reported case of construction workers suffering unlawful deductions from salary by their employer – Shan Jian Xin Construction – is thus very concerning. While your Ministry has numerous powers to intervene to protect the rights of foreign workers, it appears to be negligent in declining to do so.

It has been widely reported that construction workers from the above mentioned company suffered deductions of $1,265 from their monthly earnings of $1,341.56. Their net pay was thus a mere $76.56 for 287 hours work. While it is true that some deductions in limited circumstances are permitted in law, many of the deductions in this case are clearly unlawful and punitive. To be specific, the employee’s itemized payslip lists a deduction of $150.00 for “safety training” (translated from Chinese). The Employment Act at Section 27(1) paras (a) through (k) gives a list of deductions that are permitted in law, and safety training is not one of them. Furthermore, deductions which it has been reported were seen as punitive by an agent of your Ministry, and which were apparently designed to discourage other employees from exercising their statutory rights are clearly also unlawful.

The facts are clear. There are reasonable grounds for believing that an offence under the Employment Act has been committed.

The time has thus now come for your Ministry to show our foreign workers that they enjoy the protection of Singapore’s laws. Section 124 of the Employment Act specifically empowers “the Minister” – yourself – to investigate. Similarly, that Section also empowers any of your Parliamentary Secretary, the Permanent Secretary to your Ministry, “the Commissioner” or any “inspecting officer” to investigate. Please either see to it that an investigation takes place, or explain why, in the circumstances, you think doing nothing is the better course of action.

One only needs to recall the case of the SMRT bus drivers’ strike to be reminded how a private employment issue can quickly lead to public inconvenience and international embarrassment. Singaporeans are not likely to be forgiving if house building programmes or the opening of new MRT lines are delayed by labour disputes. Please take responsibility, ensure that your Ministry is not negligent in protecting the legal rights of foreign workers, and act accordingly.

For the purposes of advocacy, I will be releasing this letter to the online media.

Best Regards
Andy Wong


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Why Singapore has no minimum wage

Why does Singapore not have a minimum wage? This may be a million dollar question, but it has a one hundred billion dollar answer.

Most developed countries have one – either in law or negotiated through unions. But oddly this is one feature of first world life that the PAP stubbornly refuses to even consider. It is something that many locals would like to see for many reasons. It would help to level the employment landscape which is currently tilted in favour of cheaper foreign workers who can more easily support a family in their lower cost of living home country. A minimum wage would also encourage employers to work towards more productive economic growth rather than pumping up the wealth of the nation by importing cheap labour inputs of increasingly marginal economic benefit in ever greater numbers.

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NTUC – The snake that eats its own tail

The snake that eats its own tail.
The union employer that abuses its own staff.

It is hard to imagine a more stunning demonstration of how un-fit for purpose Singapore’s “tripartite” labour model really is. In fact, if you made this up as a hypothetical example of what could go wrong with employer-employee-union relations in Singapore, people would laugh in your face because it is too ridiculous to believe. Unfortunately however it is true.

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Are we tightening on cheap labour? Are we helping Singaporeans?

The Low Wage Singaporean

The plight of the low wage Singaporean is well recognised. Struggling more than most to make ends meet: cleaners, labourers, toilet attendants and others typically earn less than $1,000 per month. Despite Singapore’s much-lauded GDP growth, this is a group that has been left behind. According to MOM statistics, the real monthly income of a citizen in the 20th percentile has been flat [1][2] over the past decade. In June 2012 it was reported that the monthly salary of a citizen in this group was $1,500 [3]. This group, together with those earning even less, account for one fifth of Singapore’s working citizens. To restate – one fifth of Singapore’s working citizens earn $1,500 per month or less, and have seen no real increase in their incomes in the last decade.

The Competition

Clearly this is a cause for concern, and the reason for wage stagnation is widely held to be the downward pressure caused by the wide availability of cheap foreign workers. NTUC Director Diana Chia, speaking in May, gave voice to an argument that resonates with many:

“Because we had easy access to foreign labour, we’ve made it easier for employers to say, what’s the impetus for me to increase their salary? It’s natural for people to behave like that. After all, as an employer, you’re profit-driven.”

While Singapore, like many countries, has long felt the need to augment its workforce in areas shunned by locals, in recent years the government’s increasingly liberal approach to immigration has seen foreigners take on more jobs that were once done by many locals. An example was brought into focus by the recent SMRT bus drivers strike – once the dust had begun to settle it was reported [4] that the mainland Chinese component of the workforce – a relatively recent addition – receive a basic starting salary of just $1,100. That pay packet is very much in the range of salaries earned by local low wage workers and presumably puts downward pressure on SMRT’s pool of local drivers, who are thought to earn more. In a country however with tens of thousands of self-employed taxi drivers, it is hard to accept that a salaried, CPF eligible position driving a bus is something locals truly shun – rather low wages and increased working hours are likely to deter applicants.

The Concern

The government, to their credit, is aware that there is a problem and states that the challenges faced by low wage workers are a priority. In his May Day speech PM Lee said [5] we “must make a special effort for the low wage workers”. But what is to be done to help those we see as getting short-changed by the PAP’s model for economic growth? If the problem is the excessive availability of foreign labour, then the solution should clearly be to tighten the inflow.

Measures Taken

But have the government acted? Good question. One can hardly turn on a radio [6] or open a newspaper these days without having a reminder of the government’s supposed “tightening” of the labour market rammed down ones throat. However, as I wrote a few months ago [7] I am highly skeptical that the government’s actions so far are meaningful. The government has a wide range of passes and permits under which employers can recruit foreign workers – from the work permit (WP) and S pass (SP), for low and semi-skilled candidates respectively – to the P1 employment pass at the opposite end of the spectrum, for which one needs a minimum salary of $8,000 to even be considered. For the purpose of this discussion, clearly we need not consider P1 employment pass holders since they are not in any sort of competition with the low wage local workers about whom we are concerned.

It is workers on the WP and the SP who can most easily be seen as competing with low wage Singaporeans for employment. The next rung up on the permit ladder is the Q1 employment pass, for which one needs to earn at least $3,000 (and probably more)[8] to be considered. To be eligible for the WP however there appears to be no minimum salary – in fact there have been reports of WP holders being paid as little as $500 per month [9] – and as such the impact on low wage citizens is likely to be significant. At the SP level, there is a minimum salary of $2,000. This is somewhat above the $1,500 salary of a citizen in the 20th percentile, but as the SP is aimed at semi-skilled workers this group can be seen as competing with citizens who seek to upgrade themselves and improve their lot by moving into more productive work. To answer the question of tightening on cheap labour to help low wage Singaporean’s we need to consider the flow of WP and S pass holders.

In answer to the question of what has been done, my answer is: not much. Despite almost constant reminders in the state controlled press, it is hard to find meaningful examples of policy changes the government has made to tighten the flow of cheap labour. The most obvious change was announced in the 2012 budget [10]:

The government will tighten the foreign worker quota by reducing Dependency Ratio Ceilings (DRCs), which specify the maximum proportion of foreign workers that companies in various industries can hire, to curb foreign worker growth from 1 July 2012.

The manufacturing industry will take a five per cent cut in DRC from 65 to 60 per cent. This means that foreigners will only be allowed to make up 60 per cent of the manufacturing workforce, as compared to 65 per cent previously.

The services sector will also take a reduction in foreign worker DRCs, from 50 per cent to 45 per cent.

S-pass holders will also see a cut in DRC of five per cent to 20 per cent.

These changes will be implemented come 1 July, where companies in the manufacturing and services industry will not be allowed to bring in new foreign workers that will result in them exceeding the new ceilings. Companies that exceed the new ceilings with their existing worker pool will be given an additional two years, till June 2014, to reshuffle their employee make-up to fall back within the new DRCs.

What has been done is nothing more than a five percentage point reduction in the ceiling on the proportion of foreign workers that local companies can employ. Is a five percentage point reduction meaningful? Clearly it is better than nothing, but it is hard to imagine a government policy that would tighten the supply of labour less and still be taken seriously. Only those companies which are right on the limit in terms of reliance on foreign workers will be affected, and even then only impacting future hiring decisions. Since the current crop of workers can continue as they are until June 2014 it is likely that most business can continue as normal, and this in particular makes claims of a tight labour market impacting businesses hard to believe. In light of this, it is also hard to imagine this policy creating a significant set of new opportunities to improve the lot of the Singaporean worker.

Let me re-iterate – a five percentage point reduction in the limit to the proportion of foreign workers a company can hire is not a meaningful tightening of the supply of labour. In fact, it is the least a government could possibly do and still be taken seriously.

So what of the endless media coverage of the supposed tight labour market? I would point to a couple of things – separate from dependency ceilings the government has also increased the cash levies employers have to pay MOM for each worker they hire. Whilst this is a nice revenue source for the government, and probably has a positive impact on the economics of hiring foreign staff, it cannot really be said to impact the supply of labour. I suggest employer unhappiness with recent policy changes is more likely a result of increased levies than minor changes to dependency ratios. More importantly, the subservient relationship media tends to have with the government in Singapore is well recognised. One key reason why we keep hearing about a tightening of the labour supply is probably that the government wants us to hear about it. As long as this is government policy, the media are likely tasked with reminding us of it at every opportunity. Although the miniscule nature of the policy changes does not appear likely to have a meaningful impact on the supply of labour, this is the government position and we are likely to be informed of this on a regular basis.

[1] http://www.mom.gov.sg/newsroom/Pages/HighlightsDetails.aspx?listid=138
[2] http://www.mom.gov.sg/Publications/mrsd_singaporeans_in_the_workforce.pdf
[3] http://www.mom.gov.sg/Publications/mrsd_Q42012empsit.pdf
[4] http://sg.news.yahoo.com/china-bus-drivers–pay-is-fair–smrt-ceo-insists-114033131.html
[5] http://www.pmo.gov.sg/content/pmosite/mediacentre/speechesninterviews/primeminister/2012/May/speech_by_prime_ministerleehsienloongatntucmaydayrally1may2012.html
[6] http://sg.news.yahoo.com/about-300-enquire-into–3k-dishwasher-post.html
[7] https://andyxianwong.wordpress.com/2012/11/10/imaginary-labour-shortage-in-singapore/
[8] http://www.mom.gov.sg/newsroom/Pages/PressReleasesDetail.aspx?listid=377
[9] http://asiancorrespondent.com/87909/migrant-workers-at-panasonics-singapore-plant-start-petition-2/
[10] http://sg.news.yahoo.com/blogs/singaporescene/singapore-gov-t-tighten-foreign-worker-quota-081803198.html

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Imaginary Labour Shortage in Singapore

I have read with surprise recently quite a few articles about a so-called “labour shortage” in Singapore. On Saturday PAP MP for AMK Ang Hin Kee posted on his Facebook an advert taken out in the Straits Times [1] by Haniffa Pte Ltd, a company from Little India claiming that their staff are 5 times busier than previously due to a “labour shortage”.

“Previously one staff could service one customer at a time, but now due to shortage of labour one staff has to service more than 5 customers at a time.”

Today on TRE I saw the report [2] of many SME bosses pleading with the government for help dealing with a so-called “manpower crunch”.

The puzzling thing though is, as hard as I try to understand this, I cannot find any real evidence of a “manpower crunch” in Singapore. In fact TRE has reported a couple of times in the last few months that the officially reported number of foreign workers in Singapore is still increasing, furthermore the rate of increase this year is higher than previously [3][4]. The reality is that despite a lot of talk, the government has done little to reduce the inflow of foreign workers. Dependency ratios have been cut, but only by a tiny 5 percentage points, and this is not a change that will impact current employees until 2014 – so for the time being it seems to be business as usual. In light of the fact that this change will not affect existing works for two more years, it is particularly puzzling how Haniffa Pte Ltd for example can claim that their staff suddenly became five times busier when all their existing staff should be able to continue working just as they have done previously.

I write this article just to remind all Singaporeans to think carefully before believing these sorts of stories that are cropping up quite often recently. As we know the government will release a report soon on the foreign manpower needs of companies in Singapore, so the timing is suspicious. With the majority [5] of our economy being linked to government controlled companies, it is actually the government more than private employers that will be impacted by any changes – just look for example at SBS going all around China to hire bus drivers [6]. There is therefore a real concern that the government will use this so-called “shortage of labour” to justify keeping things the way they are – propping up Singapore’s economy with an unsustanable inflow of foreign workers, either because they have run out of ideas on how to develop Singapore further, or because they are not brave or intelligent enough to solve the long-standing problem of low productivity in our economy.

[1] http://www.facebook.com/photo.php?fbid=461123510605303&set=a.152579238126400.53313.149772861740371&type=1&theater
[2] http://www.tremeritus.com/2012/11/11/sme-bosses-complain-to-govt-about-manpower-crunch-affecting-their-business/
[3] http://www.tremeritus.com/2012/09/29/foreign-population-continues-to-increase-unabatedly-in-2012-despite-pm-lees-promise-to-moderate/
[4] http://www.tremeritus.com/2012/08/21/foreign-population-continues-to-increase-unabatedly-after-ge-2011/
[5] http://en.wikipedia.org/wiki/Economy_of_Singapore
[6] http://www.tremeritus.com/2012/10/24/sbs-transit-going-from-town-to-town-in-china-to-recruit-drivers/


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