Nov 10, 2012

Singapore - Managers could get overtime pay, too

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SINGAPORE: Mid-level white-collar workers - or professionals, managers and executives (PMEs) - could soon get overtime pay for the extra hours they clock at the office, as well as receive retrenchment and retirement benefits currently enjoyed by their blue-collar counterparts, should changes to the Employment Act proposed by the labour movement come to pass.

While the news would please PMEs - who make up a third of the workforce here today, up from 27 per cent about a decade ago - it met with swift resistance from the business community at a time when companies are already looking nervously at their balance sheets.

Only hours after the National Trades Union Congress (NTUC) held a media briefing on its proposals, the Singapore National Employers Federation issued a press statement - in which SNEF Executive Director Koh Juan Kiat cited concerns about "higher in-employment costs, over-protection of benefits and more labour market rigidities" - and indicated that it will release a "full statement" next week, after consulting its members.

Noting that the proposals "would further increase employment and compliance costs as foreign worker policies are being tightened", the SNEF urged caution in precarious times. "We should move cautiously ... We need to strike a balance between adequate and over-protection," it said.

Speaking to TODAY, Association of Small and Medium Enterprises President Chan Chong Beng criticised the timing of the proposals. "A lot of costs are rising now, don't make SMEs more nervous ... especially now, with a shortage of workers, this will be a double blow to companies," he said.

Mr Chan added: "The effort is good, but this is not a right time to do it. Multinational companies might be able to comply, but SMEs may not when their profits have decreased. They should let things settle down, see how the productivity drive goes in the next two to three years."

NTUC Assistant Secretary-General Cham Hui Fong, however, reiterated the necessity of the proposals.

The former Nominated Member of Parliament said: "If we really want this Employment Act to be for employees, a majority of them will have to be protected. And when we talk about majority, it will have to be Singaporean workers, although the Act is nationality-blind ... if we continue to just stay put at certain levels, at the end of the day, a lot of our Work Permit holders … (and some) S-Pass holders will be protected under the Act, but not our own Singaporeans."

Apart from more protection for PMEs, NTUC also proposed changes including the mandatory provision of monthly payslips and a minimum rest period between shifts for vulnerable groups of workers such as low-wage and shift workers.

Blurring lines between blue and white-collar workers

The Employment Act was last reviewed in 2008. In April, Acting Manpower Minister Tan Chuan-Jin announced that it will be reviewed to accord greater protection for three groups of workers - PMEs, contract and freelance workers and low-wage workers.

Currently, there are about 630,000 PMEs in the workforce. NTUC hopes the revised Act will cover at least half - or more than 300,000 PMEs.

Among other things, it suggested an increase to the S$2,000 salary cap for non-manual workers - or PMEs - who are covered under Part IV of the Act, which legislates areas such as overtime payment, working hours, eligibility for retrenchment and retirement benefits, and annual leave.

Currently, this section of the Act covers manual workers earning a basic salary of S$4,500 or less per month, and non-manual workers earning a basic salary of S$2,000 or less per month.

On what the new cap should be for non-manual workers, NTUC Director in Legal Services and PME Unit Patrick Tay said he hoped that it would be "at least" at the 60th percentile of monthly median salaries - a figure which is not made available publicly.

Based on the Ministry of Manpower's wage report last year, the 50th percentile and 75th percentile of basic monthly wages of managers were S$6,451 and S$9,830, respectively. For professionals, the 50th percentile and 75th percentile of basic monthly wages were S$4,380 and S$5,915, respectively.

Calling for more regular reviews of the Act to keep pace with developments, Mr Tay, who is also a Member of Parliament, estimates that amendments to the Act - following the latest review - will be announced next year and implemented late next year at the earliest.

The labour movement's proposals are the latest in a series of initiatives to enhance protection at the workplace for PMEs.

Over the long term, NTUC hopes that the distinction between manual and non-manual workers will be removed under the Act, with equal protection for both types of workers.

Pointing out that the number of PMEs entering the workforce will increase rapidly in the next "five to 10 years", Mr Tay said: "The lines are quite blurred with the changing employment profile, landscape and nature of work … our proposal is that, in time, there may not be a need for this kind of differentiation."

While a vast majority of PMEs are currently not covered under the Employment Act, many companies have in place adequate benefits for office workers - over and above what are stipulated in the Act for blue-collar workers.

Still, JobsCentral Group Chief Operating Officer Michelle Lim welcomed the "timely move". She added: "Most PMEs are better educated and expected to be able to exercise good judgment in protecting their employment interests. However, PMEs, like any employees, also need protection from unfair or exploitative employment terms and practices."

On the impact on companies, Ms Lim pointed out: "It's those employers that are providing lesser terms that will feel the impact the most."

Lauding the proposals, Ang Mo Kio GRC MP Inderjit Singh felt that companies will have to "adjust" and "learn to work under these new conditions". "If you look at it in the long-term, if we can build employee loyalty like what we used to do in the past and have happy and more productive employees, I think everyone wins," he added.

Woo Sian Boon and Amir Hussain

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