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Protect freelancers under the Employment Act, MPs urge

SINGAPORE — With more people taking on freelance jobs providing ride-hailing and food-delivery services, the calls grew louder in Parliament for these workers of the “gig economy” to be protected under the Employment Act.

Office workers cross a street in Singapore's central business district. Photo: Reuters

Office workers cross a street in Singapore's central business district. Photo: Reuters

SINGAPORE — With more people taking on freelance jobs providing ride-hailing and food-delivery services, the calls grew louder in Parliament for these workers of the “gig economy” to be protected under the Employment Act.

This came even as Singapore’s main labour law that sets out basic terms and working conditions was amended to cover all employees, except public servants, foreign domestic workers and seafarers who are protected under industry-specific legislation.

In a marathon debate on Tuesday (Nov 20) that lasted nearly four hours, 17 Members of Parliament (MPs) spoke up about the changes to the Employment Act, which presently covers workers earning S$4,500 and below.

From April 1 next year, the salary cap will be removed, extending its core provisions — including paid public-holiday and sick-leave entitlements, as well as protection against wrongful dismissal — to 430,000 more workers who are managers and executives.

This is still not enough, as several MPs urged the Government to ensure that Singapore’s labour laws keep pace with the rise of the gig economy.

Nominated Member of Parliament (NMP) Walter Theseira said that many self-employed workers are subject to control by parties who direct their work conditions.

Private-hire car platforms, for instance, monitor drivers closely and control many aspects of their work. In some cases, drivers are promised minimum earnings if they meet performance standards.

Associate Professor Theseira, an economist with the Singapore University of Social Sciences, said: “Many contracting parties want to have all the benefits of control over the self-employed, but none of the statutory responsibilities under the Employment Act.

“The point of the Employment Act is to give statutory rights to workers because their bargaining power is weak. Otherwise, there would be too much pressure on workers to willingly sign away their rights.”

He also called on Manpower Minister Josephine Teo to set clearer directions, so that firms are not tempted to classify workers as “self-employed” to evade their obligations under the Employment Act.

MP Zainal Sapari, from the Pasir Ris-Punggol Group Representation Constituency (GRC), said that workers providing services for ride-hailing company Grab and food-delivery service Deliveroo, for example, are not employees. They are independent contractors not entitled to statutory and other benefits.

Employment laws must address these vulnerabilities, he stressed.

Ms Denise Phua, an MP for Jalan Besar GRC, said that the latest changes to the law are “silent” on how legislation can ensure that these workers receive a fair employment package, and whether there are provisions to make sure that the firms engaging them can be “jointly or severally liable” for providing entitlements, such as leave benefits or hospitalisation.

“In instances of a medical emergency or a fatal accident, would employees with multiple employers be protected and provided for, or would this duty be pushed among different employers?” she asked.

Responding, Mrs Teo said that freelancers do not have the same relationship with their service buyers as that between employers and employees. “This is the main reason we do not attempt to regulate self-employed persons’ relationship with service providers under the Employment Act,” she added.

Mrs Teo said that the Government is making “good progress” rolling out the recommendations laid out by a tripartite workgroup that studied the challenges faced by freelancers.

These include having voluntary standards for written contracts, and a model where service buyers pay a portion of the freelancers’ wage into the workers' Central Provident Fund Medisave accounts.

She acknowledged that employers could, indeed, wrongly classify their workers as freelancers to avoid their obligations under the law, and urged those unsure of their employment status to approach the Manpower Ministry (MOM).

In the past three years, the MOM has intervened successfully in about 100 such cases, and has helped those who were misclassified as freelancers recover their statutory benefits or Central Provident Fund contributions.

“Mischievous employers should take note and realise that they can be prosecuted for non-provision of such salary and benefits,” she cautioned.

INCREASE IN THRESHOLD ‘TOO INSIGNIFICANT’

Under the latest changes, rank-and-file employees in white-collar jobs such as retail sales assistants — prescribed as “non-workmen” under the law and who are earning up to S$2,600 monthly — will be protected in terms of time-based provisions, meaning their hours of work, overtime pay and rest days.

This is a S$100 increase in the salary threshold. Previously, only non-workmen earning up to S$2,500 a month received extra protection.

The change means that 100,000 more workers will benefit from the coverage, with protection extended to half the workforce.

Still, Non-Constituency MP Daniel Goh from the Workers’ Party called the S$100 increase “too insignificant”.

He noted that annual real wage growth in recent years has hovered at about 1.9 per cent. “This means that within two to three years, this S$100 increase in salary threshold would be rendered irrelevant.”

He suggested removing the distinction between non-workmen and workmen (manual workers). Right now, workmen earning up to S$4,500 are eligible for the added protection.

While acknowledging that the gradual rise takes into account employers’ concerns over rising business costs, Assoc Prof Goh said that the S$100 increase is “quite imbalanced against the favour of white-collar workers”, and should be more substantial.

Mr Gan Thiam Poh, an MP for Ang Mo Kio GRC, went further to suggest that the monthly wage ceiling be removed across the board for overtime payment.

Companies, he said, would be more motivated to look into ways to raise productivity if they need to pay equally for “each unit of work-time input… whether work is done within office work hours or during overtime”.

In response, Mrs Teo said that the Government’s longer-term intent is to close the gap between the wage thresholds for workmen and non-workmen.

She noted that in every amendment of the Employment Act, the Government, unions and employers consider carefully the impact on both workers and firms.

“When benefits (increase), so, too, are the costs borne by employers,” she said.

This point was raised by NMP Douglas Foo, a vice-president of the Singapore National Employers Federation, who spoke about businesses grappling with escalating costs and the lingering uncertainty of global trade wars.

The executive chairman of Sakae Holdings said that with the higher salary threshold, employers will be hit by higher overtime costs.

As it is, labour forms about 43 per cent of operating costs for firms in the food-and-beverage and accommodation-services sector, he said.

He asked for “ample time” for firms to adjust, though he also said that companies should not “dally and will need to be pro-active” to take steps to manage their manpower better now.

AT A GLANCE: OTHER KEY CHANGES FROM APRIL 1, 2019

• The Employment Claims Tribunals will be a “one-stop” avenue to resolve employment disputes and settle claims of wrongful dismissal, which are now under the purview of the MOM. Before April 1, the MOM will release tripartite guidelines setting out what is deemed a wrongful dismissal. For example, discrimination based on factors such as gender, age, race or religion amounts to wrongful dismissal. Poor job performance and redundancy resulting from excess manpower or restructuring are not considered wrongful.

• Managers and executives will also qualify for protection from wrongful dismissals if they have served their employer for at least six months, instead of a year previously.

• Employers will be allowed to make salary deductions if their employees consent in writing and may withdraw their consent at any time without penalty. This pertains, for instance, to employers making wage deductions for voluntary group insurance premiums. Previously, the Employment Act limits the type of salary deductions employers can make, such as when staff members damage or lose goods entrusted to them.

• Employers must recognise medical certificates issued by all registered doctors and dentists, instead of only those given by government and company-approved doctors.

• The manpower minister may devise regulations to safeguard workers from employment practices that could affect their well-being adversely. For instance, plans are afoot to make it a civil contravention for firms to ask employees to indicate receipt of salaries before they are paid, or to sign blank or inaccurate receipts. TODAY understands that while the proportion of employers using salary vouchers — as proof employees have received their wages — is very small, there has been feedback about such practices in the construction sector, for example, and affecting those in casual work arrangements, such as hawker assistants.

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