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Stallholders at social enterprise hawker centres to get greater flexibility in contracts

SINGAPORE — From next year, stallholders at social enterprise-run hawker centres will have greater flexibility when it comes to how long they wish to open their stalls, and they will no longer have to worry about unreasonable termination clauses.

Stallholders at social enterprise hawker centres to get greater flexibility in contracts

The National Environment Agency said that the five social enterprise entities operating 13 hawker centres in Singapore have agreed to make changes to some of the hawkers’ contractual terms with effect from Jan 1 next year.

SINGAPORE — From next year, stallholders at social enterprise-run hawker centres will have greater flexibility when it comes to how long they wish to open their stalls, and they will no longer have to worry about unreasonable termination clauses.

On Friday (Nov 9), the National Environment Agency (NEA) said in a news release that after discussions, the five social enterprise entities operating seven new hawker centres have agreed to make changes to some of the hawkers’ contractual terms with effect from Jan 1 next year.

Fei Siong Food Management, NTUC Foodfare, Timbre Group, Hawker Management under Koufu, and OTHM under Kopitiam will have to allow stallholders in their centres to operate at least five days a week, with the option to be open for more days a week or more than eight hours daily if they wish.

Stallholders may also terminate their tenancies early by giving no more than two months’ notice. If so, they will not have to forfeit their security deposit or pay rent of more than two months in lieu.

These and other changes come three weeks after the authorities embarked on a review of the social enterprise model in running hawker centres. It had come under fire and increasing scrutiny in the recent months, following complaints from hawkers about unreasonable contractual terms.

Earlier this year, it emerged that about a third of the stallholders at Our Tampines Hub had to open for 24 hours a day, while stallholders in all social enterprise-run hawker centres have to operate at least six days a week.

Observers such as food critic and consultant K F Seetoh, as well as some hawkers operating in these centres, had also raised concerns over high ancillary costs, such as for dishwashing and table-cleaning services.

In Singapore, 13 out of 114 hawker centres across the island are managed by five social enterprise entities. Seven of the 13 centres are new, built after the Government announced in 2011 that it would restart the hawker centre building programme.

Besides making the latest contractual changes, all the operators have formed hawkers’ feedback groups in the hawker centres they manage, with at least one feedback session having been conducted in each of the seven new hawker centres so far.

Reiterating that new hawker centres need time to establish themselves and build up a new clientele, an NEA spokesperson said: “Hawkers would benefit from more flexibility in the way they operate their stalls than (it is) today, even as we experiment with new management models and seek new and better ways to sustain the hawker trade.”

On Friday, on the sidelines of a visit to Ci Yuan Hawker Centre (managed by Fei Siong) in Hougang, Dr Amy Khor, Senior Minister of State for Environment and Water Resources, said that the authorities are examining the extra operating costs borne by hawkers.

“We are looking at whether any changes can be made in the short term, and we will make an announcement as soon as we are ready,” she added.

Dr Khor said that some of the contractual terms “may seem onerous”: “They were replicated from contracts that operators used for other food establishments they were running… but they do exercise flexibility with these terms.”

When the social enterprise model was first put into practice about three years ago, the NEA allowed the operators “some flexibility” in deciding on the terms, while the agency controlled “key parameters” such as food prices and total operating costs that stallholders bear.

However, operators are not allowed to change or raise their stallholders’ basic operating costs during the term of their tenancy agreements. They must also get NEA’s approval before implementing any new extra charges, even if they are optional.

“Going ahead, NEA as a regulator will rebalance these soft-touch regulatory approaches towards social enterprise operators and exercise greater oversight,” Dr Khor said.


DOING MORE TO PROMOTE FOOD CULTURE

Commenting on the latest news, Mr Seetoh told TODAY that while the changes are “a good start”, more needs to be done in terms of educating the public about food culture and promoting it.

“(This is) especially in the ‘soft’ aspects with regards to the Unesco bid we are gunning for. In short, we need to do more for food culture because the authorities do not and are not able to oversee nor do they govern it well,” the founder of Makansutra website said. Mr Seetoh has been outspoken on issues related to social enterprise-run hawker centres. 

A hawker who used to own stalls in several social enterprise-run hawker centres, including Our Tampines Hub Hawker Centre and Jurong West Hawker Centre, said that the new termination clauses would have helped her. She recently had to give up her stalls due to personal problems with her business partner, and did not want to be identified.

However, she said that after negotiations with OTHM under Kopitiam last month, she had to forfeit her security deposit of two to three months’ basic rent, as well as the equipment at the stall. She also has to pay rental and additional fees for the period that her stall remains empty.

“It’s good that they are finally doing something. Now there is more flexibility for stallholders and a reasonable termination clause. But it doesn’t help those stall owners who have already suffered losses,” she added.

Ms Joey Teo, who owns a Teochew satay bee hoon stall in Ci Yuan Hawker Centre, said that the changes will allow her to be more flexible with her operating hours.

The 29-year-old works six days a week, but said that she may now take a day off “once in a while” if she has urgent matters at hand.

“I don’t think it’s possible to close two days a week every week. Rental fees roll on every day. We won’t be able to earn (if we don’t open for business),” she added.

 

CHANGES AT A GLANCE

1. Operating hours

From next year, stallholders may operate at least five days a week, and can be open more days for business if they wish.

Operators will give stallholders options on their opening hours, and operators and hawkers are encouraged to work together to schedule their days off.

For hawkers who wish to open their stalls more than eight hours a day, operators will engage them on how they plan to do that and check if they have enough manpower.
 

2. Termination clauses

Stallholders can terminate their tenancies if they give their operators sufficient notice, which should be no more than two months.

Stallholders who give sufficient notice will not forfeit their security deposit, which should not be more than two months’ rent.

Unless there is a breach of tenancy agreement or damage to stall premises, the operator cannot ask tenants who gave sufficient notice to terminate their tenancies to pay rent of more than two months or to pay rent until a replacement stallholder is found.


3. Liquidated damages

Operators may impose liquidated damages for regulatory or other breaches — no more than S$50 for minor ones and S$100 for major ones.


4. Legal fees

Operators will bear all legal fees that stallholders could incur arising from the preparation and execution of the agreements with stallholders, except any stamp duty payable by stallholders.

Operators should “strive to keep business and administrative costs reasonable for hawkers”, the NEA said.


Correction: An earlier version of this story said five social enterprise operating 13 hawker centres have agreed to make changes to some of the hawkers’ contractual terms, with at least one feedback session conducted in one of the seven new hawker centres so far. It also said the seven of the new hawker centres were built in the last decade. These are inaccurate. The contractual changes will be implemented only in seven new hawkers centres, which were all built after the Government announced in 2011 that it would restart the hawker centre building programme. At least one feedback session has also been conducted in each of the seven new hawker centres so far. We apologise for the errors.

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