Written Contracts for Workers Covered under Employment of Foreign Manpower Act

3 Assoc Prof Walter Theseira asked the Minister for Manpower (a) why written contracts are not mandatory for workers covered under the Employment of Foreign Manpower Act; and (b) whether there are plans to make such contracts mandatory.

The Minister of State for Manpower (Mr Zaqy Mohamad) (for the Minister for Manpower): Mr Deputy Speaker, under the Employment Act, employers are required to issue key employment terms (KETs) in writing to all employees. This covers all workers, whether local or foreign. The mandatory KETs, which must be provided within 14 days from the start of employment, include the job title, main duties and responsibilities, place of work, working arrangements, salary details, leave entitlements, medical benefits, probation and notice period. Employers can issue these KETs in the form of an employment contract or employee handbook.

In addition, for work permit holders, employers are required to ensure that their workers receive a copy of the In-Principle Approval (IPA) letter prior to their departure for Singapore. The IPA letter contains key employment information, including occupation, basic monthly salary, and fixed monthly allowances as well as deductions. This requirement is to ensure that before departing their home countries, the workers are already notified of the most critical terms of their employment. Employers are not allowed to make downward revisions to the workers’ salary information that was declared on the IPA, unless they have obtained the workers’ written agreement and notified the Ministry.

The requirements to provide written KETs and IPA letters already mean that foreign workers will have sufficient clarity of the details of their employment, in written form. There is no further advantage to be gained by requiring employment contracts for foreign workers to be written. In fact, it will create an unintended outcome that if for some reason no written contract is issued, there is no employment relationship at all and the foreign worker will lose whatever protection he should be entitled to under the law.

Mr Deputy Speaker: Assoc Prof Walter Theseira.

Assoc Prof Walter Theseira (Nominated Member): Thank you, Mr Deputy Speaker. I thank the Minister of State for that reply. I would just like to ask whether the Ministry has conducted any studies that look into the extent to which these written agreements between the foreign workers and the employers, to what extent are they actually upheld in the labour market? And if there are any violations, for example, are they enforceable and so on? I think the concern here is with the imbalance of power between the foreign worker and the employer, it is possible to push them into doing things which are maybe even illegal or prohibited because they are not aware of their rights and they cannot enforce them effectively, even with these written contracts in place.

Mr Zaqy Mohamad: I thank the Member for his clarification. Certainly, we share the same concern. Based on a survey of foreign domestic workers in 2015, for example, 94% of foreign domestic workers indicated that they had signed an employment contract with their employers. Today, in fact, we have got new programmes in place, like the Settling-In Programme (SIP) for both foreign workers and foreign domestic workers.

We do checks as well as part of the process when they come in, to understand their employment rights as well as advisories on how they can settle in better in Singapore. We do a check to make sure that when they come in, they have their IPAs in hand. Our recent checks through the SIPs from August to December 2019 showed that 98% of foreign workers and almost all foreign domestic workers had the complete set of IPA letters with them before coming to Singapore. So, technically, they already have that written contract.

That is good progress. Certainly, there is still that remainder, a small minority, which we need to keep on working on. We do, from time to time, enforce against employment agencies as well as employers who do not comply.

Mr Louis Ng Kok Kwang (Nee Soon): On the point of salary reduction, I raised this earlier and MOM did say they are reviewing the ability of an employer to reduce the salary after the IPA was issued. Could I ask if there is an update on this review?

Mr Zaqy Mohamad: Today, if you wish to reduce the salary, it has to be (a) with the agreement of the employee and (b) you have to notify the Ministry. The check is, you have to notify the Ministry before you can do it. That is your check and balance today.

Of course, if foreign workers have a concern, they can always report to the Ministry and we will take a look at it, for example, if there are other deductions that were not originally agreed by the employee.

Was there a specific area that Member was after?

Mr Deputy Speaker: Yes, Mr Louis Ng.

Mr Louis Ng Kok Kwang: I understand that you can do that, but as the other Member had raised, there is a power imbalance here. So, if you are offered a salary in the IPA and then you have come to Singapore already, having paid all your deposits back in your home country, and the employer then says, "I am going to reduce your salary. Take it or you go back home", very likely, they will take it and very likely, they will not dare to report to MOM. I hope we can close that loop.

The previous reply to me was 2% of workers faced this problem. But with the number of Work Permit-holders, 2% actually is quite a big number.

Mr Zaqy Mohamad: The 2% was not the number that faced the problem; but rather, the 2% was the number that came in without IPAs. We said 98% of foreign workers came in with IPAs. This is something that we can certainly work on. Today, the additional mechanism that we have is the SIP. What has been enhanced since then is that workers do have to come through SIP and they spend a day with not just the trainers, the facilitators, but there are also NGOs onsite like Migrant Workers Centre, for example, who conduct the SIPs themselves. One of the reasons we do that is to ensure that there is that check and balance from the NGO side, trainers, as well as teaching them their rights.

I do understand the Member's concerns. It is something that we will continuously improve on. The main difference in the last few months is that the SIPs have come in place and we have expanded them, especially for sectors that are most vulnerable. We have given focus to construction, manufacturing and process. That was where most of our disputes were in the past.

As you have seen, 98% of foreign workers come in with IPAs. It is an improvement from the past. But, yes, I do agree that we still have to work on that 2% who come in without the IPAs. Today, they cannot complete their SIPs if they do not come in with IPAs. That is something that we hope to expand and we will enforce against employers who do not comply.