Impact on Employment of Full-time and Part-time Drivers from Expansion of Coverage of Progressive Wage Model

Speaker, if an employer terminates an employee’s contract of service, but still engages the worker’s services under conditions that effectively makes the worker an employee, this is misclassification of an employee to avoid employer obligations.

The Ministry of Manpower (MOM) will investigate such cases and take action against employers where warranted.

In a tight labour market, employers must also consider carefully how they contract with their workers, or they may face difficulties ensuring sufficient manpower to meet business needs. For example, an employee who is terminated and rehired under a contract for service may choose to leave and join another company as an employee, for greater employment certainty.

To help employers with the expansion of the Progressive Wage Model, the Government has introduced the Progressive Wage Credit Scheme (PWCS) as transitional support. The PWCS funds up to 75% of the wage increases given in 2023 to employees earning up to $2,500 and 45% for those earning above $2,500 up to $3,000. We encourage employers to take the opportunity to uplift wages and upgrade the productivity and skills of lower-wage workers.

I thank the Senior Minister of State for his answer. I have got one supplementary question. What efforts and programmes are in place to make sure that workers in general, in the labour market, especially older workers who may be either less literate or less up to date with media news, what measures are there to help workers be aware of this potential practice of misclassifying an employer-employee relationship?

I asked this in the context of a previous Parliamentary Question I raised to Senior Minister of State Dr Koh Poh Koon in the previous Parliamentary Sitting about the risk of platform companies' practice of classifying jobs that previously were employee jobs and re-gazetting them as gig platform contracts; and I asked about the risk of such practices catching on in other sectors. So, I was wondering, in context of that, would the Senior Minister of State Mr Zaqy be able to share more? How are we helping workers be aware and to protect themselves?

I thank the Member for his questions. I think for most employees, they know their general rights. If something is amiss, where you are terminated unfairly, you can always come to MOM, the Tripartite Alliance for Fair and Progressive Employment Practices or one of the unions, especially for those in the Progressive Wage Model sectors, where most are pretty much covered by the unions.

As far as we know, today, neither MOM nor any of our lead sector agencies have received any complaints with regard to termination and being converted to be self-employed persons. I think in a tight labour market, as I have explained, one who is unfairly terminated and being asked to come back as a platform worker, for example, I think that is unfair. But they do have choices too to work for someone else. Certainly, for the employer, it is not too wise to do so. Once you are self-employed, you can serve multiple employers too. So, then, therefore, the employer loses the worker as well.

But if you come across any of such cases, whether among your Clementi residents or otherwise, please feel free to come to MOM.