One of the key themes in Singapore’s Budget Speech for Financial Year 2o16 delivered on 24 March 2016 by the Minister of Finance, Mr Heng Swee Keat, was “the spirit of partnership where Singaporeans work together in new ways to transform our economy and strengthen our society.”
Indeed, this spirit will be reflected in Singapore’s labour landscape as the Ministry of Manpower (“MOM”) put forth three main policy thrusts during the Committee of Supply debate on 8 April 2016 - (a) a manpower-lean and productive economy, (b) a strong Singaporean Core in the workforce, and (c) a competitive Singapore workforce at a global level.
This Update will provide a brief summary of these policy thrusts and other key announcements in Singapore’s employment landscape. We will also discuss these policy thrusts and their impacts on businesses in Singapore in a seminar on 18 April 2016. Please click on the following link if you are interested to attend.
A Manpower-Lean and Productive Economy
To help ease the bottlenecks of Singapore’s manpower limitations and productivity challenges, MOM will seek to support transformation through a sectoral approach, with particular attention and support being given to Small and Medium Enterprises (“SMEs”).
Updating the LED Scheme
One key development on this front is the Lean Enterprise Development Scheme (“LED Scheme”), which was launched in October 2015 to help SMEs develop their capabilities, manpower and markets. The aim of the LED Scheme is to support progressive SMEs that want to become more manpower-lean and develop a stronger Singaporean Core. This is done through transitional foreign manpower policy adjustments (such as allowing companies to have temporary foreign workers while recruiting and training locals to take on better jobs when the new business models have stabilised projects), and integrating existing Government assistance schemes in a more coordinated manner, among other initiatives.
In addition to the LED Scheme, the Government has also introduced the Automation Support Package which will provide support of over S$400 million over a three year period for companies to automate, drive productivity, and scale up to overseas markets.
Strengthening the Singaporean Core
As Singapore seeks to transform its industries to become manpower-lean and productive, another key focus is to help channel as many Singaporeans into key industry sectors and ensure a strong Singaporean Core, both at the sector and individual level.
Developing Sectoral Manpower Plans
At the sector level, the development of Sectoral Manpower Plans under the SkillsFuture initiative by the Workforce Development Agency (“WDA”) will help to drive sector-specific manpower and skills plans for each key sector in order to support industry growth and productivity efforts and strengthen the Singaporean Core in these key sectors.
Nurturing and developing human capital will be key to Singapore’s economic transformation and efforts to become more manpower-lean. In this regard, the Human Resource Sectoral Tripartite Committee (“HRSTC”) (comprising unions, businesses, Government and institutes of higher learning) was formed in September 2015 to develop a Human Resource Sectoral Manpower Plan (“HRSMP”). One of the initiatives being considered under the HRSMP is the development of a National HR Professional Certification Framework to certify HR professionals based on various components such as competencies, work experience, and professional code of conduct and ethics.
Extension of Scope of Career Support Programme
At the individual level, MOM has launched the “Adapt and Grow” initiative to provide enhanced employment support to help Singaporeans “adapt to changing demands and grow their skills”. This involves the enhancement of the existing Career Support Programme (“CSP”) which was launched in October 2015 to encourage employment of mid-career Professionals, Managers, Executives, and Technicians (“PMETs”). Under the CSP, wage support will be provided to businesses which employ mature workers, who have been looking for jobs for at least six months, in mid-level jobs that pay at least $4,000 a month. From 1 May 2016, such wage support under the CSP will now be extended to help:
- all PMETs made redundant who are unemployed for six months or more; and
- all mature PMETs (aged 40 and above) who are made redundant, or are unemployed for six months or more.
Extension of Scope of Professional Conversion Programme and P-Max
There will also be government support for PMETs switching between different specialisations within the same sector. The Professional Conversion Programmes (“PCP”), which was first launched in 2007 to provide training and wage support for PMETs looking to make career changes, will be doubled from ten sectors to over twenty sectors; the new sectors include chemicals and pharmaceuticals, and logistics and retail sectors. P-Max, which was launched in 2015 under the SkillsFuture initiative to facilitate job placements for PMETs in SMEs, will also be expanded to include additional partners, trade associations and chambers.
More Place and Train Programmes and Work Trials
Rank and file workers will also receive greater support (including salary support and training subsidies) to upskill and re-skill themselves to take on new jobs. WDA will expand the outreach of Place and Train programmes, covering additional sectors such as hotel and infocomm media, and education. For individuals who are not able to get direct placement into employment, “Work Trials” will be enhanced to facilitate attachment to companies for on-the-job-training, which will allow parties to consider the potential for permanent employment.
Improving Information Support and Facilitating Employment
MOM will also improve information support to both employers and jobseekers through initiatives such as e-career services, virtual job fairs, and improved job portals (for example, the National Jobs Bank which was launched in 2014). Further, MOM will be strengthening partnerships with the employment agency industry and best-in-class placement companies to help strengthen placement of local PMETs.
Strengthening the Singapore Workforce
Strengthening the Singapore Core at The Enterprise Level: Assessment of “Triple Weak” or “Triple Strong” Companies
Aside from strengthening the Singaporean Core at the sector and individual level, the Singaporean Core will also be strengthened at the enterprise level. On this, MOM announced measures relating to the assessment of “triple weak” or “triple strong” companies. The MOM has also announced that the Tripartite Alliance for Fair Employment Practices (“TAFEP”) will play an active role in such assessment.
“Triple weak” companies, i.e. companies who are weak in (a) the proportion of Singaporeans employed (Singaporean Core), (b) their commitment to nurture and strengthen the Singaporean Core for the future, and (c) their economic linkage and social impact, may be put on a “watch list” by MOM at TAFEP’s recommendation. These “triple weak” companies will be subject to closer scrutiny and potentially have their work pass privileges curtailed or suspended by the MOM. This will ultimately have a negative impact on the company’s renewal of existing employment passes and processing of new employment pass applications.
On the other hand, more support will be provided to companies who are recognised as “triple strong”. A Human Capital Partnership Programme will be launched by the MOM later this year to facilitate and help these “triple strong” companies utilise the initiatives under SkillsFuture to strengthen the Singaporean Core, bring in foreign expertise who will strengthen and transfer capability to the local PMETs, as well as nurture promising local talents into potential regional and global talents.
Other Key Announcements
Improving Earnings for Low-Wage Workers
The Workfare Income Supplement (“WIS”) and Workfare Training Support (“WTS”) schemes will be enhanced in 2017 to provide more support for low-wage Singaporean workers. The qualifying income ceiling under the WIS scheme will be raised from the current average monthly wage of $1,900 to $2,000, and WIS payouts will be increased. The eligibility criteria for the WTS scheme will also be expanded to include persons with disabilities who earn low wages and are under 35 years old.
More Support for Employment of Older Workers
The Special Employment Credit, which would have been due to expire this year,will be modified and extended to the end of 2019 to provide employers with a wage offset for workers aged 55 and above and earning up to $4,000 a month.
Further, the following changes will be introduced from 1 July 2017:
- the mandatory re-employment age ceiling will be raised to 67 years;
- the provision under the Retirement and Re-Employment Act which allows companies to cut the wages of employees who turn 60 will be removed; and
- amendments will be made to the law to allow a new employer to take on the re-employment obligations of the original employer, subject to the employee’s agreement.
MOM will be releasing the updated Tripartite Guidelines on the Re-employment of Older Employees, which will provide more details on the changes introduced.
Changes to Foreign Worker Levies
Starting from 1 July 2016, MOM will proceed with the levy increases that were announced in 2015 for Work Permit holders in the Services and Construction sectors, as well as S Pass holders in every sector. In light of the decreasing number in Work Permit holders in the Marine and Process sectors, MOM will defer levy increases for Work Permit holders in the these two sectors by one year.
Enhanced and More Inclusive Leave Entitlements for Parents
From next year onwards, fathers whose children are born on or after 1 January 2017 will be entitled to two weeks of mandatory paid paternity leave, an increase from the one week currently. To be eligible for this increased paternity leave, he must be lawfully married to the child's mother, the child must be a Singaporean citizen, and he must have worked with his employer for a continuous period of at least three months prior to the child’s birth. Additionally, the proportion of maternity leave that mothers can share with their husbands will be increased from one to four weeks.
Adoption leave will increase from four weeks to twelve weeks for adoptive mothers of infants younger than one year old who are adopted on or after July 1, 2017. Adoptive fathers will be able to share up to four weeks of their spouse's adoption leave.
The repeated calls for more support to be provided to unwed mothers have also come to fruition – the Government has indicated that the full 16 weeks of maternity leave that married mothers presently enjoy will be extended to single mothers from early next year.
With the slowdown in workforce growth and imminent challenges facing our employment landscape, it is clear that MOM’s key priority for 2016 is to help Singaporeans remain employable and pursue skills and careers of the future, in line with efforts to transform Singapore into a manpower-lean, productive and globally competitive economy. For employers, the MOM’s focus on strengthening the Singaporean Core will be especially critical, and companies are advised to review their recruitment processes and human resource practices to avoid falling within the “triple weak” category, and ensure that their operations and growth in Singapore continue to stay relevant to Singapore's economy and society.