Who will lead labour after Lim Swee Say?

Love him or hate him (or puzzle at his odd quips), Lim Swee Say has been a fixture in the Labour Movement for the last 8 years and has exercised considerable influence in this sphere. But now that he has announced his clear intention not to fill the post again, the question is: who will (and will it matter)?

Every NTUC Secretary-General since Devan Nair has held a cabinet position, often concurrently. I don’t expect that to change this time around. Why this is so is probably because of the longstanding relationships between the NTUC and the PAP, as an alliance between the two had formed during the struggle for independence and during the years after. Some say that the PAP controls the NTUC. Others say that the NTUC has clout in government. Perhaps both are true.

Either way, this means that the pool of candidates is not very large – look at the cabinet. The other heirs apparent over the years have faded away – Josephine Teo, Halimah Yaacob and Ong Ye Kung all once held key positions but are no longer with the movement.

Neither Deputy Secretary-General Heng Chee How nor the Assistant Secraties-General: Ms Cham Hui Fong, Mr Patrick Tay Teck Guan, Mr Yeo Guat Kwang, Mr Ang Hin Kee and Mr Zainal Sapari seem to possess the political clout for the position.

In my reckoning, it seems possible that Josephine Teo may be positioned to take up the mantle, but at the same time she still doesn’t command the political power necessary for the position. It would be a step backwards as well, since she had already left the NTUC to fulfill her role as Minister of State.

Grace Fu seems another possibility, since she is also a minister in the PMO and well exposed to the private sector, but an another interesting candidate pops up within the cabinet.

Chan Chun Sing.

Kee chiu.

Kee chiu.

Whatever you want to say about him, he has a certain demeanour that the rank-and-file can understand; something that reminds me of Lim Swee Say – very “on the ground” (okay lah, “low class” if you’re a hater), in spite of a career as a SAF scholar. Moreover Chan Chun Sing was the chosen replacement for Lim Swee Say in my Buona Vista constituency. Who is to say that history will not repeat itself (because it is going to be the same people making these decisions)?

Chan Chun Sing as NTUC Secretary-General will throw up synergies with his current portfolio as Minister for Social and Family development. Hopefully his constant exposure to those who are suffering the most will mean that he will find avenues to raise wages to sustainable levels as NTUC Sec-Gen.

We’ll have to wait for October to see.

Who wants to work forever?

Well I do, and that’s because I like my job. There are others as well who want to keep working for various reasons – avoiding monotony, force of habit, feeling of being valued, financial needs, social reasons… the list goes on.

Singapore’s most visible elderly workers – our cleaners. Photo from https://guanyinmiao.wordpress.com/

The latest report from MOM showed that employment of older workers aged 55-64 has increased from 65% in 2013 to 66.3% this year and, according to a Straits Times report, employent for workers aged between 65 and 69 has risen from 35.2 per cent in 2011 to 38.5 per cent in 2013 it now stands at 41.2%. This is in part due to the tight labour market and also the promotion and enactment of the RRA (Retirement and  Re-employment Act), which came into force in 2012. Now, there is talk about extending the RRA to 67.

Workers can still retire whenever they want, really. But this is a good option for those who do want to stay employed.

The only potential risk from the RRA (considering that we have full employment)? Employers of older workers may (or may not) experience higher healthcare benefit costs and health-related absenteeism. To mitigate this, MOM has cut the CPF contribution rate for this age group by 5%, meaning that the cost burden is passed on to workers. Is this a worthwhile tradeoff?

The target age of 67 was supposed to have been met back in 2003, as part of a decades-old plan to bring into balance Singaporeans’ longer life expectancy, productivity and retirement needs. This is a benchmark that Singapore desperately needs to meet, given the fact that we have scaled back our foreign-sourced population growth plans.

I had the opportunity to ask Heng Chee How (NTUC’s Deputy Secretary General) for his thoughts on what kind of impact we will see form a rising re-employment age.

“The offer and acceptance rates for reemployment in both the public and private sector since the law took effect are both in high 90+%.  That is very encouraging,” he shared, “The Tripartite Committee on the Employability of Older Workers (Tricom) issued an Advisory asking companies to extend the re-employment age ceiling from 65 to 67.  It also asked the Government to provide incentives to firms to do so, and the Government has agreed.”

As to whether there is discrimination against older workers and whether it is true that older workers are less productive, Mr Heng was quick to set the record straight.

“Every age group has its strong performers, average performers and poor performers. The best performers among the mature workers are those who know how to leverage their strengths, experience and networks to best effect.”

“There is ageism in every society. Our strength lies in strong tripartism and effective unionism at workplaces. Together with efforts by like-minded entities like TAFEP (Tripartite Alliance for Fair and Progressive Employment Practices), we have the mechanisms to promote fairness at work and to deal with allegations.”

“Re-employed workers want to be treated fairly and be valued for their performance and contribution, and not be typecast and diminished just on account of their crossing a certain chronological age.  Employers worry whether re-employed workers can keep up their performance, updated skillsets, productivity, health and adaptability.  These are factors that affect a firm’s competitiveness.  Value is created by bringing down barriers of prejudice and negative stereotyping, and by positivity, lifelong learning and active, healthy aging.”

Personally, I see the 5% CPF rate cut as a form of ageism. It seems terrible to think that this should be considered normal – instead I hope to see it as a necessary evil to gt buy-in from employers but it should be reinstated gradually and I hope that the half to one per cent CPF reinstatement for older workers in mid-2015 is part of this journey back to fair employment practices.

Here at Last: Wage Protection for Security Officers

It has been a long-drawn debate between the G, NTUC and security companies and the result has been a long delay in the implementation of NTUC’s Progressive Wage Model (PWM) for Security Officers. I’m glad the wait is over.

The deadlock was broken when the parties in the Security Tripartite Cluster agreed to implement the Progressive Wage Model and the Government announced that it would be implemented as part of the licensing framework for security agencies.

Given that the ruling will only kick in for security agency license renewals after 1 September 2016, the real impact will only be seen several years down the road, but at least it is set in stone.

There has been much confusion (myself included) over whether this constitutes a minimum wage, but it is clearly a far cry from the classic US-style minimum wage, where a single wage is applied across all sectors with little regard for skills and career development concerns. This confusion has resulted in people variously saying that NTUC has had to eat its own words after criticizing suggestions for a US-style minimum wage.

I shamelessly stole this graphic from NTUC and vandalized it – please read.

I shamelessly stole this graphic from NTUC and vandalized it – please read. 

Singapore, like other nations, is clever enough to try and implement sector-based wage protection and integrate it with skills development pathways. This results in more work needing to be done to maintain the system in balance and keep all sectors updated to new developments in technology and knowledge, but it is preferable to the “lazy way” of implementing a classic single minimum wage instead of something like the Progressive Wage Model.

My only gripe is that it is taking forever to implement. Only cleaners and security officers have been covered so far since the PWM was mooted in 2011 (landscaping workers are next). There is plenty of ground to cover.

This is a good interim solution for the security industry and Singapore – wage protection often falls into different forms along a spectrum, with no wage protection at one end (where Singapore used to be) and the collective bargaining of overpowered unions on the other (in nations such as France). With only a fraction of our workforce in unionized companies, it will be a long time before our workers have the awareness required to secure their own rights.

Who do we have to blame for that? Since it is collective bargaining, I guess we only have ourselves to blame.

5 Ways to Interpret Lim Swee Say’s latest CPF Gobbledegook

Minister in the PMO and Labour Chief Lim Swee Say’s latest statement about CPF has been feeding the flames of Mount Facebook since it was reported yesterday evening.

His easily-misinterpreted statement, delivered off-the-cuff on the sidelines of a Singapore Model Parliament event, has left many fuming, some puzzled, and others scrambling to defend the man.

The Man. photo: cabinet.gov.sg

The specific quote in question:

“Instead of thinking about whether you can spend your savings in the CPF at the age of 55, I think we should think about how can we help our Singaporeans to continue to remain employed, to continue to earn a good living, continue to have good jobs, and at the same time to continue to contribute to the CPF because the more money they have in CPF, the longer they defer the use of the CPF — this will mean they will have more for retirement.”

Mr Lim made a daring grab for the mantle of Captain Obvious from NMP Eugene Tan by, among other things, saying that people who put more into their account (by working past the ‘retirement age’) will have more money for retirement. There was also this nearly pointless quote: “You have your money, you have the account, and you receive the statement, the account on a regular basis. So, you know how much money you have in the CPF”.

Here’s five ways we can interpret his overall statement as reported:

1) You probably won’t have enough money in your CPF to retire, so it’s best to defer retirement. Ditch that pipe dream.

If this is true, that’s pretty in your face. While I personally agree that retirement is a myth these days, Mr Lim is known for making bizarre and confusing statements like “Cheaper Better Faster”, which took months for NTUC to clarify and is still being misinterpreted today, the “Little Frog” story from GE 2011, “better, betterer, betterest”, and of course, “I feel so rich”, the legendary proportions of which doubtless will colour every statement about CPF Mr Lim will ever make.

2) Those who don’t have enough money to retire should continue working.

Blunt, but true, if that’s what he meant. It doesn’t bode well coming from the mouth of the labour chief, though. This corroborates with the fact that some 50% of CPF Members today cannot meet their Minimum Sum and will not have enough to retire on.

3) Don’t spend your CPF savings on other things (like housing and education) so you have enough for retirement.

If that’s what he was trying to say, then it’s terrible advice. This interpretation, however is a little far fetched, although the reporter’s opening line “The best way for Singaporeans to prepare for retirement is to use less of their Central Provident Fund (CPF) money when they are young, said Labour Chief Lim Swee Say” lends some weight to this.

4) Specifically saying that younger Singaporeans should stay employed and earn more to have more for retirement.

It’s good advice, and a friend in NTUC tried to this as a defence by bringing up the example of someone she knew who was out of a job for several years before he was 40. This, however, doesn’t seem to be what Mr Lim is talking about at all.

5) People should plan to continue working and leave monies in the CPF account between 55 to the Drawdown Age (currently 63), even though they can, by right, withdraw monies in excess of their Minimum Sum at age 55.

This is possibly the best interpretation for Mr Lim, should he want to come out and clarify his statement. It makes sense, is sound advice, and doesn’t sound prescriptive. Too bad he totally botched the delivery, as he often does.

Here’s the kicker: in the same interview, Mr Lim was also reported to have said that “the labour movement has been watching the debate closely, and wants to ensure that what is discussed does not create confusion among workers and union leaders.”

Looks like he’s got some catching up to do.

UPDATE 23 June, 10:15pm: A clarification has been made on what Mr Lim said. It seems that his use of the word “young” to describe people aged 55 resulted in mass confusion. Point 5 is our winner.

How raising wages could help raise productivity

While it is regrettable that the NWC didn’t have enough sense to raise the wage increment threshold from $1,000 to $1,200 after two years, I’m actually more surprised by another statement made in the NWC statement.

The NWC’s recommendation was that “real wage increases should be in line with productivity growth over the long term”. Sounds sensible (because it is), but wait a second and think about that formula.

Yes formula.

The formula for labour productivity is essentially the value of the output of the worker divided by the value of the input of the worker. The G likes to reduce all this to dollars, and not just dollars, monetised dollars, basically what a company sells. So based on the recommended G formula from the “Way to Go” website (Singapore’s modern productivity drive post-Teamy the Bee), it doesn’t matter if a worker produces, say, 1,000,000 units of Item A. If the company doesn’t sell any of it, then labour productivity is considered low.

Poor worker. Slaved his ass off and can’t get a raise because his company basically sucked.

SPRING has a more generic calculation, but that’s for internal audits – we’re interested in the overarching G definition of “productivity”, which the NWC is using, and that is money.

I don’t believe that every company leeches profits in order to torture workers. Some do, but others don’t. Even so, when companies/NWC say that they can’t increase real wages because productivity hasn’t increased, what they’re saying is (assuming the worker isn’t a lazy douchebag):

a) we can’t convince our customers or clients to pay more, so I can’t pay my workers more (which is what is happening with the security industry after decades of cheap-sourcing).

b) I can’t get my damn act together and sell the goods and services that you produce for the company profitably, so I can’t give you a raise.

c) Singapore’s companies are so lousy at putting the factors of production together efficiently, so I guess all you workers will have to suffer for it. Sorry.

It seems to me that one way to raise productivity is to raise wages! If unions can play hardball and push wages up, then the cost of goods and services, especially in the local context, will be forced to rise (international trade is another different problem, which is why Singapore tries to stay away from international competition in low value-added goods and services).

For example, raising cleaners’ wages, as NTUC has managed to do (by basically negotiating properly and getting the G to play along), will mean that the buck is now passed to cleaning companies. Those cleaning companies worth their salt will survive by passing on the cost to customers (maybe even add a little more fat into the billing if their product/service is sufficiently differentiated). VOILA! Productivity! (also because we assume that although labour productivity may stagnate, capital productivity will actually rise).

The downside is that the workers with the higher wages do pay for SOME (not all) of the cost that is passed down to the customers, because sometimes they are the customer (HDB S&CC charges for example). The rest of it is paid for by other companies (boo hoo, higher cost of doing business), the G, or by the rest of us who didn’t get a raise (boo hoo, inflation). But three cheers all around (for SG) if we can sell some value-added, innovative, unique, differentiated product globally and make other economies pay for it (SG needs entrepreneurs)! Okay, I’m getting into the international economics thing I didn’t want to get into now… back to local.

Sure, some companies will die along the way, but as long as the economy/market doesn’t actually shrink during that time, the displaced workers will find new employment at this higher wage level elsewhere (at a more productive company that has managed to convince clients to pay more).

Now I’m waiting for the economists to come and try to point out all the exceptions to my suggestion and why it won’t work (in theory).

Patrick Tay on OT pay for white-collar workers

I had the opportunity to have a chat with Patrick Tay, Director of NTUC’s Legal Services Department and MP for Nee Soon GRC about a post I wrote earlier, where a boutique manager managed to claim full rate OT pay from her employer in spite of what was written in her contract.

He agreed that the lady was due the compensation, and told me of two cases in the past where an entry-level accountant and a lecturer managed to claim OT pay.

The upcoming changes to the Employment Act (effective 1 April 2014), will extend these rights to workers earning under $2,500 a month (although anyone earning over $2,250 will have their OT pay rate calculated based on $2,250). That means a lot more people will also be covered by the Act.

Off hand, I can think of a bunch of designers, junior accountants, folks in retail, F&B and maybe even some legal folks who pull far more than 44 hours a week for less than $2,500 a month.

Even if you have a title with the word “executive” in it, the law still protects you. Many employers like to say that “executives” cannot claim OT, but this is false. Mr Tay said that “If you’re not holding substantial managerial responsibilities, you should be covered by EA.”

That’s good news for a lot of us, as log as everyone knows and follows the law.

The law is one thing, but what to do about your labour rights is yet another. Mr Tay says that the first step would definitely be to talk to your employer about the situation – some of them just aren’t aware of the law. If it is possible to get your employer to play ball with the law, then it’s best for everyone. The next thing then would be to find a way to get your work hours on record so that you have something to base the OT calculations on.

If your employer won’t play ball, you’ll have to decide on whether you want to keep working there. Either way, you’ll want to find some way to prove how many hours you’ve worked each week – timesheets, punch cards, emails, and other records (or even an employment contract showing your minimum working hours). Maybe even the testimony of a colleague or two.

At least with those in hand, you’ll be able to bring your case to MOM, or fight it in court like Ms Monteverde did. If you’re an NTUC member, you could even get some legal help from Patrick Tay and his team.

Union vs Employer: new dawn for collective bargaining?

Friday’s ST (Home section, p2) ran an article about the Singapore Industrial and Services Employees’ Union (SISEU) winning a court case against an errant employer. The NTUC’s legal arm, led by Mr Patrick Tay, took the company to the Industrial Arbitration Court for not giving annual increments to workers. Unusual.

Let’s face it, almost everyone in Singapore thinks that the best thing about being a NTUC member is the supermarket discount. You need look for no other anecdote to tell you that Singapore’s unions, at least to the face of the public, are practically unknown for their wage bargaining, dispute resolution, worker representation work. In other words, Singapore’s unions are best known for not being unions.

The NTUC has long been accused of being in bed with both government and businesses (and not without reason). Many workers have seen wage stagnation and breaches of workers’ rights and have no idea who to turn to for recourse.

That’s why this little news report sticks out. 41 unionised workers got a ruling for a built-in annual wage increase of 2.5%, or $50 (more than 2.5%) if they earned less than $2,000 – less than the 5% initially sought, but within the NWC guidelines.

NTUC’s Patrick Tay, who is also MP for Nee Soon GRC, shared that his legal arm fought four cases in court last year. One was even for PMEs, who are not even normally represented by unions. When the Industrial Relations Act is amended to give PMEs union representation in the future, you can bet that Patrick Tay’s team will start to get really busy.

Until then, the best thing to do is spread that this union membership thing isn’t just for discounts. If all else fails you can still sue your union.