My Executive


    Nov 18, 2013

    Don't turn too quickly to labour laws

    WHEN laws are changed to boost employees' rights, employers will understandably cry foul. Any additional rules and regulations for them to follow will not come without costs, since processes usually have to be modified to comply.

    Amendments to two Bills passed in Parliament last week - to bring more employees under the fold of labour laws and give them more ammunition against errant employers - would have probably caused some dread.

    Under the expanded Employment Act, professionals, managers and executives earning up to $4,500 a month will now receive protection in the areas of unfair dismissal and sick-leave benefits.

    More rank-and-file workers will also be covered, with the salary cap up from $2,000 to $2,500 a month.

    The House also gave the green light to amend Central Provident Fund (CPF) Board laws, and stiffer fines and jail time now await employers who delay or default on contributions to their workers' CPF accounts.

    The changes are just two in the recent raft of reforms to strengthen workers' rights. Since last year, measures have been introduced to curb the inflow of foreign workers, introduce new family-leave benefits, and mandate employers to consider local workers first when hiring.

    The tightening of foreign-manpower policy for the past two years, especially, has affected many companies. They have been crying out for more time to adjust and switch to better technology or increase workers' productivity.

    Even for companies that are not errant, all the changes mean, at the very least, more onerous administrative work.

    The argument goes that labour costs will go up and eat into profits. Small and medium-sized enterprises, which make up 99 per cent of companies here and employ six in 10 people, are always more badly affected. Even apparently simple measures, like making it compulsory to issue payslips, will take a toll.

    The Government has acknowledged the pressure, and pushed back implementation of the payslip rule, which was to have been part of the changes to the Employment Act last week. Other concessions were also given, like capping the amount of pay eligible for overtime calculations.

    Has the pendulum swung too far against employers? Not if employees and employers are on the same side.

    There is no doubt the reforms were necessary. With the nature of jobs changing, and technology taking jobs away from people, workers need support more than before. But that does not mean the worker's gain becomes the company's loss, or vice versa.

    Globalisation has opened Singapore to competition from far-flung places, closely intertwining the fates and fortunes of employees and employers. This is especially so for SMEs and their workers.

    Although the new laws and rules give workers more ammunition against errant employers, we should guard against turning too quickly to legal means.

    Instead, where there is no deliberate wrongdoing, both sides ought to stick with negotiations and informal systems that have worked for years. Employers too can take a leap of faith and trust employees not to exert these rights in a cavalier manner.

    Swinging too far to either side - protecting workers at the expense of employers or the other way around, and taking an adversarial stance - could hurt Singapore.

    This commentary first appeared on