Why does our Employment Act look so weak?

Singaporeans first

Someone tried to compare our Employment legislation with that of Australia. Here’s what he posted:

– 38 hours work week
– 28 days annual leave
– 2 days compassionate leave
– Long service leave
– Minimum wage
– Community service leave
– Redundancy Payment

– 44 hours work week
– 7 days annual leave
– No compassionate leave
– No long service leave
– No minimum wage (which is not entirely true)
– No Community service leave
– No redundancy payment

This comparison does not give a realistic picture of the employment landscape in Singapore. To start with, laws do not exist in a vacuum. There exists many other policy tools that prevent exploitation.

Realistically, no one is going to work for you if your company offers only MOM prescribed benefits. I’ve heard of very, very few companies that actually only offer 7 days of annual leave and no compassionate leave. In fact, very few companies actually pay less than what the Progressive Wage wage floor demands – that is $1200.

There are two reasons why our we don’t have wide spread worker exploitation:

a.) We have a very tight labour market. At 98% employment, businesses are already having trouble looking for manpower. Because of this, the real problem is that people are job hopping much more than is healthy for the country. People would resign and work for the competitor for a mere $100 more.

b.) The economy is robust. And this is important, because if there was no business in this country, no trade and little profit, then yes… companies would have a reason to pay the minimum and dispense with the niceties. But if business was good and booming, the chances of employers providing better packages is higher.

The data has been talked to death. Wages are continuously improving. More employees are demanding work-life balance. Companies know for a fact that if they don’t treat their staff reasonably well, they will work for your competitor without too much consideration.

In fact, for Singapore (and for Singapore alone), I would argue that having an Employment Act that is too onerous on the business owner is unhealthy to entrepreneurship.

When an Act of Parliament is passed, it affects all. In the world of business, there are many types of business owners and economic conditions change very quickly. Should a small hawker, provision shop or small family business be subject to the same standards that an MNC is being held to?

So if legislation is too onerous, it affects market conditions, discourages entrepreneurship, makes it inflexible to manoeuvre to market conditions and is prone to policy gaming. No business, no profit and labour activity decreases. Who suffers? Is it not the worker? The very people we’re trying to protect?

I understand that it would be naive to think that a corporate entity would bother with unprofitable things such as conscience. I mentioned earlier our laws do not exist in a vacuum. There exist many policy tools that upholds employee welfare: The Ministry of Manpower provides for the basic welfare for the entire country and labour mechanisms such as unions, the National Wages Council and tripartite pressure will make it very unprofitable for the businessman to exploit their workers.

Should the legislation be tweaked to force companies to allow for better benefits? Of course, and this tweaking will never end. So instead of a zero-sum race to the bottom, trying to outdo the next country and see who gives more holidays, I think it is more effective for policy makers to concentrate on creating for a better economic ecosystem instead – one that makes it profitable and equitable for both businesses and workers.







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