More of here, less of there: increase in repeat workers and fat profits for the underground job broker in Singapore

Posted by on May 27, 2019 in Articles, Facts, research, analysis, Media Coverage, News, Our Stand

The recruitment landscape for non-domestic Work Permit holders has changed dramatically in just a few short years. About 80% of these workers are ‘repeat workers’ i.e. they have had a job here before their current ones. This is a big change from only four years ago when we found a slight majority on their first jobs.

In tandem with the increase in repeat workers — which Transient Workers Count Too has long advocated for, in the interest of retaining experience and improving productivity in our industries — there has been an unexpected phenomenon taking root domestically: the rise of the unlicensed Singapore-based job broker. Our study ‘More of here, less of there’ found that about half of our survey respondents relied on a Singapore-based ‘dalal’ to get their current jobs. ‘Dalal’ is a North Indian and Bangladeshi term to mean an informal recruiter. As recently as 5 – 10 years ago, the concept of a ‘Singapore-based dalal’  was almost unheard of. Recruiters were always based in their home countries.

The Straits Times did a feature story (27 May 2019) on our research findings — its headline is shown in the header pic above — saying:

The report estimated that there could be $232 million flowing into the hands of unlicensed job brokers – or “dalals” – here each year.

and quoting from our report:

“Not only is the dalal practice illegal and deprives the state of tax receipts, the indebtedness that results makes workers vulnerable to exploitation and abuse,” [TWC2] said.

Typically, the Singapore-based dalal is also a Worker Permit holder, not a Singaporean. This worker-dalal leverages his connections with employers to get jobs for his countrymen. He has no employment agency licence and therefore does not abide by the maximum fees prescribed by law. He is also flouting the conditions of his own Work Permit which wouldn’t permit him to do such work.

Responding to Straits Times’ queries, the Ministry of Manpower said:

… the ministry has taken action against some 350 foreigners conducting unlicensed employment agent activities between 2016 and last year, from stern warnings to court prosecutions.

The newspaper pointed out that there were 718,800 non-domestic Work Permit holders here, so the number of job transactions involving Singapore-based illegal recruiters would be in the hundreds of thousands. MOM’s figure of 350 cases over three years (2016 to 2018) would be a fraction of one percent. A drop in an ocean, so to speak.

TWC2, in our report, makes the point that because illegal job brokers take the trouble to cover their tracks, trying to chase them down is not a viable strategy for dealing with this problem. Instead, we should fix the recruitment model to give workers easy access to information about available jobs and a route to getting those jobs without having to use avaricious and illegal job brokers.

The Straits Times summarised our point by saying:

Urging MOM to take action, TWC2 recommended that all work permit-level jobs be listed on a centralised job portal so workers can go through the recruitment process themselves.

It was interesting to see MOM’s response to this. The newspaper reported:

[The MOM spokesman] said MOM tells new construction workers about the agency fee cap and the implications of acting as an unlicensed agent or using such an agent, through the mandatory Settling-In Programme.

It seems rather strange that anyone can hope for this to be a solution, since by the time workers attend the Settling-In Programme, they’ve already gotten a job and have long since paid a prince’s ransom to illegal agents. There’s a certain futility in locking the stable door after the horse has been stolen. In any case, this doesn’t address the chief issue: that workers have no other easy way to get jobs except through illegal dalals. Workers use these channels out of necessity. It’s not as if workers desire to hand over vast sums of money.

That said, the ministry also referred to an online directory set up by the Singapore Contractors Association — not by the ministry, thus different from what we are recommending. Other stories on this website have touched on this directory and our information is that it is not quite effective in placing construction workers into jobs, or at least not fully scaled up.

The huge sums raked in by illegal job brokers also raises concern about money laundering, thus impacting Singapore’s reputation as a financial centre. The Second Schedule of the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act lists Section 6(4) of the Employment Agencies Act (“Carrying on employment agency, or performing employment agency-related work or activity, without valid licence”) as a predicate offence. The proceeds from such an offence would be ill-gotten gains for which any attempt to legitimise should be highly suspicious. As mentioned above, TWC2 estimates there is about $232 million a year sloshing through.

The study was conducted in April 2019, involving 381 respondents from TWC2’s Cuff Road Project. The report cautions against assuming the representativeness of the study to the migrant worker population as a whole, but since the reason why workers end up on our Cuff Road Project is virtually always unrelated to their recruitment experiences, we do not think that this convenience sample is skewed in any substantial way.

The Straits Times story can be found here (paywall): https://www.straitstimes.com/singapore/illegal-job-brokering-on-the-rise-here-says-group

Our report can be downloaded by clicking the link at right.

TWC2 is an organization that is dedicated to assisting low-wage migrant workers when they are in difficulty. We are motivated by a sense of fairness and humanity, though our caseload often exceeds our
means.

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