Like many countries in the Persian Gulf, Singapore too operates a ‘kafala’ system. It’s a system in which migrant workers must be sponsored by an employer in order to enter, stay and work in the destination country. It thus makes migrant workers completely dependent on their respective ‘kafeels’ (sponsors) for their livelihood and residency. In Singapore’s case, the ‘kafeels’ are the employers, and they have the power to cancel a worker’s Work Permit at any time.

Some employers are tempted to exploit the control that the State has given them over other human beings. Knowing that, for a worker, his continued residency and employment is at the discretion of the employer, the boss may, for example,

  • demand a lowering of the salary midway through a contract, putting the worker in a dilemma of either accepting the lowered salary or losing his job (having his Work Permit cancelled) and having to go home;
  • demand an under-the-table payment for the ‘privilege’ of agreeing to a worker’s request for a transfer.

TWC2 has long advocated the abolition of such a system. One idea is that migrant workers should have Work Permit validities of fixed term, e.g. five years, which can be renewed when, at the five-year point, the worker can show that he is still gainfully employed. Work Permits should thus not be linked to any employer.

Possibly the Singapore government thinks that by tying a worker to an employer, we ensure stability in the foreign workforce. Otherwise, workers may job-hop.

This is short-sighted policy. There are numerous downsides, for example,

1. The power imbalance tends to push down salaries, and when labour is so cheap, employers see no reason to invest in skills and productivity. Singapore may thus carry more migrant workers than we actually need for the same economic output, and this creates a burden on infrastructure and maybe even social costs.

2. The immobility of workers to change jobs creates a rigidity in the job and skills market which leads to poor allocation of resources.

3. Exploitation of power by employers encourages all sorts of illicit payments which, over time, normalises a culture of corruption.

Sumon’s case

All these issues are illustrated by the problem faced by construction worker Sumon Md Kamrul Hassan, as told to us in September 2019 when he came to TWC2.

He joined his employer JN Engineering (Private) Limited on 18 July 2020. To get this job, he had to pay the agent $900 — roughly twice the basic salary of $460  that the job came with.

However, within about a week of starting work, he came down with dengue fever. There followed a dispute with his boss about medical leave wages and meals not being provided to him during his recovery. Sumon showed TWC2 the WhatsApp messages he exchanged with his boss, and on perusal, our sense is that the employer was unhappy that he fell ill so soon after hiring him. This can be seen from messages from the boss saying “3 time[s] sick leave in one month” which probably referred to the extensions of his medical leave for a proper recovery, and “due to a lot of expensive of you”.

Ultimately, the boss decided to terminate Sumon’s employment, but also offered him permission to seek a transfer job — TWC2 saw a message from the boss to this effect. Sumon then began to look for a new job as soon as he recovered, and succeeded.

The new employer applied for an In-principle Approval from the Ministry of Manpower in mid-September 2020 and this was approved. But to get his new Work Permit, Sumon had to get JN Engineering to sign off on the transfer, and now it seems that the previous boss changed his mind.

“Now he don’t want to give permission,” Sumon tells TWC2.

As to why he changed his mind, we do not know. But MOM’s present policy does give him complete discretion.

The effect of this is injurious to the new employer’s and Singapore’s larger interest. The new employer is now without a worker he was relying on getting, which may affect progress on whatever project the new employer has.

TWC2 will assist Sumon by writing to MOM to see if there is any other way forward.

How else to get a stable workforce?

Abolition of our kafala system would cure these inefficiencies. We should move quickly to untying workers from their employers and issue Work Permits of fixed duration. But undoubtedly, there might be resistance from those we think that workforce stability would be lost as a result.

Firstly, it is quite shocking that our consciences are not disturbed when, to obtain the economic benefit (for ourselves) of workforce stability, we rely on State-sanctioned coercion and all sorts of human rights abuses that flow from that. Nor do we seem pertubed that we have created a system that engenders all sorts of corrupt payments. These moral arguments should be enough for us to want to dismantle the system.

Secondly, there is a far better way to obtain workforce stability: Treat your workers better. Moreover, TWC2 recommends that employers invest in upskilling of workers, and in return for bearing the cost of training courses, employers can bond their workers for a year. This way, we create a virtuous cycle of increasing skills and productivity.

(Naturally there has to be guidelines for how much training investment warrants a bond, and also a clear rule that the worker can still free himself from the bond by paying back the cost of training, pro-rated by how much of the bond period he has fulfilled.)

Our present policy is not fit for our economy’s needs and our times. The kafala sytem has to go.