Short of foreign labour, Singapore sending workers home even when they want to stay and work

Changi airport, terminal 4

The Sunday Times of 23 May 2021 carried an article headlined “S’pore’s construction blues: Manpower shortage exacerbated by bar on South Asian workers” (paywall) in which TWC2’s Alex Au was quoted as saying that migrant workers whose work permits were terminated prematurely should be allowed to seek a transfer to another firm, which could ease the shortfall.

This follows an earlier Straits Times article “Dorm life one year on: Singapore workers adapt to safety steps but labour crunch an issue” (paywall) on 24 April 2021, in which TWC2’s Ethan Guo was quoted as saying that TWC2 has seen a huge number of cases involving problems with transfers and this has been the No. 1 concern among the inquiries it has received.

He added that some employers have deliberately obstructed transfers by cancelling the workers’ work permits and repatriating them before they can make the switch. “Effectively, it’s a lose-lose situation,” he said. “Singapore loses these productive workers when we already do not have enough workers. For the worker, he not only loses the opportunity (to earn more) but is also being sent home.”

In this commentary, we will explain further what is happening on the ground, and how our policy-makers, in permitting employers to pursue their private interests (often driven by an overwhelming need to control and intimidate workers), is letting the labour shortage worsen.

See also our letter in the Straits Times, 24 May 2021: Allow foreign workers whose work permits have been cancelled to stay and look for new job, and our article Nearly 8,000 foreign construction workers had permits cancelled close to expiry date which estimated that we lost 10,000 to 20,000 workers in the second half of 2020 even though they might have wanted to stay and work.

We will argue that the Ministry of Manpower (MOM) is not doing all they can to maximise retention of foreign labour in Singapore, even as they acknowledge that there is a dire shortage.

Manpower minister Tan See Leng said in Parliament on 11 May 2021 that they are aware of the problem. What one might normally expect is that the ministry would then go all out to retain as many workers as possible, since it is not expected that the Covid-19 situation in India and Bangladesh would improve enough anytime soon for us to safely reopen borders.

However, based on the cases that stream through TWC2, with many resulting in repatriation despite workers wanting to stay and work, our observation is that outcomes don’t match what one might expect if the ministry were really going all out. Perhaps the ministry has other priorities than retention of foreign labour, and where those other priorities result in further haemorrhage of workers, it appears that their stance is: so be it.

If so, such a stance is injurious to Singapore’s larger interest. Or, to put it another way, while the shortage of labour might have begun from factors outside our control, the exacerbation of it is self-inflicted.

Below, we quote four key sentences from Tan See Leng. Longer passages surrounding these sentences, which should enable readers to assess the context, can be seen in the footnotes.

1. In 2020, the number of Work Permit holders in the CMP [construction, marine and process] sectors declined by nearly 60,000 or about 16%.

2. … we encourage businesses to retain their existing migrant workers and tap on other workers that are already here in Singapore.

3. When a work pass expires or is cancelled, we typically require the worker to leave Singapore in two to four weeks.

4. If the work pass holder is able to find new employment before repatriation, there is no reason for us to purposefully force these worker [sic] to return to his home country…

Even on a cursory reading of the above statements, there appears to be conflict between sentence 3 and sentences 2 and 4.

And indeed, this plays out almost daily in TWC2’s caseload. Workers come to us for help because their bosses insist on repatriating them. We would love to report that with intervention by MOM, repatriation is stopped and the workers then quickly move on to new jobs, contributing to our otherwise strained construction, marine and process industries. But in truth the most common outcome is that MOM does not intervene — telling workers that they have no choice but to resign themselves to repatriation does not count as intervention — and workers are more often repatriated than not.

Sentence 3 is the “killer” clause. MOM continues to accord employers the unfettered right to cancel work permits, and once cancelled, MOM makes repatriation mandatory. In fact MOM enforces it with rigour. All the encouragement about retention and hiring existing foreign workers here comes to nought once an employer activates cancellation. As Tan himself said to Parliament, “… we typically require the worker to leave Singapore…”

Two main ways for work permits to end

At this stage of our discussion, it is vitally important to distinguish between work permit expiry and work permit cancellation. Expiry and cancellation lead to different options for workers and employers; we must take care not to conflate the two scenarios in any discussion.

Work permit cancellation

The employer can cancel an employee’s work permit at any time. As Tan See Leng said (above), once it is cancelled, the worker must be sent home. There are uncommon exceptions wherein the Ministry of Manpower (MOM) intervenes and, at its discretion, allows the worker to switch to another job, but being uncommon, discretionary and not a right, we’ll leave it out of our discussion.

Work permit expiry

In the lead-up to work permit expiry, there is a fairly complex matrix of options for employers and workers, best shown graphically below. Do note the period between the 40th and 21st day before the expiry date — we call this the no-consent-needed window period. It will be mentioned a few more times further down.

The options are very limited up to the eighth week (or 56th day) before the expiry date. The employer can terminate the employment contract with the worker and cancel the work permit, or the worker can resign, in which case, the employer would cancel the work permit. Either way, repatriation is typically mandatory.

Starting from the 56th day before expiry, the employer can renew the work permit. For all practical purposes, the worker has no real choice in the matter. It’s almost as if our system refuses to recognise that workers should have choice. Once the employer has renewed the work permit and if the worker does not want to continue working, then the worker can only resign. In that case, the work permit is cancelled (not expired) and repatriation becomes mandatory.

If the employer chooses not to renew the work permit, then from the 40th to the 21st day before expiry, the worker gets a “no-consent-needed” window period in which he can look for a new job without need to get the old employer’s consent. At least that’s the theory.

In practice, what we’re hearing is that as soon as a new employer puts in an application for a new work permit, the old employer is promptly informed and given a chance to frustrate the transfer. Again you’d notice, the worker’s wishes — to switch jobs — do not count.

More seriously, the ethical infraction seems not to bother anyone’s conscience.

An analogy for a Singaporean would be like this: If Mary Lim has found a new job at ABC Webdesign, would it be right for the authorities or anyone else to then inform her old employer XYZ Digital that she is planning to quit and change jobs? Worse yet, is it right that the authorities would then offer XYZ Digital an opportunity to frustrate the changeover and either (a) compel Mary Lim to continue working for them or (b) exile her into the wilderness, unable to take up the ABC Webdesign job?

If one looks carefully at the graphic above, the most striking thing is that the existing employer can at any time either renew or cancel a work permit. Both acts compel a certain result for a worker, even if it is against his wishes.

In their public communications, MOM has a tendency to play up the no-consent-needed window allowing transfers as the expiry date approaches, but by our observation, far too many employers frustrate workers’ use of this entitlement by using their (employers’) right to cancel the work permit, thus triggering mandatory repatriation.

Why do employers want to frustrate transfers?

It’s all about power and the intimidatory use of power — to keep workers working for them, to keep them submissive, and to keep wages low. And if MOM’s overarching credo is that cheap and submissive foreign labour is good for Singapore — and there is plenty of reason to think that that is their overarching credo — then it is hardly any wonder why our regulators are so indulgent towards employers’ use of power to intimidate.

This may also explain why, despite the minister’s attempts to assure Parliament that his ministry is trying to mitigate the labour shortage, the ministry is quite happy to live with internally contradictory half-measures. It’s a problem of mixed priorities.

There are roughly two broad categories of existing employers: those with a healthy order book and need to retain their workforce; and those who don’t have enough contracts in hand and may need to downsize.

Those who want to retain their workforce

As workers’ permit expiry dates approach, these employers would dearly like to have their workers agree to renewal. The problem is that in the context of labour shortage, other employers are offering better salaries. Knowing this, many workers, if asked, tell their bosses that they don’t want renewal since they are confident they can get a better-paying job.

Good bosses may offer a pay rise to keep the workers on board. With Singaporean employees, bosses find themselves having to do this quite often. Other good bosses may agree to part ways amicably.

Alas, there are other bosses who feel so miffed that a worker has turned down renewal of the work permit that he wants nothing better than to punish the worker for his exercise of self-autonomy. The boss may also feel that if he lets one worker move to a better job, his other workers might be encouraged to do likewise. His pride and power would never allow that.

Such a boss would then resort to the option that MOM has conveniently left in his hands — the right to cancel a work permit at any time (even during the renewal or no-consent-needed window). Once cancelled, the worker is then deprived of his entitlement to the no-consent-needed window and he must be repatriated.

Repatriation — throwing a man overboard so to speak — becomes even more likely when the existing employer is informed that a new employer has submitted a work permit application for a worker whose work permit has not been renewed. The employer is going to see this successful worker as “too big for his boots” and is not going to let him become an encouraging example to his other workers.

So, rather than let the transfer process go ahead, there is strong incentive for the old employer to frustrate the transfer through cancellation of the work permit. Kill the chicken to scare the monkeys — as the traditional Chinese saying goes.

Each time we at TWC2 see a case where the employer cancels a work permit in the two months approaching expiry, rather than let the permit expire normally, we suspect that there is an ulterior motive involved.

Those who need to downsize

At any given time, not all companies are doing well. There will be employers who cannot afford to hold on to all the workers they have. Yet even then, they may not look kindly on workers getting better-paying jobs elsewhere after expiry of their work permits. The same spectre of these successful workers becoming alluring examples for their other workers haunts these employers just the same. They only want to downsize, not to lose all their workers in an exodus.

For this reason, we come across cases where the employers have actually told their workers that they are not planning to renew their work permits. “Company no have projects,” the workers tell us as the reason why their bosses are not keeping them. And yet, instead of being nice to these hitherto loyal employees by letting them use the no-consent-needed window to look for new jobs, the bosses cancel their permits and repatriate them.

The unfettered right to cancel and repatriate is the problem

It’s clear by this point that giving employers the unfettered right to cancel work permits at any time, and then linking cancellation to mandatory repatriation is the nub of the problem.

A simple solution would be to de-link cancellation from mandatory repatriation. Especially in these times when Singapore is so short of foreign labour, permit cancellation should not automatically lead to losing a worker from our economy. Every such worker should get a reasonable opportunity (say, three months) to look for a new job.

So why is policy not changed?

It’s not for us to read the minds of the folks at MOM, but the jigsaw puzzle only makes sense when we recall what we said earlier: that by all appearances, MOM’s credo is that exploitatively cheap and submissive foreign labour is good for Singapore, and therefore giving employers huge powers to control, even intimidate their workers, including the option of repatriation (through premature cancellation of worker permits), serves this objective.

If employers throw men overboard to intimidate their remaining workers, but as a consequence, Singapore’s shortage of foreign labour is further exacerbated by repatriation, does MOM say: so be it?

In the light of this, we look at Tan See Leng’s statements again:

“If the work pass holder is able to find new employment before repatriation, there is no reason for us to purposefully force these worker [sic] to return to his home country…”

Ah, but the system allows employers to purposefully force their workers to return home.

“…we encourage businesses to… tap on other workers that are already here in Singapore.”

How meaningful is this if the transfer process can so easily be frustrated by previous employers?

Here are some important passages extracted from the official Parliament reports, of what Manpower minister Tan See Leng said on 11 May 2021. The passages that we have put in bold were quoted by us near the top of this commentary article.

Businesses have indeed been affected, quite badly, particularly with the Construction, Marine Shipyard and Process (CMP) sectors being the hardest hit as they rely heavily on migrant workers for jobs that few locals would want to work in. In 2020, the number of Work Permit holders in the CMP sectors declined by nearly 60,000 or about 16%.

We are very mindful of the manpower crunch that these firms face today. Besides providing financial relief to help them, we are also taking steps to alleviate the manpower shortage. From November 2020 right up to April 2021, we granted entry approvals to an average of 5,100 S Pass and Work Permit holders per month. However, restrictions on inflow of workers from higher risk countries is likely to persist for some time. This is as the size of the inflow coming in has to be reduced when the COVID-19 situation deteriorates in these source countries from where they come from, and we can only increase these inflows when the situation in these home countries improve. Because this is the only way we can ensure the safe inflow of the workers, whilst managing and mitigating the risk of transmission in our community.

Further on, he said,

In the meantime, we encourage businesses to retain their existing migrant workers and tap on other workers that are already here in Singapore. Mr Leong Mun Wai asked if the non-resident employment decline in 2020 of 181,500 was matched by the decline in total population of non-residents within the same period. The answer is yes.

He also asked about repatriation arrangements. When a work pass expires or is cancelled, we typically require the worker to leave Singapore in two to four weeks. This depends, of course, on the pass type. Time is given for the employer to arrange repatriation, and also for the worker to settle his or her own personal affairs, such as closure of bank accounts and termination of leases.

Then he added,

Each year, about 30% of all work pass holders do not continue employment with their original employer and have their passes expire or cancelled. If the work pass holder is able to find new employment before repatriation, there is no reason for us to purposefully force these worker to return to his home country, for him to incur additional recruitment fees from overseas employment agents, to undergo additional COVID-19 testing, and on return to Singapore, to serve up to 21 days Stay-Home Notice (SHN). Furthermore, making the worker do this unnecessary round-trip would increase the risk of him returning with a COVID-19 infection.

On the other hand, however, if the work pass holder does not find new employment before the deadline, we ensure that his former employer will fulfil its obligation to successfully repatriate the worker.

If we had insisted that the worker had to leave Singapore even though he has already found an employer, we would have had to allow the entry of nearly double the number of workers last year, and this would further strain our SHN facilities. Of course, the alternative would be to compound further the manpower difficulties faced by businesses, as what the hon Member of Parliament Ms Jessica Tan and also Mr Pritam Singh have highlighted.