At last, a (temporary) scheme to retain construction workers — more dirigiste allocation than real choice

One cryptic paragraph in an announcement put out by the Ministry of Manpower (MOM) on 13 August 2021 sounded hopeful. It said:

The Government will partner the Singapore Contractors Association Ltd (SCAL) to introduce a six-month retention scheme (1 September 2021 till 28 February 2022) for experienced construction WPHs whose previous employment has been terminated.

“WPH” = Work Permit holder.

Other than that short statement, there was no information about the mechanics or other details of the plan, though we would later find a simple poster drawn up for workers’ information. In the absence of details in the initial announcement, TWC2 decided to get on-the-ground information from workers who were enrolled in the retention scheme so as to understand how it worked. By speaking regularly with six workers we found, we could piece together a picture.

Workers were kept in a holding pen waiting for interviews to be arranged. None of our six guys had any job interviews for the first twenty out of the thirty days they were on the scheme. They could not contact employers directly; there was no listing of job vacancies that they could peruse. They had to wait for interviews to be arranged for them. When an interview was finally scheduled, they could only decide whether to accept or reject that particular job if the employer confirmed an offer at the end of the conversation. They could not choose among multiple offers.

On the bright side, none of the workers reported being asked to pay a fee.

Labour market background

The relentless attrition of workers since the start of the Covid-19 pandemic has led to a situation where the construction sector is badly short of labour. Many projects are reporting delays as a result.

In the last few months, TWC2 repeatedly pointed out how self-defeating it was for MOM to stick with its policy whereby employers who have terminated their foreign employees’ work permits must repatriate these workers.

While one might be perplexed why, in a situation where workers are in short supply, employers wouldn’t want to keep their employees and why they resort to cancellation of permits and repatriation, it should be borne in mind that the labour shortage is at a macro industry-wide level. At a micro level, some individual contractors might have failing businesses. Their projects might have dried up or they have run into financial trouble and therefore have to close or downsize. Some of them might allow their workers to seek new jobs with other employers, but many employers simply do not want to give their workers such a choice. These employers insist on repatriating their men right after cancelling their work permits.

Up to this announcement, MOM stood by its position that that choice — whether to repatriate or grant consent for transfer — is for the employer to make.

Why won’t employers who have excess workers give their workers the chance to find a new job locally? This is where the irrationality of power comes in. Many employers simply do not want to appear “soft” towards their foreign employees. Another explanation is that in downsizing, only part of the workforce is to be laid off. If these laid-off ones get a chance to find new jobs — and perhaps better-paying ones too in the current environment where demand exceeds supply — the remaining workers might feel unhappy. The boss might therefore feel it more in his interest to penalise the unwanted workers (by being repatriated without a chance to get new jobs) so that the retained workers would feel grateful to him for keeping them in employment. The logic is rather twisted, but it’s something TWC2 saw playing out week after week.

Whatever bosses’ private reasons might have been, the effect was a steady loss of workers from our construction industry as a whole. Other employers with projects in hand just could not get the workers they needed as borders remained largely closed.

TWC2 repeatedly called on the government to reverse this policy. We argued that any worker who lost his job should have the option to find a new one in Singapore without having to be repatriated. Singapore’s larger interest demanded this, we said. For example, see this letter we wrote to the Straits Times Forum in May 2021. Since the letter had to conform to the newspaper’s word length limit, we penned a longer commentary, explaining the issue in greater detail. This longer commentary can be found on our website. See Short of foreign labour, Singapore sending workers home even when they want to stay and work.

In October 2020, we highlighted how Qatar changed its laws to permit all workers who have lost their jobs to stay 90 days (if they wished) to try to get a new one. See Qatar abolishes its kafala system, when will Singapore do so?

Enrolling into the SCMX scheme

The six workers who kept us appraised of progress as they waited for new jobs had lost their earlier jobs (from different previous companies) for a variety of reasons. For example, one of them, who had worked loyally for his previous employer for eight years, had been taking driving lessons hoping to become a driver. He paid for the lessons out of his own pocket, but when it came time to take the test, his employer refused to give him time off. Relations between boss and worker turned sour resulting in the latter’s termination.

Another had lost his job because the construction company ran into financial difficulties and closed down.

Some of the workers approached TWC2 for help after losing their jobs, and we told them about this scheme — which we will refer to here as the SCMX worker retention scheme. Others were surprised to receive a call from the Singapore Contractors Association Limited (SCAL) soon after their work permits were cancelled. SCAL runs the SCMX scheme. It is apparent from the unsolicited phone calls that MOM must have set up a system whereby workers whose permits had been cancelled by employers would be referred to SCAL. We don’t think this is universally the case (discussed below), but exactly which workers got referred and which didn’t is not always clear.

MOM did make an effort to inform TWC2 of the guidelines. We were told that to be eligible for the scheme, a construction work permit holder has to:

• have had his work permit cancelled by the current employer from 1 Sep 2021 onwards AND
• not changed employer more than once in the last 12 months AND
• not have any outstanding claims (e.g. salary claims) against his current employer

Nonetheless, our social workers had about five cases where we assessed the worker to be within these guidelines but despite writing to MOM, we heard nothing further. Nor did the worker hear from SCAL. In two other cases, MOM responded by saying those workers were not eligible because of a “past record”. What this was exactly was not explained.

What we see is that there is an additional layer of discretion being applied despite these stated guidelines, and that extra layer is shrouded from view.

More frustratingly, several other workers whom we hoped to refer into the scheme were unsuccessful because in each case, as MOM said to us in reply, the employer had already bought a flight home for the worker. This seems totally illogical to us, for if the scheme was meant to retain workers and experience despite employers cancelling their work permits and wanting to send them home, then letting bosses go through with their plans to kick the guys out of Singapore is contrary to the stated point of the scheme.

Moved into Sungei Tengah Lodge

Workers who were admitted into the scheme were moved to accommodation in Sungei Tengah Lodge, Singapore’s largest dormitory with around 25,000 beds pre-pandemic. When we first spoke with our informants in September 2021, they reported that the SCMX group occupied four rooms in this dorm, all in the same block. They were about 40 men in total.

However, by the end of October, the group had grown to “more than 100 workers”, our contacts said. This increase was consistent with what we observed were inefficiencies with the operation of the scheme. It seemed only natural for a backlog to build up.

The workers did not have to pay for their accommodation or their catered meals.

We would later learn that SCAL would charge the new employer (if a worker is job-matched to one) a tariff of $15 per day, presumably for bed and board, for the period that the worker had been in the dorm. In addition, based on the two examples we saw, we reckon that the new employer is also charged an employment agency fee equivalent to one month’s basic salary.

In one worker’s case, the total amount charged was about $800, and in another case about $1,100.

Our concern is that the new employer may try to claw this amount back through deductions from workers’ future salaries. We advised our clients to be vigilant about this and to report to us immediately should it happen.

Like a few hundred thousand other dorm-resident workers, they were confined within their dorms. They could not go out unless permission was given.

Long wait

• SCAL will find interested employers for them and will arrange three job interviews within a 30-day period. Presumably, the men’s job history and qualifications will be circulated to potential employers before interviews are arranged.

• After each job interview, the worker will be asked (assuming the employer still wants to hire him) whether he is accepting the job. Only if he turns it down will the next interview be arranged. So, it’s not as if he will have three possible jobs to choose among.

• If the worker refuses all three jobs offered in succession, he will be sent home.

• In effect though, the job interviews seem to be arranged room by room. “The men in the first room get interviews first,” reported a few of our informants. “Then the next week, the men in the next room.” The result is that of our six informants, none got any job interview in their first three weeks in Sungei Tengah Lodge, because they were “waiting our turn”.

• In the interest of clarity, we asked if the men in a room were interviewed as a group together. Our informants said, “Not together, one man one interview.”

• According to our informants, the SCAL representative told them that employers will be asked to offer salaries about ten percent higher than their previous jobs. In reality, we later heard from the successfully re-employed informants that the increase was not as straightforward as that.

• The six workers had a sense that employers too were put on a queue, as seen from the first-hand account of one among them. He had an employer interested in hiring him, and this worker told SCAL about it. SCAL then said that once he (the worker) was on the SCMX scheme, no other employer could offer him a job outside the scheme. The worker conveyed the same information to the interested employer, to which the employer replied that they were members of the Singapore Contractors Association, yet had heard nothing about being able to get workers from the scheme. It finally turned out — at least as far as our six workers were made to understand — that SCAL had its members on a conveyor belt; only when it was “their turn” did the employers get a chance to participate in the SCMX scheme and look at the CVs of available workers.

On the last point above, we cannot be certain if that really is the operational plan at SCAL since our informants were workers — TWC2 being a worker-centric organisation — and they can only tell us so much. But it does seem wasteful that the scheme is designed as much to exclude and throw away hiring opportunities as to include. See also our comment about monopoly near the end of this article.

Outcomes

By the end of October 2021, this was the situation for the six men we followed up with. Four men got new jobs after long waits. One got fed up with waiting and decided to go home, while the sixth was still in limbo.

#1 “RJ”: Got his first interview after three weeks; accepted the job that came with a salary increase of about 4 percent.

#2 “M”: Got his first interview after four weeks; he accepted the job, but then had to wait another week before MOM issued an In-Principle Approval for Work Permit (IPA) — reason for the delay unknown. Not clear what his new salary is, but it seemed to be slightly better than the previous.

#3 “J”: Accepted  a job — not clear how many interviews he went through — after nearly four weeks on the scheme. New job pays about 10 percent better than previous job.

#4 “A”: Accepted a job after his first interview which didn’t happen until after nearly four weeks of waiting. New job comes with a 5 percent salary increase.

#5 “RD”: Got fed up after not getting any interviews for more than three weeks and decided to go home instead. SCAL wants him to buy his own airticket even though the press announcement said SCAL would pay for their airtickets.

#6 “S”: As at the end of October, he was still in the dorm, after nearly six weeks on the SCMX scheme. He has had two interviews but he either turned down the offer or was not offered employment. In his mind, he is quite prepared to go home rather than take an unsatisfactory offer.

We do know a bit more about what kinds of jobs they accepted, but it would be too revealing of their identities if we discussed this here.

Our comment

The SCMX scheme does not appear as bad as a classic slave market. Unlike slaves in a slave auction, workers in the scheme can turn down any bid made for them, though they cannot choose among offers because the bids are made serially, not simultaneously. However, only three bids are allowed, seriously limiting their choices.

The entire design of the scheme appears to be aimed at ensuring that the price paid for the men (a.k.a. salaries) does not skyrocket. This is done by limiting choice for the workers as well as limiting competition among employers.

The conveyor-belt way of arranging interviews makes the process inefficient; it is hard to imagine how it can be scaled up if the numbers of retrenched workers increase, since only one agency (SCAL) with limited staff is allowed to arrange interviews. It also adds to the length of time a worker is idled (and confined) in the dorm waiting for interviews. And by limiting choice all around, it makes it doubtful whether best matches of employer needs and workers’ skills are obtained.

Whilst we are glad that our calls to stop the haemorrhage of workers have been heeded, and also glad that the mechanics of the scheme do not impose any financial cost onto workers, it is being done in a way that further restricts worker autonomy. Creating a monopoly and a slow, inefficient system is not the right path forward.