AFTER negotiations described as "difficult", the National Wages Council (NWC) last week recommended two measures for low-wage workers in its yearly report to set pay guidelines.
One was a $60 minimum raise for those earning a basic monthly salary of less than $1,000 - the second year in a row it has urged firms to give such workers a raise.
It also tackled, for the first time, the issue of low-wage workers on outsourced contracts, calling on service buyers and providers to work together to pass on the increase by reviewing ongoing contracts if necessary.
Wages Council member and labour MP Zainal Sapari hails the recommendation on outsourced workers as "an important step forward". The director of the Unit for Contract and Casual Workers at NTUC also reveals why the issue is close to his heart.
Last year, the NWC (comprising union leaders, employer groups and government officials) called for a $50 raise. Some say employers were let off the hook this year. They have to pay just $36 towards a $60 raise, since the recently introduced Wage Credit Scheme subsidises the other $24.
I am not surprised that there are people who think the recommendation could have been larger. I couldn't agree more. NTUC asked for a higher amount. But after negotiating with NWC members, $60 was something we could get an agreement on.
But if you translate into percentage terms, it is 6 per cent. Compare this with the average raise other rank-and-file workers are getting - that's between 3 and 5 per cent.
Unionists say the negotiations were "difficult".
Well, vigorous debate is always healthy. Each side in the tripartite partnership was given the chance to explain its position based on whatever data, statistics or stories it has. We shared our perspectives. We put those views on the table, and came to a consensus on what would be acceptable to all.
The recommendation on outsourced workers, for example - that is unprecedented in the sense that it requires a change of mindset on the part of both service buyers and providers.
How many low-wage workers are there, and in what sectors?
There is no official definition of a low-wage worker.
Looking at Ministry of Manpower (MOM) figures, about 115,000 full-time resident workers earn a gross monthly salary of $1,000 or less. But the number who may be impacted by the NWC report is higher as the recommendation was based on basic salary.
We have identified five sectors where we think there is quite a large number of such workers: cleaning, security, retail, landscaping and logistics.
The new recommendation on outsourcing was an NTUC initiative?
Yes. Last year, 80 per cent of unionised companies were willing to give the $50 raise. But the ones that did not come on board - cleaning companies, for example - were tied up in outsourced contracts, some for up to three years.
Service providers told us that thin margins meant it was difficult to give the raise if service buyers did not chip in. That means no wage increases for the workers for three years.
Last year, my union, Batu (Mr Zainal is executive secretary of the Building Construction and Timber Industries Employees' Union), referred 12 of these cleaning companies to MOM for conciliation but MOM could not convince or compel them to give the $50 raise. We were contemplating bringing the cases to the Indus-trial Arbitration Court, but decided that our chances of getting a favourable ruling were not high.
So we decided to work through the NWC instead. The fact that NWC was willing to make this a specific recommendation represents an important step forward.
You now have the recommendation. What's next?
So there are ongoing outsourcing contracts as well as contracts to be signed in future.
For ongoing ones, we will take the moral suasion approach.
On the part of NTUC, we will work with unionised companies and encourage management, if they are service buyers, to come on board. There are funding schemes, such as the Inclusive Growth Programme and the Best Sourcing Initiative, to help them.
In terms of implementation, it would be best to let service providers and buyers come to a solution acceptable to both. In one form, the buyer could pay $36 out of $60, the non-subsidised part. Or they could co-share the increase in costs. Whether it's $18-$18, or another breakdown, it's up to them. The social enterprises under the NTUC family - such as FairPrice, NTUC Foodfare and NTUC Income - will lead by example as service buyers.
With regard to non-unionised companies, it is important that the Government continues to take the lead. The onus is also on business associations represented on the NWC to get their members to adopt NWC recommendations.
For contracts to be signed in the future, we want a clause in all outsourcing contracts saying NWC recommendations shall be implemented each year.
One possibility is to include NWC compliance in mandatory licensing requirements. We are exploring this.
The Government has already announced that mandatory licensing will happen for cleaning companies next year. I understand this is now being looked at by the Attorney-General's Chambers and is scheduled to be out in the third quarter of next year.
If it becomes a licensing requirement, all future contracts will factor it in naturally as a cost.
But ultimately we want companies to know paying low-wage workers better makes them more motivated. Cleaning and security, furthermore, constitutes just 5 to 7 per cent of the cost of running a facility. It makes no sense for a company to put money into corporate social responsibility, but fail to give low-wage workers a $60 raise. Sometimes all it takes is for one guy at the top to make the decision to improve workers' lives.
You've spoken in Parliament about outsourcing on quite a few occasions. It's close to your heart, isn't it?
It's interesting that I'm now helping low-wage workers in cleaning and security. My father was a cleaner who also worked as a security officer.
He held three jobs. He would wake up at 4.30am every day, and set off to work as a daily rated worker, cleaning the streets. At 8am, he rushed to Tekka Market, where he collected rubbish.
At 11am, he would be home, have lunch, and rest for a while before going off at 3pm to the Kallang indoor skating facility, where he worked as a security officer until 11pm.
He slept just five hours.
As a teenager, I didn't get to see him much. But I'm proud of him because as a cleaner and a security officer, he was able to raise a family of five children.
Why could he do it when a lot of cleaners and security officers today find it difficult to cope? I realised outsourcing has been one of the reasons - companies wanting to concentrate on core businesses instead of taking on cleaners and security officers as full-time staff.
My father was earning $600 as a daily rated worker 30 years ago. Today, there are still cleaners - though not many - earning $600 to $700. I find such a situation unacceptable.

After negotiations described as "difficult", the National Wages Council (NWC) last week recommended two measures for low-wage workers in its yearly report to set pay guidelines.

One was a $60 minimum raise for those earning a basic monthly salary of less than $1,000 - the second year in a row it has urged firms to give such workers a raise.

It also tackled, for the first time, the issue of low-wage workers on outsourced contracts, calling on service buyers and providers to work together to pass on the increase by reviewing ongoing contracts if necessary.

Wages Council member and labour MP Zainal Sapari hails the recommendation on outsourced workers as "an important step forward". The director of the Unit for Contract and Casual Workers at NTUC also reveals why the issue is close to his heart.

  • Last year, the NWC (comprising union leaders, employer groups and government officials) called for a $50 raise. Some say employers were let off the hook this year. They have to pay just $36 towards a $60 raise, since the recently introduced Wage Credit Scheme subsidises the other $24.

I am not surprised that there are people who think the recommendation could have been larger. I couldn't agree more. NTUC asked for a higher amount. But after negotiating with NWC members, $60 was something we could get an agreement on.

But if you translate into percentage terms, it is 6 per cent. Compare this with the average raise other rank-and-file workers are getting - that's between 3 and 5 per cent.

  • Unionists say the negotiations were "difficult".

Well, vigorous debate is always healthy. Each side in the tripartite partnership was given the chance to explain its position based on whatever data, statistics or stories it has. We shared our perspectives. We put those views on the table, and came to a consensus on what would be acceptable to all.

The recommendation on outsourced workers, for example - that is unprecedented in the sense that it requires a change of mindset on the part of both service buyers and providers.

  • How many low-wage workers are there, and in what sectors?

There is no official definition of a low-wage worker.

Looking at Ministry of Manpower (MOM) figures, about 115,000 full-time resident workers earn a gross monthly salary of $1,000 or less. But the number who may be impacted by the NWC report is higher as the recommendation was based on basic salary.

We have identified five sectors where we think there is quite a large number of such workers: cleaning, security, retail, landscaping and logistics.

  • The new recommendation on outsourcing was an NTUC initiative?

Yes. Last year, 80 per cent of unionised companies were willing to give the $50 raise. But the ones that did not come on board - cleaning companies, for example - were tied up in outsourced contracts, some for up to three years.

Service providers told us that thin margins meant it was difficult to give the raise if service buyers did not chip in. That means no wage increases for the workers for three years.

Last year, my union, Batu (Mr Zainal is executive secretary of the Building Construction and Timber Industries Employees' Union), referred 12 of these cleaning companies to MOM for conciliation but MOM could not convince or compel them to give the $50 raise. We were contemplating bringing the cases to the Indus-trial Arbitration Court, but decided that our chances of getting a favourable ruling were not high.

So we decided to work through the NWC instead. The fact that NWC was willing to make this a specific recommendation represents an important step forward.

  • You now have the recommendation. What's next?

So there are ongoing outsourcing contracts as well as contracts to be signed in future.

For ongoing ones, we will take the moral suasion approach.

On the part of NTUC, we will work with unionised companies and encourage management, if they are service buyers, to come on board. There are funding schemes, such as the Inclusive Growth Programme and the Best Sourcing Initiative, to help them.

In terms of implementation, it would be best to let service providers and buyers come to a solution acceptable to both. In one form, the buyer could pay $36 out of $60, the non-subsidised part. Or they could co-share the increase in costs. Whether it's $18-$18, or another breakdown, it's up to them. The social enterprises under the NTUC family - such as FairPrice, NTUC Foodfare and NTUC Income - will lead by example as service buyers.

With regard to non-unionised companies, it is important that the Government continues to take the lead. The onus is also on business associations represented on the NWC to get their members to adopt NWC recommendations.

For contracts to be signed in the future, we want a clause in all outsourcing contracts saying NWC recommendations shall be implemented each year.

One possibility is to include NWC compliance in mandatory licensing requirements. We are exploring this.

The Government has already announced that mandatory licensing will happen for cleaning companies next year. I understand this is now being looked at by the Attorney-General's Chambers and is scheduled to be out in the third quarter of next year.

If it becomes a licensing requirement, all future contracts will factor it in naturally as a cost.

But ultimately we want companies to know paying low-wage workers better makes them more motivated. Cleaning and security, furthermore, constitutes just 5 to 7 per cent of the cost of running a facility. It makes no sense for a company to put money into corporate social responsibility, but fail to give low-wage workers a $60 raise. Sometimes all it takes is for one guy at the top to make the decision to improve workers' lives.

  • You've spoken in Parliament about outsourcing on quite a few occasions. It's close to your heart, isn't it?

It's interesting that I'm now helping low-wage workers in cleaning and security. My father was a cleaner who also worked as a security officer.

He held three jobs. He would wake up at 4.30am every day, and set off to work as a daily rated worker, cleaning the streets. At 8am, he rushed to Tekka Market, where he collected rubbish.

At 11am, he would be home, have lunch, and rest for a while before going off at 3pm to the Kallang indoor skating facility, where he worked as a security officer until 11pm.

He slept just five hours.

As a teenager, I didn't get to see him much. But I'm proud of him because as a cleaner and a security officer, he was able to raise a family of five children.

Why could he do it when a lot of cleaners and security officers today find it difficult to cope? I realised outsourcing has been one of the reasons - companies wanting to concentrate on core businesses instead of taking on cleaners and security officers as full-time staff.

My father was earning $600 as a daily rated worker 30 years ago. Today, there are still cleaners - though not many - earning $600 to $700. I find such a situation unacceptable.