Well Done on This Policy!!

When Singaporeans should come last
Shed foreign workers first in tough times, says labour chief
By Goh Chin Lian

Present at The Singapore Tripartism Forum yesterday were (from left) labour chief Lim Swee Say, NTUC president John De Payva, Acting Minister for Manpower Gan Kim Yong and SNEF president Stephen Lee. -- ST PHOTO: NG SOR LUAN

LABOUR chief Lim Swee Say wants companies to put Singaporeans at the end of the queue when shrinking the number of their rank and file workers.

Mr Lim believes the way to go in the current downturn is for firms to let non-Singaporeans go first, by not renewing the contracts and work permits of their foreign workers.

The secretary-general of the National Trades Union Congress held up this approach at a forum yesterday with about 450 employers and 100 unionists.

The one-hour dialogue focused on ways to handle worker issues in the current economic downturn, from wages to dealing with excess manpower.

Mr Lim said companies that retain Singaporeans will help to minimise unemployment.

But more importantly, they will have a head start in an upturn, he noted, because they will have enough resident workers to meet the ratio required by the Manpower Ministry to hire foreign workers.

Mr Lim, a Minister in the Prime Minister's Office, was one of three leaders who tackled the questions from employers and unionists.

The other two were Manpower Minister Gan Kim Yong and Singapore National Employers Federation (SNEF) president Stephen Lee.

The question that got them talking about foreign workers came from the general secretary of the United Workers of Petroleum Industry, Mr Karthikeyan Krishnamurthy.

He wanted to know if there were any guidelines for employers on shedding foreign workers first, or can a free-for-all approach be taken.

Mr Lee noted that some companies already do not renew the permits and the contracts of foreign workers when they expire.

To illustrate, Mr Lim gave an example of a factory that has to lay off, say, 10 workers from among 100 workers, half of whom are Singaporeans.

It can expand its workforce more swiftly in a future upturn if it sheds 10 foreigners now instead of five Singaporeans and five foreigners.

'When they have to hire another 10 workers, where do they find the 10 workers? While their competitors are competing for Singaporeans in a tighter labour market, they can quickly ramp up with 10 foreign workers.'

That's because they have the 50 Singaporean workers to meet the required ratio of local to foreign workers.

For instance, the ratio is 1:1 in the service sector, which means companies can employ one foreign worker for each local worker on their payroll.

'It actually makes business sense for companies to release progressively the foreign workers in times of excess manpower, assuming there is no skills mismatch,' he added.

However, the exception is when a foreign worker has a specialised skill that cannot be easily replaced with an untrained Singaporean, Mr Lim said.

Minister Gan emphasised the importance of keeping a balance of foreign and local workers so that companies can keep their operating costs low.

Recalling a conversation with a food manufacturer, he said: 'His remark is that if he is asked to employ only Singaporeans, his cost would have gone up and he would have no choice but to shift the whole company out of Singapore to China.' [Reminiscent of GCT's 'Greed is good' and also a product of the free market / open market system - are there any other choices for this manufacturer? Especially when Singaporeans ourselves want cheaper and cheaper fishballs? This is a good time for ALL Singaporeans to reflect on paying that little bit more to keep the money in OUR economy and to help our fellow countrymen instead of pinching the last penny till blood comes out of it. And yes, that applies to the public sector as well!!]

The 100 Singaporean workers in his company would then lose their jobs.

The call for foreign workers to go first comes amid fears of further retrenchment as the world economy is set to slow further next year.

Compounding the worry is DBS Bank laying off 900 workers here and abroad last month. The labour movement fears more companies may follow the lead of the bank, which is popularly seen as a government-linked entity.

Already, layoffs in the electronics sector are expected to hit 1,000 in the last quarter of this year.

Although more jobs will be at risk, Mr Gan, in a speech at the start of the forum, sought to reassure Singaporeans, saying the country is in a position of strength following several years of good economic growth. Also, its resident employment rate is high, standing at 77 per cent in June this year.

To get workers trained and ready for an economic recovery, Mr Gan also opened the Institute for Adult Learning earlier in the morning.

The institute will further reinforce Singapore's masterplan for the continuing education and training of resident workers.

It will do so by, among other things, training trainers to conduct more effective adult training.

chinlian@sph.com.sg