Tuesday, March 10, 2015

Calls for legal overhaul in employees’ favour

by Ben Abbott

09 Mar 2015

Singapore’s employment laws should be amended to ensure Singapore’s employees and employers see employment relationships as long-term ones, an MP has claimed.

Sembawang GRC MP Vikram Nair told Parliament Singapore’s current employment laws mean employers are happy to employ – because they know they can terminate employees easily.

He claims local employment laws need to move ‘slightly’ closer to Western employment law.

“In many other countries employment laws are much more rigid, providing more protection to employees, but also meaning employers are more cautious in employing,” Nair explained.

He gave the example of termination and redundancy payments being pegged by legislation at high levels, meaning employers saw an ‘opportunity cost’ in employing new staff.

“This means that companies are more careful about employing people.”

However, Nair said there were advantages to more stringent protections.

“It also means that when a company does employ people the employment relationship itself is likely to last longer, and because of that companies may be more incentivised to invest in employees and invest in training employees,” he said.

Singapore’s unemployment rate is so low, Nair claims, because employers are “very happy to employ” with the understanding employment can be ended easily by either party.

[That is ONE explanation or interpretation. The flip side of this "observation" is that employers, anticipating the costs of termination, must be VERY SURE that they need the additional staff, and will only hire when they are absolutely sure that they need the staff. So perhaps many employers who, if they were in SG, would have hired new staff, have instead decide to hold off hiring to make sure that they have enough work for a full-time, long-term staff. Otherwise, there would be costs when they have to let the staff go. Hence, high unemployment. As for the "longevity" of staff in those countries, the high unemployment rate is possibly also a reason. If you quit, can you find another job quickly? If not, then perhaps you shouldn't quit.]

He said in the context of the Budget’s SkillsFuture initiatives – which encourage lifelong development of individual job skills - employment laws were in need of adjustment.

“I think what we could do is move our employment laws to be slightly more protective to give our employees a bit more protection, but perhaps not go to the extreme of some of our Western counterparts,” he said.

“This will still give Singapore a competitive advantage in the employment market, but at the same time it will allow both employees and employers to see the employment relationship as a slightly longer term one in which they might be more incentivised to invest.”

[The situation in SG is different. With very low unemployment, and a shortage of staff, it is the employees' market. If a waiter quits today, he can be employed by this evening. Tightening or protecting the employee in this environment merely penalises the employer for no good reason. In this environment, the Employer is ALREADY incentivised to try to hold onto their staff. ]

Nair said the evolution of capitalism meant the average lifespan of a Fortune 500 company was now just 18 years, according to a recent McKinsey & Company report.

The result was a market where employees would work at “many different companies” during their lifetimes – and new companies would need to be ready to invest in them.

“With business lifespans much shorter, the industry collaboration process needs to be a dynamic process,” Nair said. “We need to engage new employers on an ongoing basis, and get their buy-in to train employees and invest in their employees.”

[An example of incoherent thinking. Or poorly rationalised argument.

Basically, he seems to want to propose legislations to tilt things in favour of the employees and he seems to have fallen in love with "Western Employment Laws".

So he goes, "let's do it like the West" and then goes on to make incredible inane and logically ambiguous conclusions. 

Then to show that he is up to speed on current affairs, he notes that average lifespan of a Fortune 500 company is 18 years. That's AVERAGE. That's for Fortune 500 companies. 

So smaller, less than Fortune 500 companies? How long do they last? Less than 18 years?

Then he notes that this resulted in a market where employees work in many different companies in their lifetime

Is he trying to reverse this trend? 

No... he seems to think that this... I have no idea what he seems to be thinking, because this "fact" or facts completely undermines his proposition that laws should be tilted in favour of employees - companies are shorter-lived, and employees are more mobile. 

And he wants to further burden companies, and immobilise employees. 


Shows that he is living in the past. I mean, future.]

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