MOM will act against employers who misclassify employees for cost-cutting

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Elysia Tan

Published Wed, Mar 22, 2023 · 02:35 PM

Employees who are terminated and rehired may choose to join another company for greater employment certainty, warns Senior Minister of State for Manpower Zaqy Mohamad. PHOTO: LIM YAOHUI, ST

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THE Ministry of Manpower will investigate cases of employers misclassifying employees to avoid employer obligations, and take action where warranted. This includes cases where employers terminate their employees’ contract of service, but engage their services under conditions that effectively make them employees.

Senior Minister of State for Manpower Zaqy Mohamad said this on Wednesday (Mar 22), in a response to a parliamentary question by Workers’ Party Member of Parliament (MP) Leon Perera (Aljunied GRC).

Perera had asked about safeguards for full-time and part-time drivers on contract of service covered under the recently-expanded Progressive Wage Model (PWM).

These drivers may face contract termination and re-hiring as platform drivers by employers who are looking to cut costs, the MP said.

Under the new Occupational Progressive Wages for drivers, employers must meet wage requirements for them at various job levels, in addition to providing training and career pathways. Platform drivers are not covered under the PWM.

Zaqy said that employers must consider their methods of contracting workers in the tight labour market, because affected employees may seek greater employment certainty elsewhere, which leaves these employers with difficulties in ensuring sufficient manpower to meet business needs, he said.

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The senior minister also reiterated the existence of the Progressive Wage Credit Scheme, which works as transitional support by funding up to 75 per cent of the wage increases given in 2023.

“We encourage employers to take the opportunity to uplift wages, and upgrade the productivity and skills of lower-wage workers,” he said.

Addressing a supplementary question from People’s Action Party MP Tan Wu Meng (Jurong GRC) about efforts to ensure awareness among employees of this potential misclassification practice, Zaqy said that most employees “know their general rights” and can seek support from unions for unfair termination.