Calls for legal overhaul in employees’ favour

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.

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.”

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.”