Mr Leon Perera asked the Minister for Manpower where the recent expansion of the Progressive Wage Model sector coverage included drivers on contract of service for both full-time and part-time drivers, what safeguards will be put in place for these drivers who may now face termination of their contracts by their employers and re-hired back to service the employers as platform drivers to save cost for their employer.
The Senior Minister of State for Manpower (Mr Zaqy Mohamad) (for the Minister for Manpower): Speaker, if an employer terminates an employee’s contract of service, but still engages the worker’s services under conditions that effectively makes the worker an employee, this is misclassification of an employee to avoid employer obligations.
MOM will investigate such cases and take action against employers where warranted.
In a tight labour market, employers must also consider carefully how they contract with their workers, or they may face difficulties ensuring sufficient manpower to meet business needs. For example, an employee who is terminated and rehired under a contract for service may choose to leave and join another company as an employee, for greater employment certainty.
To help employers with the expansion of the Progressive Wage Model, the Government has introduced the Progressive Wage Credit Scheme (PWCS) as transitional support. The PWCS funds up to 75% of the wage increases given in 2023 to employees earning up to $2,500 and 45% for those earning above $2,500 up to $3,000. We encourage employers to take the opportunity to uplift wages, and upgrade the productivity and skills of lower-wage workers.
Ministry of Manpower
22 March 2023
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