No-consent period for job transfers “adjusted”, in effect shrunk

Over the course of their employment in Singapore, migrant workers often forge friendships and connections with others; be it a supervisor who works for a different sub-contractor on the same site or another person from the same village who used to live in the same dormitory, but worked for a different company. These connections come in particularly handy when their current work permits are nearing expiry and the workers are seeking a transfer to a different company. If they are able to reach out to a friend’s employer who faces a manpower shortage or an old employer who has a vacant position, a job offer might come their way (often with a rise in salary).

Much, however, depends on whether they have the option of seeking a transfer in the first place. Until 8 November 2021, the rule governing the option was like this:

If the worker and his existing employer could not agree on renewal of the work permit — in other words, if either party did not want a renewal — then,

… the worker would be free to seek another job (without first having to be repatriated) within a window period stretching from the 40th to the 21st day before the work permit expiry date, without needing to obtain consent from the existing employer for the transfer.

In this article, we refer to this time window permitting workers to seek transfer jobs without needing consent as the “no-consent period”.

In theory, this should mean that every construction worker would be able to continue working in Singapore either through renewal of his work permit or through getting a new job. Some workers might want to go home nonetheless, perhaps to see their families after a long separation.

However, TWC2 has observed and documented in earlier articles that employers were still finding ways to deny workers this right of transfer, even if workers wanted to stay here in Singapore to work.  The no-consent period wasn’t available to all who should have been entitled to it.

Employers’ efforts to deny workers their right of transfer were so effective that Singapore lost a significant proportion of our foreign construction workforce from the middle of 2020 onwards. The Covid-19 disruptions meant that there were many employers whose businesses became unviable as a consequence of the pandemic, but by successfully obstructing workers’ transfers, other businesses in need of extra men to help them complete their already-delayed projects just could not get their hands on them.

Borders being closed, transfer workers were the only ones potentially available to businesses that needed labour, but as thousands were sent home by other (failing) employers, this human resource was lost to Singapore.

TWC2 spoke up repeatedly about the problem, which stemmed from the Ministry of Manpower’s (MOM’s) half-hearted implementation of the no-consent window period, thus allowing employers to repatriate workers home even when the latter wished to continue working in Singapore.

Policy change

Under the “new measures to support the retention of work permit holders” announced on 30 October 2021 by MOM, the no-consent period was “adjusted … to better address the needs of employers and workers”. Under the new rule,

If the worker and his existing employer could not agree on renewal of the work permit, then,

… the worker, if he wants to continue working in Singapore, will need to ask his employer for a 30-day extension of the work permit.

(i) if the employer is agreeable, the worker then stays on the job for 30 more days, during which he can also use that 30-day period as a no-consent period to seek a transfer job;

(ii) if the employer is not agreeable to the extension, then the worker joins a 30-day retention scheme in which an industry association, with the blessing of MOM, will find willing new employers for him.

The result, therefore, is a Catch-22 situation where to be able to transfer to another company without his current employer’s consent, a worker has to seek his current employer’s consent in the form of a 30-day extension.

Although the no-consent period is now about ten days longer than before, the opportunity for a worker to transfer to another employer of his choosing is now entirely contingent on his current employer granting him a 30-day extension of his work permit.

It remains to be seen how many employers are willing to do that. One whose business has become unviable and who is downsizing would have no motivation to grant a 30-day extension. On the other hand, an employer who has not lined up a replacement worker might want to benefit from the 30-day extension of the departing worker.

Then again, TWC2’s gutfeel is that even when an employer has a full order book and is short-handed, there are other more powerful factors that argue, in the boss’ mind, against agreeing to an extension.

1. The worker’s refusal to agree to renewal might probably be seen as a slight against the employer, who would then be inclined to penalise him where possible, including denying him a free choice of transfer;
2. Penalising this worker sends a usefully powerful message to other workers, keeping them in line;
3. In the overall scheme of things, an extra 30 days’ service by one worker is not a meaningful benefit compared to the more powerful motives described in 1 and 2 above.

The existing employer will need to provide accommodation and salary and bear any medical cost that arises during the 30-day extension. Moreover, the announcement by MOM makes no mention of the foreign worker levy during the extension; we assume it will be payable too.

Speaking to workers confirms that our gutfeel is shared by them too. Workers see the sensitivities of the boss’ pride as an inescapable reality on the ground and believe that most employers will refuse to grant a 30-day extension.

Retention scheme is opaque

Given that there is no other pathway for a worker to transfer to an employer of his choosing without having to obtain his employer’s consent — bar returning to his home country, waiting out the pandemic and then paying an agent a hefty sum to come here again — it may be more apt to describe the policy change as a relegation of the no-consent period to semi-irrelevance, rather than as an “adjustment” of it.

While there remains the avenue of getting a new job via the industry associations’ job-matching schemes, these do not permit workers to freely choose an employer.

TWC2 recently described the experience of six workers in the construction industry’s SCMX retention scheme, and our article clearly shows

1. workers are kept waiting for at least the first 20 out of the allowed 30 days for even one job interview;
2. the industry association arranges job interviews serially, and the worker must decide whether he wants the single offered job before another possible employer interview is arranged — so workers cannot choose among several available jobs;
3. a maximum of three job interviews are arranged.

Clearly, power is very much kept in the hands of employers.

There are additional flaws: Firstly, workers are asked to wait for an SMS from MOM enrolling them into the scheme. If somehow a worker does not get an SMS — and since no process is perfect, sooner or later one or more workers will fall through the gaps — there seems to be no other formal process to opt into the scheme.

Secondly, by ensuring that workers never get a chance to choose between two or more available jobs, there is a strong bias in this system to drive down salaries.

From what we’ve heard from a significant number of construction workers who have reached out to us, and who are anxious to stay in Singapore, their option of a new job of their choice has evaporated. Many had in fact lined up job offers in advance, to be executed once their 40th- to 21st day no-consent period kicked in. Where they once could use the relatively assured no-consent period to transfer to an employer of their choice, the no-consent period has now become the gift of the employer, and they are now reduced to the uncertainty of an opaque scheme.

This does not have to be the case. A simpler and fairer system is entirely possible.

A simpler and fairer system

TWC2 is not advocating a return to the previous 40th- to 21st day no-consent period. It comes with too many complications and has proven to be too easy for employers to undermine.

Meanwhile, we recognise that the job-matching schemes by industry associations are not without merit. In particular, it ensures that workers have proper housing and food during the waiting period, it arranges a transfer to a new job without making the worker pay, and quite possibly, it ensures (or can ensure) that the new employers are serious ones with good track records.

We can blend these into the proposal that TWC2 has long argued for. Our proposal is that workers whose jobs have ended — whether their permits were not renewed, or got cancelled prematurely or they resigned — should have the option of staying on in Singapore up to 90 days more to look for new jobs. No doubt, the authorities are concerned about who should bear the cost of their housing and upkeep while in Singapore, but we must pay equal regard to the matter of free choice by workers in whatever solutions we design.

We propose this: If the worker’s job has ended but he wants to continue working in Singapore, then he has three choices*:

(a) if he and his employer can agree to a 90-day extension, he remains with the existing employer for 90 days during which he also enjoys a no-consent period to look for a new job;

(b) he can enrol into an industry association job-matching scheme for up to 90 days (the association should still aim get him matched within 30 days). The scheme should be tweaked to offer him three concurrent job openings among which the worker can choose one. The industry association covers the cost of his food and board.

(c) he goes into a 90-day no-consent period with neither the employer or industry association supporting him. He is responsible for getting his own meals and accommodation. Dormitories may have to tweak their practices to allow individual tenancies for these individuals instead of only renting out rooms to employers.

*to be fair, if a worker resigned of his own volition, he should only get option (c). Neither the existing employer nor industry association should be supporting him for his 90 days.  The cost of having to support themselves for up to 90 days with no income should make workers think twice before they quit their existing jobs.

We anticipate that many workers will still be attracted to option (b). They may choose to enrol in an industry association job-matching scheme instead of striking out on their own with option (c), provided the matching scheme is modified to give workers three concurrent job choices. For many workers, the assurance of free food and lodging and the assurance that the new job will come with no agency fee are factors for preferring (b) over (c) despite a reduced choice of jobs.

This is not to say we condone charging workers for new jobs under options (a) and (c), but it is a reality that will take other measures to eradicate.

Why choice is important

It’s a first principle in economics that choice vested in buyers and sellers leads to a better allocation of resources. We shouldn’t be afraid of giving workers choice; this aligns with our desire for a happier and more productive workforce.

This is not to say either that the migrant labour market should always be a free-for-all. We have written about many other market distortions that need to be fixed. But adding another distortion through, in this case, effectively constraining workers’ access to a no-consent period, is not the right way to go about it.