The trend worries Mr Lim Boon Heng, Minister in the Prime Minister's Office, because these workers rarely receive social security coverage such as medical benefits and contributions to their Central Provident Fund (CPF) accounts.

Singapore needs to address this problem, he said yesterday, suggesting that the National Wages Council (NWC) study the issue over the next two years.

His call comes as the NWC, prompted by the worsening economic crisis, prepares to reconvene next month to revise wage guidelines set this May.

Mr Lim warned that 'if we do not establish a national consensus on their terms of employment', Singapore could face a situation similar to that in Japan in the 1990s, when the number of these disadvantaged workers rose.

The former labour chief drew the comparison at a dinner to mark the 40th anniversary of electronics manufacturer Singapore Epson Industrial. He lauded the Japanese manufacturer, which has more than 800 employees here, as a socially responsible employer for treating its contract workers in the same manner as employees on its permanent payroll.

Read the full story in today's edition of The Sunday Times.