Condos should not seek JSS rebates from managing agents

Manpower, Finance ministries say payouts should be kept by vendors to support jobs

Management council members said MA fees can be $16,000 to $20,000 for a condo with three employees. ST PHOTO: LIM YAOHUI

Service buyers should not ask for reduced contract fees on the basis that their providers are receiving wage subsidies through the enhanced Jobs Support Scheme (JSS), the Manpower and Finance ministries have said.

JSS payouts, which subsidise local workers' wages, have sparked tension between property management councils and managing agents (MAs).

Several letters to The Straits Times Forum have called for MAs to pass on rebates to management corporations, or MCSTs. They noted that MAs are still being paid their fees, which include a component for the salaries of staff deployed at condominium sites.

MCST council member Angeline Koh wrote that managing agents appear to be "enjoying a windfall".

She told the ST that if, for instance, staff are paid $2,000 a month, the total amount in JSS payouts MAs would get over the 10 months of the scheme would exceed $20 million, yet they are being fully reimbursed for the direct cost of the staff by the MCST.

The calculation assumes one employee per MCST but bigger properties can have two or three on site.

Singapore has about 3,500 active MCSTs.

Mr Fan Jia Ming, who is on the management councils of Oxley Towers and Pavilion Square, said MCSTs pay a monthly fee that includes the MA staff salaries. If the MCST cuts headcount by one, that employee would most likely be laid off unless redeployed elsewhere.

"In this respect, the end-employer is in essence the MCST, even though legally the staff (member) is employed by the MA, and it's the MCST's decision to keep someone employed," he said.

Mr Jethro Widjaja, who helps his brother with management council operations at Thomson Grand, said MAs are contracted by MCSTs on an annual basis and need monthly payments, so many MCSTs have not been able to lower their monthly fees even though the manpower supplied may have been reduced during the circuit breaker.

Management council members said MA fees can be $16,000 to $20,000 for a condo with three employees. But MAs say that passing on JSS payouts would not fulfil the intent of the scheme, which is to protect jobs.

The Association of Strata Managers said the MA has to bear costs such as stay-at-home leave for employees who return from overseas and other liabilities during the coronavirus pandemic, while salary cuts for senior executives, including no-pay leave, have been implemented to prevent retrenchments.

"If the JSS is passed on to the management council, is this not a windfall for them since they do not have any employees? Should the consumer now ask all businesses to reduce their prices because of the JSS since the prices contain an element of staff cost?" it said.

The Association of Property and Facility Managers noted that MA staff have been stepping up cleaning and disinfecting of common areas in condos and enforcing safe management measures.

"MAs are working towards keeping the residents safe, with many stretching their resources thin, as they work longer hours to provide essential services to residents now working from homes," it said.

In a joint response to queries from ST, Ministry of Manpower (MOM) and Ministry of Finance spokesmen said the payouts to outsourced service providers help them meet their obligations to workers, even when their businesses are affected.

"Typically, service buyers do not have direct say over the employment and deployment of specific workers. As the key decision on worker employment rests with the outsourced vendor, the JSS payout should be retained by the vendors to support employment," they said.

"Service buyers should not ask for reduced contract fees on the basis that their service providers are receiving wage support through the enhanced JSS as its provision is temporary in nature."

They added that if there is a significant change in services required, service buyers and providers should mutually agree on a revised payment in view of the long-term contractual relationship.

"If feasible, MAs may choose to extend a suitable fee rebate to their MCSTs on a goodwill basis," they said.

The National Trades Union Congress and several industry associations and union leaders told management councils on May 22 that it is "imperative" they do not pressure service providers to reduce contract fees without adjusting expectations and deliverables on their part.

An MOM advisory issued on May 26 and updated on June 12 says that labour supply companies should pass on JSS payouts to clients, but this does not apply to providers offering outsourced services such as cleaning and MA services.

Labour supply firms include employment agencies whose staff are contracted out to work for clients.

Outsourced service providers, in contrast, are responsible for the day-to-day management of the contracted workers such as supervising them, appraisals and training, says the advisory.

Several managing agents the ST contacted - Knight Frank, Colliers International, Cushman & Wakefield and JLL - declined to comment on whether they are providing rebates to MCST clients.

But Savills Property Management is offering some rebates on managing agent fees to MCST clients.

Mr Chan Kok Hong, its managing director, said Savills manages 140 buildings but declined to provide details on the rebate.

"The rebates are given as a goodwill gesture and in appreciation of the good business relationship that we have with our clients," he said.

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A version of this article appeared in the print edition of The Straits Times on July 24, 2020, with the headline Condos should not seek JSS rebates from managing agents. Subscribe