Tweaks to tenders 'can reduce risk of worker pay cuts'

An elderly cleaner working at the Maxwell Market food centre.
An elderly cleaner working at the Maxwell Market food centre. PHOTO: ST FILE

Labour MP Zainal Sapari believes that tweaks to how tenders are evaluated can reduce the risk of pay and benefits of outsourced workers being cut every few years.

Under the current system, companies bidding for public sector contracts have little incentive to raise workers' pay beyond the minimum specified by the progressive wage model, said Mr Zainal, who is assistant secretary-general of the National Trades Union Congress (NTUC).

One thing the Government could do to create a level playing field between newcomers and incumbent companies bidding for contracts is to give a discount for renewals, he told The Sunday Times.

Companies trying to renew their contracts may then bid at a higher price as they add annual leave or pay increments for their workers.

"If the existing companies offer $1,100, and a new company offers $1,000, a discount could mean they would be given the same score for price when it comes to evaluation," said Mr Zainal, who heads the NTUC unit overseeing low-wage workers.

The Government could also specify in tender documents that workers cannot be made worse off by a new contract, or even list some of the benefits workers should receive, such as an annual wage supplement, he added. "The unions are more than happy to help in monitoring," he said, pointing out that most companies that tender for government contracts are unionised.

Mr Milton Ng, president of the Environmental Management Association of Singapore, also suggested that when awarding three-year contracts, the service buyer could look at whether the service provider has a plan to increase wages each year.

The Finance Ministry said it will not be fair to arbitrarily set a discount for the incumbent contractor, as the bid price for each tenderer may not be entirely attributed to wage costs. "We are mindful that the Government is ultimately spending public funds," said a spokesman, adding that public contracts cover around a tenth of the cleaning and security services workforce.

Rather than specifying wages or benefits in tender documents, incorporating these into licensing or accreditation requirements is more effective since these apply to both public sector and private sector contracts, the spokesman said.

Industry experts said workers in the heavily-outsourced industries of security, cleaning, and landscaping are often older and are unlikely to look for a better-paying job elsewhere even if they lose out under a new contract.

School cleaner Leong Sau Keng, 65, who has worked at the same school in the west of Singapore for 12 years, said her pay has been cut twice under new contracts as the new company made its bid based on lower salaries.

A few years ago, her pay was cut from $650 to $550, she recalled in Mandarin. "They said, 'if you don't want to do, there are other people'."

Although her pay has gone up substantially since then, thanks to the progressive wage model - a wage ladder which links pay rises to skills upgrading and sets a minimum pay of $1,000 for cleaners - there is no guarantee it will rise any further in her current role. She has seen her pay drop by $50 to $1,000 after the most recent change in contracts.


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A version of this article appeared in the print edition of The Sunday Times on June 19, 2016, with the headline 'Tweaks to tenders 'can reduce risk of worker pay cuts''. Print Edition | Subscribe