MPs raise concerns over who will foot higher costs from proposed platform workers protection law

Concerns over who will pay for the increase in costs that will likely arise from a proposal to raise Central Provident Fund (CPF) contributions for ride-hailing drivers and on-demand delivery workers were a major theme during the debate in Parliament over the Platform Workers Bill.

For four hours on Sept 9, 14 MPs from both sides of the aisle spoke about the impact of the Bill on workers and consumers, touching on issues such as fair wages, workplace safety and a lack of trust in how some of these online platforms operate.

Senior Minister of State for Manpower Koh Poh Koon said the Bill, which proposes to align the CPF contribution rates of platform workers and platform operators with those of employees and employers, will unavoidably lead to an increase in business costs.

“As a society, if we all believe that we should provide some core protections for our platform workers, we should be prepared to pay just a little bit more... In fact, our surveys show that many consumers are indeed prepared to do so,” Dr Koh said.

The Bill also seeks to provide platform workers with a standardised work injury compensation regime, which some MPs fear will raise insurance premiums for operators, which will then be passed on to workers and consumers.

Dr Koh said the Government recognises the concerns around the higher costs, and will put in place measures to manage the impact.

For instance, provisions in the CPF Act and Work Injury Compensation Act that prohibit employers from recovering the cost of their share of CPF contributions and work injury compensation will be amended so that they also apply to platform operators.

Dr Koh said he also believes the existing open and competitive market for work injury compensation insurance will facilitate sustainable premiums.

Mr Yip Hon Weng (Yio Chu Kang) called on the Government to provide clear insights into the potential cost implications of the Bill, noting that this would help consumers calibrate their expectations and allow relevant organisations and ministries to proactively prepare and implement support measures.

Leader of the Opposition Pritam Singh said the Workers’ Party (WP) supports the Bill, but noted that there is little clarity on how much of the higher costs will be absorbed by the platforms.

“How much does the minister anticipate prices to increase by, and how will this be equitably spread between consumers, platforms and platform workers?” he asked.

Mr Singh added: “Should the price increase be too high for consumers, one cannot rule out the prospect of a demand shock that causes consumers to recoil and reduce overall demand for platform services. If that were to happen, platform workers could find themselves with less work and even lower incomes.”

Mr Liang Eng Hwa (Bukit Panjang) noted that many platform operators are still making losses and rely on money from investors to keep operations going. “In my view, the sector is still in search of the optimal financial equilibrium and yet to be on the more self-sustaining footing,” he added.

Non-Constituency MP Leong Mun Wai of the Progress Singapore Party (PSP) said the PSP welcomes the Bill, calling it an important first step in improving platform worker welfare.

But Mr Leong flagged what he said were insufficient protections in the Bill that would prevent platform operators from discriminating against platform workers who opt in for higher CPF contributions, and urged the authorities to ensure companies do not reduce incentives or earnings rates for platform workers to offset the higher labour costs.

He suggested the Ministry of Manpower (MOM) go a step further by imposing a minimum base fare for every ride or delivery. Pegged to a living wage, this could be part of collective agreement negotiations in the future, he added.

MPs like Ms Joan Pereira (Tanjong Pagar GRC) asked how MOM intends to ensure that platform worker incomes keep pace with inflation, and whether the Government could provide more support for training and career development.

“Platform workers are price takers with little control over their earnings... Unless they work longer hours, or platform operators raise the prices, wages will stagnate and even decrease,” said Mr Sharael Taha (Pasir Ris-Punggol GRC). 

Mr Singh also asked how MOM would investigate platform companies for discriminatory practices. “This would be difficult, if not impossible, to prove discrimination as the evidence would lie in the word, or precisely the algorithms, of the platform companies,” he said.

On this issue, WP MP Jamus Lim (Sengkang GRC) suggested that the proposed workplace fairness legislation slated to be introduced later in 2024 should include provisions to make such practices illegal.

Nominated MP Jean See, who is from the labour movement, noted that platform operators wield wide-ranging control based on principles and algorithmic decisions that are a black box to platform workers.

The law must institute clear guard rails that require platform operators to adopt a worker-centric viewpoint when reviewing their algorithms, work practices, and workflows, she said.

She also suggested that platform operators be required to inform workers how their fees and earnings are determined, and provide income protection for workers during app outages.

Ms See said operators should also be made to participate in AI Verify, the national artificial intelligence governance testing framework, so workers can have greater assurance that platform algorithms are fair, unbiased, and safe.

On workplace safety, labour MPs Melvin Yong (Radin Mas) and Ms Yeo Wan Ling (Pasir Ris-Punggol GRC) called for the proposed work injury compensation regime to also cover workers when they are waiting for jobs or travelling to find their next job.

“To them, this is time spent at work,” Mr Yong said.

Ms Pereira and Mr Yip asked for more mental health support for platform workers, and called on the authorities to clamp down on the verbal abuse and threats that these workers often receive.

Several MPs also made suggestions about how the higher CPF contributions for platform workers could be implemented.

Mr Louis Chua (Sengkang GRC) asked whether the staged increase in the platform operator contribution rate could be accelerated, while Mr Singh asked why MOM did not choose an opt-out system, which he believed would be more effective in securing participation to address the housing and retirement needs of these workers.

The debate on the Bill will resume on Sept 10.

Source: Straits Times © SPH Media Limited. Permission required for reproduction.

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