Cheap sourcing - awarding contracts to the lowest bidder - is so prevalent that it is depressing the pay of low-wage workers.
But National Trades Union Congress (NTUC) assistant secretary-general Zainal Sapari hopes the law will change that, as a fairer contract will eventually benefit the workers.
The Labour Movement is calling for an enhancement to the Government Procurement Act, which was first passed in Parliament in 1997, and governs the contract-awarding practices of government agencies.
Speaking to The New Paper at NTUC Centre yesterday, Mr Zainal, who is also an MP for Pasir Ris-Punggol GRC, said he will raise the issue in Parliament during the upcoming Budget debate.
One of the principles under the current Procurement Act is to ensure value for money - goods and services bought must be the most effective and efficient use of public revenue.
But this could lead to consequences such as compromising on the welfare of workers.
Industries providing essential services are usually most vulnerable to cheap sourcing, said Mr Zainal, who is also the director of U Care Centre, which provides guidance on work-related issues to low-wage workers.
With the amendment, he hopes to address the issue of one-sided contracts, a complaint among service providers such as those in the cleaning and landscaping industry.
But will companies be supportive of such practices in light of a slowing economy?
The Labour Movement hopes the Government can take the lead with progressive procurement practices, and the private sector will be compelled to follow.
Read also: Sustained help for low-wage workers needed
Mr Zainal thinks this is the right environment as there is "greater awareness" about low-wage workers due to social media.
He said: "When we look at the economy, we have to take things into perspective. Growth rate last year was 1.8 per cent and this will be the new norm.
"I personally feel we cannot always use the economic environment argument at the expense of helping workers."
One of the Labour Movement's proposal is an option for contract variation to address any unforeseen changes in government policies, such as the Progressive Wage Model (PWM) or foreign worker levies.
First mooted in 2012, the PWM requires service providers in the cleaning, security and landscaping industries to pay their workers a minimum wage and it links pay increase to training.
Mr Zainal said: "Generally, service providers were supportive (of the PWM), but the challenge was to convince the service buyer to pay more so (that they) can pay workers better."
Other proposals include ensuring that liquidation damages, or compensation for breach of contract, is proportionate to the service lapse and termination clauses to ensure that the worker's job security is not compromised (see report on the right).
Cleaning and landscaping companies are eager for these proposals to be implemented.
Environmental Management Association of Singapore president Milton Ng brought up the example of how some companies were locked into contracts they could not terminate when it became untenable due to extra costs from new government policies.
He said: "Business conditions are evolving. If service providers are under duress (due to the contract), the services will be affected."
Chairman of the Landscape Industry Association Singapore, Mr Goh Eng Lam, thinks there should be a decreased emphasis on price when it comes to evaluating a tender.
He said: "Companies will naturally bid aggressively based on prices.
"Eventually, the worker will suffer as the company has to bear with the contract and take on aggressive cost-cutting to keep afloat."
This article was first published on Jan 06, 2017.
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