Foreign Construction Workers in Singapore

SAP 2.57/WP.
106
SECTORAL ACTIVITIES PROGRAMME
Working Paper
Foreign construction workers in Singapore
George Ofori
School of Building & Estate Management
The National University of Singapore
Working papers are preliminary documents intended tostimulate discussion and critical comments
International Labour Office

Geneva
2
Contents
Page
1. Introduction...................................................................................................................1
Terms of reference ..........................................................................................................1
The report ........................................................................................................................1
“Definitions” ...................................................................................................................1
2. Executive summary.......................................................................................................2
3. Overview of the construction industry in Singapore .................................................3

Economic structure .........................................................................................................3
Industry's features ...........................................................................................................4
Continuous development.................................................................................................4
Issues and challenges ......................................................................................................5
4. Structure of the construction workforce.....................................................................7

Nature of data..................................................................................................................7
National labour data ........................................................................................................7
Census data ............................................................................................................7
Construction workforce composition..............................................................................9
Sources of foreign workers ...........................................................................................11
5. Terms of employment .........................................................................................................13

General welfare.............................................................................................................13
Wages of construction workers.....................................................................................13
Regional comparison ...........................................................................................16
Working hours ..............................................................................................................16
Accommodation............................................................................................................17
6. Foreign worker policies ......................................................................................................19

Policy intention .............................................................................................................19
History...........................................................................................................................19
Initial developments ............................................................................................20
Attitudes and early efforts to reduce the number of foreign workers..................20
Target 1991..........................................................................................................21
Current foreign construction worker policy ........................................................21
Work permits.................................................................................................................22
Statutes and regulations .......................................................................................22
Who can apply .....................................................................................................24
Duration ...............................................................................................................24
Application ..........................................................................................................24
Information which should accompany application..............................................25
Processing and approval ......................................................................................25
Conditions attached to a work permit..................................................................25
Numbers...............................................................................................................26
Contraventions.....................................................................................................26
Dependency level ..........................................................................................................28
Foreign worker levy ......................................................................................................28
Central Provident Fund .......................................................................................28
Levy .....................................................................................................................29
7. Effects of employment of foreign workers on local industry ..................................32

General issues ...............................................................................................................32
Reaction of industry to policies ....................................................................................32
Response to foreign worker levy increases .........................................................33
Managerial problems.....................................................................................................34
Productivity .........................................................................................................34
Communication and attitudes ..............................................................................34
Labour subcontractors .........................................................................................35
8. Reducing reliance on foreign construction workers ................................................37

Training.........................................................................................................................37
Certification ..................................................................................................................38
Improving working environment ..................................................................................39
Attracting construction workers: CIDB initiatives .......................................................40
Upgrading of construction operations...........................................................................41
9. The future ....................................................................................................................42

Level of requirements ...................................................................................................42
Proposals .......................................................................................................................42
Regional developments .................................................................................................43
Future human-resource challenges: Concluding remarks .............................................43
References................................................................................................................................44
1. Introduction
Terms of reference
The terms of reference for the preparation of this report were:
To obtain existing primary and secondary source data on migrant labour in the
construction industry on questions such as:
− trends of annual inflow of migrant workers (by sector, by country of origin);

− structure of migrant construction workers;
− recruitment and labour contracts;
− conditions of employment and welfare; and
− effects of migration on the national construction industry.
The report
This report considers foreign construction workers in Singapore. It was prepared from
published material available in Singapore. It concentrates on site operatives, both skilled and
unskilled. To put the issue into the proper context, the report also discusses the recruitment of
foreign workers in other sectors of the economy.
The report first provides an overview of the construction industry in Singapore. It
then discusses the structure of the construction workforce, highlighting the place of foreign
workers. The countries from which Singapore obtains such workers are indicated, and the
wages of Singaporean and foreign construction workers are compared. The nation's policies
on foreign construction workers are next discussed, highlighting their historical development
and considering some of the main instruments including the work permit, the dependency
level and the foreign worker levy.
The effects of the use of foreign workers on the local construction industry, are
discussed, and efforts being made to reduce Singapore's reliance on foreign construction
workers are outlined. These include training and certification, creation of a good working
environment and upgrading of construction operations. Finally, the report considers briefly,
likely future issues relating to the use of foreign construction workers in Singapore.
“Definitions”
All financial data in this report are in Singapore dollars (SGD), denoted as $. At the
time of writing this report in July 1994, US$1.00 = SGD1.52. Annual data in the report relate
to calendar years, except where reference is made to the fiscal year (1 April to 31 March) as
in the case of figures published by the Construction Industry Development Board (CIDB).
2
2. Executive summary
Owing to its small human resource base, Singapore’s economic progress has been
based on systematically upgrading the level of technology in all sectors, and adopting high
value-added activities, while phasing out labour-intensive ones. Whereas the employment of
foreign workers is permitted in some sectors, continued reliance on such workers is not
considered desirable, as it is thought that social and economic problems may result. The use
of foreign workers is viewed as a necessary temporary measure to avoid shortages which
could hinder the nation’s economic development. The long-term intention is to reduce the
reliance on such workers. Meanwhile, effort is made to derive optimum benefit from those
employed, for example, by enhancing their quality through training.
The inflow of foreign workers into Singapore is controlled, and companies are urged
and assisted with technical and managerial advice and financial incentives to adopt
approaches which would enable them to substitute for low-skilled labour. The Government is
determined to build up a highly skilled local workforce. Employers have been continuously
urged to upgrade and automate their operations “because, in the long run, Singapore will not
be able to compete with other countries which have cheap and abundant labour” (Ministry of
Labour, 1983: p. 1).
The construction industry of Singapore has played a key role in the country’s socio-
economic development, creating the physical facilities and infrastructure which have made
possible the nation’s remarkable progress. Following effort to improve upon it, the industry is
relatively advanced. However, it continues to use labour-intensive techniques. Since the
1970s, the construction industry has required increasing numbers of foreign workers as
Singaporeans have shunned it, preferring the more comfortable, often safer, better-paying and
more prestigious opportunities in other sectors. Over 70 per cent of the construction
workforce is foreign.
Singapore’s policies on foreign workers are embodied in legislation, regulations and
an administrative system which ensures effective monitoring and control. The statutory
provisions and administrative framework are continually fine-tuned to reflect changed
circumstances. The employer of a foreign worker is directly responsible for the worker in all
respects, including the provision of accommodation and eventual repatriation. The long-term
policy regarding foreign construction workers is to reduce the number of unskilled workers.
However, those with skills will be allowed to stay longer. Employers are being given the
incentive and encouragement to adopt working procedures and practices which will help
achieve these aims.
The number of Singaporeans taking up careers in construction is unlikely to increase.
Conditions in the countries from which Singapore obtains its foreign construction workers
are changing, as economic development is proceeding apace in most of them. These
developments need to be monitored and their implications for the availability of workers for
the construction industry in Singapore addressed.
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3. Overview of the construction industry in Singapore

This section gives a brief overview of the construction industry of Singapore, to
provide a background to the consideration of foreign construction workers in the rest of the
report. It discusses the role of the construction industry in the economy of Singapore, the
structure of the industry, attempts to improve upon it, and its challenges.
Economic structure
The construction industry in Singapore has an annual gross output of about $10
billion, with a capacity of about $12 billion. It employed over 166,000 workers in fiscal 1993.
The industry contributes around 7 per cent of gross domestic product (GDP) and accounts for
about 6.5 per cent of total employment (Research and Statistics Department, 1993). Foreign
workers provided 75.3 per cent of the total number of workdays in construction in 1993
(CIDB, 1994c).
The largest construction contracting enterprise in Singapore has an annual turnover of
about $300 million. The average turnover of the top 20 contractors is about $150 million
(CIDB, 1994a). Since the mid-1980s, construction enterprises from Singapore have won a
sizeable volume of projects abroad, especially in countries within the region. A total of $1.6
billion was won in 1992. Table 1 provides a set of indicators of the performance of the
construction industry in Singapore between fiscal 1990 and 1994.
Table 1. Performance of the Singapore construction industry, fiscal year 1990-92

1990 1991 1992 1993 1994
Construction GDP growth rate (%) 7.2 21.0 18.0 8.0 15.0
Total progress payment ($ billion) 4.9 6.8 8.9 8.9 11.2
Value of contracts awarded ($ billion) 8.0 7.9 12.8 10.6 11.7
Construction workforce ('000s) 104 117 138 166 n.a.
Building Tender Price, Index (1990 = 100) 100 107 105 100 100
Material Cost Index, Index (1985 = 100) 128 125 115 113 114
Labour Cost Index, Index (1985 = 100) 110 119 134 138 139
Source: CIDB (1994a); Ministry of Trade and Industry (1995a).
The value of progress payments represents the sum of the value of all payment
certificates issued to construction enterprises for work completed during the period. The
construction industry has been experiencing a boom since the late 1980s, as shown by the
increase in construction value added of 21, 18 and 15 per cent in fiscal 1991, 1992 and 1994
respectively. The level of construction demand in 1992 ($12.8 billion) was an all-time high.
This period of expansion followed a four-year recession in construction in 1985-88.
4
The prices of materials have been falling over the past few years, after gaining much
ground in 1988 to 1990 (Ofori, 1993). On the other hand, labour costs have been increasing
over the past few years. The downward trend in tender prices since 1991 is surprising, given
the high level of activity.
Industry's features
Singapore’s construction industry uses some of the most advanced construction

technologies available. While foreign construction enterprises have been prominent in the
country during the past two decades, their dominance of large and sophisticated building
projects has been eroded. However, they retain control of a large share of the market for
complex civil engineering works.
The procedures and practices adopted by the construction industry in Singapore are
based on those prevailing in the United Kingdom, for reasons of history. The architect leads
both the design and construction teams, and the quantity surveyor plays a key role in the
construction process. Projects are awarded to a main contractor, who may engage
subcontractors for aspects of the work some subcontractors may be “nominated” by the
client. On most projects the main contractor’s involvement in design is minimal.
However, the construction industry of Singapore absorbs progressive concepts and
technologies from all over the world, especially Japan, the United States and the more
advanced European countries in this regard, such as Germany and France. A manifestation of
this is the widening use of novel procurement practices such as project management and
design-and-build. A series of studies have shown that the industry’s overall level of
management expertise and productivity are relatively low (CIDB, 1989; Task Force on
Construction Productivity, 1992). Construction companies in Singapore also invest little in
research and development (R & D), and their capability to offer financial packages to back up
their tenders is limited.
A key distinguishing feature of the construction industry in Singapore is its reliance
on labour subcontractors. Even the larger companies do not normally employ full-time site
labour, skilled or unskilled. This human resource management practice has been linked to the
industry’s labour-shortage problems, as well as its low productivity and quality of
workmanship (The Mirror, 1984).
Continuous development
Effort has been made by the Government of Singapore to upgrade the country’s
construction industry since it launched an industrialization and mass-housing programmes in
1960. This effort was further intensified upon the formation of an agency charged with
managing the development of the construction industry.
The Construction Industry Development Board (CIDB) was established in 1984 to
spearhead, promote, monitor and guide the continuous improvement of the industry. Thus,
Singapore is one of very few countries with a specially dedicated agency for construction
industry development. The CIDB has recorded achievements in all aspects of construction (as
shown in table 1). Writers on construction industry development frequently cite it as a model
for developing countries (Miles and Neale, 1992; Ofori, 1993).
5
The mission of the CIDB is:
To develop a high quality construction industry which gives value-for-money products and
services, and serves Singapore's economic needs (CIDB, 1994b: p. 64).
The Board’s plan for the future is to “build on what it has achieved ... to help the
construction sector to attain quality and capability standards found in developed countries”
(CIDB, 1994b: p. 62). It will focus on three main areas: skills development, enhancement of
quality and productivity standards, and strengthening capabilities of construction firms.
The CIDB’s ten-year plan for human resource development is aimed at:
∗ training and certifying a core of skilled foreign workers for structural and basic
finishing trades;
∗ increasing retention of skilled foreign workers;
∗ training and certifying Singaporeans for higher value added interior and building
service trades;
∗ expanding the range of trades to include dry trades;
∗ strengthening training of supervisory, technical and managerial personnel; and
∗ increasing opportunities for career progression of construction personnel (CIDB,
1994b: p. 62).
In the area of quality and productivity, the CIDB will offer firms incentives to attain
high quality of work, and to improve on their environmental (safety and housekeeping)
standards. Design disciplines will be integrated, and information technology (IT) and other
engineering tools used to raise efficiency. Buildable designs and prefabrication will be
promoted to improve productivity.
In the third area in which improvements will be sought, construction enterprises will
be encouraged to attain international competitiveness. The gradation system used to
categorize contractors when registering them for public-sector projects will be strengthened.
A group of top-class contractors will be identified. Conditions will be improved to encourage
more local participation in large projects and develop design-and-build capability.
Subcontractors will also be developed. Export of services by local construction enterprises
will be assisted through the provision to contractors of information and networking support.
Issues and challenges
Current topical issues relevant to the Singapore construction industry and challenges
it will face in the near future – most of which the CIDB is addressing, as discussed above –
include:
(i) quality of workmanship – most sizeable construction organizations (including large
clients) aim to attain ISO 9000 certification; for large contractors wishing to tender for
major public-sector projects, it will soon be mandatory;
(ii) use of IT – construction organizations are using, and are being encouraged and assisted
to use, IT to rationalize and expedite their operations and improve their efficiency;
6
(iii) buildability – designers are being encouraged to pay attention to buildability in their
designs, and thereby allow for a greater proportion of standardization and prefabrication
to improve construction productivity;
(iv) advanced technology – owing to the country’s physical and resource constraints,
construction organizations will have to use modern technologies to obtain a more rational
use of inputs, including land, and enhance their competitiveness at home and abroad;
(v) repair, maintenance and refurbishment – as the economy matures, the industry will have
to build up its capability to upkeep or upgrade the large volume of existing buildings and
items of infrastructure; and
(vi) regionalization – construction enterprises will have to win and undertake contracts
overseas, to protect themselves from the cyclicality of construction activity, especially
given the small geographical size of the country.
Summary
Construction is an important sector of the Singapore economy which has an agency

administering its continuous development. It is relatively advanced and forward-looking. It is
aware of its possible future challenges and has started, or is preparing, to address them.
However, the industry's productivity is relatively low. Lack of human resources has been one
of its key problems. It is reliant on foreign workers.
7
4. Structure of the construction workforce

This section is devoted to a consideration of the structure of the construction
workforce in Singapore, analysing the countries of origin, as well as trade of the foreign
workers.
Nature of data
Attempts to analyse data on the construction workforce in Singapore face several

problems. The Labour Force Survey, from which the Department of Statistics derives its
published information on the nation's workforce, does not include “construction workers
living on worksites” (Department of Statistics, 1993: p. 7). Thus, the data do not cover much
of the foreign construction workforce in Singapore who (as discussed in section 5) live on
worksites. Whereas the CIDB publishes very useful information on both local and foreign
construction workers, its recent data on the composition of the workforce by nationality are in
percentages only (rather than absolute numbers).
National labour data
Table 2, which presents recent information on the numbers of workers in the economy
of Singapore as a whole, and in construction and manufacturing, shows that, as in most
countries, the construction workforce is predominantly male, whereas the proportion of
females in the manufacturing sector is much higher. The workforce in the “Others” sector
(agriculture and fishing, mining and quarrying) is also mainly male.
Census data
Until more accurate data became available in the late 1980s, estimates of the
proportion of Singapore's construction workforce which was foreign had been put by various
people at between 50 and 80 per cent (Ofori, 1993). Some conflicting estimates have been
published recently. For example, The Straits Times (1992b) reported that 120,000 foreign
workers were employed in the construction industry in 1991, whereas in another article in the
same issue of the newspaper, the authors noted that there were 100,000 foreign construction
workers in February 1992 (De Silva and Toh, 1992), when indeed, the level of construction
activity was higher than it had been in 1991. The CIDB Task Force on Productivity (1992)
estimated that there were over 80,000 foreign construction workers in Singapore, constituting
about 25 per cent of all foreign workers in the country. Data from the CIDB indicate that the
demand for construction labour increased by 21 per cent in 1993, making the total 166,000
(as noted in Section 1).
8
Table 2. Employed persons aged 15 years and over by industry and sex, 1991-94
Total Manufacturing Construction* Others
1991
Total 1 524 315 429 612 98 981 12 077
Male 917 794 240 246 90 355 10 176
Female 606 521 189 366 8 626 1 901
1992
Total 1 576 151 434 121 103 222 13 792
Male 944 336 243 595 92 256 12 030
Female 631 815 190 526 10 966 1 761
1993
Total 1 592 039 429 479 102 097 12 538
Male 952 314 247 799 91 102 10 500
Female 639 725 181 680 10 994 2 039
1994
Total 1 649 296 422 539 108 824 14 118
Male 987 137 247 766 96 490 11 684
Female 662 159 174 773 12 333 2 434

* Figures for “Construction” do not include workers living on worksites.
Source: Research and Statistics Department (1993).
Table 3 presents Saw’s (1985) analysis of data from Singapore’s 1980 census. It
compares employment of both citizens and non-Singaporeans in construction with that in
manufacturing, and considers the proportion of each in the total. Only 5.5 per cent of workers
who were Singapore citizens had taken up employment in construction. Most foreign men
and women worked in manufacturing, but around 28.2 per cent of foreign men worked in
construction.
9
Table 3. Working persons aged 10 years and over by industry, residential status and sex, 1980
Total Manufacturing % Construction %
Permanent residents
1. Singapore citizens
Persons 957 607 273 880 28.6 52 975 5.5
Males 622 985 145 691 23.4 48 378 7.8
Females 334 622 128 189 38.3 4 597 1.4
2. Non-citizens
Persons 40 208 13 683 34.0 3 391 8.5
Males 28 876 7 835 27.2 3 207 11.1
Females 11 332 5 848 51.6 184 1.6
Non-permanent residents
Persons 79 275 36 558 46.1 15 980 20.1
Males 54 656 20 622 37.7 15 406 28.2
Females 24 619 15 936 64.7 574 2.4
Source: Saw (1985).
Construction workforce composition
Table 4 compares the breakdown of the construction workforce by residential status

with construction output. It shows that the level of recruitment of foreign workers has
fluctuated over time, as the workload of the industry has changed. During the recession in the
late-1980s, foreign workers accounted for most of the job losses in construction, and the
proportion of foreigners in the construction workforce fell below 50 per cent.
Table 4. Construction workforce by nationality, and volume of work

Year Construction workforce Volume of work
Foreign Local Total % GDP in construction
(a) (b) (c) (a:c) (current prices $106)
1981 81 700 47 300 129 000 63 2 164

1982 79 800 56 100 135 900 59 3 146
1983 105 500 63 700 169 200 62 4 203
1984 95 100 68 500 163 700 58 4 974
1985 67 700 59 700 127 400 53 4 168
1986 50 100 52 900 103 100 49 3 149
1987 41 700 46 200 87 900 47 2 885
1988 38 100 45 200 83 300 46 2 812
Source: CIDB (1989); Research and Statistics Department (1993).
10
Table 5 presents data on the structure of the construction workforce in Singapore by

country of origin. It indicates the extent to which the industry currently relies on foreign
workers, and also shows the dynamism of the composition of the construction workforce.
Table 5. Nationality of construction workers (%), 1990, 1992, 1993

1990 1992 1993
Local 32.4 19.4 24.7
Malaysian 36.7 40.2 32.1
Thai 24.4 29.6 32.2
Bangladeshi 2.8 6.6 5.2
Other NTS* 3.7 4.2 5.8
* NTS: Non-traditional sources.

Source: CIDB (1991, 1993, 1994c).
By 1990, only two years into a recovery of construction activity, the proportion of
foreign workers had already risen to over 67 per cent from 46 per cent two years earlier. This
proportion exceeded 80 per cent in 1992, and declined to just over 75 per cent in 1993.
In 1992, Malaysians made up over 40 per cent of construction workers in Singapore.
The total number of Malaysian workers was about twice that of Singaporeans. Most of the
Malaysians were skilled workers. They constituted about half of the workers in the structural,
finishing and building services trades. Thais formed the second largest group of foreign
construction workers in Singapore, being one-third of structural tradespersons and more than
half of general workers. Most of the construction workers from India and Bangladesh were
unskilled.
Table 6 gives a detailed breakdown of the construction workforce in 1993, indicating
trade and country of origin. The structural composition is discussed below. Table 6 shows
that Singaporeans are in significant numbers only in areas where high levels of skill are
required. Singaporeans constitute nearly half of building services workers and over half of
operators of plant and equipment, but only about a third of workers in finishing trades, and
about one-fifth of structural trades. There are virtually no Singaporean general construction
workers (unskilled workers).
By 1993, Thais had (marginally) overtaken Malaysians as the largest single
component of Singapore’s construction workforce (by nationality). Malaysians still made up
the bulk of the skilled workers. Thais formed about 35 per cent of workers in the structural
trades, and about 78 per cent of unskilled workers. Bangladeshis and Indians together
constituted 11 per cent of the construction workforce, the bulk of them being engaged as
general workers.
11
Table 6. Construction workers by trade and nationality (August 1993)

Trade Local Malaysian Thai Bangladeshi Indian % of
total
Structural
Concretor 1.1 1.2 2.1 0.2 0.3 4.9

Carpenter 3.1 6.1 4.9 0.8 0.3 15.1
Metal-form erector 0.6 1.5 0.7 0.1 0.1 3.0
Scaffolder 0.6 0.5 1.1 0.0 0.0 2.2
Steelbender 2.4 4.5 3.5 0.7 1.0 12.1
Welder 0.7 0.8 0.4 0.0 0.0 1.9
Subtotal 8.3 14.6 12.7 1.9 1.7 39.2
Finishing
Bricklayer 1.5 3.0 0.7 0.1 0.2 5.3

Painter 1.4 1.1 0.2 0.0 0.0 2.6
Pavior 0.5 0.4 0.0 0.0 0.0 0.9
Plasterer 2.1 3.9 0.9 0.0 0.2 7.2
Tiler 1.8 2.6 0.0 0.1 0.1 4.6
Subtotal 7.3 11.0 1.8 0.1 0.5 20.7
Building services
Electrician 2.6 1.6 0.3 0.2 0.2 4.9

M & E worker 2.0 1.4 0.2 0.2 0.1 3.8
Plumber 1.6 1.2 0.6 0.4 0.4 4.2
Subtotal 6.1 4.1 1.2 0.8 0.7 12.9
Plant and equipment

operation
Plant operator 1.2 0.6 0.3 0.1 0.0 2.0

Crane operator 1.1 0.9 0.0 0.0 0.0 2.0
Subtotal 2.2 1.5 0.3 0.1 0.0 4.0
General worker 0.8 1.0 16.3 2.3 2.9 23.2
Total 24.7 32.1 32.2 5.2 5.8 100.0
Source: CIDB (1994c).
Sources of foreign workers
The countries from which Singapore obtains its foreign workforce are categorized
into “traditional” and “non-traditional” sources. Traditional sources of foreign workers are
those countries whose culture and work ethos are compatible with those of Singapore. These
included Hong Kong, Japan, Macau, Malaysia and the Republic of Korea. As discussed in
12
section 6, initially, all foreign workers came first from Malaysia, and then from the traditional
sources. However, as these nations became successful economically, the supply of workers
fell. Moreover, Singapore’s requirements for foreign workers soon surpassed what these
countries could provide. Hence, other sources were required.
Non-traditional sources of foreign workers for Singapore include Bangladesh, India,
Indonesia, the Philippines, Sri Lanka and Thailand. Workers from these countries were
recruited in the latter stages of Singapore’s development.
The classification of sources of Singapore’s foreign workers has changed. The
distinction is now mainly between Malaysian workers and all others. In defining
“non-traditional sources”, the CIDB (1994c) stated:
Singapore traditionally obtains its supplementary foreign manpower from Malaysia. In ...
recent years, Singapore is getting foreign workers from places such as Thailand, the Indian
subcontinent, Hong Kong and Macau. These countries and economies are known as
non-traditional sources (p. 42).
The following classification of foreign construction workers is currently adopted (as

noted from the “Application Form For Work Permit”):
(a) Malaysian construction workers on three-year work permits.
(b) Malaysian construction workers on two-year individual work permits.
(c) North Asian (Hong Kong, the Republic of Korea, Macau and Taiwan, China)
construction workers on work permits.
(d) People's Republic of China construction workers on work permits.
(e) Malaysian construction workers on block work permits.
(f) Non-traditional source (Bangladesh, India, the Philippines, Thailand, etc.) workers on
work permits.
Summary
Singapore’s construction industry relies heavily on foreign workers, with Malaysians

and Thais forming the bulk of them. This is due to the country’s small human-resource base
and the lack of popularity of careers in construction in Singapore (as discussed in section 8).
The proportion of foreign workers in the total fluctuates with levels of construction activity,
and (as discussed below) is subject to government control.
13
5. Terms of employment
In this section, the terms under which foreign construction workers are employed in
Singapore are discussed under the headings general welfare, wages, working hours and living
accommodation.
General welfare
The industrial environment in Singapore is very peaceful. Various issues of the annual
report of the Ministry of Labour state that Singapore enjoyed a strike-free year (the previous
year). The array of employment-related statutes and regulations aiming to protect the worker
and ensure smooth industrial relations, and the effectiveness of the administrative framework
for their enforcement is partly responsible for this.
Foreign workers enjoy protection under Singapore’s stringent labour legislation and
regulations. They are given a mandatory medical check-up by their employers, and also enjoy
company medical benefits and insurance protection (The Straits Times, 1990b). The Ministry
of Labour observed:
Foreign construction workers here, regardless of their nationality, are given adequate
protection under local laws with regard to the terms and conditions of employment, safety and
health at the workplace, and compensation for work-related injuries (The Straits Times,
1990b: p. 16).
Foreign workers who are not members of a union may refer specific issues such as
non-payment of wages to the Labour Standards Branch of the Ministry of Labour “which
ensures that all workers receive the statutory entitlement laid down in the labour legislation”
(Toh, 1993: p. 11).
Foreign workers also have an opportunity to learn a trade on a part-time basis during
their stay in Singapore. Those with skills may attain formal certification of their abilities.
Foreign workers with special skills may also qualify for permanent resident status, and,
ultimately, Singapore citizenship.
Wages of construction workers
Much data on workers' remuneration is published in Singapore. However, comparison

of earnings among sectors and categories of workers is not easy. The Department of Statistics
(1993) adopts the Singapore Standard Industrial Classification of Economic Activities. It
includes “bonuses” in its data on “earnings”. But the CIDB publishes salaries of professionals
and supervisors, and site operatives separately. The CIDB (1994c) defines the “basic wage”
as:
... the basic pay received by construction tradesmen before ... deduction of the employee’s
CPF [Central Provident Fund] contribution and personal income tax. It excludes overtime
payments, commissions, levy, annual wage supplement, variable payments/bonuses,
14
employer’s CPF contributions, food/entertainment/transport/ ... allowances, other monetary

payments and payments-in-kind (p. 42).
Table 7 shows data on earnings in selected sectors of the economy of Singapore. It

indicates that in the period reviewed (1982-94), earnings in construction were consistently
below the national average. Moreover, only in three years, 1982 to 1984, at the peak of a
construction boom, did monthly remuneration in construction exceed that in manufacturing.
Table 7. Average monthly earnings by sector, 1982-94

Total Manufacturing Construction Commerce
1982 859 732 761 725

1983 947 818 863 799
1984 1 048 892 908 892
1985 1 131 964 939 935
1986 1 140 976 929 945
1987 1 176 1 009 926 977
1988 1 273 1 116 1 005 1 049
1989 1 398 1 243 1 128 1 174
1990 1 528 1 395 1 275 1 305
1991 1 669 1 552 1 426 1 419
1992 1 804 1 686 1 624 1 535
1993 1 918 1 818 1 713 1 631
1994 2 086 1 995 1 865 1 763
Source: Research and Statistics Department (1993, 1995).
Table 8 presents data on the daily wages of Singaporean and foreign construction
workers from various countries in 1990-93. It shows significant earnings differentials among
persons in different trades, as well as among workers from various countries. The data show
that wages of Malaysian workers differ only slightly from those of Singaporeans.
Non-traditional source workers appear cheap compared to Singaporeans or Malaysians.
To obtain the cost to the employer of engaging workers from various countries, the
employer's additional direct costs for each group of construction workers should be
considered, as these differ for the various nationalities. For Singaporean and Malaysian
workers (except those on two-year work permits) these include the CPF contribution,
whereas for non-traditional source workers, direct costs include the foreign worker levy.
Other costs relating to the employment of foreign workers include transport, accommodation
and costs of complying with statutory requirements. Some Malaysian workers require no
accommodation as they can commute to work daily.
These additional direct costs account for the differences in earnings of workers of
different nationalities. The small proportion of the total in Singapore made up of workers
from the non-traditional sources shows that such workers may not be that cheap. The
productivity of workers from the various countries is related to the ease of communication
with them, their work ethic and attitudes, and so on.
15
Table 8. Average daily wage of local and foreign workers in August, 1990-93 ($)
1990 1991 1992 1993 Change, '93
over '92 (%)
Bar bender
Singaporean 48.98 52.11 52.68 53.57 1.7
Malaysian 37.51 40.61 51.96 47.32 -8.9
NTS* 17.85 19.31 19.02 19.54 2.7
Bricklayer
Singaporean 48.14 55.86 55.32 55.30 0.0
Malaysian 45.05 49.89 54.62 51.02 -6.5
NTS 18.00 18.24 18.90 19.62 3.8
Carpenter
Singaporean 47.92 53.66 53.13 56.06 5.5
Malaysian 45.26 42.19 53.31 46.54 -12.7
NTS 18.00 18.63 19.13 20.34 6.3
Electrician
Singaporean 44.53 51.06 57.25 53.32 -6.9
Malaysian 32.67 41.03 49.68 53.55 7.8
NTS 16.00 17.22 18.75 17.98 -4.1
Painter
Singaporean 45.98 52.14 54.34 52.96 -2.5
Malaysian 45.00 46.17 48.20 49.86 3.4
NTS - 15.83 19.73 20.22 0.2
Plant operator
Singaporean 45.34 56.35 55.24 55.50 0.5
Malaysian 46.64 48.16 47.85 52.97 10.7
NTS 27.33 20.86 19.17 22.91 19.5
Plasterer
Singaporean 43.81 57.19 59.28 57.43 -3.1
Malaysian 41.13 52.63 57.45 53.97 -6.1
NTS 20.00 18.32 19.12 19.57 2.3
Plumber
Singaporean 42.39 56.08 53.80 54.80 1.9
Malaysian 43.81 44.21 49.82 49.86 0.1
NTS 16.82 18.02 17.98 19.32 7.5
Scaffolder
Singaporean 50.00 41.57 52.11 52.09 0.0
Malaysian 38.13 34.50 46.41 45.55 -1.9
NTS 19.00 19.93 18.45 18.73 1.5
Steelworker
Singaporean 50.59 54.32 57.12 53.23 -6.8
Malaysian 44.00 45.22 49.49 52.61 6.3
NTS 20.00 19.16 16.97 19.44 14.6
Tiler
Singaporean 52.78 60.24 56.19 58.84 4.7
Malaysian 51.40 54.11 55.83 53.56 -4.1
NTS - - 18.32 17.01 -7.2
General worker
Singaporean 36.40 35.51 35.34 33.78 -4.4
Malaysian 27.42 28.59 29.60 34.06 15.1
NTS 17.86 16.62 18.24 16.96 -7.0
* NTS: Non-traditional sources.
16
Regional comparison
Singapore could face competition from countries in the region for foreign
construction workers, including the nations of origin of these workers. Monitoring
developments in these countries is important. The CIDB’s annual survey of the human
resource situation in the construction industry compares construction wages in Singapore
with those in some of the other countries in the region.
The average daily wages of construction workers in the South-East Asia region are
indicated in table 9. The wages of workers in Singapore are the second lowest among the
countries considered. Construction wages in Singapore are around one and a half times those
in Malaysia, explaining perhaps why workers from that country seek opportunities in
Singapore. However, wage levels in Singapore are less than half those in Hong Kong in all
categories of trades considered. In the case of Taiwan, China, the wage differentials are even
wider.
Table 9. Average daily construction wages in South-East Asia, September 1993

Tradesperson Average daily wage (SGD)*
Singapore Taiwan, China Hong Kong Malaysia
Bar bender 59 148 161 37

Carpenter 61 146 113 37
Bricklayer 60 134 119 36
Concretor 57 138 119 36
General worker 34 96 79 18
* All currencies converted with exchange rates as at September 1993.
Working hours
The CIDB (1994c) considers “the standard working week” to be 44 hours. “Working
in excess of 44 hours is considered as working overtime” (CIDB, 1994c: p. 43).
Working hours in sectors of the Singapore economy which have a large proportion of
operatives are depicted in table 10. During the period 1982-94, construction had the highest
number of working hours per week, averaging about 50 hours per week each year. In
September 1992, construction had standard working hours of 48.8 per week, compared with
42.4 hours for all workers, 42.7 hours for manufacturing, and 43.8 hours for agriculture,
fishing, mining and quarrying. The average weekly overtime hours in construction, at 12.7
hours, were also the highest among all the sectors of the economy in September 1992. By
comparison, the average weekly overtime hours for all workers in the overall economy was
9.3 hours; for manufacturing, 9.8 hours; for commerce, 5.9 hours; and for agriculture, fishing,
mining and quarrying, 7.9 hours (Research and Statistics Department, 1993).
17
Table 10. Average weekly hours worked by all workers, 1982-94

Total Manufacturing Construction Commerce Others*
1982 45.4 47.6 50.5 44.0 47.6

1983 45.6 48.1 50.5 43.9 47.6
1984 45.6 47.8 52.2 43.5 47.1
1985 44.6 46.5 51.0 43.3 46.6
1986 45.1 47.7 50.0 42.9 46.8
1987 45.5 48.4 49.5 42.8 46.3
1988 45.6 47.4 48.2 41.7 46.4
1989 46.6 48.6 50.0 42.0 47.2
1990 46.5 48.5 49.7 42.3 48.1
1991 46.7 48.7 50.0 42.7 47.5
1992 46.6 48.7 50.5 42.6 46.6
1993 46.9 49.2 50.6 42.8 45.0
1994 47.0 49.3 51.0 42.9 45.0
* Agriculture and fishing, and mining and quarrying.
Accommodation
An appendix to the standard Application Form For Work Permit indicating the “terms
and conditions” of the Foreign Workers’ Scheme states:
The employer sponsoring the foreign workers shall provide adequate dormitories or hostels
with proper supervision of the foreign workers especially after working hours. All foreign
workers should be provided with proper beds. Adequate sanitary and other facilities should be
provided (Appendix to Application Form For Work Permit, p. 1).
Foreign workers are provided with accommodation on or off-site by their employers.

For off-site accommodation, employers normally rent premises to house a number of
workers – the workers are provided with transport to and from sites. These premises are often
within residential areas. They can be overcrowded and noisy, to the annoyance of neighbours
(Tan, 1993; Toh, 1993). However, complaints have been rare. Since 1979, under the
Dormitory Housing Scheme, the Housing and Development Board rents out housing blocks
at market rates on two-year tenancies to employers of foreign workers endorsed by the
Economic Development Board, and for construction firms, the CIDB (Chung, 1995: p. 32).
Although relations between the foreign workers in these blocks and Singaporean residents in
neighbouring blocks in the estates are generally good, there have been some complaints of
occasional unruly behaviour such as excessive noise, fights and littering. In March 1994, the
18
Government announced a new scheme to provide land for big companies to construct
dormitories for their foreign workers. “The aim is to provide accommodation away from the
estates, but close enough for workers to make use of estate amenities such as shops and
hawker centres” (Chung, 1995: p. 32).
Various studies of foreign workers’ living quarters on-site show that they are
generally satisfactory, and have the necessary statutorily required basic amenities such as
clean running water and electricity. However, the quality differs, depending on the employer,
the site and the workers (Gwee, 1986; Leong, 1989). Leong (1989) found a variety of
conditions. On one site, the 500 workers were provided with spacious, air-conditioned
accommodation free of charge with tight security. On another, the conditions were
unhygienic, and the buildings dilapidated. Kagda (1989) observed that some foreign workers
lived in “cramped, dirty and unhygienic conditions” (p. 2). Some, including contractors, put
the blame for the poor quality of living environment (where it occurs) on the foreign workers
(Leong, 1990). The Contractors’ Association observed that all site facilities were in
compliance with regulations, and provided all necessary basic amenities. They had to be
inspected by relevant authorities before they were occupied. Subsequent housekeeping was
the responsibility of the workers (The Straits Times, 1990b). In the early 1990s, the Singapore
Contractors’ Association Ltd. proposed to build permanent quarters in centralized locations
for foreign construction workers. This would not only improve workers' welfare, but also
enhance their safety as the temporary site buildings, mostly of timber, could be a fire hazard,
with many workers cooking with open fires (Tan, 1993). It would also upgrade site security,
making intruders easy to spot and apprehend. Work on some permanent dormitories for
foreign workers was started in early 1995.
In May 1995, a temporary three-storey building housing foreign workers on a site
where, ironically, permanent dormitories were being constructed for foreign workers,
collapsed, killing one person and injuring 64 others (The Straits Times, 1995a: p. 1). That
same month, in order to improve the conditions in such housing, the Government announced
its intention to require housing for foreign workers on construction sites to be of reasonable
quality, “safe and ... meet all the environmental health requirements” (The Straits Times,
1995b: p. 25). A committee comprising the CIDB, Fire Service Bureau, Housing and
Development Board, Ministries of Labour and the Environment, Public Utilities Board and
the Public Works Department was set up to formulate regulations to ensure that such quarters
are structurally sound, comply with all fire and electrical safety rules, and are well-lit and
ventilated (The Sunday Times, 1995: p. 24).
Under the Building Control (Temporary Buildings) (Amendment) Regulations 1995,
workers’ quarters, canteens and other temporary buildings must be designed and supervised
by an engineer and meet minimum standards of storey height, ventilation, staircase width and
extent of fenestration.
Summary
Foreign construction workers in Singapore have quite good terms of employment.

They enjoy protection under the country’s labour statutes and regulations. Their wages are
relatively high. They also receive medical and insurance coverage and free accommodation
and transport to and from work. A period of employment in Singapore can bring such added
benefits as the opportunity to acquire a skill and formal certification of competence in a trade.
19
6. Foreign worker policies
Singapore has a set of policies for controlling the number of foreign workers recruited
into sectors of its economy. This section considers some of these policies, paying special
attention to those relating to construction workers.
Policy intention
The inability to recruit and maintain an adequate level of local workers has been one
of the major problems of the construction industry in Singapore during the last two decades
(Ofori, 1993). In its 1992 annual report, the CIDB stated:
There is a pressing need to upgrade construction personnel through training and testing. This
is to address the twin problems of skilled workers’ shortage and the industry’s dependence on
foreign workers which in turn give rise to low worksite productivity and poor quality of
construction (CIDB, 1993: p. 27).
Thus, while foreign workers have been allowed in to meet the needs of the
construction industry in Singapore, their recruitment is considered an interim measure only,
and the aim is to reduce their involvement over time. This policy is in line with the national
policy relating to foreign workers in all sectors of the economy:
Although foreign workers help contribute to Singapore’s economic growth, the presence of a
large number of such workers can pose social and other problems to host countries as
experienced by some European countries. The employment of foreign workers is therefore
restricted to only those sectors or industries which are vital to the development of the
economy and where there is a shortfall in local manpower (Ministry of Labour, 1987: p. 26).
The long-term policy for foreign workers is clear:
We will progressively reduce our dependence on foreign workers. To overcome temporary

shortages, we will however continue to allow a revolving pool of foreign workers on short-
term work permits. Only those who have critical skills of economic value to Singapore will be
considered for employment on a longer basis (Ministry of Labour, 1987: p. 35).
History
As mentioned above, construction is not the only sector of the Singapore economy
which uses foreign workers. Other sectors include manufacturing (including shipbuilding),
the domestic sector and hotels. In this section, an account of the history of the engagement of
foreign workers in Singapore is provided, concentrating on construction workers.
20
Initial developments
Singapore achieved much success in its early development efforts. It fulfilled its
objective of creating employment opportunities through manufacturing and public
construction projects, most notably housing, stated in its first national development plan
(Ministry of Finance, 1961) within a decade of the implementation of the plan. Chew (1970)
highlighted the prevailing labour policies and problems of Singapore and suggested that
effort be made to develop a “technical” labour force. Chew (1970) observed:
Unemployment throughout the 1960s was high. Yet, in the latter 1960s, there were complaints by
industrialists of skill bottlenecks adversely affecting operations. One hears too of crafts students at
the Singapore Vocational School booked by firms prior to graduation. The Economic
Development Board ... has also deprecated the lack of trained craftsmen (p. 12).
The rapid industrialization of the economy created jobs in manufacturing and

commerce. Opportunities for further education were increasing, and Singaporeans were
delaying their entry into the workforce. Moreover, jobs in construction lost their appeal
owing to the poor working conditions (Ganesan, 1982). The construction industry failed to
attract new entrants; it also lost some trained personnel. A shortage of construction workers
was clear by 1969 as labour costs increased by over 100 per cent (The Contractor, 1984).
Similar shortages were being experienced in other sectors. The Ministry of Labour (1972)
observed:
The year [1971] saw the rapid transformation of the labour market in Singapore. The remarkable
expansion of the economy has generated such a tremendous number of employment opportunities
that there are now problems of labour shortages in certain sectors of the economy. The problem of
unemployment which was ever present in past years is no longer a problem. All indications show
that the Republic is fast approaching a state of full employment (p. 1).
With the labour shortage, an increasing number of factories have been unable to recruit local
labour for their workforce and have therefore to look to immigrant workers for their labour. In
order that the economic advancement of Singapore is not hindered, the Ministry has further
liberalized its policy on work permits for certain categories of workers (p. 2).
Attitudes and early efforts to reduce the number of foreign workers

Soon after independence, attitudes of the public to careers in construction began to
change, for the worse. By the mid-1970s Singaporeans preferred to work for less pay in other
sectors, or even to remain unemployed rather than take up the many available places in the
construction industry (The Construction Times, 1976). Foreign workers from Malaysia and
Indonesia became increasingly prominent in the construction industry. Initially, most of them
came from the southern states of neighbouring West Malaysia. Later, workers from the more
northern states of Malaysia also arrived. The unskilled workers were given two-year work
permits and the skilled ones, three-year permits.
These developments occurred although wages in construction had exceeded the
national average for the first time in 1967. Six new technical and vocational training centres
were also opened, increasing the annual intake from the 100-200 range to over 2,000. The
Ministry of Labour also stepped up efforts to improve site safety and worker welfare. In
1972, in addition to liberalization of the grant of work permits to certain categories of foreign
workers, the Employment Act was amended to raise the limit imposed on overtime by
employees from 48 hours per month to 72 hours per month “to ensure that the Republic had
sufficient personnel to sustain its industrial expansion and economic growth” (Ministry of
21
Labour, 1973: p. 2). As construction boomed in the late 1970s labour shortages became even
more severe, increasing construction costs considerably (Wong and Yeh, 1985). More
Malaysians were employed.
The profile of the foreign construction workers in Singapore at this time was
significant. Many of them were farmers with little or no skills in, or experience of,
construction. They would come to Singapore to seek work during lull periods in the farming
calendar, and return home not only on festive occasions (on extended holidays), but also
during planting and harvesting seasons. Moreover, after acquiring some training in
Singapore, many would subsequently take up work nearer their homes, in their own
countries. Their places would be taken by a fresh batch of unskilled workers, often from the
same countries as the previous groups of workers. This constant cycle led to problems such
as poor quality of work and low productivity, as well as failure to develop a stable core of
workers.
With the number of available construction workers subject to sudden changes,
unanticipated periods of critical shortages could occur. On such occasions, semi-skilled
workers would temporarily take the place of more skilled ones, leading to poor workmanship
and high wages. The shortages led to increasing labour cost, low productivity, high labour
turnover, and poor work discipline. From 1980, contractors were permitted to recruit foreign
workers from “non-traditional” sources. Previously, only the manufacturing sector had been
allowed to use such workers.
Target 1991
One of the most important statements on Singapore’s long-term policy on foreign
workers was made in a New Year speech in January 1982 by the then Prime Minister. In this
speech, Mr Lee Kuan Yew announced the Government’s intention to phase out all low-
skilled foreign workers in the Singapore economy by 1991. Highly skilled and qualified
personnel would be retained and given permanent residence with a view to granting them
citizenship.
All non-traditional source workers except those in construction and shipbuilding, as
well as domestic maids, were to be phased out by 1986. Circumstances militated against the
achievement of this aim. Toh (1993) observes:
... it was soon realized that a totally local labour force was not feasible. The booming construction
sector and other sectors of the economy during the late 1980s warranted abandonment of the
policy of phasing out guest workers by 1991. Economic conditions made it apparent that it was
necessary to retain a controlled pool of foreign workers on short-term work permits ... to serve as
a buffer against cyclical economic swings.
It is significant to note that both the dependency level and the comprehensive foreign
worker levy (see below), important control instruments relating to foreign workers, were
introduced in 1982. In 1984, employers were encouraged to recruit skilled workers from
Hong Kong, Macau, the Republic of Korea and Taiwan, China to meet the continuing
shortfalls.
Current foreign construction worker policy

Programmes to develop a stable core of local construction industry workers have been
in place since the 1960s. It has long been understood that, as locals were averse to careers in
22
construction, it was not sufficient to have training programmes. A more comprehensive

programme of human-resource development and management as well as practical measures
to reduce labour usage in the industry were required. Initiatives in this regard are considered
in section 7.
In 1992, a CIDB survey showed that there would be a dramatic increase in the
requirement for construction workers as a result of an unprecedented rise in the level of
demand for construction. The Government proposed to use this opportunity to undertake a
review of its foreign-worker policy for the construction sector. It would adopt a three-
pronged approach:
(a) to pursue a long-term strategy to improve construction productivity and quality, making
“... jobs higher skilled, higher value added and better paying so that more Singaporeans
are attracted to the industry” (The Straits Times, 1992a: p. 40);
(b) to allow the industry to recruit additional foreign workers to meet cyclical increases in
construction activity, but the increase in the number of foreign workers required should
be due to “increased construction output and not because of declining productivity” (The
Straits Times, 1992a: p. 40); and
(c) to simplify the foreign-worker quota (dependency level) system, make it more
transparent, and bring it in line with those used in the manufacturing and services sectors
as the definition of the control ratio was “complicated and restricted” (The Straits Times,
1992a: p. 40).
Work permits
One of the most important elements of Singapore’s foreign-worker policies is the

requirement for a work permit to be obtained for each foreign worker employed, or working
in the country. This facilitates the control of the number of foreign workers in each sector of
the economy, and in total.
Statutes and regulations

Under the Regulation of Employment Act, 1965, “non-citizens who are offered
employment at a salary of $750 per month or less are required ... to possess work permits”
(Ministry of Labour, 1969: p. 18). The 1965 Act has been repealed: the Employment of
Foreign Workers Act 1991 is the governing statute at present (as discussed below). In
November 1970, the “block permit” system was introduced, under which companies could
apply for a number of foreign workers together, rather than individually.
In 1982, the ceiling for work permit holders was raised to a salary of $1,000 per
month (Business Times, 1990). The scope of the work permit regulations was revised in July
1984 “in view of the rising salaries of non-graduate foreigners seeking employment [in
Singapore]” (Ministry of Labour, 1985: p. 3):
All foreigners and permanent residents working in Singapore at a basic salary of not more than
$1,500 per month now have to apply for a work permit. Those who are earning more than $1,500
per month have to apply for an employment pass ... (Ministry of Labour, 1985: p. 3).
The Employment of Foreign Workers Act 1991 (Chapter 91A of the revised 1991
edition) is the main legal instrument governing the recruitment and deployment of foreign
workers in Singapore. The Act describes a “foreign worker” as:
23
(a) any person who is not a citizen of Singapore who seeks employment with, or is offered
employment by, or is, at 1st January 1991, in the employment of, an employer at a salary
of not more than $1,500 a month or such other sum as may, from time to time, be fixed
by the Minister by notification in the Gazette; or
(b) such other person or class of persons as the Minister may, by notification in the Gazette,
specify (sec. 2).
The Act provides for the appointment of a Controller of Work Permits and
“employment inspectors”. Per section 5 of the Act,
(1) No person shall employ a foreign worker unless he has obtained in respect of the foreign
worker a valid work permit which allows the foreign worker to work for him.
(2) No foreign worker shall be in the employment of an employer without a valid
workpermit.
(3) No person shall employ a foreign worker otherwise than in accordance with the
conditions of the work permit.
The powers of employment inspectors are also provided for under the Act. They
include: entering and searching premises where they have reasonable cause to believe that a
person is employed; asking relevant persons to produce documents for inspection; examining,
orally, persons supposed to know relevant facts; and requiring, by order in writing, the
attendance of persons with knowledge of relevant facts. The Act specifies minimum and
maximum financial or custodial penalties for employer organizations (and some of the key
persons directly responsible) and foreign workers contravening its provisions.
The Act outlines the procedure for application for a work permit, and of appeal by
those aggrieved by a decision of the Controller. Per section 8(3), the Controller may “vary or
revoke any of the existing conditions of a work permit or impose new conditions; or vary,
suspend or cancel a work permit” (section 7(3)). Per section 12, a work permit is valid only in
respect of the trade, occupation, employer and foreign worker specified in it. It is not
transferable (section 13(1)), and is also valid for a specified period, unless it is suspended or
cancelled by the Controller (section 12(2)).
The employer is required to keep “a register of foreign workers” (section 8(1)) which
“shall at all reasonable times be open to inspection by an employment inspector” (section
8(3)). Upon terminating the employment of a foreign worker, an employer “shall return the
work permit to the Controller within seven days of such termination” (section 9(2)).
The Act provides for the payment of a levy in respect of the employment of foreign
workers:
The Minister may, by an order published in the Gazette, provide for the imposition of a levy of
such amount as may be specified in the order on employers in respect of any foreign worker or
class of foreign workers or on persons who have, ... obtained a work permit to engage in any trade,
calling, occupation or other activity for the purposes of gain (section 11(1)).
Employers or persons failing to pay the levy on time are liable to pay penalties on the
outstanding amounts.
From 1 January 1994, the monthly income ceiling for work permit holders was raised
from $1,500 to $2,000, “paving the way for more skilled workers to be employed in
Singapore” (Ministry of Labour, 1995: p. 39).
24
Who can apply

The employer applies for the work permit before the foreign worker arrives in the
country. Companies applying for foreign workers must meet the following criteria (Liew,
1994):
(a) have a registered business in Singapore;

(b) employ local workers, and pay their CPF contributions regularly in the correct amounts
and without default; and
(c) be actively involved in construction work, with a minimum project value of $500,000,
lasting a minimum of six months – in 1989, construction enterprises could only apply for
foreign workers for projects worth over $1 million and lasting over a year (Koh, 1990).
Duration
Work permits for most foreign workers are issued for two years, and may be renewed
for another two-year period. Those with special skills may be given a further two-year
extension of their work permits. In 1989, Malaysian workers “with skills relevant to the
economy” (Ministry of Labour, 1990: p. 12) were given three-year work permits. These
persons may be:
(a) those with GCE Ordinary Level certificate with at least five credits, or a full GCE
Advanced Level certificate for an examination taken at one sitting; or
(b) those holding a two-year work permit and a recognized trade certificate.
Foreign workers holding three-year work permits may be eligible for:
(a) applying for permanent residence in Singapore if they have worked for at least one year
in a field related to their skills. After five years as a permanent resident, the worker may
qualify for Singapore citizenship;
(b) renting a public-housing flat;
(c) sending their children to school in Singapore on terms not unlike those relating to
Singapore citizens and permanent residents; and
(d) applying for “long-term visit passes” for their spouses and children below 21 years old.
Application
The work permit is issued in relation to a particular employer, which may be the main
contractor, first-level subcontractor, or second-level subcontractor. That particular employer
has to apply for the permit, and is responsible for the worker.
For non-traditional sources, the employer should first apply for “prior approval”,
indicating the number of workers required. If approved, prior approval is valid for two
months. Within the two-month period, the employer should submit work permit applications
in respect of the workers, and if approved, is given an In-Principle Approval letter, also valid
for two months. This constitutes a temporary permit commencing on the date following the
worker’s arrival in Singapore. The foreign worker levy is payable from this date.
The application process for Malaysians is simpler and easier. A temporary permit may
be issue within an hour, the actual work permit being ready within 14 days.
25
Information which should accompany application
The contractor or subcontractor should submit the following information together

with the completed application form for work permit(s):
(a) information on current workforce;

(b) list of applicants’ names;
(c) copy of applicant(s) passport(s);
(d) declaration form;
(e) brief company profile;
(f) CPF statement of accounts for the last three months;
(g) some key contract documentation including Letter of Award (indicating commencement
and completion dates and contract sum) and Permit to Carry Out Building Works;
(h) for subcontractors, endorsement of main contractor.
The employer should furnish the CIDB with a security bond and a security guarantee
of $5,000 for each worker before the workers are brought into the country.
Processing and approval

Efforts have been made to streamline and simplify the process of applying for a work
permit, and make it more convenient to applicants. These include the introduction, in 1970,
of the “block permit” system, which allowed the application for a number of foreign workers
to be submitted together.
Moves have also been made to shorten the processing of applications for work
permits. In 1990, the Work Permit and Employment Department of the Ministry of Labour
“moved nearer towards a ‘one-stop/one point’ service” (Ministry of Labour, 1991: p. 5). It
took over some of the functions of the Immigration Department (on visas for foreign
workers) and the Stamp Office (on payment of stamp duty in respect of the application)
relating to work permit applications.
In October 1992, the CIDB took over the processing of applications for work permits
for construction workers from the Ministry of Labour, providing a one-stop service at the
Work Permits Section of the Board’s Manpower Development Division, located at the
Construction Industry Training Institute. Through a computer linkage to the Ministry of
Labour, the processing time for work permit applications was reduced by over 75 per cent
(CIDB, 1994a).
Conditions attached to a work permit

The Foreign Workers’ Scheme has the following “terms and conditions”, listed in an
appendix to the Application Form for Work Permit:
(a) all foreign workers (males only) are to be recruited from approved countries;
(b) the employer must recruit and bring foreign workers directly from their country of origin
– no foreign worker shall be employed while on a social visit to Singapore;
(c) foreign workers are to be paid the same wages and entitled to the same wages as local
employees, but the employer may deduct the cost of any food, transport and/or
accommodation provided to the foreign worker;
(d) all foreign workers must be at least 16 but below 55 years of age;
26
(e) foreign workers employed by an employer must not be contracted out to other
employers.
Numbers
Initially, few permits were applied for. In 1968, applications for 1,740 work permits
for foreign workers were submitted to the Ministry of Labour, of which 958 were granted
(Ministry of Labour, 1969). In that year, 2,420 applications were made for change of
employers or occupations. Work permit renewals and endorsements for change of occupation
totalled 4,522. At the end of 1968, there were 38,872 foreign workers (in all sectors of the
economy) in Singapore, compared with 47,217 the previous year (Ministry of Labour, 1969).
As the construction industry experienced a boom in the early 1990s (see table 1), the
demand for foreign construction workers was high. In fiscal 1991, the CIDB’s Work Permit
Section received applications for 93,690 foreign workers, a 13 per cent increase over the
previous year’s figure (CIDB, 1993). The CIDB received some 30 per cent more applications
for foreign construction workers in fiscal 1992.
Contraventions
The Labour Inspectorate of the Ministry of Labour enforces the Employment of
Foreign Workers Act. It carries out inspections in “all types of establishments ranging from
large construction sites to factories, restaurants, hairdressing salons and small shops”
(Ministry of Labour, 1992: p. 13).
Initially, problems relating to the employment of foreign workers in Singapore were
very modest. The number of cases of illegal employment of non-citizens was 460, 261, 197
and 348 in 1977, 1978, 1979 and 1980 respectively (Ministry of Labour, 1978, 1979, 1980,
1981).
By the late 1980s the problem had become serious. The number of cases reported
increased from 3,700 in 1983 to 9,500 in 1985 (Koh, 1990). Several thousand foreign
workers were rounded up and repatriated in 1989, showing the extent of the problem. Over
10,000 construction workers, mainly from Thailand, left the country before a new law (the
Immigration (Amendment) Act) providing for stiffer punishment of illegal foreign workers
came into force. This led to major disruptions in work on several construction projects,
including those involving large and reputable contractors, such as the Central Expressway
and Changi Airport Terminal 2.
Several of the repatriated foreign construction workers later returned to Singapore
after they were given work permits. Between 15 March and 6 May, 14,783 permits were
issued by the CIDB, four times the usual number (The Straits Times, 1989a). The processing
time was reduced from 14 days to four days. Half of these work permits were for Thai
workers, a sevenfold increase in the normal figure.
The developments in 1989 culminated in a tougher version of the Immigration Act
and in the Employment of Foreign Workers Act, 1991. The problem of foreigners working
illegally in Singapore persists although the scale is much less now than in the 1980s. Table 11
shows information on illegal foreign workers and their employers apprehended by officers of
the Labour Inspectorate in 1991, 1992 and 1994. It indicates that 2090 and 1797 illegal
foreign workers were arrested in 1991 and 1992 respectively. Of these, 330 and 346 were
convicted in 1991 and 1992 respectively. By mid-1993, 2,000 foreign workers had been
detained and 350 convicted. A total of $5 million had been collected in fines on errant
27
employers (Miller, 1993). In 1994, some 1538 illegal foreign workers were arrested, 315
offenders were convicted, and some $5.3 million in fines were paid (see table 11).
Table 11. Contraventions of Employment of Foreign Workers Act, 1991-92, 1994

1991 1992 1994
Complaints of illegal foreign workers 2 193 2 957 4 469

received
Inspections conducted 695 639 279
Number of illegal foreign workers 2 090 1 797 1 538
arrested
Number of illegal foreign workers 380 346 315
convicted
Revenue from fines collected from
employers of illegal foreign workers 2.5 5.1 5.3
($ million)
Source: Ministry of Labour (1992, 1993, 1995).
In 1993, attention was focused on the employers of illegal foreign workers. The
Immigration (Amendment) Act was further strengthened to require those charged with
employing or harbouring illegal foreign workers to prove that they had inspected their
passports and work permits, and had grounds to believe that they were valid. The problem got
worse.
In 1994, newspaper reports alleged that 10,000 illegal immigrants were caught, twice
the 1988 number. From January to September 1995, 9,343 were arrested (The Straits Times,
1995e: p. 26). In the stiff competition and low margins prevalent in the industry, some
contractors are tempted to employ illegal workers because not only do they avoid paying the
government levy, but they would also pay such persons much less than the market rate
relating to their skills and experience (Ibrahim, 1995: p. 34). The argument that some
contractors had employed illegal workers because they could not obtain adequate numbers of
workers was belied by the fact that some firms which had been found to be employing such
persons had not reached their 1:5 dependency ceiling.
The majority of illegal immigrants apprehended in Singapore are found on
construction sites, owing to “inadequate security, poor or no access control and no system of
identifying workers, making it easy for offenders to seek shelter and employment” on these
sites (The Straits Times, 1996: p. 24). The “multi-level” subcontracting prevalent in the
Singapore construction industry adds to the difficulty of controlling illegal immigrants on
site. Moreover, a foreign worker may be deployed on more than one site from day to day. In
1995, the Immigration Act was amended to make the principal (main) contractor responsible
for any immigration offender found on its site. If such a person was found, “it would be
presumed that the principal contractor had control of access to the site and had knowingly
allowed the immigration offender to enter or remain there” (The Straits Times, 1996: p. 24).
An offender faces a fine of between $15,000 and $50,000 or a jail term of not more than one
year, or both. To successfully defend itself, the contractor should be able to show that it had
taken measures to tighten security at the site (such as building a fence, employing security
guards at all entrances and giving identification cards to all its workers). The Employment of
Foreign Workers Act was also amended to make it an offence for a principal contractor to
allow illegal foreign workers to enter or remain at its site (The Straits Times, 1996: p. 24).
28
Observers believe that as a result, main contractors may employ foreign workers, and then
assign them to subcontractors (Ibrahim, 1995: p. 34)
Dependency level
The “dependency level” is another instrument used to control the number of foreign
workers in Singapore. It indicates the permitted ratio of foreign workers to Singaporeans in
the workforce of each employer in the sector of the economy concerned. The quantum for
each sector is changed over time as circumstances dictate. The main determinants are
prevailing levels of activity and the projected future situation.
Table 12 shows changes in the dependency levels for the various sectors since 1985.
With the introduction of the two-tier policy for the construction industry in 1991 (see below),
the previous approach of considering Malaysians on two- or three-year work permits as
Singaporeans for the purpose of calculating the dependency level was discontinued, and only
Singaporeans were included.
Table 12. Dependency levels for various sectors of the Singapore economy
1987 Foreign workers not more than 50 per cent of firm’s total workforce
For manufacturing, reduced from 50 to 40 per cent, but remains at 50 per cent for
1989
construction
Companies in services may recruit foreign workers from traditional sources up to 10
1990
per cent of their workforce. Level raised to 20 per cent in November 1990
1991 For construction, increased from 1:1 to 2:1, with introduction of two-tier levy system
For construction, raised from 2:1 to 3:1 in April 1992, and then increased again to 5:1
in November 1992. HDB contractors can employ five additional foreign workers per $1
1992
million annual turnover for upgrading projects, and three additional foreign workers per
$1 million turnover for new HDB construction contracts
Source: Ministry of Labour (1986, 1988, 1990, 1991, 1992); Toh (1993).
In order not to disrupt the operations of organizations or persons employing foreign

workers, changes in dependency levels are announced well in advance. Moreover, employers
with excess foreign workers due to the change are not compelled to reduce their workforce
immediately the change takes effect. Rather, they can replace workers once their work
permits expire.
Foreign worker levy
Central Provident Fund

Initially, foreign workers in Singapore were covered by the Central Provident Fund
(CPF). Although only a small proportion of foreign workers in Singapore are on the CPF (as
discussed below), a short note on the Fund is appropriate. Both the employer and the
employee pay specified proportions of the employee’s remuneration to this Fund each month.
The accumulated amount may be withdrawn by the employee upon reaching 55 years of age,
or just before the employee leaves Singapore for good. The Ministry of Labour (1992)
observed:
29
The Central Provident Fund (CPF), to which both the employer and employee contribute, was
set up in July 1955 with the basic objective of providing financial security to every wage-
earner in his old age or when he is no longer able to work.
... the Board has over the years, introduced various schemes to provide for home-ownership
and health care for members as well (Ministry of Labour, 1992: p. 28).
The current rate is the long-term level of CPF contribution of 40 per cent of the
employee’s remuneration, with equal proportions from the employer and the employee. To
encourage employers to take on older workers, the CPF contribution rates are significantly
lower for persons above 55 years. By the end of 1994, the Fund had 2,251,750 members, with
some $57.6 billion to their credit (Ministry of Labour, 1995).
Levy
Foreign construction workers were the first in respect of whom employers had to pay
a levy. In 1980, a levy of $230 per month was payable for every non-Malaysian foreign
construction worker employed. In April 1982, the Foreign Worker Levy was introduced for
work permit holders in all sectors including construction, in place of the CPF Savings
Scheme, as the latter was deemed unsuitable for foreign workers owing to the relatively short
duration of their stay in Singapore. Employers would pay 30 per cent of the monthly wage of
each foreign worker, or a minimum of $150.
The levy would make employment of foreign workers expensive (Teo, 1990; Toh,
1993). This would reduce employers’ reliance on foreign workers which would otherwise
impede Singapore’s efforts to improve the overall productivity of the economy. As the
Ministry of Labour (1983) observed:
The Levy Scheme was introduced to discourage employers from indiscriminate recruitment of
low-skilled foreign workers instead of automating and mechanising their operations. It helped
raise the cost of employing foreign labour which would have been cheaper as a result of the
policy to phase out CPF contributions for foreign workers (p. 17).
The Levy Scheme has been fine-tuned over time. In January 1989, the scheme was
extended to cover Malaysian workers on two-year work permits as and when their permits
expired and were renewed. However, “workers with skills relevant to the economy were
granted three-year work permits with CPF benefits ... They would be absorbed into the local
workforce eventually” (Ministry of Labour, 1990: p. 12).
Different quantums of the levy may apply to various sectors of the economy. Since
1984, the levy for domestic maids has been lower than those for other foreign workers. In
1987, the levy was reduced from $200 to $140 for workers in the manufacturing sector,
whereas that for other workers remained unchanged. The levy for workers in manufacturing
was increased to $170, before being brought in line ($220) with the other sectors in January
1989.
From table 13, it is clear that the quantum of the levy was increased progressively
until 1991, when the two-tier scheme was introduced. Under this scheme, the flat $300
monthly levy for all foreign construction workers was raised to $350 per month for unskilled
workers, while that for skilled workers was reduced to $250 per month. The Employment of
Foreign Workers (Levy) Order defines a skilled construction worker as a construction worker
who holds a trade certificate issued or recognized by the CIDB. The two-tier levy scheme
30
again underlines the intention to scale down the use of low- and unskilled foreign labour in
Singapore.
Table 13. Foreign worker levy for construction, 1982-95

Commencement Quantum of levy (per worker per month)
1980 $230 for non-Malaysians
April 1982 30 per cent of wages (min. $150 per month)
October 1984 $200
1 January 1989 $220
1 July 1989 $250
1 February 1990 $280
1 August 1990 $300
1 January 1991 Two-tier system:
Skilled worker – $250 per month
Unskilled worker – $350 per month
1 July 1992 Skilled worker – $250 per month
1 April 1995 Skilled worker – $200 per month
Source: Ministry of Labour (1982, 1989, 1990, 1991, 1992, 1995).
The new levy system was introduced together with a relaxation of the dependency
level from one foreign worker to one Singaporean employed to two foreign workers to one
Singaporean employed. Introducing the two-tier levy system, the CIDB observed:
The higher levy for unskilled workers will help to reduce the industry’s dependence on foreign
labour...
[It] will help to accelerate the number of certified skilled workers who are three times more
productive than those who are unskilled.
The new levy system is also intended to encourage contractors to mechanise their operations...
(Construction Focus, 1990: p. 1).
With effect from 1 April 1995, the monthly foreign worker levies were as follows:
skilled workers – $200; and unskilled workers – $440 (table 13). Perhaps following its
success in helping to realise policy intentions in construction, the two-tier levy system was
introduced for the marine industry in July 1991, and manufacturing in 1992.
Under the Overseas Testing Scheme, introduced in 1995, foreign workers can be
tested and certified at designated centres in their home countries before they come to
Singapore (Lee, 1995: p. 3). This allows contractors to pay the lower levy for skilled,
certified workers as soon as the foreign workers start working. The workers will be tested to
the same standards as at the CITI, by CIDB officers. Among countries where centres will be
set up are Bangladesh, China, India and Myanmar.
31
Summary
Table 14 compares key aspects of Singapore’s foreign worker policy in 1984 with
those prevailing currently, and shows changes in all the major respects: classification of
sources, possibility of permanent residence for skilled personnel, dependency level and
foreign worker levy (quantum and structure).
Table 14. Singapore’s foreign construction worker policy in 1984 and 1994
1984 1994
Traditional sources:
Hong Kong, Japan, Macau, Malaysia, Republic of Malaysia considered only traditional source
Korea
Non-traditional sources:
Bangladesh, India, Indonesia, Philippines, Sri North Asia (Hong Kong, Republic of Korea,
Lanka, Thailand Macau and Taiwan, China), People’s Republic
of China, Bangladesh, India, Philippines, Sri
Lanka, Thailand
Workers from traditional sources:

For skilled workers, two-year work permits Skilled Malaysian workers – three-year work
renewable until 1991 permits with possibility of permanent residence
Non-traditional sources:
Two-year work permits renewable for further two Unskilled Malaysians and NTS workers – two-
years year work permits renewable for another two
years. For skilled workers, a further two-year
renewal possible
Workers from non-traditional sources except in Controlled revolving pool of foreign workers
construction, shipbuilding and domestic services permitted in critical sectors: manufacturing
to be phased out by end 1984, unless their work (including shipbuilding), hotels, construction
permits are renewed. These renewals not to go and domestic services. Control tools: work
beyond 1986 permit, dependency level and foreign worker
levy. Reliance on unskilled workers to be
reduced. Skilled workers may be retained
Traditional source workers:

Employer pays 20.5 per cent of workers’ wages For Malaysian workers on three-year work
into Central Provident Fund (CPF) monthly – permits, employer pays CPF of 20 per cent –
employee pays 22 per cent – paid to worker later, employee pays 20 per cent
according to CPF regulations
Non-traditional source workers:

Employers pay levy of 30 per cent of workers’ Two-tier levy:
monthly wages, minimum $150 Skilled workers – $250 per month
Unskilled workers – $400 per month
32
7. Effects of employment of foreign workers on local industry
Many writers have referred to the economic, social and political problems relating to
the employment of foreign workers in Singapore (Koh, 1990; Liew, 1994). The small
geographical size of Singapore gives the issue particular poignancy. After briefly discussing
some broader issues, this section considers the implications of the employment of foreign
workers in the construction industry of Singapore, with emphasis on the (direct) technical
effects.
General issues
Toh (1993) outlines some of the possible effects of the employment of foreign
workers in some sectors of the economy of Singapore:
(a) delays to economic restructuring and upgrading of enterprises’ operations;

(b) adverse effect on occupational safety as foreign workers are relatively inexperienced and
might lack the necessary work discipline;
(c) negative impact on productivity through lowering of average skill levels, as new,
untrained foreign workers replace those departing on expiry of their work permits;
(d) social problems relating to the need for additional infrastructure to ensure these workers’
welfare; and
(e) political implications, for example as other governments or people take exception to
alleged harsh treatment of their citizens in the country.
For construction, the free recruitment of cheap foreign workers which drives down the
wages of local workers would be serious. It would further erode the attraction of careers in
construction, and make it necessary for even more foreign workers to be recruited to meet the
industry’s labour requirements.
Another construction-related negative impact of the employment of large numbers of
foreign workers is that it tends to set in motion a vicious circle. The image of the industry is
already unattractive. As more foreign workers with low skills and poor educational
backgrounds are engaged in it, Singaporeans might feel that such work is not for them. This
would lead to locals shunning the construction industry, leading to further reliance on foreign
workers. Such a chain of events would hinder and frustrate efforts to attract Singaporeans
into the industry.
Reaction of industry to policies
It is worth outlining reactions of construction practitioners in Singapore to the

Government’s policies relating to foreign workers. This would indicate the industry’s own
views on the use of foreign construction workers, and also show certain aspects of the effect
of the recruitment of such workers on the industry. Table 15 presents a summary of the
results of a survey by Liew (1994).
33
Table 15. Summary of results of survey by Liew (1994)

Issue Affirmative
response (%)
Contractors want more foreign workers 92
Increased dependency level helped ease 76

shortage of workers
Insufficient local workers to meet 100

dependency level requirements
Structure of levy inappropriate because

Singapore requires more unskilled workers 84
than skilled workers
Levy for unskilled workers too high 100
Less turnover of foreign workers due to 100

work permit regulations
Duration of stay allowed for foreign workers 60

is insufficient
Illegal employment prevalent because it is 64

cheaper, despite the higher risk
Source: Liew (1994).
The number of contractors responding to Liew’s (1994) questionnaire was very small
(25). Thus, the data cannot be used to generalize for the entire industry. However,
construction practitioners, in general, appear to view foreign workers not as a temporary
resource for supplementing their needs, but as the only way by which the requirements of an
inherently labour-intensive industry with an unfavourable social image locally can be met.
This can be inferred from the response of contractors to: the crackdown on illegal foreign
workers in 1989 – they highlighted the resulting labour shortages (Koh, 1990); reduction of
the foreign-worker dependency level, or increases in the level considered by the industry to
be insufficient (as in February 1992) – again stress was put on lack of local workers to enable
construction enterprises to recruit enough foreign workers to meet their requirements (The
Straits Times, 1992e); and increases in the foreign worker levy – contractors highlighted
reduction in profit margins and the likelihood of cost inflation in construction (The Straits
Times, 1992e). Reactions to increases in the foreign worker levy are considered in some
detail below.
Response to foreign worker levy increases

The official response to calls for the levy to be reduced has been consistent. For
example, in response to such calls by businessmen, a senior Minister of State said:
34
Allowing foreign workers into Singapore by lowering levies will bring about a depressive effect
on local wages at the lower end. This is unacceptable as it contradicts the Government’s policy
that all Singaporeans should have a share in the country’s economic pie (Tan, 1992: p. 40).
Managerial problems
Productivity
It can be observed that the ability to recruit foreign construction workers has made
local construction enterprises unwilling to take measures to reduce their requirement for
labour, especially where these call for high amounts of investment. Many reports have
referred to the relatively low level of productivity in construction. The CIDB Task Force on
Productivity (1992) found that the local industry’s productivity compared unfavourably with
those of its counterparts in Finland and Japan. Efforts to encourage the construction industry
to adopt standardization and prefabrication have recently been intensified. The Best Buildable
Design Awards have been introduced to offer practitioners an incentive in this regard.
At the national level, construction is considered to be dampening down the overall
productivity of the economy. Increases in other sectors are often pared down by lack of
improvement or reduction in construction productivity. Thus, as shown in table 16,
productivity figures for the economy are computed as a “total”, and then “excluding
construction”. The data show that, since 1985, increases in construction productivity have
been consistently lower than the national average, except in 1992. The impressive showing in
1992 could not be maintained, as it was followed by a negative figure in 1993.
Inherent problems relating to productivity in construction caused by the uniqueness of
construction projects and lack of transferability of experience are exacerbated by the use of a
revolving pool of foreign workers. The relatively short duration of stay of foreign
construction workers in Singapore gives employers little incentive to invest in their
improvement. Contractors also spend little time and effort on the development of their
foreign workers in terms of loyalty and inter-trade cohesiveness.
Communication and attitudes

Given the multiplicity of operations involved in even the simplest construction
project, the number of different trades required and the intricate web of relationships among
the specific tasks of workers or groups of workers, it is essential that workers on a particular
project are able to communicate effectively as many groups of workers of different trades
need to cooperate closely. It is also important for the contractor to maintain discipline and
appropriate work procedures and practices. Issues of safety, efficiency and productivity make
this imperative. The correct working attitude is important. This is not easy to attain, given the
diverse background of workers on each site.
35
Table 16. Changes in productivity by sector, 1980-94 (%)

(compared with same period a year ago)
Year Total Total Manufacturing Construction Commerce
(excluding
construction)
1980 5.7 5.6 4.6 6.6 4.9

1981 5.2 5.8 9.2 0.5 1.3
1982 1.6 1.9 -0.7 4.2 1.2
1983 5.3 5.1 9.1 10.1 2.1
1984 6.9 6.7 7.2 9.0 4.5
1985 3.6 2.4 -1.5 10.3 0.4
1986 6.7 7.1 13.6 0.7 4.9
1987 4.8 4.8 3.7 0.8 5.9
1988 4.5 4.4 2.0 2.2 10.8
1989 5.0 5.2 3.8 – 4.4
1990 3.9 4.0 4.6 1.2 6.3
1991 1.5 1.6 3.5 3.9 3.3
1992 2.7 2.1 3.0 12.8 1.5
1993 6.7 8.1 12.2 -5.8 5.1
1994 5.3 5.7 11.4 4.2 5.4
Source: Ministry of Trade and Industry (1987, 1993, 1995).
The mixture of construction workers from different countries speaking different

languages and with different cultures, traditions and work ethic poses managerial problems
on-site. Communication between Singaporean supervisors and the largely semi-literate
foreign workers from many communities, most of who have little command of English or
local languages, is difficult. This leads to errors resulting from misunderstood instructions,
which, in turn, culminate in re-works, wastage, delays and increased costs.
Studies show that the main adjustment problem facing foreign workers is language
(Toh, 1993). Many employers have supervisors who have learned the main languages of the
countries of origin of the foreign workers. However, the use of sign language is not
uncommon on construction sites. The limitations of such a form of communication are clear.
There is anecdotal evidence that because of the ease of communication with them in Malay,
contractors prefer to employ the more expensive Malaysians, even as general workers, rather
than workers from non-traditional sources.
Labour subcontractors
The construction industry in Singapore operates predominantly on the basis of a
labour subcontracting system. The Kepala (or “headman”) provides services to main
contractors for the various trades such as carpentry, bricklaying, plastering. The Kepala is
usually a skilled tradesperson who takes up a subcontract on a lump sum or unit rate basis.
36
The Kepala recruits workers directly to undertake the work, while the main contractor
provides all materials, equipment and supervisory personnel.
Where the Kepala has subcontracts on a number of sites, the workers on these sites
will be under a chargehand, or representative, the Kepala transferring workers between sites
to ensure their optimum deployment.
The Kepala system enables the contractor to avoid the large overhead expenses of
permanent workers and the necessary administrative personnel. The contractor also avoids
investment in training, and necessary incentive and motivational mechanisms. The system
requires a large number of construction workers. As local workers have been at a premium,
the availability of foreign construction workers may be considered the mainstay of the
Kepala system.
The drawbacks of the Kepala system are:
(i) poor workmanship as the Kepala does not invest in training, and switches workers
from site to site to achieve the best return from the expenditure on them;
(ii) wastage of materials as the Kepala’s workers are most concerned with the quickest,
not necessarily the most efficient, methods;
(iii) improper usage of the main contractor’s equipment by the Kepala’s workers;
(iv) the Kepala’s inability to retain workers, or seek their improvement and welfare,
leading to the failure to develop a core pool of construction workers; and
(v) workers do not enjoy permanent employment; they also do not receive any perks and
welfare benefits normally relating to such employment.
Over the years, several studies have been undertaken on the Kepala system with the
view to improving upon it. The latest, and perhaps the most promising, is the Singapore List
of Trade Subcontractors (SLOTS) of the Singapore Contractors’ Association Ltd. which
registers subcontractors, making them visible and possible to reach with assistance and
support, such as training.
Summary
The effect of the recruitment of foreign workers on sectors of the Singapore economy
in which they are employed has been studied by many writers. In construction, practitioners
have become used to foreign workers, and consider them vital: they see no alternative. This
contrasts with the nation’s long-term aim to reduce reliance on such workers. The most
important effect of the utilization of foreign construction workers is its possible dampening of
construction productivity owing to the low skill base of the workers, and communication
difficulties.
37
8. Reducing reliance on foreign construction workers
To reduce reliance on foreign construction workers the Government of Singapore has

been encouraging and assisting the industry to mechanize its operations, and adopt
appropriate corporate policies and practices. Some of the measures taken in this direction are
discussed in this section.
Training
Efforts are being made to develop a core of skilled local construction workers.
Foreign workers are also given the opportunity to acquire construction skills during their
period of employment in Singapore.
Training in construction, as in other technical skills, has been given increased
attention since the 1960s. The establishment of the Construction Industry Training Centre
(CITC) in 1983 – whereas all other training was centrally controlled by the then Vocational
and Industrial Training Board (now the Institute for Technical Education) – shows the
priority given to development of construction skills in Singapore. The CITC was renamed the
Construction Industry Training Institute (CITI) in 1994.
The CITI trains construction workers in Singapore at both the basic level (leading to
the Builder’s Certificate) and advanced level (leading to the Advanced Builder’s Certificate).
The courses are offered in both full- and part-time mode, and are open to Singaporeans,
permanent residents and holders of valid work permits.
Table 17 provides data on the enrolment of trainees for courses at the CITI. Part-time
trainees predominate. The full-time trainees are mostly members of the Construction Brigade,
which young Singaporean males may join during their national service. Brigade enlistees are
given training and on-the-job experience in construction. Some of them take up careers in the
industry after their national service. The major decline in full-time CITI entrants in 1991-92
resulted from changes to the regulations of the Construction Brigade. However, the decline in
that year was more than offset by a substantial increase in part-time entrants.
Table 17. Enrolment of trainees at CITI, 1987-93

Fiscal year Full time Part time
1987-88 902 1 298

1988-89 858 2 027
1989-90 981 3 087
1990-91 971 3 326
1991-92 577 5 489
1992-93 773 4 131
Source: CIDB (1992, 1993).
The CITI aims to train new entrants as well as provide opportunities to existing
workers to acquire structured training leading to certification. It offers multi-skills training to
38
make workers versatile, reducing the number a company will need to employ, and increasing
their utility. Apart from imparting necessary skills in construction operations, emphasis is
also put on developing appropriate worker attitudes: discipline, teamwork and good
housekeeping, and so on.
The CIDB has a three-pronged strategy to raise the skills of workers (CIDB, 1993).
First, it would coach those who already have skills to achieve consistent quality
workmanship. Second, it would train new entrants and experienced workers within a short
period of time (a five-month programme for new entrants to be semi-skilled; and a three-
month programme for the latter to become certified as skilled). Finally, it would equip
contractors, site supervisors, engineers and site foremen to be able to train their workers.
Certification
The testing and certification of construction trades has been undertaken by the CIDB
since 1984. It seeks to formally test and recognize the competence of trainees and existing
“skilled” personnel working in the construction industry, both Singaporean and foreign. The
Board aimed to increase the number of certified skilled workers in the industry from 12,200
in fiscal 1991 to 24,000 by fiscal 1995.
Over time, effort has been made to increase the convenience of certification to
potential trainees and their employers. Mobile certification has been introduced. The number
of skilled workers tested each year has progressively increased. Compared with the eight
trades which were tested in 1984, 21 are now tested. In fiscal 1991 alone, five new trades
tests were introduced: concreting, drain laying, marble laying, roofing, and pavement and
kerb construction.
Table 18 presents data on the number of construction workers tested and the number
certified. The average pass rate of about 35 per cent for the three-year period is rather low.
Preparatory courses are now held for prospective candidates for trade tests which familiarize
them with the structure and contents of the tests.
Table 18. Number of construction workers tested and number certified, 1990-93
Number Number Cumulative total
Year
tested certified certified
1990-91 4 591 1 630 9 592

1991-92 6 899 2 727 12 318
1992-93 5 571 1 603 13 291
Source: CIDB (1993).
Table 19 shows data on workers certified by the CIDB as at March 1993, classified by
trade and origin. The data also well reflect the proportion, by nationality, of workers in the
industry. Foreign workers certified in the structural and finishing trades outnumber their
Singaporean counterparts by more than 2:1, whereas there have been far more locals than
foreigners certified in the building services and plant operation trades, in the former by a ratio
of 3:1, and in the latter, 2:1.
39
Table 19. Number of workers certified by CIDB by trade (as at 31 March 1993)
Trade Local Foreign Total
Structural 1 388 2 873 4 261

Finishing 1 367 3 854 5 221
Building services 2 527 679 3 206
Plant operation 816 383 1 199
Civil engineering 18 16 34
Source: CIDB (1994c)
Improving working environment
The dangers posed to personal safety by construction work is one of the reasons why
Singaporeans are unwilling to take up careers in it. Table 20 compares relative levels of safety in
the construction, manufacturing and commerce sectors in Singapore, by considering the
frequency rates of accidents. Accidents on construction sites in Singapore, where high-rise
building is common, are mainly caused by falling objects or by workers falling from heights.
Table 20. Industrial accidents by frequency rate* and industry, 1982-94

Total Manufacturing Construction Commerce
1982 6.1 6.2 4.9 0.7

1983 5.5 5.4 6.3 -
1984 4.6 4.5 5.1 0.4
1985 4.5 4.2 5.5 -
1986 4.0 3.7 5.0 0.8
1987 4.0 4.0 4.8 0.9
1988 4.0 4.2 3.6 -
1989 4.2 4.1 3.9 3.3
1990 4.0 4.0 3.7 4.3
1991 4.0 3.9 3.9 3.4
1992 3.6 3.5 3.0 0.9
1993 3.2 3.2 2.6 1.3
1994 2.8 2.8 2.5 0.7
* Frequency rate: Number of industrial accidents per million work-hours worked.
Since the mid-1980s, considerable effort has been made by the Singapore
Contractors’ Association, the Ministry of Labour and the CIDB to improve levels of safety in
the industry, mainly through education of workers, and more effective supervision on
worksites. The latest initiative is the formation of a subsidiary company by the Contractors’
Association to undertake safety audits on construction projects.
40
The success of the efforts being made to improve site safety is indicated by the fact
that since 1988, the frequency rate of accidents in construction has consistently been lower
than the national average and the level in manufacturing (table 20). The HDB has realized
remarkable achievements with respect to safety. It managed to reduce the accident frequency
rate on its sites from 7.18 accidents per million hours worked in 1982 to 0.66 in 1992.
With effect from April 1993, foreign construction workers are required to attend a
half-day course on safety before receiving their work permits. The Construction Safety
Orientation Course is conducted in the main languages of Singapore’s key sources of foreign
workers (The Straits Times, 1993).
Under the Factories (Building Operations and Works of Engineering Construction)
Regulations, 1994 (Department of Industrial Safety, 1995):
(i) for projects with a contract sum of $5 million or more, the contractor is required to
appoint a full-time supervisor “to spend at least 40 hours a week exclusively on safety
supervision and promoting the safe conduct of work” (p. 12);
(ii) for projects with a contract sum of $10 million or more, the contractor must implement
a safety management system covering “areas such as safety policy, safe working
practices, hazard analysis, safety inspections, in-house safety rules, and maintenance of
machinery and equipment” (p. 12); and
(iii) in addition to (i) and (ii) above, for projects with a contract sum of $30 million or more,
the contractor must appoint an independent external auditor to audit the safety
management system at least every six months.
Attracting construction workers: CIDB initiatives
The construction industry in Singapore has been burdened by an unfavourable image

which has worsened as the country has made greater economic progress over time, and more
glamorous and obviously more challenging work opportunities have emerged. Construction
work is largely viewed as: “dirty, dangerous and demanding” (The Contractor, 1992).
After a comprehensive study of perceptions of careers in construction among
Singaporeans from various walks of life, the CIDB launched the “Construction and You”
programme in 1992, with an intensive media campaign. The campaign promotes construction
as a field in which Singaporeans can find rewarding and challenging work at all levels
(professional, technician, trades and unskilled). It takes the form of coverage in the press and
television, as well as posters, booklets, brochures, exhibitions and talks. The campaign
highlights the contribution made by construction to the development of the nation; the
multiplicity of job opportunities available; the more challenging nature of construction work;
the improved working conditions; and increased wages.
As a result of the effort made to improve the industry’s image by the CIDB, the
Singapore Contractors’ Association Ltd., the Housing Development Board and other
organizations, the Minister of State for National Development urged Singaporeans to take up
careers in construction. The industry was not as “difficult, risky or low-paying as commonly
perceived” (The Straits Times, 1992d: p. 44). “Singaporeans must have a share in building
our homes, schools, roads, offices and shopping centres” (The Straits Times, 1992d: p. 44).
41
Upgrading of construction operations
As discussed above, the CIDB has made continuous efforts to reduce the number of
workers engaged in the construction industry in Singapore. It offers firms advice, guidance
and incentives. Standardization and prefabrication of components have been promoted as the
main components of the drive in this regard. The Board introduced the Buildable Design
Appraisal System and the Buildable Design Awards in 1991 to recognize and acclaim
enterprises adopting labour-saving construction methods.
Even before the CIDB was formed, efforts had been made to upgrade the construction
industry in Singapore. A number of incentive schemes were in place to encourage contractors
to mechanize their operations, hence reducing their requirement for labour. These schemes
have been administered by the CIDB since its formation, and new ones have been introduced
over time. The incentive schemes include: the Investment Allowance Scheme (which offers
tax write-offs, of up to 50 per cent of the value of investment, to firms purchasing approved
equipment); the Accelerated Depreciation Scheme (which enables companies to depreciate
their equipment, for tax purposes, over a shorter period); and the Research Development
Assistance Scheme and the Product Development Assistance Scheme under which grants are
given in support of R & D.
Among initiatives which will help construction enterprises improve their human
resources is the emphasis on quality. Awards for construction excellence were introduced in
1986. The annual Zero Defects Construction campaign launched in 1989 emphasizes the
importance of completing tasks right the first time every time. The Construction Quality
Assessment System (CONQUAS) was instituted in 1989. CONQUAS is an objective system
for assessing quality of work produced by contractors. The CONQUAS Premium Scheme,
which offers up to 5 per cent tendering preference, soon followed. Jointly with the Singapore
Institute of Standards and Industrial Research (SISIR), the CIDB awards the CIDB-SISIR
ISO 9000 certification. The Board provides training to prepare organizations for certification.
Procurement and other policies of major public-sector client agencies such as the
Housing and Development Board and the Public Works Department are tailored towards
assisting contractors to upgrade their operations. They generally aim to improve the operating
environment of construction enterprises engaged on their projects. For example, the HDB’s
Interest-Free Financing Scheme helped its contractors acquire necessary equipment, and its
Core Contractor Scheme assured selected firms a minimum workload and offered them better
contractual terms to enable them to plan their capital investments.
Summary
Singapore wishes to reduce its reliance on foreign construction workers. Measures it

is taking include further training and certification, improvement of the image of the industry
in order to attract more Singaporeans, and upgrading construction operations to reduce the
requirement for labour as well as improve the environment on construction sites.
42
9. The future
In this section, an attempt is made to consider likely future trends in Singapore’s
requirements for construction workers, and the factors which might influence the availability
of such workers, both locally and in the countries in the region. The role of the construction
industry in meeting long-term national human-resource aims is also discussed.
Level of requirements
In section 3, it was mentioned that the repair, maintenance and refurbishment sector
of the construction industry will become even more important in future, as the economy
progresses towards maturity and the volume of buildings increases and ages. As such work is
relatively more labour-intensive, the industry’s requirements for labour are likely to increase
even if overall demand for construction declines.
As the pool of Singaporeans wishing to work in construction shrinks with other
sectors of the economy faring better in the competition for workers, even more foreign
workers may be required. Again, this may be the case, even if the volume of construction
activity declines. It has been observed that the construction industry can reduce the number of
foreign workers it uses only if its image is further enhanced to attract local people (Goh,
1991). Whereas safety had improved, management, workers and their union needed to work
hard to make the working environment more conducive. So far, the Government has played a
disproportionally large role in these efforts. More multipartite concerted action will be
required in future.
Proposals
Various proposals have been made for liberalizing the regulations relating to the
employment of foreign workers in Singapore. Most have suggested that the controls on an
absolute number be relaxed. Imaginative recommendations include the introduction of a two-
tier levy system under which employers can recruit more foreign workers by paying a higher
levy. Another suggestion is the institution of a tender system, under which companies could
hire additional foreign workers above the permitted ceiling. Sng (1992) considered the
feasibility of a tender system for foreign workers, similar to the Vehicle Quota System.
If the national objective of progressively upgrading the level of technology and
improving the level of productivity in the economy is not to be undermined, effort should be
made to raise the quality of the contribution foreign workers make to output. Intensive
training before these workers are engaged is essential. In construction, the foreign workers
need not only trades training, but also orientation courses on the nature of work on a
construction site in Singapore, and basic language courses.
Regional developments
Some relevant major developments are taking place, are planned or are anticipated in
the countries in the region, which will have an impact on the availability of foreign workers
for employment in Singapore. In general, most of the countries are making considerable
progress on the economic front. The cases of two countries are now outlined.
43
Indonesia earned some US$1.2 billion from the export of 631,000 workers in its last
five-year plan, and hopes to earn US$3 billion from 1.5 million of its citizens working abroad
under its current five-year plan (The Straits Times, 1994b). But Indonesia has decided that it
will send only skilled workers abroad. Over the next five years, it hopes to change the present
proportion of 80:20 per cent unskilled to skilled which it currently exports, to the export of
professionals only. It will do this through the control of permits and monitoring of labour
agencies.
The case of Malaysia offers another example. It is estimated that foreign workers in
Malaysia send home some US$1 billion each year (The Straits Times, 1995c: p. 15). The
country has an estimated (legal) foreign workforce of some 1.5 million. There are also
“hundreds of thousands ... working in the country illegally” (The Straits Times, 1994a: p. 24),
despite numerous raids in which several people have been rounded up by the enforcement
agencies. Apart from the economic cost and the well-recognized impact of reliance on foreign
workers on productivity and effective utilization of the nation’s human resource, the
Government considered foreign workers as causing social problems which could harm
national harmony and security. Some of these problems are: “housebreaking, smuggling,
robbery, rape and murders as well as forging identification documents, spreading
communicable diseases such as tuberculosis and sexually transmitted diseases” (The Straits
Times, 1995d: p. 3). In early 1995, Malaysia imposed a freeze on the recruitment of unskilled
foreign workers. This freeze led to severe labour shortages, with some enterprises reporting
that they were operating well under their installed capacity, and that their market share might
be irretrievably eroded.
Developments such as these should be constantly monitored in Singapore. Their
probable wider implications and possible measures to address them should also be
considered.
Future human-resource challenges: Concluding remarks
Foreign construction workers will have to be considered in the attempt to seek

solutions to Singapore’s projected future challenges relating to its labour force: the impact of
new technologies, and qualitative changes in the labour market including the ageing of the
workforce, growing academic standards of the population, and increases in female
participation and part-time workers (Steering Committee on Labour-Management Co-
operation, 1985).
For construction, the above trends will have very serious implications as they are
likely to lead to a contraction of the pool of the local workforce. It will be necessary to make
imaginative use of foreign workers to supplement the country’s requirements of construction
labour.
44
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SECTORAL ACTIVITIES PROGRAMME

Foreign construction workers in Singapore

International Labour Office

3. Overview of the construction industry in Singapore .................................................3

4. Structure of the construction workforce.....................................................................7

5. Terms of employment .........................................................................................................13

6. Foreign worker policies ......................................................................................................19

7. Effects of employment of foreign workers on local industry ..................................32

8. Reducing reliance on foreign construction workers ................................................37

9. The future ....................................................................................................................42

The terms of reference for the preparation of this report were:

− trends of annual inflow of migrant workers (by sector, by country of origin);

3. Overview of the construction industry in Singapore

Table 1. Performance of the Singapore construction industry, fiscal year 1990-92

Total progress payment ($ billion) 4.9 6.8 8.9 8.9 11.2

Value of contracts awarded ($ billion) 8.0 7.9 12.8 10.6 11.7

Construction workforce ('000s) 104 117 138 166 n.a.

Source: CIDB (1994a); Ministry of Trade and Industry (1995a).

Singapore’s construction industry uses some of the most advanced construction

The mission of the CIDB is:

Issues and challenges

Construction is an important sector of the Singapore economy which has an agency

4. Structure of the construction workforce

Attempts to analyse data on the construction workforce in Singapore face several

National labour data

Female 606 521 189 366 8 626 1 901

Total 1 576 151 434 121 103 222 13 792

Male 944 336 243 595 92 256 12 030

Female 631 815 190 526 10 966 1 761

Total 1 592 039 429 479 102 097 12 538

Male 952 314 247 799 91 102 10 500

Female 639 725 181 680 10 994 2 039

Total 1 649 296 422 539 108 824 14 118

Male 987 137 247 766 96 490 11 684

Female 662 159 174 773 12 333 2 434

Source: Research and Statistics Department (1993).

Total Manufacturing % Construction %

Construction workforce composition

Table 4 compares the breakdown of the construction workforce by residential status

Table 4. Construction workforce by nationality, and volume of work

1981 81 700 47 300 129 000 63 2 164

Table 5 presents data on the structure of the construction workforce in Singapore by

Table 5. Nationality of construction workers (%), 1990, 1992, 1993

Local 32.4 19.4 24.7

Malaysian 36.7 40.2 32.1

Thai 24.4 29.6 32.2

Bangladeshi 2.8 6.6 5.2

Other NTS* 3.7 4.2 5.8

* NTS: Non-traditional sources.

Table 6. Construction workers by trade and nationality (August 1993)

Concretor 1.1 1.2 2.1 0.2 0.3 4.9

Subtotal 8.3 14.6 12.7 1.9 1.7 39.2

Bricklayer 1.5 3.0 0.7 0.1 0.2 5.3

Subtotal 7.3 11.0 1.8 0.1 0.5 20.7

Electrician 2.6 1.6 0.3 0.2 0.2 4.9

Subtotal 6.1 4.1 1.2 0.8 0.7 12.9

Plant and equipment

Plant operator 1.2 0.6 0.3 0.1 0.0 2.0

Subtotal 2.2 1.5 0.3 0.1 0.0 4.0

General worker 0.8 1.0 16.3 2.3 2.9 23.2

Total 24.7 32.1 32.2 5.2 5.8 100.0