Higher costs to protect platform workers ‘part and parcel’ of doing business, says Koh Poh Koon as law passes

SINGAPORE: Costs arising from providing platform workers with basic protections are “part and parcel” of doing business and are “no different in nature” from what other employers are already incurring, said Senior Minister of State for Manpower Koh Poh Koon. 
He was addressing concerns raised by lawmakers during the second day of a debate on the Platform Workers Bill, which passed into law on Tuesday (Sep 10). 
Under the new law, platform workers such as delivery riders and private-hire and taxi drivers will be better protected from 2025. 
They will see higher Central Provident Fund (CPF) contributions to support their housing and retirement adequacy, work injury compensation and representation in union-like associations. 
The increased CPF contributions will gradually match those of salaried employees. This will be mandatory for platform workers aged 30 or younger in 2025, and optional for those who are older.
The law was passed in parliament after about eight hours of debate spread over two days, with more than 25 Members of Parliament (MPs) speaking.
The Workers’ Party and Progress Singapore Party both expressed support for the Bill, although the debate saw heated discussion on the relationship between the National Trades Union Congress (NTUC) and the ruling People’s Action Party. 
On the Bill, top of MPs’ minds was who would actually end up bearing the costs of stronger protections for platform workers – the workers, the platform companies or consumers.
Several lawmakers also raised concerns that workers who are mandated or opt in to the higher contributions may be discriminated against by other workers. 
During the debate on Tuesday, MPs also pointed to other areas of concern:
During his round-up speech, Dr Koh reiterated that the Bill would account for the vast majority of platform workers doing work that is precarious.
That being said, he assured Members that the government will “certainly” review the scope of the Platform Workers Act in the future. 
On concerns about the costs that come with platform worker protections, Dr Koh said these are “no different in nature” from what other employers are already incurring, and are “part and parcel” of running a business. 
“It is a levelling up of what platform operators ought to have been paying, if they are to ensure basic protections for platform workers like what other employers have been doing for their employees all along,” said the Senior Minister of State. 
Introducing CPF and work injury compensation for platform workers ensures that platform operators who derive their sources of revenue from the “hard work and risks” taken by the platform workers provide them with basic rights and protections, he added.
It will also ensure a level playing field for companies operating in Singapore to compete fairly in terms of business costs, Dr Koh said. 
Employers in non-platform sectors build the added costs into their overall operations and decide how to price their services based on a range of factors such as costs, profitability and market competition. 
“This is what keeps prices manageable. It would be disingenuous to reflect and charge these costs through a separate fee component,” Dr Koh said. 
Hence, platform operators should “think carefully” before doing so as the market is a competitive one, he said. “Such a move would be tantamount to passing the costs directly to customers.”
Consumers have a choice to switch to other platforms where costs are shared more equitably, or even stop using such platform services altogether and seek out alternatives.
Platform workers too can choose to switch platforms if they feel that costs are unfairly passed on to them, Dr Koh said. 
Additionally, the costs incurred by platform operators as a result of the protections can be audited. 
Platform work associations can work with platform operators to regularly publish such data so workers and consumers can clearly see how the costs are shared across stakeholders to counter any claims of profiteering or loading of costs onto workers, said Dr Koh. 
Several lawmakers highlighted platform workers’ fears that they could face discrimination in job-matching on platforms if they opt in for the higher CPF contributions.
They asked whether platforms’ algorithms could be audited to make sure this does not happen.
Dr Koh said this was challenging because algorithms are dynamic, whereas an audit would be reactive and of limited use, and because algorithms are platform operators’ proprietary knowledge.
“If we force platform operators to reveal such knowledge, this may drive them away and bring about a loss of platform worker jobs, which is not our desired outcome,” he said.
He said that possible discrimination will be addressed by platform work associations with the legal mandate to represent the interests of platform workers.
These associations can take up any discriminatory practices with platform operators and inform the Manpower Ministry where necessary.
“Similar to the trade union space, this can be done in a way that seeks to achieve win-win outcomes and preserves the harmonious relationship between the platform workers and platform operators in this fast-evolving industry.”
He also noted that an increasing proportion of platform workers will be covered by the higher CPF contributions, as these are mandatory for younger workers turning 30 and below in 2025.
It was therefore “in the interest” of platform operators to treat all platform workers fairly regardless of whether they opted in or were under mandatory coverage.
Dr Koh also pointed to market competition again and said that consumers and platform workers can easily switch platforms depending on what they feel works best for them.
To retain workers, it was therefore in platform operators’ interest to treat all platform workers fairly, he said.
In a statement after the Bill passed into law, the Singapore National Employers Federation (SNEF) said platform operators and workers have a “symbiotic relationship” and must “work hand in hand to balance business flexibility with the enhanced protections”.
SNEF, which has engaged 12 platform operators on the changes since August 2021, said it would continue to advocate for the operators’ interests while fostering a harmonious relationship with workers and the government.
NTUC also released a statement describing the Bill as “a win” for platform workers, and reiterating that it will form new platform work associations with legal backing to represent them.
It said the law paves the way for more grievance resolution mechanisms for members of these associations, including conciliation with the Manpower Ministry and escalation to the Industrial Arbitration Court where necessary.
Registered platform work associations can engage in direct dialogue with platform operators and can represent members on work matters like fair treatment and sustainable earnings, added NTUC.
The associations will also work with platform operators on health and safety. This could include reviewing the impact of platform policies on workers’ health and safety, and improving safety protocols for drivers and riders who are constantly on the go, said NTUC.