Contract for service, short term contract and employee

There are still many discussions with regards to the SMRT drivers and whether the pay for a job should be the same or different. Let me just share a little on the HR practices with regard to this.

In the case of a contract for service, the workers are employed simply to do a specific job with a specific pay. Period. There is no employer employee relationship, no benefits or difference in pay between one worker and another.

In the case of a short term contract, there is an employer employee relationship, but the pay can be different and the terms and conditions of employment can be different. The main argument in this SMRT driver issue is whether the pay should be the same or different.

Allow me to clarify this. Thereotically, the basic pay for jobs of the same specification is the same. So there should be no quarrel over the job worth. Two persons doing the same job would be paid the same basic pay for that job. In practice this is hardly the case.

The computation of an employee’s pay, assuming new sign ons, will still have to take into consideration many other factors. Qualifications and experience would affect the pay offered if they are relevant. New sign ons could be offered different starting pay because of these factors.

The other factor that is in play in this case is the nationality. Workers come from different countries with different cost of living and could be comfortable with different pay offered. $100 can be a lot in some countries and not enough in others. A simple example is the pay of a similar worker producing Apple Iphones in Indonesia, China or Thailand. Their pay will be different for the same job because of the country they are in. If they are to be paid the same as those in the USA, then there is no advantage to farm out such jobs to lower cost countries. Same job different pay because of different cost of living of a country is only practical.

An added factor to this is that the foreign workers are not working in their own countries and bearing the respective cost of living. They are now in Sin City and have to bear the higher cost of living here. Thus, this point must also be input into the pay to ensure that they are adequately compensated or else it will be meaningless for them to be here. This amount could be the same to all foreign workers here as it is related to the cost of living here.

Employers also have to account for the cost involved in hiring them. And the workers must also take into consideration the amount they have paid to the recruiting agents to be here.

In summary, employers recruit foreign workers for competitive cost advantage. But there are occasions when there is a shortfall of skilled local workers and employers would be willing to pay more to bring in foreign contract workers even at higher pay then locals to complete a job. The final computation of pay for a worker is thus not a simple factor of same job same pay irrespective of nationalities and other factors. The critical issue is that the pay must be fair to the workers and to the employer after taking into consideration all factors, and both parties perceived that it is fair. This is the tricky part of salary administration. It is not QED.

The deadly derivative game

Justice Pillay had made a major ruling against Deutsche Bank of the lost of $59m for recommending derivative trading to a client few days back. In 3 months, the client, Dr Chang Tse Wen, lost $59m! This must be a kind of a record for the speed and the sum to be lost by an individual client.

The client was recommended to put money in discounted share purchase programme commonly known as accumulator. Whatever names they called it, derivatives, in whatever combinations or clever arrangements, are nothing more than betting slips. They are not investments but high risk betting or gambling.

How could such gambling slips be approved and be sold so widely across the world is troubling. The amount of derivatives bought and sold is mind blogging and could be the very instrument that could collapse the world financial system. But many high net worth clients would have to go first, losing their millions and their pants.

Investors who do not know how the derivative games are played are best to stay clear from such instruments.

Criminals in high places and high finance

HSBC was slammed with more than a billion in fines for money laundering. UBS too was fined as much for rigging Libor. And several other big banks too were caught for equally serious criminal acts. The American and European authorities are currently investigating several banks for similar financial crimes.

What is nauseating is that no individual was found guilty of any crimes. The criminals were the inanimate banks and institutions. And the fines paid were from the shareholders. The shareholders are paying the fines of these criminals in high places. Where is justice? People in high places can commit crimes and be freed from punishment? How then would they stop doing what they were doing when they know that they are untouchables?

The US is now looking into bringing a few of these criminals to court and make them pay for the crimes personally. Until this is done, until these criminals in high places are put behind bars, the banking and finance industry will be dominated and in the control of such criminals and getting paid obscenely, unchecked by anyone.

The banking and finance industry has been in the hands of rogues and robbers for too long. When would the long arms of the law reach them and put an end to their crimes?

What do fake degrees mean?

Many stories have come out from Australia where unqualified doctors were practicing and some even operated on their patients. Imagine taking drugs prescribed by quacks or operated by quacks! Could it happen here, in our renowned world class hospitals? Are there any quacks treating our sick and prescribing medicines which they know nothing about?

Then in the field of engineering, we are building many high rise flats. Any faked engineers or architects employed to build them? What can be the consequences should a high rise building collapse? Or our highways, bridges etc. Could they go down with the people and vehicles on them, onto people and properties below?

Fake degrees are not just about money, about deceit, cheating. It is about lives at stake. A fake professor lecturing in a university may not cause much harm except twisting the minds of the students. But fake professionals in many fields can be very deadly. No pray pray.

Low Thia Khiang the new Zhuge Liang 诸葛亮

The Palmer Affair has slowly subsided with no politicians being ended up on the wrong side of the stick. Nobody got sued. When it blew up, there was a lot of temptation for the opposition parties to strike while the iron is hot and went on a lashing exercise to extract the same damage from the PAP as it demanded of WP during the Yaw Shin Leong Affair. The temptation was great and it took great of restraint for any opposition politician not to push the dagger a bit deeper and give it a little twist.

What happened was like a non event. The party that was expected to be up in arms, the WP, took a very low profile. There was a kind of discipline imposed. Other Low Thia Khiang, the rest was as mum as the PAP side. And Low’s comment, which could be eagerly awaited and could drag him into a heated tit for tat open war on who was dirtier, was greeted with great relief, perhaps a little disappointment for those who have sharpened their knives for full combat.

Instead of more dirt being dug out for display, instead of more heated accusations and defending, nothing of that sort happened. There was a little praise coming from Low which gave no one any chance to rebut or to tear him and his party down. The WP did not go down as another unforgiving and vicious party. It was like a gentleman party, like Low Thia Khiang. Hey, everyone is nodding that that was a coup de grace, putting himself and his party above the mud. Great strategic thinking at work.

And the rest of the opposition parties took the cue and all refrained from stirring up more shit to embarrass and to draw flakes to themselves. Our political temperature and climate seem to have improved, with great humility, graciousness and generosity. Hope this will be reciprocated in the by election and the next GE, as the new norm of decency. It bodes well for all. Low Thia Khiang and his party deserve a praise. I think it must be hard on him for now bowing to pressure from his members to do the fifteen when others did the first. 人作初一我作十五。