Labour Laws in Singapore - Time to Review?

I spoke during the recent Ministry of Manpower (MOM) Committee of Supply Debate in Parliament on 6 March 2017. During my opening speech as Chairman of the Manpower Government Parliamentary Committee, I urged the MOM to review the Labour Laws of Singapore. There is a buffet list of items that can be addressed but in the interest of time, I covered several key areas and will be using other platforms to share the detailed list of items for review. Many of the areas are technical in nature and my speech covers the more 'painful' ones. Here's the extract of my speech :

Introduction

Together with our tripartite partners, Ministry of Manpower has made major headways inthe past five years, from amending the Employment Act and Industrial Relations Act to cater to the growing PME workforce, to introducing the Employment Claims Tribunal next month to provide adjudication for all workers for their salary related employment claims. At the policy front, the Fair Consideration Framework and raising of Employment Pass salary criteria and other foreign manpower tightening measures have helped level the playing field for the local workforce. Enhancements to the Work Injury Compensation Act and Workplace Safety and Health Act have also been instituted to keep pace with wage changes and workplace accidents.

From a manpower perspective, there are several challenges for us with the first being rising structural forces/unemployment. What has been a worrying trend is that the layoffs especially affect Professionals, Managers and Executives (PMEs) and the slower rate of re-entry into workforce for this category of workers, especially those who are older in age. This is largely due to what I have previously mooted/identified as the ‘three mis-matches of Skills, Expectations and Jobs’. 

By the same token, we face the longer term challenge to sustain inclusive quality growth bearing in mind we have an ageing workforce, relatively flat productivity the past five years and a much slower employment growth. With Globalisation, Uberisation, Digitisation, Robotisation and the 4th Industrial Revolution, the Future Jobs; Future Workforce; Future Skills; Future Training; Future Labour Market; and the Future of Work is rapidly evolving and transforming. The new nature of the employment relationship; rising median wages; workforce profile change and diversity of work will require us to review our labour legislation to keep pace with the changes and the uncertain global outlook. I am therefore suggesting for the Ministry of Manpower and our tripartite partners to continue its good work to carry out a review of the labour laws of Singapore -the Employment Act, Industrial Relations Act, Employment Claims Act and Trade Unions Act to keep pace with the changes.

Employment Act

There are several provisions which I believe can be further enhanced and improved in the Employment Act and which the tripartite partners should examine to be relevant and inclusive.

(i) Whether there is a need to restrict the scope of the Employment Act to those earning less than $4500 as well as exclude civil servants from the ambit of the Act;

(ii) An oddly drafted Section 45 of the Employment Act which sets out the criteria of eligibility of retrenchment benefits, but is phrased as a negative eligibility clause. The section can be appropriately worded to give a more certainty to the payment of retrenchment benefits and leaving the quantum to be negotiated just as it’s being done with collective bargaining. Tripartite partners can also explore removing the two-year time bar, as shorter employment terms are more common now. If removal is not possible, another possibility is to move this provision out of Part IV to the main body of the Act to be more inclusive since Part IV’s application is limited.

(iii) With an increasing number of mergers and acquisitions and organisational restructuring and reorganisation these days, we often face the challenge of whether a transfer falls squarely within the provisions of Section 18A of the Employment Act which allows for transfer of employees to a new entity without the need to pay retrenchment benefits. I suggest we further improve Section 18A to provide more clarity. In particular, an inclusionary approach such as a clearer and narrower definition of what situations are covered under Section 18A would be a boon as the current provision is too broad and ambiguous. The scope should be limited to a sale of business. We should clarify that outsourcing is not covered. By the same token, transfers involving companies under receivership or judicial management should also be covered. Furthermore, a minimum notice period (of at least one month) should be stipulated and that the notice should be in writing. To prevent multiple transfers, we should prohibit the transfer of the same group of employees for a period of one year after the first or subsequent transfers. Higher penalties specific to Section 18A should be introduced and the union should be entitled to continue providing limited representation for up to two years so that PMEs don’t lose protection.

Industrial Relations Act

In the course of representing unions and union members in the Industrial Arbitration Court and advising unions on industrial relations issues, I have come across a number of situations in which the Industrial Relations Act does not envisage nor clearly addressed. I will just confine them to two areas for now.

(i) Status of Collective Agreement (CA) during a Judicial Management/Receivership leave of Court

Other than having to formally apply for a leave of Court, there is limited scope for us to enforce a collective agreement or have recourse in the event of any non-compliance of the CA. I opine that the CA should continue to apply so as to protect the workers and there must also be an avenue for the union to enforce the CA during this moratorium.

(ii) Expanding Tripartite Mediation Framework

Tripartite Mediation is a very useful tripartite mechanism for alternative dispute resolution. It is also tightly linked to the Employment Claims Tribunal as claims limits are raised if one goes via the tripartite mediation route. Although there is no salary cap, PMEs in certain categories where they are in management roles or where there may be conflict of interests as provided in the Act are excluded from utilising tripartite mediation. I submit we should review this prohibition. We should also explore extending tripartite mediation to cover unfair dismissals of those outside the scope of the Employment Act.

Employment Claims Act

I am delighted that the Employment Claims Tribunal will come into operation next month. The Employment Claims Act currently covers all workers in an employment relationship but limited to 18 contractual and 43 statutory type of salary-related claims. With greater complexity in the terms and conditions of work as well as cases of unfair termination of contract where workers especially PMEs are just given notice pay and told to leave the company, I hope the Act can keep pace with the developments and address some of these issues which may not be salary related. 

Trade Unions Act

In light of an expected growth of freelance workers or what many call the ‘gig economy’ in the next 5-10 years, the Labour Movement hopes more can become union members and enjoy the plethora of membership privileges NTUC and our unions offer. At present, the Trade Unions Act requires a person to be in a ‘contract of service’ to join a trade union. Freelancers who are in a ‘contract for service’ may not be full fledged union members per se. As such, I suggest MOM to form a workgroup to study this carefully and remove or relax the prohibition and explore ways to allow freelancers to be union members without compromising or contravening traditional collective bargaining and representation. 

Conclusion

The above are my thoughts and suggestions based on the issues that confront us currently and which we need to address to ensure our labour laws are not just relevant but future-ready. The review cannot be done in silos, and in the spirit of tripartism, I ask for our tripartite partners to review and examine carefully and further strengthen our tripartite relationship in the course of doing so by bringing even more workers and companies within our fold.