SPEECH AT 2ND READING OF EMPLOYMENT (AMENDMENT) BILL ON 20 NOV 2018

Mr Deputy Speaker Sir, I rise in support of this Amendment Bill. I declare my interest as a member of the tripartite workgroup which was involved in working out the areas of enhancement to this Bill.

 Introduction 

The Employment Act was first enacted in 1968 to address theurgent need to accelerate economic growth and ensure a steady flow of foreign investment into Singapore in anticipation of labour market disruptions. The Act created more systematic and stable employment conditions to increase labour productivity and business efficiency to achieve these aims. Indeed, the Act is instrumental in ensuring a stable labour market – a major contributing factor of Singapore’s economic growth. 

The Act has been revised regularly and is an embodiment of the delicate balancing of tripartite concerns to maximise labour force participation while ensuring that workers’ rights are protected and balanced against the employers’ need to stay competitive to create good jobs for workers. To ensure its relevance, this balancing act also has to take into account the changing demographics of our workforce and the disruptive forces impacting work and our economy.  

Since the last amendment of the Act which took effect on 1 April 2014, I have made calls in and outside of Parliament to review the Act, in light of the changing workforce profile, rising median wages and issues that needed redress and I am heartened that the Bill addresses a number of these issues through 2 broad thrusts, the expansion of coverage of workers under the Act and enhancements made to better protect workers’ welfare.

Expansion of Employment Act Coverage: (i) PMEs

First, the inclusion of all, I repeat, all, professionals, managers and executives (PMEs) under the Act is a watershed moment for Singapore’s labour legislation and extends key statutory benefits to an additional 430,000 workers. Today,professionals, managers, executives (PMEs) form about 36% of our local workforce and this rises to 56% if you include the technicians (PMETs). This figure is growing quickly and PMETs will make up two-thirds of our local workforce by 2030. 

As companies push forward with transformation efforts, we must ensure that the Act provides adequate coverage for our changing workforce. I have been lobbying since 2011 for the expansion of the Employment Act to cover all PMEs. Am glad we have moved the needle in 2014 and now to all PMEs including those earning more than $4,500 a month. This is important as there remained cases where aggrieved PMEs earning more than $4,500 a month did not have recourse under the Act.

Having a salary cap meant that there was a deliberate delineation of workers covered under the Act and those who were not. Some rogue employers tried to “game” the Act by making use of the salary cap to exclude workers from the Act. Others tried to cause confusion by referencing the salary cap to deny PMEs from collective representation by unions and for unions who tried to extend and expand the scope of representation to cover PMEs although this is allowed under the Industrial Relations Act.

The removal of the salary cap resoundingly signals the raising of employment standards in Singapore by according all workers with protection under the core provisions of the Act and with access to the Employment Claims Tribunal (ECT).This is a radical step forward, given that just a decade ago, PMEs were not even covered under the Act. 

With the removal of the salary cap, companies should have no excuse to prevent unions from representing and organizing PMEs earning more than $4,500 a month. I call upon all employers to take this opportunity to work with our unions and the labour movement to review their employment practices and make concerted efforts to get all their staff (especially PMEs) within their companies to become union members and be part of the tripartite relationship and framework.

Expansion of Employment Act Coverage: (ii) Rank and File Workers

Protection under Part IV of the Act has also been extended to more rank and file workers. The increase in the salary cap for non-workmen from $2,500 to $2,600 and overtime rate payable for non-workmen from the salary level of $2,250 to $2,600 under Part IV of the Act will benefit more than100,000 non-workmen. 

Having come across incidents where rogue employers have excluded workers from Part IV protection by giving workers inflated managerial and executive titles and paying them just above the salary cap of $2,500 a month, I strongly urge employers to scrutinise their employment practices to ensure that the workers are not unfairly excluded from Part IV protection. I also appeal to workers to come forward to seek the unions’ assistance if they are of the view that they have been unfairly excluded from the Part IV protection. 

While there is clearly a need to accord stronger protection for a select group of vulnerable workers under Part IV, there is increasing difficulty on the ground to clearly determine if a worker is a workman or a non-workman. This is particularly challenging as many forms of work now involve a mix of both manual and non-manual work and jobs will continue to be transformed. There is a need to keep watch on this issue to ensure that Part IV of the Act retains its relevancy in the changing world of work. Perhaps there may come a day where we will do away with the PME and non-PME and PME and bargainable dichotomy.

Enhancements to Better Protect Workers’ Welfare

Second, a series of enhancements have been made to enable better protection of workers’ welfare. In view of rapidly changing needs of the workforce, flexibility has been provided under the Bill for the Manpower Minister to address undesirable employment practices through the making of regulations. This will allow the Minister to respond quickly to curb undesirable employment practices and protect the well-being of workers.

The Commissioner for Labour’s powers have also been strengthened to inquire into retrenchment practices. Employers will have to furnish information on retrenchment of any employee, if required to do so by the Commissioner. I believe that this will further complement the Tripartite Advisory on Managing Excess Manpower, which stipulates the norms of retrenchment benefits and fair retrenchment practices, as well as the mandatory reporting requirement for retrenchments and assistance provided by the Taskforce for Responsible Retrenchment and Employment Facilitation.

Another enhancement is the transfer of adjudication of wrongful dismissal claims to the ECT. Today, where an employee considers that he has been dismissed without just cause or excuse by his employer, he may make representations in writing to the Manpower Minister to be reinstated. With the passing of the Bill, the ECT will serve as a one-stop service for salary-related and wrongful dismissal claims. I thank the tripartite partners on agreeing on a set of FAQs/guidelines to provide clarity on what amounts to a wrongful dismissal, which may include forced resignations without just cause. The Bill also provides that the ECT and High Court are to have regard to the tripartite guidelines on wrongful dismissal when deciding any claim involving wrongful dismissals. Such transparency will help to ensure that employees are adequately protected from wrongful dismissal while employers are not saddled by frivolous allegations.

Issues of Concern

 While good progress has been made in the Bill under these 2 broad thrusts, I have a number of concerns to which I opine clarification or enhancements are needed in furtherance of the objectives of the Act: 

First, with increased volatility and streamlining of businesses, I am particularly concerned about the need to provide greater clarity of the ambit of Section 18A of the Act which allows employers to transfer employees in a transfer of business undertaking. There is a need for the formulation of a set of Tripartite Guidelines as well as FAQs on the scope of application of Section 18A. I urge the tripartite partners to work on this urgently, especially since this section now applies to all workers including PMEs earning more than $4500.

Second, I would like to ask the Minister what support has been put in place to facilitate the transfer of jurisdiction of wrongful dismissals to the ECT to ensure that access to justice is not hampered. When the jurisdiction of salary claims was transferred from the Labour Court to the ECT, some workersexperienced difficulties in filing their claims as the ECT processes required the submission of more forms and documentation. Support must be provided to enable workers to access justice via the ECT. 

Third, now that there is a one-stop service at the ECT for salary-related and wrongful dismissal claims, it is timely to consider having simplified enforcement proceedings of these claims which are under the purview of the ECT. I have come across quite a number of cases where the worker has sought recourse at the ECT and has successfully obtained an order for the employer to pay him his unpaid wages but the employerfails to pay up. Workers who are unfamiliar with the legal system would be surprised or dismayed to find out that they would have to take additional steps and expend more time and costs to enforce the order with no guaranteed outcomes. At this stage, the worker may have not been paid his salary for a few months or may even be out of work. Some workers may have taken out enforcement proceedings but these efforts are later thwarted in cases where the employer is wound up. Some possible interventions which could be explored include:

(a) The provision of simplified enforcement mechanismsthrough the ECT which can help to see through employers’ satisfaction of Orders for which no appeals have been filed. In cases where employers are unable to pay due to financial difficulties, employers will have to submit evidence of their inability to pay and the ECT can assess and determine if this is truly the case;

(b) The short-term relief fund (targeted at the bottom 20th percentile of the workforce) funded by Ministry of Manpower and operated by Tripartite Alliance for Dispute Management (TADM) (for workers who have successfully made ECT claims against their company but fail to recover payment) can be expanded to assist more vulnerable worker groups;

(c) Where the employer has become insolvent, the Ministry of Manpower can also advance money to pay part of the workers’ unpaid wages and stand in place of the workers as a preferred creditor (of the same level of priority the workers would have had for a claim of unpaid wages) to recover the advanced monies upon distribution of the insolvent company’s assets. This will reduce the waiting time for workers to be paid and eliminate the hassle and stress of having to take additional administrative steps within the insolvency framework to recover their unpaid wages.

Fourth, Clause 15 of the Bill seeks to define the circumstances in which an employee is eligible for paid hospitalisation leave. I welcome the amendment to the clause which clarifies that an employee who is certified to be ill enough to require hospitalization will qualify, even if not warded in a hospital. This reflects more accurately the position under section 89(3)as it is currently worded. In this respect, I would like to seek clarification from the Minister on the following points :

(a) Clause 15 states that the certification must be done by a medical practitioner employed by a hospital approved by the Minister. I understand that private hospitals may also be approved for this purpose. There are situations where the employee is being treated by a doctor in private practice who is accredited to the hospital. Could the Minister confirm that a certification by such accredited doctors can be recognized for purposes of granting paid hospitalisation leave?

(b) With the proposed amendments to section 89, the employer will recognize outpatient sick leave which is certified by any medical practitioner. Could the Minister confirm that the law does not prohibit employers from recognizing hospitalization leave certified by medical practitioners as well?

(c) With regard to infectious diseases, clause 15 provides that an employee who is under quarantine under any written law will be deemed to be hospitalized. There are, however, some infectious diseases such as chickenpox and HFMD which are not covered under the Infectious Diseases Act. Would the Minister consider allowing employees who come down with such illnesses to be granted paid hospitalization leave under the Act?

Fifth, Clause 4 of the Bill has streamlined the list of specified deductions which an employer may make from the employee’s salary, and introduced a “catch-all” provision allowing employers to make any other deduction to which the employee has given written consent. I would like to seek clarification from the Minister on the following:

(a) To ensure that measures included in clause 4 to protect the employee are effective, could the Minister confirm that the written consent must be obtained from the employee at the point in time when the deduction is to be made, and that employers will not be deemed to have met this requirement through practices such as incorporating clauses in the employment contract stating that the employee agrees that the employer may make deductions as and when considered necessary?

(b) If an employee is penalized by the employer for withdrawing his or her consent, what recourse can the employee seek from the Ministry, and what actions will the Ministry take against the errant employer?

(c) For payments to Credit Co-operatives, it should still be specifically mentioned in the Employment Act as an “authorised deduction”. This is the best assurance of regular collections and ensure sustainability of Credit Co-operatives. Such co-operatives serve an important social purpose to encourage savings and provide affordable loans to working people who are their members. This helps to steer people away from loan sharks and money lenders and a vicious cycle of permanent indebtedness. 

Conclusion

To conclude, while we have made good progress in advancing workers’ protection under this Bill and the Bill embodies our spirit of tripartism in striking a balance among tripartite partners’ concerns. We must continue to take a pro-active approach to ensure that our labour legislation stays current and relevant in a maturing economy and workforce. With this, I support the Bill, thank you.