INDUSTRIAL RELATIONS (AMENDMENT) BILL

INDUSTRIAL RELATIONS (AMENDMENT) BILL: Order for Second Reading read.

5.13 pm

The Minister for Manpower (Mr Gan Kim Yong): Mr Deputy Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

As our economy evolves and our educational profile of our workforce improves, we have seen a larger proportion of Professionals, Managers and Executives (PMEs) within our workforce. Currently, they make up about half of our local workforce and this proportion is likely to increase further in the future.

Like rank-and-file workers, PMEs do encounter employment disputes with their employers from time to time, particularly on salary-related matters. In 2008, 245 PMEs sought my Ministry's assistance to mediate disputes. In 2009, the number rose to about 360. With increased economic volatility and shorter business cycles, the frequency of employment

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dispute is likely to grow. While PMEs could use the civil litigation process to settle their disputes, this route can be costly and protracted. There are already existing mechanisms to help rank-and-file employees and junior executives earning $2,500 a month or less to resolve employment disputes, including access to the mediation and the adjudication of salary claims at the Labour Court. This has proven to be effective. We want to extend a similar mechanism of support to professionals, managers and executives.

Sir, this Bill will enable my Ministry to establish the new employment dispute resolution mechanism for PMEs. That mechanism comprises two components, namely adjudication and tripartite mediation. We will allow PMEs to have their salary claims adjudicated at the Labour Court. However, to facilitate early and amicable resolution of employment disputes, a new tripartite mediation process will also be introduced to help PMEs resolve common employment disputes including salary claims. This will help to minimise the need to resort to adjudicate or civil litigation actions.

Tripartite mediation

I will first explain the amendments relating to the introduction of the tripartite mediation process.

Mediation provides greater flexibility for the settlement of employment disputes. Over the years, we have built up an effective system of resolving employment disputes in the unionised sector under our existing tripartite framework. Disputes have been amicably resolved with positive outcomes and paved the way for closer labour management relations in workplaces. The tripartite mediation process is a new concept. It leverages on the expertise and experience of our tripartite partners to help employers and employees resolve employment disputes and foster workplace harmony.

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Currently, PMEs in the unionised sector can seek conciliation to resolve their employment disputes if they are eligible for full or limited representation through their trade unions. A new Part IVA in the Industrial Relations Act will be introduced to provide an avenue for PMEs in the non-unionised sector to seek remedy for their disputes through the new tripartite mediation process.

Eligibility

Section 30F of the new Part IVA spells out the eligibility criteria for tripartite mediation. As a first step, we will allow PMEs, who earn up to $4,500 a month and have joined any registered trade union as individual members without any form of representation rights, to have access to tripartite mediation. The salary cap of $4,500 will potentially cover about half or about 500,000 of the Professionals, Managers, Executives (PMEs) in the workforce. This includes both those PMEs who are already individual union members and those who may join trade unions as individual members in future. Union membership is integral to the design of the tripartite mediation process which leverages on the expertise of tripartite partners in resolving industrial and employment related disputes.

For PMEs who are not union members, my Ministry will continue to offer advice and assistance as well as voluntary mediation services through the existing Executive Mediation Unit if disputing parties consent to participate.

Scope

The scope of tripartite mediation, as specified in section 30G, will cover disputes arising from salary arrears, breach of individual employment contracts and payment of retrenchment benefits

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which are the most common issues faced by PMEs. We should encourage employees to surface their disputes as early as possible when the facts of the case are still clear so as to have higher chances of successful mediation. Therefore, the dispute must be lodged within a year from occurrence of the material fact that gives rise to the dispute. For disputes arising out of termination of contract of employment, the case must be lodged within six months from the date of termination.

To address employers' concerns of potential conflict of interests, section 30G provides employers with the right to object to the eligibility of certain categories of employees such as those in senior management positions, those involved in hiring, firing, promotions, dismissals and disciplinary duties, those with access to confidential information such as payroll and budgeting information, those who represent employers' interests in union-management matters and those whose access to tripartite mediation may give rise to a conflict of interest. This is similar to the provision for employers' objections under limited representation in Part IV of the Industrial Relations Act. The Commissioner of Labour will consider the employer's objection and decide whether it will stand.

Procedure

Under section 30H, PMEs who wish to make use of the tripartite mediation mechanism should lodge the case with the Ministry of Manpower through the registered trade union of which he is an individual member or any federation that his union may be affiliated to. The Commissioner will then arrange for a tripartite mediation session to be conducted by a conciliation officer. The Commissioner would also assign tripartite mediation advisors (TMAs) to assist the employee and his employer respectively in

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the mediation. The TMAs will be appointed by the Minister for Manpower with nominations from our tripartite partners, namely the Singapore National Employers' Federation (SNEF) or National Trades Union Congress (NTUC). These advisors should have a track record and be experienced in managing and resolving employment disputes, and be knowledgeable in employment practices and norms.

The conciliation officer may allow other persons to assist the TMAs at the request of the requesting parties. Such persons may include the employee's union officials, or a representative of an employer or a business organisation which the employer is a member of. However, practising lawyers will not be allowed to participate in the mediation process in line with the current provisions for conciliation in the Industrial Relations Act.

Attendence

Successful mediation requires the commitment from both parties to resolve the dispute on mutually agreeable terms. It is important for both employer and employee to attend the tripartite mediation as it provides an opportunity for them to explore options and to arrive at an amicable settlement.

The Bill, therefore, provides for measures that can be taken if either party to the dispute fails to attend any mediation process. Non-attendance without reasonable excuse by the employee may result in the tripartite mediation proceedings. An employer who fails to attend repeatedly can be ordered by the Minister to attend tripartite mediation. If he again fails to do so, he may be fined up to $5,000.

Effective mediation will reduce the likelihood of disputes being referred for litigation. It also encourages the adoption of good employment practices to avoid

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disputes in future. If the dispute cannot be resolved through mediation, the employee concerned may pursue their claim through the civil courts. If the dispute involves a salary claim, the claim may be adjudicated by my Ministry through the Labour Court following amendments to the Employment Act. Salary being the most fundamental employment right for employees requires a low-cost and an expeditious settlement through adjudication.

Adjudication of salary claims

Sir, currently, the Employment Act allows junior managers and executives with basic monthly salary of $2,500 and below to have access to the Labour Court for adjudication on salary claims. Clause 6(a) raises this salary ceiling to give Professional, Managers and Executives with basic monthly salary of up to $4,500 access to the Labour Court for salary claims. This is open to PMEs in all companies regardless of whether they are unionised or otherwise.

Clause 6(b) introduces a cap of $20,000 on the amount which the Commissioner can award for each lodged claim. Imposing a cap encourages employees to surface their salary claims as early as possible before salary arrears accumulate to large amounts. Based on our records, all past disputes involving PMEs were below the $20,000 limit. Those who wish to claim for an amount higher than $20,000 or to pursue non-salary claims can continue to do so through the civil courts.

This Bill also makes a technical amendment to the Employment Act to clarify that the adjudication process in the Labour Court shall not involve any trade unions unless the company involved is already unionised and its employee is a union member with full representation and collective bargaining rights. This is already the current practice.

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Enhancing penalties under the Industrial Relations Act

Sir, let me now move to the other changes in the Bill. Penalties under the Industrial Relations Act have remained unchanged since 1966. Clause 5 of the Bill seeks to align the IRA penalties with those that commensurate offences in the Employment Act. For other offences, the maximum fines will also be updated.

To provide greater flexibility to impose appropriate penalties in lieu of prosecution, section 88 has been inserted to allow the Commissioner to compound any offence with a composition fine not exceeding $1,000.

Mr Speaker, Sir, the introduction of this new mechanism involving adjudication and tripartite mediation ensures that our employment laws and practices continue to remain relevant to the changing workforce profile and needs. If the Bill is passed in Parliament, we intend for it to take effect on 1st February 2011. The new mechanism would help the growing population of Professionals, Managers and Executives resolve employment disputes amicably. Effective implementation of this new mechanism will foster workplace harmony for the benefit of all.

In formulating the mechanism, we have engaged the tripartite partners to design a system that is workable and fair to all parties. As part of the consultation process, we have also sought feedback from the public. This new mechanism gives our tripartite partners an important instituional role in helping to resolve employment disputes pertaining to Professionals, Managers and Executives. As we move forward, we will work closely with the tripartite partners to ensure smooth implementation.

Sir, I beg to move.

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Question proposed.

5.26 pm

Mdm Halimah Yacob: Mr Deputy Speaker, Sir, I rise in support of this Bill. The amendments address a current deficit in our law and seek to provide Professionals, Managers and Executives (PMEs) who have employment disputes with their employers with access to adjudication and tripartite mediation. Extended access to adjudication for PMEs who earn less than $4,500 is a welcome move as this is something already provided for in many countries. For example, in Malaysia, executives have access to the Industrial Court in order to resolve their employment disputes.

Our rank-and-file workers already have recourse to adjudication by the Labour Court because of the coverage under the Employment Act. Sir, the difference in this Bill is that it also provides for a tripartite way to resolve employment disputes involving PMEs. I am not aware of any other country which has a similar provision which means we are likely to be the first to introduce it.

The establishment of this tripartite mediation mechanism is, in my view, a great testimony to the strength of tripartism in Singapore and the extent to which it has evolved and matured over the years, and the confidence and trust that the tripartite partners have developed in each other.

Sir, we know very well that we need a procedure for the amicable settlement of disputes involving PMEs. With better education and the transit to a knowledge-based economy, the percentage of PMEs in our workforce has increased exponentially. If we insist that their disputes should continue to be settled through litigation in a civil court, as is the current situation, we are not being fair to the PMEs as litigation is costly and takes a long time.

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At the same time, a status quo is also not to the advantage of employers as dissatisfied PMEs cannot be productive workers. With a strong labour market, PMEs could also vote with their feet, resulting in the companies losing good employees in whom they have invested heavily.

Also, unlike mediation, litigation injects a lot of hostility and contention in the workplace. The beauty in the tripartite mediation approach is that it provides a non-adversarial, less conflictual method of resolving disputes as the focus of the mediation is to find a solution acceptable to the two sides, not to mention it is also inexpensive and simple. So even though the tripartite mediation mechanism is introduced through legislation, its approach is still very much conciliatory.

Sir, the Bill also seeks to address other gaps in the current system. Although there is currently an Executive Mediation Unit in the Ministry which provides conciliation service to PMEs with disputes against their employers, the Executive Mediation Unit has no power to compel attendance, a point which is now addressed under clause 30J(2) which provides that mediation is compulsory and that an employer who fails to attend tripartite mediation is guilty of an offence and can be fined up to $5,000.

Sir, let me take this opportunity to commend the Ministry for Manpower for introducing this Bill and providing greater protection to our PMEs. Let me also commend the employers in Singapore, too, for their far-sightedness and their constructive approach in supporting this Bill.

Some critics may argue that this Bill has not gone far enough. But we need to bear in mind that everything has to have a start and this is as good a start as any. Others may be concerned that this may open a Pandora's box with a deluge of

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PME disputes suddenly surfacing. My advice to employers is that if they do not want their PMEs to refer to their disputes to adjudication and tripartite mediation, then treat them fairly and, above all, provide for an effective grievance procedure within the company itself which the PMEs can have easy access to.

Sir, let me now come to some specific clauses in the Bill. Clause 30(f) of the Bill limits access to tripartite mediation only to executives earning not more that $4,500 a month. While this income ceiling would cover quite a significant number of executives today, I would like to urge the Ministry not to cast this in stone but to regularly review this salary ceiling as incomes will rise and we have to ensure that the scope is wide enough to cover a sufficient number of executives; otherwise over time, we will find that this mechanism becomes less and less useful to executives.

Sir, clause 30(i) provides that an employer has the right to object to the eligibility of an executive employee to tripartite mediation on certain grounds listed under paragraphs A to E. Clause 30I is an exclusion clause. In other words, although an executive may be earning less than $4,500 per month, he or she may be excluded if he or she falls within any of those paragraphs, for example, if the person is employed in a senior management position. Although I am aware that each case will have to be decided on its own merits, as this is an exclusion clause, I hope that it will be invoked sparingly as we do want as many executives as possible to be covered under tripartite mediation.

The other concern that I have is whether some employers can take advantage of clause 30(i) in order to frustrate an executive's claim by deliberately delaying the process, instead of the given 14 days in order to file an objection. I would like to urge the Ministry

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to monitor the situation closely so that the objective of the Act is not undermined.

Sir, clause 30(k) provides for the appointment of tripartite mediation advisers to assist the conciliation officer in the solving of disputes. The Bill is, however, silent on how this tripartite mediation advisers will be appointed, what would be their qualifications and what would be their roles. I would appreciate if the Ministry could throw more light on this.

Sir, on the amendments related to the Employment Act, the Bill raises the salary cap for salary disputes involving PMEs that can be referred to the Labour Court under section 115. Currently, only those earning $2,500 can refer their salary disputes to the Labour Court, but under the Bill, PMEs earning up to $4,500 can do so. This is certainly an improvement and I welcome it.

However, the Bill has also introduced a limit on the salary claims that PMEs can make in the Labour Court, which is $20,000, when currently there is no such limit. Could the Minister explain why there is a need to impose this limit and whether this would deter PMEs with bigger claims from making use of adjudication process to settle their disputes? At the same time, I would also like to urge the Minister to review this $20,000 limit regularly to ensure that the provision remains effective.

Secondly, Sir, under the Bill, executives can refer only salary claims to the Labour Court for adjudication if the dispute cannot be resolved through tripartite mediation. Again, whilst this is a good start, over time, I hope that the Minister could consider widening this provision so that other claims could also be referred to the Labour Court, as

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limiting it only to salary claims is quite narrow although it is still a very useful start.

I also urge the Ministry to allocate adequate resources and to have sufficiently trained staff so that this new tripartite mediation mechanism can work effectively. As the claims of executives will not be based on the Employment Act, which does not cover them, and with their better education, conciliation officers need to be properly trained to effectively chair the tripartite mediation sessions. The NTUC, on its part, has been gearing up efforts to provide assistance to PMEs once the new law is in place.

In conclusion, Sir, in my view, the adjudication and tripartite mediation mechanism provided under this Bill is a huge step forward and provides for a constructive way of resolving the grievances involving our executives. This is a win-win formula, possible only because of our strong tripartite relationship. I am confident that it will further enhance labour management relations in Singapore.

Sir, I support the Bill.

5.34 pm

Assoc. Prof. Paulin Tay Straughan: Mr Deputy Speaker, this Bill aims to establish a new scheme for the mediation of disputes involving employees engaged in the professional, managerial or executive positions and their employers. There is ample evidence to show the strong correlation between job satisfaction and productivity at the workplace.

I stand in support of this Bill, as a proposed dispute resolution mechanism involving adjudication and tripartite mediation will help sustain harmonious workplace relations.

Mr Deputy Speaker, I have three short queries for the Minister. First, on the

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stipulated income ceiling of $4,500 for eligibility of inclusions, may I ask the Minister what is the proportion of disputes filed in the past three years which involve employees earning less than $4,500? This data will help us appreciate the number of cases which this Bill will help offload from civil litigation. I believe it is important to avoid civil litigation whenever possible and over-reliance on litigation to resolve disputes will inevitably drive up legal costs. More importantly, a case that heads towards the Courts for formal adjudication will inevitably result in irreconcilable relations, especially where the nature of disputes is likely to be resolved by mediation. The amendments proposed in this Bill will be mutually beneficial to both employees and employers.

My second query focuses on the constitution of the Mediation Panel. For mediation to work, the expertise of the panel is critical. May I ask the Minister for details on how members of the Mediation Panel will be chosen, what are the criteria for selection and will panel members be given formal training to equip them with the necessary skills to resolve labour disputes?

Finally, will the outcomes of mediation be known to the public? I think it is important that proceedings are kept transparent and, through observation, employers may pick up best practices to avoid potential unhappiness in the workplace. Similarly, employees will also be able to level up on their appreciation of what are the fair practices and fair expectations they may have from their organisations.

5.37 pm

Mr Zainudin Nordin (Bishan-Toa Payoh): Sir, the planned amendments to the Industrial Relations Act will cover more executives when the salary ceiling for

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executives covered by the Act is changed from $2,500 to $4,500.

Historically, Sir, the scope of the Industrial Relations Act and the jurisdiction of the Ministry of Manpower have been limited to the protection of junior or mid-level employees based on salary ceiling criteria. The current relatively low salary threshold meant that many junior or mid-level PMEs do not have easy access to an avenue of redress in relation to employment-related disputes. Sir, therefore, with the current involvement of more PMEs in our workforce and the higher education levels and the increasing salary levels due to the economic growth that we have experienced, the scope of representation allowable in the current Industrial Relations Act is rather limited. As the median salary for employees moves up, the proposal to raise the salary thresholds allows more junior managers and executives access to the adjudication process for salary claims. This is a very positive development.

Furthermore, Sir, the increased economic volatility and shorter business cycles have led to a sense of employment insecurity. Employers are often challenged to reduce costs of operation. Thus, when cost-cutting measures involve employees, we could potentially see more PMEs facing employment disputes with their employers. The costs for legal representation in the Civil Dispute Court for junior to mid-level PMEs may still prove to be a significant burden. While the civil litigation process is still available to settle their disputes, a speedy and low-cost dispute settlement would certainly benefit both employers and PMEs. This helps to move away from confrontational labour management relations to strive for industrial peace with justice.

The proposed change in salary ceiling is expected to benefit over 500,000 professional, managers and executives. I

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understand that there have been suggestions to raise this ceiling even higher than $4,500. First, I would encourage that MOM continuously monitor the salary trends and the effectiveness of this mechanism to ensure that it serves its purpose.

Sir, currently, the eligible PME union members in unionised companies can seek some form of representation from their trade unions to resolve their individual employment disputes under the Industrial Relations Act. However, PME union members in the non-unionised companies do not have similar avenues. The proposed amendments allow such PMEs access to a new tripartite mediation process to resolve their employment disputes with employers, provided they are members of a registered union without individual rights, subject to a new $4,500 salary ceiling. This new dispute resolution process emphasises on mediation between employees and employers. The mediation will be led by the Ministry of Manpower and supported by SNEF and NTUC.

Sir, the introduction of this new dispute resolution process is a change – a positive change to the employment landscape in Singapore, which is commonly regarded as a relatively easier jurisdiction for employers to navigate. This is an important change for human resource professionals and managers to understand and to adapt to. And this change should be viewed positively. Regardless of the avenues of the redress available, efforts should be taken to prevent a dispute from even arising. Adoption of good corporate practices, development and enforcement of sound company policies and regulations will be instrumental in preventing unnecessary disputes. The introduction of a speedy and low-cost dispute resolution process, in fact, not only empowers the employees

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but it also confers employers with benefits. While much remains to be seen, an effective dispute resolution process could be helpful in stamping frivolous employment litigation that is intended to harass and pressure an employer to a monetary settlement.

Sir, similarly, the implementation of a new dispute resolution process is indicative of a paradigm shift in the employment landscape in Singapore to one which is increasingly protective of our employees. The current state of Singapore's employment law is favourable for businesses and companies. However, this should not be taken for granted. The development of an employer-employee relationship based on trust and confidence should not be neglected. It forms the basis upon which employees develop loyalty to their employers and the motivation to work in the best interests of the business. Even more so, where employees may now have a better bargaining position, employers should always be mindful to treat employees with due respect.

Sir, my experience as the Executive Secretary of the Education Services Union shows that more PMEs are keen to join and want the union to represent them in one way or another. Singapore's unique and strong tripartism is a strength that must continue to be leveraged for the good of our country. This tripartism has moved the nation over the years towards a more conducive industrial relations climate, thus, coincided with our economic growth. The strong tripartite partnership has been a key competitive advantage for Singapore. It underpins its economic competitiveness, its harmonious labour management relations and the overall progress of a nation as a whole.

I am sure my esteemed colleagues from MOM and SNEF will agree that we should all pursue a partnership and problem-solving approach in addressing,

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formulating, finding solutions to and implementing employment and industrial relations issues.

Sir, I support the Bill.

5.44 pm

The Minister of State, Prime Minister's Office (Mr Heng Chee How): Mr Deputy Speaker, Sir, thank you for allowing me to join the debate. I wish to speak on two points and ask three questions. My two points are about how the structure of the Singapore workforce has changed and how tripartism must keep up with the changes to remain relevant.

Sir, when Singapore became independent, we depended on a mixture of trade, agriculture and British military bases to make a living. The education level of the population and the workforce at that time was low and so were the wages. With the withdrawal of the British military at the end of the 1960s and the advent of industrialisation from the early 1970s, Singapore's workforce became more manufacturing-based and a generation of factory workers and technicians emerged. But up till then, the workforce was mainly blue collar. Later on, the services industry expanded and white collar workers grew as a segment of the workforce as well.

Over the years, the Singapore economy has transformed itself even more and has become ever more high value-added as well as knowledge-based. The education of the population has changed in tandem with the needs of the economy and with improving living standards.

As a result, the segment of Professionals, Managers and Executives (PMEs) came about and grew.

In 2009, the percentage of PMETs, that is, the PMEs plus the technicians, as a group within the workforce, crossed the 50% mark for the first time. This is a significant milestone because it signals

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that the hopes, aspirations, needs and fears of this group has become important and will grow further.

One of the areas that the tripartite partners must, therefore, pay close attention to is the resolution of disputes at the workplace to promote fair treatment and fair play in order to ensure industrial peace, not only for the rank and file but for all, including the PMEs for industrial peace is a pre-requisite for the long-term, large and recurring investments and such investments in turn define the prospects for more and better jobs for Singaporeans.

All this while, rank-and-file workers in unionised companies who are members of trade unions can take up their grievances and disputes with management via the unions. Executives who are ordinary members of executive unions may do likewise. And for executives who are members of rank-and-file unions, they have, in recent years, been able to have access to union services in respect of four categories of issues: retrenchment and benefits, victimisation, breach of contract as well as the wrongful dismissal. And that is provided for under the Industrial Relations Act.

For those who are not union members, or for union members who are PMEs but who work in non-unionised companies, they may approach the Ministry of Manpower’s Executive Mediation Unit (EMU) for advice and assistance.

Sir, over at the NTUC, we run a General Branch Services Unit which services the workplace-related enquiries and calls for assistance of union members who are our members but who work in non-unionised companies. In the past several years, we have seen a clear trend in the enquiries and calls for assistance from such members. Since the year 2006, as the proportion of all callers to our General Branch Services Unit hotline,

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15% of those were PMEs in 2006, but by 2009 and also this year, that has gone up to 42%. In terms of the kinds of matters that they seek help on, about 30% relate to termination and retrenchment, 20% about salary arrears and benefits, and 30% are about labour law. Sir, I believe that this increase in the proportion of PME requests for assistance reflects the increasing numbers and proportion of PMEs within our workforce.

Tripartism in Singapore is a pragmatic one. It is also a proactive one. It does not wait for a problem to arise or get out of hand before acting. It is a tripartism that is able to be sensitive to developments on the ground, listen very accurately, promptly and see what needs to be done and then act on it quickly. And that is why Singapore's tripartism has been able to tackle successfully the many crises that have hit us over the decades and the numerous crises just these past 10 years, including the big recession that hit us last year, and yet come out stronger. And this is why tripartism in Singapore is not just a vision or a slogan but a reality and a key competitive advantage.

It is therefore timely and necessary for the tripartite partners to take into account this fact of a growing PME segment and mobilise its energies and resources to attend to the trend. By doing so, it will further reinforce its value and relevance and strengthen its ability to turn a need into an advantage for the mutual good of employees and businesses.

I, therefore, welcome the introduction of this Dispute Resolution arrangement for PMEs. It complements the existing arrangements for the PMEs at MOM, and makes it even more focused and refined for PMEs who are union members.

Sir, my three questions are, firstly, why should there be a $4,500 salary limit to who can be included under this

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arrangement? While employees can understand why those who hold hire and fire powers or who are privy to confidential information about the company or employees may be excluded from the arrangement on grounds of conflict of interest, it is not immediately obvious why there should be a salary limit of $4,500. So, some may wonder if such an arrangement is fair or practical enough and it would be good if the Minister could explain this more.

The second question is: why limit the arrangement to the said categories of issues as listed in the Bill? Because disputes and grievances can arise over any number of issues at any point of time and, for some, this would seem to prejudge what may occur. So, what is the rationale behind limiting the range of issues that this new arrangement can cover, and would the MOM be monitoring the demand patterns – the kinds of issues that come out – as we go forward, and then refine these categories as appropriate at some future point?

And, thirdly, why is the attendance mandatory at the mediation session but at the outcome not mandatory? That is, why are we choosing mediation over adjudication? If the purpose of dispute resolution is to resolve the dispute, then one may argue that securing the attendance of the two parties is necessary and critical. We hear many anecdotes where mediation cannot take place simply because of non-attendance of one of the parties. However, having secured the attendance of the parties, then how does one maximise the opportunity to resolve the dispute? Thus, it is important to explain why the recommendations arising out of those sessions are not made binding or in some way made to carry more weight.

I hope that the Minister can elaborate and clarify on the thinking and reasons behind these parameters.

Sir, I support the Bill.

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5.52 pm

Mdm Ho Geok Choo: Mr Deputy Speaker, Sir, I would first like to commend the Ministry for raising the salary limit of employees termed "executives" to $4,500. This will allow for a wider range of representation of executives and PMEs applaud that they now have a proper recourse to grievances.

Currently, disputes between PMEs and their employers are settled through civil litigation which can be protracted, painful and a costly process. The new mediation scheme will allow parties to settle their employment disputes in a more productive way.

Sir, I would like to seek clarification on the limited list of disputes that are subject to this proposed tripartite mediation scheme. I understand that only disputes relating to breaches of employment contract, salary disputes and disputes involving retrenchment benefits are subject to this new scheme. However, disputes involving employment discrimination (ie, racial, disability or medical conditions) are not subject to this new scheme. In fact, discrimination-related disputes were raised during the public consultation for this Bill, and the Ministry recommended that PMEs who face discrimination-related grievances should raise the issues to the attention of the Tripartite Alliance for Fair Employment Practices (TAFEP). There is no doubt that the establishment of TAFEP is a step in the right direction to help PMEs but unless TAFEP is able to bite harder, shed its baby teeth and grow its permanent teeth quickly, PMEs would still need legislated representation on discrimination-related grievances. Sir, to strengthen TAFEP, we need to engage more employers with TAFEP. I would like to ask whether we have statistics on the growth of TAFEP employer membership to date.

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Sir, I note that employment discrimination in Singapore is not adequately dealt with. It is also troublesome and confusing even for PMEs to have to turn to different channels to resolve different types of disputes. Should there not be a one-stop shop for all employment disputes as opposed to separating between basic employment breaches and employment discrimination? Sir, often there could be a combination of disputes from both categories occurring concurrently. After all, the purpose of this Bill is for PMEs to gain access to a low-cost settlement mechanism and there is not a substantial reason for distinguishing between basic employment breaches and employment discrimination.

I would like to raise a suggestion concerning the issue of speeding up the settlement process. I understand that if tripartite mediation fails to reach an amicable settlement, the respective claims will be adjudicated by MOM through the Labour Court. Sir, could there be a system of adverse cost implications which will further facilitate and encourage settlement?

To illustrate, if the offeror offers a certain settlement sum but this is not accepted by the offeree, and the offeror subsequently obtains a judgement which is more favourable than the settlement sum, the offeree (who previously refused to accept the settlement sum offered by the offeror) may be penalised as the court deems fit. Sir, this system of adverse cost implications will deter parties from trying their luck in arriving at unrealistic settlement sums during mediation process. In fact, this system of adverse implications has been applied in normal litigation procedures and has proven to be effective in speeding up settlement out of court.

Sir, as much as we want PMEs to make use of the new scheme, we also

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hope that an agreement between PMEs and their employers may be reached harmoniously in the event of a dispute with as little damage to their relationship as possible. Hence, a settlement out of court should always be the top priority, with litigation being the very last resort. In this, I look forward to TAFEP playing an effective role.

On this note, I support the Bill.

5.56 pm

Assoc. Prof. Fatimah Lateef: Sir, thank you for allowing me to speak on this Bill. I welcome the fine-tuning proposed and especially with regard to clarification of certain definitions.

Tripartite mediation is indeed a positive step but as there are eligibility guidelines, can I enquire what options are then available for the cases that are not eligible for tripartite mediation? What other forms of recourse do these employees have? Why do we use a salary cut-off at the $4,500 mark? With this cut-off limit, the number of executives accessible to mediation would be reduced significantly (approximately, as quoted in the media, for 46,000 based on estimates when there are actually about 500,000 of PMETs earning up to $4,500 a month in Singapore).

Also, what other forms of mediation between employer and employee, eg, community mediation or mediation through other sources, can these employees seek? If an employee decided on these other options, are there criteria that require them to keep their employers updated?

What happens if the employee has a legal representative which he appoints? Will there be any specific differences to the approach? Sir, at my Meet-the-People

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Sessions, I see cases where residents have engaged a legal representative for their work-related issues, but somehow the residents are still being advised by these legal representatives to seek advice and assistance from the Member of Parliament. In such cases relating to work, can the employee then, whose legal representative has really not been representative or left him in a lurch, seek assistance from the Tripartite Mediation Committee? Also, Sir, why is it that only finance- and salary-related cases can be heard in the Labour Court?

In specialised industries, can the Minister please elaborate on the possibility of giving consideration to inputs from experts and specialists? Can specific requests be made for them to sit on the mediation panel and will the employees have to sort these out themselves or can MOM assist?

Next, Sir, I hope the Minister can also comment on the use of collective or group mediation in specific circumstances as they may arise.

Finally, I also support the amendment to increase the range of penalties stipulated for all the different sections.

In conclusion, I support this Amendment Bill.

5.59 pm

Mrs Josephine Teo (Bishan-Toa Payoh): Mr Deputy Speaker, Sir, I have just three points to make. The first is that my union, the Singapore Industrial and Services Employees Union, fully supports the dispute resolution framework. Currently, only PMEs who earn a basic salary of $2,500 and below can go through the Labour Court for salary claims. Under the new framework, this cap will be increased to $4,500. The increase in salary limit will provide many PMEs a much less costly

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avenue than engaging a lawyer to pursue their claims in the civil courts.

In addition to salary claims, PMEs who are General Branch Members working in non-unionised companies and who earn up to a basic salary of $4,500 can also refer issues on retrenchment benefits and breach of individual employment contracts. Our mediation advisers would also be able to support our members at the meeting. An added benefit for union members is that employers now have an obligation, under law, to attend the mediation meetings. This is a great improvement as we have previously experienced difficulties in getting some of the employers to show up. A lot of time and effort were wasted in arranging the meetings as the employer representatives may not turn up at the last minute, so we support this.

My second point is to raise some concerns on the effectiveness of this framework. One of the factors that determine the effectiveness of the mediation process is really the quality and the experience of the advisers appointed by the Ministry of Manpower (MOM). Employment terms and conditions vary across industries and so, ideally, the mediation advisers should have a wealth of knowledge about the best practices in the industry that the mediating parties belong to. They should also be reputable individuals in their own fields of expertise so that they have the credibility with the mediating parties. I hope that MOM could consider these attributes in the appointment of the tripartite mediation advisers. Also, under the new framework, employers could still object to the PMEs being represented by the union under three different categories, namely, senior management, employees involved in industrial relation functions and employees with functions that may give rise to conflict of interest. Sir, in theory, this is to afford a level of comfort to employers in their staff management. In practice, we are concerned with the over-titling of

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PMEs so as to exclude them from being represented by the unions. So, in determining whether an employer's objection is valid, I urge MOM to put in place an impartial and effective body and process to review the actual job scope function, duties and powers of the PME in question. This is to ensure that PMEs would not fall out of the dispute resolution framework which is the safety net only because of the titles that they are holding.

My third point is on the future developments that we hope to see MOM making with regard to this framework. The proposed dispute resolution mechanism is a step forward towards better employment protection for the PMEs. However, even with the tripartite mediation process, the results are not enforceable on either party. The employer could choose not to accept the advice of the tripartite body and the PME may still have to pursue his case under the civil courts. Therefore, I would like to ask the Minister how he intends to ensure the effectiveness of the process. Secondly, the areas that the PME could raise his issues on are also limited to the three main areas under the new mechanism, ie, salary claims, breach of individual contracts and retrenchment benefits. Under the limited representation coverage of the Industrial Relations Act, unfair dismissal is also one area that the unions could represent their members on. So, I hope that in time to come, MOM could expand the coverage of the dispute resolution framework to also include unfair dismissal.

Sir, I would like to just make some concluding remarks in Mandarin, please.

( In Mandarin ): [For vernacular speech, please refer to Appendix A.] I know that some employers, especially those from SMEs, have some reservations and concerns about the amendment. To these employers, I would like to give two suggestions.

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*Cols. 1625-1626.

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First, if you have always treated your employees well, you do not need to be worried at all because the union will, consistent with our practice all along, be reasonable in handling industrial disputes. Second, for those companies that are not yet unionised, I urge them to reconsider their position, because harmonious labour-management relations can have a very strong and positive impact on business success. I, myself, support this Bill and I hope that employers will also understand and support this mediation mechanism which has been very carefully considered by the tripartite partners.

6.04 pm

Mr Gan Kim Yong: Mr Deputy Speaker, Sir, I would like to thank Mdm Halimah Yacob, Mr Heng Chee How, Mrs Josephine Teo, Mr Zainudin Nordin, Mdm Ho Geok Choo, Assoc. Prof. Fatimah Lateef and Assoc. Prof. Paulin Straughan for their strong support of the Bill. I am glad that they all supported the Bill. In fact, many MPs are already asking for more even before we have started. Let me respond to some of their comments and questions.

Several Members, including Mr Heng and Assoc. Prof. Fatimah Lateef, have asked why there is a salary ceiling of $4,500. Assoc. Prof. Lateef seems to have the impression that the salary ceiling has effectively reduced the number of eligible PMEs from 500,000 to 46,000. That is not so. As I have mentioned in my main speech, with the salary ceiling of $4,500, it will cover about 500,000 PMEs, that is, about half of the PMEs in our local workforce. The new mechanism is really intended to provide PMEs with a low cost and expeditious way to resolve their employment disputes. We have consulted the tripartite partners who agreed that this salary ceiling of $4,500 is

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reasonable for a start since it covers more than half of PMEs in the workforce in about three-quarters of the 280 PME mediation cases we received annually, on average, over the last three years. We will monitor the situation as we implement the new mechanism.

Assoc. Prof. Fatimah Lateef has asked about the recourse available for PMEs who are not eligible for tripartite mediation. MOM will continue to provide voluntary mediation services through our Executive Mediation Unit (EMU). PMEs can also seek mediation through other sources and other avenues, if they wish. All PMEs earning $4,500 and below will have access to the Labour Court for adjudication of salary claims. Higher income PMEs can still pursue their claims through the civil courts.

Mrs Teo and Mdm Halimah have suggested that MOM should put in place an effective process to assess the objections from the employers on their employees' eligibility for tripartite mediation. Yes, we will do that and the inputs of the tripartite mediation advisers (TMAs) will be sought where relevant.

Mdm Ho has asked whether there could be a one-stop centre for all employment disputes. Sir, given the diverse nature of the employment disputes, it is necessary to provide alternative avenues depending on the nature of the dispute rather than a one-stop centre. Nevertheless, employees and employers can approach MOM for advice with regard to their disputes.

Some Members such as Mrs Teo have suggested that the new mechanism be expanded to cover other types of disputes like unfair dismissal. As this is a new tripartite mediation mechanism, let us start with the more common types of dispute for mediation and we can review the scope in future.

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Assoc. Prof. Fatimah Lateef has also asked about the use of collective or group mediation in cases involving a large group of employees with similar dispute with the same employer. We can consider mediating as a group to facilitate a more efficient process. However, we have to make sure that this is done without compromising the flexibility of different settlement for each case.

For tripartite mediation to be effective, I agree with Assoc. Prof. Straughan, Mdm Halimah, Assoc. Prof. Fatimah Lateef as well as Mrs Teo that the TMAs appointed must be experienced in human resource and industrial relations matters as well as knowledgeable about industries' employment practices. This will ensure that they will be effective in facilitating the mediation process. I will be inviting nominations from our tripartite partners, the Singapore National Employers Federation (SNEF) and the National Trades Union Congress (NTUC) on suitable candidates for TMAs.

Assoc. Prof. Fatimah Lateef has asked if legal representatives or other experts and specialists can participate in tripartite mediation. To keep the process low cost, third-party legal representatives will not be allowed during tripartite mediation. However, we can allow other experts or specialists to participate in the tripartite mediation upon requests if their involvement can help to facilitate an amicable resolution of the dispute. For example, the PME concerned can request for an officer from the trade union of which he is a member while the employer can seek the assistance of any business or employer organisation of which the employer is a member.

Mr Heng and Mrs Teo have asked about how we can make tripartite mediation more effective. Mr Heng has asked whether we can have the mediation outcome binding on both parties. Mdm Ho has further suggested a system of

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adverse cost implications to make the mediation process more efficient. Sir, I would like to point out that tripartite mediation provides an opportunity for parties to explore options to reach settlement terms that are mutually acceptable. Hence, it is not appropriate to make the mediation outcome binding. If the dispute could not be amicably settled through tripartite mediation and involves salary claims, the case can be adjudicated at the Labour Court where it could make an order based on the validity of the claim. The order will be binding.

Assoc. Prof. Straughan has asked if the outcomes of mediation can be made known to the public. It may be difficult to do so due to the confidentiality nature of such settlements. However, my Ministry could provide broad trends as well as share some of the best practices to help to minimise disputes and enhance workplace harmony.

Mr Zainudin Nordin has also pointed out that having good employment practices will indeed enhance workplace harmony.

Mdm Halimah has asked for the rationale for introducing the new $20,000 cap on claims for adjudication and also suggested that this be reviewed regularly together with the scope of adjudication. Sir, all claims lodged by PMEs with MOM so far fall within this limit. We do want to encourage PMEs to bring their salary claim issues to MOM as early as possible to avoid salary arrears from accumulating to a large amount. On the scope of adjudication, salaries are fundamental employment right of employees. It is also the most common employment issue. It is already a significant step to extend the adjudication to PMEs earning up to $4,500 a month.

Sir, I believe I have addressed Members' concerns and queries. Once again, let me thank Members of the

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House for supporting this Bill. In summary, the new mechanism will provide additional channels for PMEs and their employers to resolve their employment disputes. We have worked closely with the tripartite partners to design a system that is workable and fair to all parties. With the support of tripartite partners, I am confident that we can work together to implement this new mechanism effectively and help foster workplace harmony to benefit all.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

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The House immediately resolved itself into a Committee on the Bill. – [Mr Gan Kim Yong].

Bill considered in Committee; reported without amendment; read a Third time and passed.