EMPLOYMENT (AMENDMENT) BILL

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EMPLOYMENT (AMENDMENT) BILL: Order for Second Reading read.

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

The Employment Act (EA) is the primary legislation that sets out the

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minimum employment terms and conditions in Singapore. It serves a dual role. First, it safeguards basic employment standards, particularly for workers who are more vulnerable and need to be protected by law. Second, the Act regulates employment relations by establishing the basic duties of employers and workers, and providing mechanisms to settle employment disputes. The Act seeks to strike a balance between worker protection and labour market flexibility. While according workers with basic employment protection and benefits, it gives employers sufficient flexibility to manage their manpower resources.

There have been significant changes in our labour market since the Act was last amended in 1995. The services sector now employs more than two-thirds of the workforce in 2007, up from 61.5% of the workforce in 1997. Our workforce profile has also changed. Notably, Professionals, Managers, Executives and Technicians (PMETs) now form nearly half the resident workforce, up from 40% a decade ago. Outsourcing is also becoming more prevalent and with it, employment tenures have shortened. The number of contract workers has increased, accounting for 12% of the resident workforce currently. Wages have also gone up significantly since 1997.

In light of these changes, it is timely to update the EA to ensure that it remains relevant and responsive to the changing labour market conditions. Employment protection and benefits for certain groups of vulnerable workers need to be enhanced. Employment standards also need to be revised to better reflect employment norms while maintaining labour market flexibility.

My Ministry has worked closely with the unions and employers in the review of the EA to ensure that the amended Act balances the interests of both employees and employers. The amendments that I

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will be presenting today are the outcome of extensive discussions among the tripartite partners. As part of the consultation process, feedback from the public was also sought on the proposed changes.

This Bill, which is proposed to take effect on 1st January 2009, covers changes to the EA in three key areas. First, the coverage will be revised to keep pace with changes in the workforce profile. Second, we have updated the employment standards and benefits. Third, we will enhance penalties and enforcement powers, and rationalise administrative processes and outdated provisions. Let me now elaborate on the amendments.

Revising coverage

Confidential staff: No longer excluded from the Act

First, we will revise the coverage of the Act. Currently, the Employment Act covers all employees, except seamen, domestic workers, confidential staff, and employees in managerial and executive positions.

Confidential staff were previously excluded to avoid conflict of interest as some of them may be dealing with sensitive personnel matters. Today, most confidential staff, such as secretaries and HR clerks, hold rank-and-file positions and are seldom directly involved in sensitive matters. There is, therefore, no reason to continue excluding them from coverage under the EA. Accordingly, clause 2(c) amends the definition of "employees" to extend the EA's coverage to the 153,000 confidential staff in Singapore.

Managers and executives: Access to Labour Court for salary claims

Managers and executives are also currently not covered as they are

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generally in a better bargaining position. However, based on the Ministry's experience, the most common type of assistance managers and executives require is the recovery of salary claims, especially those who are more junior and paid less. They often find it costly to take up civil suits to recover salary arrears.

Therefore, we will allow junior managers and executives earning $2,500 and below in basic monthly salary, to have access to the Labour Court for salary claims. With the increasing proportion of PMETs, a significant number of employees will benefit from the access to this lower-cost dispute resolution mechanism. Such a mechanism will also be helpful to employers by providing them with an efficient and expeditious avenue for resolving salary disputes with their PMET employees. This will benefit 44,000 PMETs.

Non-workmen: Increase Part IV salary threshold to $2,000 per month

Part IV of the Employment Act provides additional employment protection and benefits for the more vulnerable employees who are engaged in manual labour or are paid lower wages, such as machine operators and cleaners. Currently, Part IV applies only to non-workmen earning a basic monthly salary of $1,600 and below, and all workmen regardless of salary. In line with the significant wage increase since the last revision of the EA in 1995, clause 11 will update the basic monthly salary threshold for non-workmen from $1,600 to $2,000, benefiting some 82,000 employees.

Workmen: Introduce Part IV salary threshold of $4,500 per month

On the other hand, highly paid and skilled workmen are able to negotiate for favourable employment terms without having to be protected under Part IV.

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Accordingly, after extensive consultation with the tripartite partners, we will introduce a basic monthly salary threshold of $4,500 for workmen under Part IV. Workmen with lower income will not be affected, and will continue to be protected under Part IV.

This change will affect a relatively small proportion of workmen, making up about 0.6% of all workmen, the majority of whom are employed in fewer than 10 companies in the petroleum, petrochemical and aerospace industries. The exclusion will provide these highly skilled workmen and their employers the flexibility to offer employment packages that better suit their needs. MOM and the unions will work with employers to ensure that the affected workmen continue to be fairly treated and properly compensated when they work overtime, and on rest days. In this regard, my Ministry, through the Singapore National Employers Federation (SNEF), has discussed with employers on how the concerns of affected workmen can be addressed.

Reviewing employment standards and benefits

_Extend paid public holidays and paid sick leave to all employees
_

Second, this Bill will enhance employment standards and benefits, and keep pace with employment practices. Paid public holidays and sick leave are well-established industry norms provided by nearly all employers. However, the Act currently only prescribes these benefits for those employees covered under Part IV. Clause 28 will extend these benefits to all employees covered under the Act. This amendment will maintain the flexibility of employers requesting employees to work on public holidays for an extra day's wage, or substitute a public holiday with another working day.

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Shorten the paid sick leave qualifying period

At the same time, in line with the trend of shorter employment tenures, we have reduced the qualifying period for paid sick leave. Under clause 28, a new employee will be entitled to paid sick leave after three months of service, compared to six months previously. This is aligned with the qualifying periods for paid annual leave. To alleviate the cost burden on employers, sick leave entitlements for new employees will be phased-in from the start of their fourth month of service, until the completion of their sixth month of service. Other changes include the recognition of medical certificates from public medical institutions for paid sick leave, and provisions to enable the Minister or the Commissioner for Labour to deem an employer as having fulfilled his statutory obligation to bear medical examination fees, if he has complied with certain requirements such as the provision of specified healthcare plans.

Re-define part-time employment

Employers have also cited the short statutory part-time working hours as a barrier to offering part-time employment. Although the share of part-time employment has increased from 3.4% in 1997 to 6.2% in 2007, we still lag behind many developed countries such as the Netherlands and the UK where part-time employment constitutes 36% and 23% of the total employment respectively. To further encourage employers to offer more part-time employment opportunities, clause 23 redefines part-time employees as those who work less than 35 hours a week, up from less than 30 hours a week. This takes into account public feedback that full-time employees working five seven-hour days should not be reclassified as part-time employees and have their employment benefits reduced. The amendment will benefit employees who

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require flexible working arrangements to attend to family or personal commitments and potential entrants to the workforce seeking part-time employment.

Reviewing penalties and streamlining administrative processes

Enhancing enforcement powers

Third, we have enhanced the enforcement powers and penalties under the Act to facilitate efforts to ensure compliance with the basic employment standards. Clause 32 provides the Commissioner and Employment Inspectors with additional powers to search and examine premises for evidence, obtain photographic and videographic evidence, and summon witnesses to furnish information, articles or documents. These are similar to existing enforcement powers provided under other legislations, such as the Employment of Foreign Manpower Act (EFMA) and the Workplace Safety and Health Act.

Enhancing penalties

The penalties, which were last revised in 1984, will be increased to be aligned with those for commensurate offences in other legislations, such as the EFMA. The maximum financial penalties will be increased from $1,000 to $5,000 for first-time offences, and from $2,000 to $10,000 for subsequent offences. The maximum composition amount will similarly be increased from $200 to $1,000 under clause 41.

Finally, this Bill makes other technical and administrative amendments to the Act. The Employment Act currently allows employees to seek redress for unfair dismissal. To remove ambiguities on interpretation, the term "dismiss" is defined under clause 2(b) as a termination of employment by an employer, with or without notice, and whether on the

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grounds of misconduct or otherwise. This clarification on the application of the Act is important because an overly narrow interpretation of the term “dismissal” defeats the redress mechanism for unfair dismissal. The employer’s responsibility, which is that any dismissal should not be done unfairly, remains unchanged. MOM will continue to be stringent in assessing appeals against unfair dismissals to discourage any abuse of this avenue of redress. Where employers dismiss employees without notice on grounds of misconduct, they will be required to show cause for the dismissal and that due inquiry has been carried out. In cases where notice is given and the contractual terms of termination are complied with, the onus would be on the employees to substantiate their claims. They may do so, for instance, by showing that their dismissal arose from the employer’s intent to deprive them of employment benefits they would otherwise have been entitled to.

We have also rationalised and removed some outdated provisions. Clause 28 repeals Part X (Employment Exchange) and Part XI (Health, Accommodation and Medical Care), while clause 43 repeals section 123 because these provisions are no longer required. Similarly, clause 26 removes the outdated restriction on collective agreements in offering maternity benefits that are more favourable than those stipulated in the EA.

In conclusion, the amendments will ensure that the Employment Act continues to be relevant and meets the changing needs of employers, workers and our labour market. Understandably, some employers might be concerned about the impact on business costs, particularly given the economic slowdown. It is worth highlighting that the amendments will benefit mainly the lower wage and vulnerable workers, who

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would feel the bite of the economic downturn more keenly. Moreover, many of the changes, such as the extension of public holidays and sick leave benefits to all employees, are already industry norms and should not significantly increase business costs. It is imperative that we set the fundamentals right in our employment framework so that our labour force will remain responsive and productive, so that we will be well-positioned when the economy recovers. SNEF and SBF were closely consulted, and we have taken into account employers’ concerns and feedback in the development of the proposals. The overall package of amendments balances the protection of workers with the need to maintain the flexibility of our labour market and the competitiveness of our labour force. I am confident that the enhanced employment conditions would better motivate employees, which would translate to higher productivity and greater competitiveness.

On this note, I would like to thank all who have contributed to the review of the Employment Act, in particular the National Trades Union Congress, the Singapore National Employers Federation (SNEF) and the Singapore Business Federation (SBF). The tripartite consensus on the amendments is a testament to our strong tripartite partnership, which has brought about industrial harmony and a favourable investment climate for economic growth and job creation. This has benefited businesses, our workers and the economy significantly over the years.

Sir, I beg to move.

Question proposed.

4.20 pm

Mdm Halimah Yacob: Mr Speaker, I rise in support of this Bill.

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These amendments to the Employment Act are long overdue. The amendments will provide better protection to workers in several respects. The scope of coverage is now wider as it covers more workmen because of the increase in the salary ceiling, and for the first time, it covers non-workmen. And for the first time, confidential staff will also be covered. The exclusion of confidential staff, many of whom do not earn very high pay, is no longer practical or fair as they also need the same protection as other workers. I am also very happy to note that junior managers and executives now have access to the Labour Court in order to enforce their salary claims. Hitherto, these employees have had to pursue their claims in civil court which is beyond their means and thus constituted a major obstacle for them to enforce their rights. Giving them access to the Labour Court is therefore equitable and fair. The amendments also enhance the sick leave provision and remove the restriction in collective agreements providing better maternity benefits in line with current needs.

But this improved protection for workers has not been at the expense of business flexibility. The amendments will benefit employers too as better and clearer standards also mean workers are motivated, open to change and more productive because their interests are better taken care of. There are also specific areas of greater flexibility which are relevant for employers such as the redefinition of part-time work and a salary ceiling for workmen. So I hope that employers will look at these amendments in their entirety, as I am aware that there are some concerns among employers on the timing of these amendments considering that we are in the midst of an economic downturn. I urge employers to give their full support to these amendments as it will not be fair to workers to have to wait until the downturn is over and we start

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experiencing strong growth again, which may be at least a few years down the road. These amendments were the result of tripartite consultations and have taken into account the different needs of the economy, employers and workers, and they in fact provide very basic employment standards which every decent employer should subscribe to regardless of the economic situation.

Let me now, Sir, make some specific comments and observations on the amendments.

For the first time, a salary ceiling has been imposed on workmen earning $4,500 per month. About 5,000 workmen will be affected by this change. This means that workmen earning this pay will no longer be automatically entitled to overtime, rest day and public holiday pay unless these are stipulated under their contracts of service or collective agreements.

The NTUC has had extensive consultations with our unions that are likely to be most affected by this change. Our affected unions understand the rationale and appreciate that the amendments also provide for the increase in the salary threshold of non-workmen to $2,000 which will benefit a significantly larger number of workers. Nevertheless, they have also voiced some concerns which I wish to highlight.

Workmen who currently earn more than $4,500 are concerned that some employers may take advantage of the change in law and start cutting back on their overtime, rest day and public holiday pay. Although all the workers from our affected sectors are currently covered under collective agreements which provide for such payments, nevertheless, they are concerned that after the collective agreements expire, employers will cite the new law as the basis to

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refuse further payments under a new collective agreement. As this is a valid concern, I would like to request that MOM monitors the situation to ensure that employers who are in a position to pay and have no valid reasons whatsoever to cut back on these payments will not take advantage of the new law to deprive these workmen of benefits that they are currently already enjoying. Such a move will create serious morale problems among the affected workmen most of whom are paid high wages because they are highly skilled workers and truly deserve those salaries. Although their number is small, nevertheless, their interest, too, deserves full attention and support, and I urge the Minister to address this concern adequately.

We also strongly welcome the increase in the salary threshold for non-workmen from $1,600 to $2,000 which will extend the protection of the Act to an additional 82,000 employees. This increase is necessary and timely as the Act's coverage has diminished because of the increase in salary levels. The Act now covers only 45% of the workforce, a situation which will deteriorate further if there is no increase and which will undermine the relevance of the Act. Some felt that the increase from $1,600 to $2,000 is rather modest and would have preferred it to be pegged to the median wage of $2,300. But we have taken into account employers' concerns over costs and have agreed to a limit which they are also comfortable with.

But our concern is that review of the salary ceiling takes such a long time. The last review was done in 1995, about 13 years ago. We hope that the next review of the salary ceiling for both workmen and non-workmen will not take another 13 years.

We urge the Minister to review the salary ceiling – both for workmen and non-workmen – regularly, at least, once every three years.

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On the redefinition of part-time work, Sir, the amendment has redefined part-time work to cover those who work less than 35 hours a week, up from those working less than 30 hours a week (the old definition). This redefinition is useful as it will help to promote employment of Back2Work women and also the re-employment of older workers. Employers will now have greater flexibility in organising work and working hours in a manner that suit their needs. However, one concern that has surfaced is whether some employers will take advantage of the situation and start converting full-time workers to part-time workers as there are some full-time workers who work less than 35 hours a week. I would like to ask the Minister what safeguards will be put in place to ensure that there is no abuse of this new definition by companies, especially in those sectors where part-time work is more prevalent or where full-time workers now work less than 35 hours.

On medical benefits, Sir, under section 89 of the Act, an employer is obliged to pay for the medical examination of his employees. However, the amendments allow an employer to be deemed to have fulfilled his obligation to bear the medical examination fees of his employees if the Commissioner for Labour so directs, upon the satisfaction of certain terms and conditions including the provision of a healthcare scheme for his employees. I would like the Minister to clarify under what circumstances this deeming provision will apply where an employer is considered to have complied with his legal obligation to pay for the medical examination fees of his employees. What kind of healthcare schemes will be considered as fulfilling this requirement? This clarity is important and, in my view, only healthcare schemes that are beneficial to the workers and more

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superior compared to the basic provided under the Act should qualify. One example of such a healthcare scheme would be the Portable Medical Benefits Scheme (PMBS) where the benefits are superior to the minimum standards of the law. I would like to urge the Minister to make clear the conditions where the Commissioner will allow companies to deviate from section 89, and to formulate guidelines to cover this aspect.

Sir, I welcome the new definition of what constitutes a dismissal which now covers a termination of service with or without notice whether for misconduct or otherwise. This is an improvement as it will provide workers with better protection against unfair dismissal as it is linked to section 14(2) of the Employment Act which provides an avenue for workers to appeal against unfair dismissals. In the past, we have had cases where employers argue that since they terminate the service of a worker with notice or salary in lieu, the Minister has no power to investigate into such a termination because it is with notice and it is not termed a dismissal. This amendment removes an ambiguity that has long existed in our law causing frustrating delays for workers seeking redress for unfair dismissals under section 14(2) of the Act, and I support it.

Sir, I support the enhanced penalties which have not been revised for a long time and which, if left unchanged, will have little deterrent effect on errant employers.

I would also like to take this opportunity to urge the Ministry to exercise greater vigilance and ensure that companies comply with the minimum standards stipulated under the Act for all the employees. Our experience shows that there are still a number of employers who violate the Act, and the most vulnerable are the low-skilled, low-pay

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contract workers. There are employers who continue to deny them of their basic rights under the Act like sick leave and annual leave, not to mention CPF payments. They are victims of cheap sourcing, and employers make use of them as cheap labour to tender cheaply for contracts. I urge the Ministry to exercise greater vigilance and eradicate such unscrupulous practices because we can have the best law in the world, but if the enforcement is not effective, particularly for the most vulnerable like the contract workers, we will have a problem.

In conclusion, Sir, these amendments were the result of tripartite consultations. It is yet another example of how our practice of tripartism has enabled us to reach consensus on such a potentially divisive subject matter. In many countries, amendments to labour laws are agonising affairs, often resulting in industrial action or greater polarisation between the government, business and labour. It shows that we have a mature industrial relations system and responsible employers and trade unions that are able to look beyond their narrow interest to discuss issues objectively and reach agreement for everyone's benefit.

On this note, Sir, I support the Bill.

4.31 pm

Mr Low Thia Khiang: Mr Speaker, Sir, for some years, the Workers' Party had highlighted that the definition of "employee" in the Employment Act was too restrictive. The current definition before this amendment excluded from the Act those who were holding jobs in confidential, executive or managerial positions, even if their salaries were not high and they needed protection under the Act.

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We therefore welcome the broadening of the definition of employee to include those in confidential positions. We note that the Bill also includes those in executive or management role with a salary of up to $2,500 for the purpose of Part III on payment of salary. This will allow such employees to claim salary arrears or seek recourse for unfair dismissal through the Ministry of Manpower rather than to sue in court which is costly and most of them cannot afford.

However, Sir, I would like the Minister to clarify the scope of clause 13 on working hours for shift workers. Clause 13 proposes to insert a new subsection 40(2A) to provide that an employee may be required to work longer than 44 hours per week, average of three consecutive weeks, to work on rest days and even to work more than 12 hours a day. The situation where this may be allowed will include work essential to the life of the community, defence or security. Sir, I can understand the need for this if a sudden crisis takes place, like where there are mass casualties. Working such prolonged hours on a one-off basis is understandable.

However, the section is wide enough to capture a situation of non-emergency where security manpower is deployed for, say, 15 hours on a daily basis. Is this section needed due to manpower shortage? From a human factor's point of view, is this good for public security? Since employees are now allowed under the new amendment to continuously work for such long hours without adequate rest, in moving this amendment, did the Minister consider the long-term effect on the health of such employees? I also wonder whether this amendment contradicts the concept of work-life balance which the Government has been promoting. ****

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4.34 pm

Ms Cham Hui Fong (Nominated Member): Mr Speaker, Sir, I rise to support the Bill.

The last amendment to the Employment Act which adjusted the salary ceiling for employees was in 1995. So for the last 13 years, the profile of our workforce has changed rapidly with the move towards a knowledge-based economy. The rapidly reducing coverage means that more and more employees, especially the Singaporean workers, are not covered by the Act.

We therefore welcome the initiative by the Government to increase the salary ceiling to $2,000, to enable a wider coverage of the Singaporean workers.

There have been extensive consultation and discussion with our union leaders on the changes. Most have been supportive. However, we do have some concerns which we would like to seek clarification.

First, the proposed changes to section 35 will hence only apply to workmen whose salary does not exceed $4,500. Before the changes, all workmen, regardless of salary, are protected under Part IV of the Act. Imposing such a cap will affect perhaps less than 1% – the Minister mentioned 0.6% of workmen today – or some few thousand workers essentially coming from the petroleum, petrochemical, pharmaceutical and aerospace industries.

There were a lot of resistance from these workers when we first raised the subject with them. But they have eventually come to understand the rationale and the total approach that the Ministry is actually looking at the amendments. But, importantly, we would like to ensure that there must be fair play and fair rewards in the transition. What we do not want to see is the employers

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citing the law and deny them of this compensation when they actually performed overtime beyond the contractual working hours. So we would like the Ministry to give us an assurance that those workmen who are currently earning more than $4,500 and are expected to carry out overtime, be it on rest days or public holidays, that they must be fairly compensated for their work done. Some companies that we spoke to, which are already aware of these changes, do not want to make any indication to the employees as yet. They would like to adopt the wait-and-see attitude, and I think a lot of them are actually looking at signals coming from the Ministry.

May I also ask if the cap of $4,500 will be reviewed over time, if the general salary of the workmen rises? We would also urge the Ministry to have regular reviews on the salary ceilings and all the employment terms and benefits, probably once in three years.

Second, on the protection of junior executives in the Employment Act. We have always assumed that executives and managers need not be covered under the Act as they are able to negotiate on their own terms of employment and seek redress through their own lawyers if they have claims against the employers. However, with the increasing proportion of new entrants joining as junior executives, we have seen many cases where they encounter difficulties, especially so during the last Asian Financial Crisis and also during good times when they are unable to make statutory claims from their employers. Hence, we will support the proposal to enable a manager or an executive earning less than $2,500 to have access to the Labour Court or claim for the unpaid salary. But we would also like to state that the salary proxy used here in this regard should not be regarded as the standard or the criterion in allowing junior managers or

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executives to join the rank and file unions, with limited representation, under the Industrial Relations Act.

In the Industrial Relations Act, executives and junior managers are eligible to join the rank and file unions, with limited representation, in areas such as unfair dismissal, retrenchment benefits and the breach of contract. The eligibility is determined by whether the person has substantial influence on industrial matters or if he has access to confidential information affecting industrial matters. So here we would like to clarify that the eligibility criteria, in the case of the IR Act, should be mutually discussed and agreed with the unions. Hence, the $2,500 salary proxy used in the Employment Act protection for executives should not be seen as the standard set for representation under the Industrial Relations Act.

Third, all the proposed changes will invariably lead to cost increases for businesses. And the timing has, unfortunately, raised some concerns among the employers. Earlier when we consulted the employers, the feedback given to us was that they would probably need some time in the transition period because they would probably need to make adjustment to the payroll system. They would have to work out the different formulas to actually compensate the workers where overtime is concerned. Today, when we engage them again, the scenario has changed totally. Overtime has been reduced in most companies over the last few weeks, and is going down very rapidly. In fact, a lot of companies are actually moving into shorter work week and temporary layoff and the numbers keep increasing.

Hence, in times like this, we would like to urge both the companies and workers to take a total approach in managing the cost. Companies should optimise whatever resources and support the Government is providing in areas that

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will support the training and upgrading of their workers. They should take the opportunity to improve the quality of the employees and also reposition themselves. We also want to urge the employees to exercise flexibility, which may include changes in their work patterns, taking up new job roles and probably taking up new skills. At this point in time, we would want the employers and workers to stay engaged, be consultative and transparent. I think this is an important time that we must continue to build trust. And these are necessary measures to stay nimble and viable.

Sir, on this note, I support the Bill.

4.39 pm

Mr Siew Kum Hong: Mr Speaker, Sir, I rise in support of this Bill.

Sir, this Bill is a timely update to the Employment Act. Since the last substantive update to the statute in 1995, we have seen significant changes to the labour market in Singapore. It is therefore an opportune time to revise the Act.

Sir, I do not propose to speak about the actual amendments that the Acting Minister has introduced in the Bill. I am sure the other speakers in this House will do far better than I could. Instead, I will touch on some areas not addressed in the present Bill, which I hope the Acting Minister will consider.

But before I go into them, I think it is useful to first set into context the function and purpose of the Employment Act.

Sir, our economy is built on capitalist principles, with the fundamental premise being that the operation of the free market should result in the most efficient, and hence best, outcome for society. But events over the past few months have shown that the unregulated free market

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can be a dangerous thing. It can lead to undesirable, even extreme, results. Clearly, there is a role for government in a free market, and we should not be reluctant or afraid to regulate where appropriate.

In the labour market, unequal bargaining power can lead to unfair treatment and exploitation of workers. It is easy enough to point to employees’ freedom of contract, but that freedom can be illusory in many circumstances. This is why we need legislation like the Employment Act, to provide for workers’ rights and to protect workers against exploitation. And, in this regard, there should be no distinction between local and foreign workers. Indeed, the Employment Act itself does not make such a distinction. After all, the Employment Act is meant to protect workers against exploitation by unscrupulous employers. What does it matter, if the workers in question are foreigners?

As a developed society, as a civilised society, we have to be committed to protecting the rights of all workers, not just locals. Because all workers, whether local or foreign, are more than just abstract factors of production; they are human beings, flesh and blood, worthy of our protection.

With these principles in mind, I now turn to my proposals for the Acting Minister’s consideration.

My first three proposals concern the Labour Court. The Labour Court is empowered to inquire into and decide disputes between workers and employers, relating to the terms of the employment contract or the provisions of the Employment Act. Orders of the Labour Court are enforceable as judgments of a District Court. So if a worker goes before

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the Labour Court and wins, but the employer does not pay up, then the worker has to take out the necessary writs of execution against the employer in the District Court, to enforce the order.

This can cause the worker hardship in certain cases. If the dispute is over unpaid salaries, then the worker will probably be low on cash in the first place. Yet, he is expected to find the money to engage a lawyer to take out writs of execution against the employer. This cannot be right.

As a question of law, a worker will be entitled to recover legal costs against the employer. But the worker will have to put up a substantial amount of cash as an upfront deposit, either to cover the lawyer's cost or to the court’s bailiff in the case of a writ of seizure and sale, or to both. Furthermore, this presupposes that the execution is successful – if not, the worker would be out-of-pocket on these legal costs which means it is a bit of a gamble on whether to take up a writ of execution.

In cases where an unscrupulous employer plays hardball with a worker and refuses to pay despite the Labour Court's order, a worker could be left without any real recourse despite winning an order from the Labour Court. In such cases, justice would have been denied to the worker. This undercuts the objective of empowering the Labour Court to hear and decide disputes in the first place.

So my first proposal is for the Labour Court’s powers to be expanded, in one or both of the following manners. Firstly, the Labour Court could be empowered to order the employer to pay the sum in question to the Labour Court in escrow – who will then in turn pay it to the worker. Employers are much less likely to withhold the sum in question when it is payable to the Labour Court, instead of the worker. A failure to pay within the prescribed

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period could also be made a contempt of court or an offence punishable by a fine.

Secondly, the Ministry could set up a dedicated unit to help the workers enforce the Labour Court's orders. This unit's services would be free to workers, but recoverable from employers as legal expenses, which the Ministry can then retain to fund this unit's operations. Access to this unit could be limited to low wage workers.

This proposal, if adopted, could result in claimants before the Labour Court being better off than plaintiffs in court proceeding. I would argue that this outcome is justifiable, on the basis that workers relying on the Labour Court are normally disadvantaged plaintiffs who merit this additional help. These enhancements are necessary to give teeth to the Labour Court's orders, to ensure that they do not end up being mere pieces of paper.

My second proposal is related, and it pertains to the plight of foreign workers who have successfully won their claims before the Labour Court. I understand from the NGOs working in this area that a foreign worker, who is trying to enforce the order against the employer, may sometimes not be allowed to remain in Singapore. While the Ministry will normally grant a Special Pass to a foreign worker pending the resolution of his claim before the Labour Court, I am told that the enforcement of the resulting order is not considered as falling within the ambit of the Employment Act, and therefore the worker may not get his Special Pass extended, such that he can remain in Singapore to enforce the order.

If this is true, then the foreign workers who have not found alternative employment and hence have to rely on a Special Pass to remain in Singapore would be unable to enforce the orders. If the

Ministry intends to retain the current system whereby foreign workers have to

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enforce orders of the Labour Court itself, then it should ensure that they can stay on in Singapore for a reasonable period to enforce their judgments.

My third proposal concerns the court's jurisdiction over workers' claims. The court may only decide upon matters arising up to one year before the date of lodging of the claim. This one-year time-bar is arguably too short, and should be extended to at least two years.

In many cases, especially in bad times where alternative employment could be hard to find, workers will be reluctant to lodge a claim against an employer who has shortchanged them so long as they remain in its employment. This is quite understandable, and such workers could be severely disadvantaged by the one-year time-bar.

For instance, fixed-term employment contracts are increasingly common in Singapore. Many contract workers sign one-year contracts, while others sign two-year contracts. But this one-year time-bar means that a worker on a one-year contract, who was shortchanged from day one but was reluctant to make a claim until the contract finished, will have to lodge a claim on the first day after the end of the contract. This is unrealistic and unnecessarily restrictive.

The problem is especially acute for foreign workers. Their work passes are at the mercy of the employer, creating an even greater deterrent against complaining while they are still serving the contract. Furthermore, foreign workers are typically on two-year employment contracts and work passes. This means that if they wait until their two-year contract expires before making a claim, they will not be able to get recourse for breaches occurring during the first year of their contract. Foreign workers are therefore caught in a Catch-22: complain and see the current contract terminated, or keep

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silent and have no recourse for breaches in the first year.

Furthermore, all claims must be lodged with the Labour Court within six months of the worker leaving employment. Contrast this with the Work Injury Compensation Act. Under that Act, a worker can make an accident claim within one year of the date of the accident. There does not seem to be a good reason why a worker who has suffered a work injury has up to one year to claim for compensation, whereas a worker who has been exploited by the employer only has six months to file a claim. I therefore hope that the Acting Minister would relax this six-month requirement, and increase the period to a year.

Sir, I now come to my fourth proposal, which relates to domestic workers. This Bill extends the Employment Act to cover many more classes of workers, but continues to omit domestic workers, regardless of their nationality.

This issue was addressed during the public consultation on the changes to the Employment Act. The Ministry's response then, was that:

"Given the nature of their work, it would be difficult to regulate their employment conditions (eg, hours of work, overtime, etc) under the Employment Act. Instead, foreign domestic workers (FDWs) are protected under the Employment of Foreign Manpower Act, which requires the employers to provide for the workers' well-being, safety, accommodation, and salary payments."

Sir, this response by the Ministry only addresses foreign domestic workers. But the definition of "domestic worker" under the Employment Act includes gardeners and drivers as well. There are also local domestic workers, some of whom are employed by cleaning agencies, whether

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on a part-time or full-time basis, to provide maid services to customers. With neither the Employment Act nor the Employment of Foreign Manpower Act applying to them, all of these workers are bereft of any statutory protection, left exposed and unprotected.

Furthermore, as I understand it, the Employment of Foreign Manpower Act only prescribes general requirements in work passes, without specifics like in the Employment Act. In the absence of specific requirements, protection for foreign domestic workers may be weak.

In any case, there are some aspects of the Employment Act which could be extended to cover foreign domestic workers, without affecting the nature of their work. For instance, protections governing the termination of employment can be extended to cover the termination of employment of foreign domestic workers, without affecting their ability to perform their duties. This should not be controversial.

I would also like to take this opportunity to call for a compulsory rest day for foreign domestic workers. Much has been said before about this issue, and I will only add a few words. It is to me inconceivable that we consider ourselves a developed society, and yet we do not grant a maid even one day off a month as of right. Imagine that. We cannot find it in ourselves to say that the very bare minimum amount of rest that a human being should get, is one day off after working 29 or 30 days in a row. However, we try to dress that up, however we justify and rationalise the status quo , our failure to prescribe a mandatory rest day is wholly unacceptable and fall far short of the standard of the developed country.

Sir, I now turn to my fifth and final proposal which pertains to the wages and welfare of foreign workers. During the

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public consultation exercise, there was a call for the legislation of a minimum wage. The Ministry rightly rejected this, correctly pointing out that a mandatory minimum wage would lead to rigidity in the labour market, compromise Singapore's cost competitiveness and adversely affect workers. I think that must be correct.

Having said that, I believe that there is nevertheless room for some form of wage protection for foreign workers. The Ministry imposes a levy on foreign work pass holders, on the basis that this levy is necessary to avoid local workers being priced out and to prevent businesses from unduly favouring foreign workers over local workers as the cheaper option.

At the same time, many foreign workers are clearly being under-paid. Many foreign domestic workers receive salaries of less than $300 a month, while some non-domestic foreign workers, such as those in the shipyard and conservancy sectors, are paid daily wages as low as $14 a day, or $322 or so, a month. These figures are almost certainly far less than the economic value of their services.

Meanwhile, the levies on foreign work pass holders range from $150 to $450 a month. If the purpose of the levy is essentially to equalise the cost of employing a foreign worker, then there is no reason why at least part of the levy cannot be passed on to the worker, because the cost to the employer remains the same. This would be fairer to foreign workers, and would also help those who have incurred debts in coming to Singapore to clear their debts faster.

Alternatively, even if the Ministry is not minded to directly pay the levy to foreign workers, it could nevertheless use the levies collected for their welfare, for instance, by funding health or repatriation insurance schemes for them. While

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employers of work pass holders are required to take out health insurance for their workers, the insurance coverage required is low and is usually inadequate for protracted hospital stays or extensive medical treatment. I urge the Acting Minister to consider using the levies for the benefit of the workers without whom there would be no levies in the very first place.

Sir, the coming years will test our economy and our workforce. This makes it critical that we ensure that, even as we focus on helping businesses survive the downturn, they are nevertheless required to treat workers fairly and justly.

Some of the issues that I have chosen to speak on in this speech may be more relevant to foreign workers than to local workers. I chose to speak on these issues, because the relationship between employers and foreign workers is often much more unequal than between employers and local workers, making foreign workers more vulnerable. In a glooming downturn, it becomes even more important to ensure that the law effectively protects foreign workers, just as it protects local workers. That is why I felt compelled to raise these issues in this debate, and I hope that the Acting Minister will give my proposals due consideration.

Sir, with that, I support the Bill.

4.52 pm

Mrs Josephine Teo (Bishan-Toa Payoh): Mr Speaker, Sir, last week in Hong Kong, I met businessmen who shared their assessment of the impact of the financial tsunami. Among other things, Hong Kong businessmen with interests in China, especially in the Pearl River Delta, highlighted that the troubles had been exacerbated by the introduction of the new Labour Contract Law in China in January this year.

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The new law in China protects employees with at least 10 years' service from being dismissed, except in very specific circumstances. The new law also requires employers to contribute to employees' social security accounts, set standards for employees on probation and specifies severance pay in the event of retrenchment. On paper, these measures go further than what our Employment Act in Singapore provides. Together with minimum wages already in place, the new law in China had led to an increase in compliance costs for businesses.

Sir, the labour movement in Singapore is keenly aware of the potential impact of changes for our labour laws on businesses. Therefore, while we seek to strengthen protection for workers, it is not our intention to push for changes that impose unreasonable burdens on businesses, especially in a downturn. Therefore, it is important to note the significant differences between labour laws in Singapore and many other countries.

First, we have not asked for minimum wages to be imposed. This is despite the downward-wage pressure faced by lower-skilled workers due to the ready access of low-skilled foreign workers. Instead, we have supported a more sustainable approach of supplementing wages of low-income workers through the Workfare Income Supplement Scheme and levelling up the workers through generous funding for job re-creation and skills upgrading.

Employers in Singapore should not take this position for granted because in many other countries and even in Hong Kong, political parties have succumbed to populist sentiments to push for minimum wages so that workers can better cope with the widening income gap.

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Mrs Josephine Teo (Bishan-Toa Payoh): 4.55 pm

Second, our social safety system has been established for nearly 50 years and has gone through refinements. These refinements, eg, the introduction of Medisave and MediShield, CPF LIFE have been made after careful consideration and with a eye on the long-term needs of Singaporeans.

Sir, in social safety, the Singapore Government has done its part to provide subsidies for public housing, sustainable management of healthcare and advanced planning for the retirement needs of Singaporeans. This state of affairs should also not be taken for granted. In the case of China, where the social security system is at its early stage and still evolving, changes to the law have inevitably affected businesses. We are fortunate that in Singapore, employers' manpower costs are no longer subject to social safety needs, eg, when we refine the CPF to introduce CPF LIFE, we did not require additional funding by employers.

It is, therefore, against this backdrop, that we consider the Employment (Amendment) Bill. While the timing is not perfect, and I think we mostly agree on that, we should test the reasonableness of the amendments in the medium to long term. In this regard, the Ministry of Manpower deserves praise for pushing ahead with the changes, despite the slowdown, and for applying a balanced approach in the consultation process, both with the unions as well as with the employers.

Sir, in discussions with union leaders, we have noted the raising of the salary ceiling for non-workmen, under Part IV, from $1,600 to $2,000. This means that more workers will be eligible for overtime payment. However, a concern that has

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been raised by union leaders is that employers may start to incorporate allowances into the workers' salaries so that they just marginally exceed the $2,000 threshold, and they do so in order to avoid having to pay overtime to such workers. In such cases, I hope to seek the MOM's assurance that it will look into the specific conditions of such cases and require the employer to act within the spirit of the law.

Sir, overall, the amendments can still be expected to cost the companies, and require some adjustments by them. Recognising the challenges that the employers may face, I would like to request the Government's assistance in three areas:

First, the enforcement to be done in a firm but fair manner. In this regard, smaller businesses may take time to understand the changes. In genuine cases where the businesses were unaware or misunderstood their new obligations, and if they are willing to make good in a timely manner, I propose that we need not overly penalise them as it is also not in the employees' interests to do so.

Second, Sir, I believe that the companies could have excess workers during this downturn. And I take the Government's assistance to encourage the companies, instead of retrenching, to send their workers and their staff for training. To do so, training grants could be made substantially enhanced to help companies tide over their difficulties. Also, we need to recognise the pressure on mid-level staff – not only on the lower income, lower wage staff – whose salaries are higher. I hope that we would not forget them in the kind of courses that we make available for funding support and also that we should set the grant cap appropriately to recognise the different cost of programmes relevant to mid-level staff.

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Sir, thirdly, in line with the adjustment to the salary ceiling of Part IV, the salary cap on absentee payroll should be reviewed and possibly increased so that companies could be motivated to include more workers in their training efforts during the downturn. Otherwise, if companies cap the payroll to mid-level staff at the funding cap, these mid-level staff will also not be motivated to go for training. It will be a lose-lose situation for all of us.

Sir, I would like to conclude in Mandarin.

(In Mandarin) : [For vernacular speech, please refer to Appendix A.] Mr Deputy Speaker, Sir, the labour law provides the regulatory framework, but not total protection. Ultimately, the best welfare for the worker is to give them a good job, and the best protection for the worker is full employment. However, during difficult times, when employers face labour shortages, they will proactively improve wages and working conditions.

Therefore, the most pressing concern of the Government is how to prevent the current downturn from moving into a long and deep recession. We need to work out effective strategies to restore economic growth. So, I urge the Government to assist companies in overcoming rising costs and cash flow problems in order for them to remain competitive, and not resort to wage reduction or retrenchment as the solution to the problem. This way, we can better help workers keep their jobs.

Sir, I support this amendment Bill.

5.00 pm

Dr Lim Wee Kiak: Mr Deputy Speaker Sir, I read an interesting article on a Viking ship a few days ago. The Viking ship which was built in 700 – 900 AD is considered by many as one of the ancient

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engineering marvels in sea faring. The Vikings combined both rowing and sailing in their design to take advantage of manpower and wind power, and it is important for them to balance the use of these forces to achieve maximum speed, as well as manoeuvrability. Among the Viking ships, the longship is the most versatile with a length of about 100 feet, a 20-foot beam, up to 60 oars, and runs on a crew of 70-80. These ships can carry up to 20 tons of supplies. To run such ships optimally, the Vikings need to harness both the manpower, as in the rowers and the wind power, effectively. During calm seas and strong winds, the rowers can actually relax a little bit. The captains can order them to slow down and give them more welfare, but during a stormy weather, the rowers have to work hard. With the sails up, in fact, the wind can overpower the rowers and capsize the ship. Similarly, if the rowers are not committed to their tasks and slacken, the ship can be capsized easily as well.

With our looming economic storm, each enterprise is like a Viking ship trying to stay afloat and on course. The employees or workers are crucial crew to ensure the ship maintains its balance in this stormy sea. While it is important to ensure that our workers and employees are well protected and their welfare taken care of, it is even more important to ensure the ship stays afloat and sails safely through this stormy sea. If the ship sinks, all the crew, along with the captain, will perish.

I rise in support of the Bill as it will give the Ministry of Manpower more teeth to protect the interest of our workers against irresponsible employers, and I strongly support the provision to enhance the penalty for those who flout the law on the Employment Act, as stated in the amendments.

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However, there are areas in the proposed amendments which, I feel, could be introduced at a more opportune time than now when businesses and industries are scrambling to keep themselves afloat amidst this financial storm. The employers are facing many cost increases in the last two years: wage increase, extension of skill development levy to include all workers, increase of medical insurance premium for their workers, rental increase, raw material increase, transportation cost increase, utility bill increase, and many more. It seems to me that the amendments in this Bill will further increase the business cost to our enterprises and erode our competitiveness.

With the amendments, I note that we are casting a wider coverage which means more workers will fall under the ambit of the Workmen's Compensation Act, by raising the salary threshold under the Bill in question. This, I feel, will invariably bring about an added cost to all employers because the insurance companies will revise the premiums as they have to cover a bigger ground.

Secondly, I hope that the Minister can explain how the salary ceiling of $4,500 under clause 9, subsection (1) of section 33 was reached, and the threshold of other employees from $1,600 a month to $2,000 a month was derived in drawing up the amendments. I note that in Malaysia, their Employment Act has a ceiling cap of not more than $1,500 ringgit for employees. However, their Act was amended in 1998 to include employees earning $1,500 to $5,000 ringgit, but they are restricted to issues relating to wages, allowances and other cash benefits. What protection and assurance will there be for employers against employees who may try to exploit the Act for self?

Another amendment that will increase the cost indirectly to employers is the

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revision from six to three months for an employee to qualify for sick leave. This, I believe, our approach is somewhat different from Malaysia and Hong Kong. In Malaysia, it is 14 days leave in a calendar year for those who have worked for less than two years, while in Hong Kong, an employee gets two days paid sick leave for each completed month of employment during the first 12 months. I would like the Minister to enlighten this House on the benefit of our approach as compared to our neighbouring countries and competitors.

I certainly hope that the Government has taken into consideration the additional weight that these changes will add to the burden facing businesses altogether. The business community will look forward to the relief that the Government can provide, as mentioned by the Prime Minister last weekend. This financial storm is no ordinary storm. It is the perfect storm of this century for the financial industry and for some, they have termed it the "financial tsunami". There are already many ships that have fallen and sunk along with the crew. Even an aircraft carrier like Lehman Brothers has capsized. While I support the measures taken to protect and benefit our workers, we need to be cognisant of the plight of the employers during this stormy season. I hope that the Government will introduce measures to keep our fleet of ships afloat, as soon as possible, before we lose more ships or crews.

5.05 pm

Mr Zainudin Nordin: Mr Deputy Speaker, Sir, the last time that a substantive revision was made to the Employment Act was in 1995, and the labour market, profile and conditions have evolved noticeably since then.

We know that the employment growth in Singapore slowed in the third quarter, with the job market expected to

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deteriorate further as the global economic slowdown and the financial crisis take its toll on our economy. Unfortunately, at times like these, employees seem to be the easiest target for any cost-cutting measure. This is akin to the ship captains unloading their burden into the high seas in the middle of a storm. Unfortunately, in this case, the deck hands are the ones being thrown overboard.

Preliminary estimates are showing that the number of retrenchments rose to 2,000 in the third quarter, compared to just below 1,800 in the previous quarter. At times like these, we have to make sure that the Employment Act stays relevant and current to be able to protect workers and also maintain order in the industry.

The proposal to revise the coverage of the Employment Act is timely as it addresses the changing employment market profile and salary scales. With the proposed amendments, confidential employees such as accounts assistants, human resource clerks and secretaries will no longer be left out and will be entitled to basic employment benefits and protection, equivalent to their other counterparts.

Salary protection is also being proposed for junior managers and executives earning at or below the $2,500 monthly salary. As withholding their salary would be an offence, errant employers will think twice before victimising their junior staff members.

In the proposals to review the employment standards and benefits, I am glad to see that emphasis is being given to the well-being of workers. In these uncertain times, the employee's health must not be neglected nor sacrificed. If an employee is unwell, employers must make it easy and convenient for employees to seek medical attention, or to take medical leave and rest at home. Paid public holiday should also be seen as an entitlement, and not merely as a privilege.

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The proposal to redefine part-time employees is another welcomed move as it offers employers some flexibility to hire part-timers and, hopefully, help absorb some of the increased excess labour in the market.

The proposed amendments will also provide the Ministry with more teeth through enhancement of the enforcement powers of the Employment Inspectors. And to make sure that the "bark" is equivalent to the "bite", the penalties against the infringements will also be increased. Furthermore, the proposals to streamline the dispute resolution process will ensure that conflicts are resolved quickly and both employee and employer can quickly move on with neither party being dragged into long proceedings.

With these proposed changes, employers must relook into the employee list to appropriately define which category employees fall into. And depending on the nature of the business or operations, up to 20% of the company's employees could fall within the scope covered under the Employment Act. With such a significant portion of the workforce affected, we need to continuously check the effectiveness of the provisions and coverage of the Employment Act.

We need to make sure that the workers are getting enough protection. Everyone – including the Ministry of Manpower, the Union and employer – must work together to ensure that employers adhere to the rules and do not exploit any loopholes, or make structural changes that would unfairly exclude the employees from the protection of the Employment Act.

Sir, I would like to highlight another area that needs attention, and that is our term contract resident employees, which numbers about 200,000 and growing.

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These casual, contract and low wage workers are often found to be in a disadvantaged situation where they are deprived from basic statutory rights like CPF, leave entitlement and medical coverage. Let me ask: why is this so? Has the Employment Act been able to make a difference to improve the situation of this group of people that is growing in number? This is an area that has to be seriously looked at.

It is often said that the sign of a successful nation is not how many millionaires it can create, but the extent to which it renders help to those who have not been able to progress as much as others. This is why I am focusing on low wage workers of which many of them are in contract employment and are trying very hard to move up into the economic mainstream.

Singapore and, more importantly, Singaporeans have come a long way since our independence in 1965. We have grown and progressed together from strength to strength over the past 43 years. The transformation of Singapore from a backwater economy to one of the most flexible and dynamic economies in the world is an achievement not to be taken lightly. Indeed, it has both been an arduous, yet amazing journey.

But we all know that 2008 is already and will be a different year. We know that likelihood for the employment opportunities this year will not be good and, worse, the unemployment numbers will also increase. We are witnessing an unprecedented phenomenon that is unfolding before our own eyes and the world economy is battered by the financial crisis. The job market in Singapore will not be spared. Hence, many workers and Singaporeans' lives will be affected by this.

Sir, let me go into detail on the contract and casual workers. In 2001,

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there were only about 59,000 individuals on contract employment. However, as at June 2007, this number has increased by more than two-fold to 183,000. This comprises 12% of the working population. Cleaners, labourers and related workers constitute close to 40,000 workers. Industries they work in include cleaning, landscaping, construction and logistics sectors. They are the unsung heroes who wake up very early in the morning to clean our offices, maintain the gardens and ensure that we have clean roads.

Through our outreach programmes at NTUC, we found out that many of them face long working hours, have low skills, and do not have many benefits, savings and job security. Sometimes, unfortunately, because of all these conditions, they are not interested to go for training and upgrading. While many benefited positively from Singapore's economy growth, these workers, on the contrary, actually experienced a drop in their salaries, and have no statutory benefits and CPF payments. Some employers also resort to employing cheap foreign workers to replace them.

It was highlighted in the Report for Wages in Singapore 2007 that among the blue-collar jobs, the lowest paid groups are the cleaners, labourers and related workers who were paid a median gross monthly wage at around $750 to $800. It was also mentioned that for the past decade, all other occupational groups enjoyed wage gains with the exception of the cleaners, labourers and related workers. The highest median gross monthly wages stood at approximately $6,000 for managers. Hence, we can see that the income disparity widens further between the lowly educated and educated.

Mr Deputy Speaker, Sir, today I would like to appeal and call for a concerted national effort to help bring these disadvantaged workers and their families

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into the mainstream of our economy through concrete and active approaches that focus on self-sufficiency, advancement, assistance programmes and corporate social responsibility. And this includes a more significant improvement and implementation of the laws, as stipulated in the Employment Act.

Each and everyone of us can help to champion this cause through various ways. For example, end-user or service buyer companies can help influence good employment conditions when contracting third-party services through responsible outsourcing.

We know that in today's globalised world, there is an increasing trend towards outsourcing, and responsible outsourcing can be a big challenge for many companies. As a result, some take risk by flouting the law as they are dealing with lowly educated, lowly skilled and vulnerable workers.

Many positive developments have taken place. For example, in March this year, the Tripartite Committee on CPF and Work-Related Benefits for Low-Wage Workers (TRICOM) had unveiled a Tripartite Advisory on Responsible Outsourcing Practices to help end-user companies enhance the employment terms and conditions of employees of their service providers. This is a good initiative and many more have come on board. But the fact that such an advisory has to be released by the committee for the industry to adopt tells us many things. One compelling question is, why do we need the advisory if the Employment Act is in place?

It is sometimes very discouraging to hear that some companies appraised staff on how much cost savings they help to achieve for the company when awarding contracts, without looking at the quality of work rendered by the service providers.

Price is often the main determinant and

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service providers end up marking down their price in order to win the contract. Somehow, workers get squeezed in this vicious spiral. In many cases, workers suffered salary decline each time they work for a new employer as a result of his former employer losing the contract to a new service provider.

I urge all responsible service buyers to constantly check and review the contract specifications and ensure that they are based on performance rather than on price and headcount. The contract specifications should include industry-recognised service standards, trained and experienced workers, good financial standing, fair employment terms and investment in workers' training. Service buyers should offer longer contract tenure so that service providers are more prepared to invest in equipment and training. Last but not least, service buyers need to have audit and enforcement procedures to ensure service excellence and money well spent.

This approach is more sustainable and will benefit the host company as workers who are taken care of, especially of their basic needs, will be motivated to perform. As a result, there will be less absenteeism and low turnover rate.

NTUC will continue to work with the Ministries and its partners to conduct more outreach programmes to educate the workers on their rights and help them to resolve their problems at their workplace.

We will work closely together to launch a concerted effort to identify and prosecute, hopefully, companies breaking the law and crack down on them. It is important that we raise the awareness of employment rights and ensure that these rights are properly enforced. We should not allow unscrupulous employers who

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undercut honest competition and take advantage of workers who are so desperate to earn a living that they are so fearful of losing their jobs if they highlight their plights to others.

Mr Deputy Speaker, we have a unique tripartite relationship between Government, employers and unions that should be harnessed to enhance the lives of all workers including the low-wage contract and casual workers. Everyone must play their part, both employers, employees and also the Government. We need to pledge to work together for a better life for all workers.

On that note, Sir, I support the Bill.

5.17 pm

Ms Denise Phua Lay Peng (Jalan Besar): Mr Deputy Speaker, Sir, I rise in support of the Bill.

For the amended Employment Act to be effective in the long term, I believe it ought to pass three tests:

(1) Is the amended Act robust enough to cater for the future?

(2) Is it enforceable?

(3) Is it sustainable?

First, is the amended Act robust enough to cater for the workforce of the future? Sir, in a McKinsey interview with the CEO of Manpower Inc, one of the largest global recruitment agencies, several trends were observed:

– a global workforce that is dominated by older and more expensive workers;

– a stark increase in ‘non-regular’ or flexible staff;

– the shortened lifecycles of jobs, including hot jobs, in the IT sector, for

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example, the 'webmaster' which is fast disappearing, as many of us learn how to construct and update our own websites;

– the poor job that most companies are doing in terms of training their workers; and

– the interest in part-time jobs by older and female staff.

Sir, the workforce of the future in Singapore is one that is likely to go in the same direction, if not already there. Our future workforce is one that will be characterised by:

– more executives and other white-collar workers on site or in home offices, as a result of our excellent education system;

– more elderly workers, an outcome of our rapidly ageing population;

– more disabled workers, a result of better education of students with special needs in our schools;

– more foreign workers, due both to job preferences of locals and an overall talent crunch;

– more part-timers, likely women and retirees; and

– more contract workers on flexible work arrangements as companies continue to adopt the strategies of workforce optimisation through outsourcing.

Sir, the Act must be robust enough to reflect the profile of this workforce of the future of ours. Specifically, I believe that the inclusion of junior managers and professionals in the Act for some benefits is progressive. However, I seek an explanation on how the salary threshold of $2,500 is derived. I doubt many junior managers earn less than $2,500 and some fresh university graduates in fact

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command starting salaries of more than $2,500. So, how is the $2,500 derived and who is the specific target group intended for coverage by the Act?

Sir, I also want to commend the Ministry for the provision of the Portable Medical Benefits Scheme, which I believe is another right move to recognise contract and other temporary workers. However, the new Act is still a work-in-progress and fairly generic and traditional. I believe there is a future need for Ministry to later on further amend the Act to better suit the profiles of the workforce of the future, to address the specific needs of part-timers, contract workers, elderly workers, disabled workers and higher-salaried white-collar employees.

Next, is the amended Act enforceable? Sir, the Employment Act is the main piece of legislation governing employment practices in Singapore. Resources must be assured to ensure that the Ministry has the teeth to enforce the Act.

Whether in economic downturns or not, there is a strong need to protect the interests of the most vulnerable employee – the lower-wage workgroup amongst us. And I refer to specifically three groups, namely, the elderly, the disabled and the foreign workers (including domestic helpers) who are hitherto not covered by the Employment Act.

Sir, these vulnerable workers are likely to be the ones who will not have a voice. They are either too lowly educated, too afraid to lose their jobs or unable to articulate their concerns or present evidences in the labour courts. In an economic downturn, they are also likely to be the first to go.

We read in April this year a special report by journalist, Radha Basu, who wrote at length on the plight of the disabled, employees in our country. A few disabled people she spoke to rejected her

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interviews fearing that they will be fired or not be able to get a job in the future. From various interest groups, we have also heard the plight of foreign Bangladeshi Indian workers who are stranded in Singapore due to unfulfilled job promises by some employers. Many have taken up extensive loans in their home country in the hope of work in Singapore, and are now too poor to return home. The same can also be said of domestic helpers, local and foreign, who are not included in the current Employment Act. Perhaps we can take a leaf from Taiwan, which actually has provisions to work with the home countries to limit, in fact, the quantum of brokerage fees or loans before these workers secure work in Singapore.

Sir, we need more teeth to protect these vulnerable groups. I fully understand that the root causes of their plights are not simple to resolve. But unless action is taken in collaboration with the other stakeholders, for example, the home countries of the foreign workers, we will risk our reputation of being a progressive country.

I know the Minister, the Senior Parliamentary Secretary and the Permanent Secretary of the Ministry of Manpower are personally empathic and want to do the right thing. I, therefore, ahead of the Budget debate, urge that more resources be accorded to the Ministry to study, analyse, prioritise and address the top needs of these vulnerable groups – low-wage, elderly, disabled and foreign workers.

Last but not least, is the amended Act sustainable? Sir, I want to also call for balance and moderation as we try to protect the needs of employees and workers in Singapore.

All of us operate in an eco-system – change in one part affects another. As

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many of us call for more protection for the rights and welfare of employees, there is a strong need to ensure that the cost of business in human resource is moderated so that businesses can sustain and jobs are kept. Therein, I believe, lies the tension and challenge of ensuring that the triad of interests of (1) employer; (2) the employee and (3) the nation is balanced.

With the widespread introduction of the five-day work-week; generous maternity leave and childcare leave; coupled with reservist leave; paternity leave; compassionate leave; and in the case of some industries, the benefit of school vacations which add another, easily, eight weeks of leave, organisations are hard-pressed to deliver results with the same manpower. When companies find Singapore less than competitive, then the provisions may not be sustainable and in winning the war, we may lose the battle in keeping the jobs for the very people we care about. Hence, the need to moderate and think of the bigger picture as together we work to adopt an employment legislation that is viable over the short and long term.

In conclusion, I want to thank the Minister for the proposed amendments which, I believe, are definitely moving in the right direction. I support the Bill, Sir.

5.24 pm

Mdm Cynthia Phua: Mr Deputy Speaker, Sir, I would like to begin by commending the proposed amendments under the Bill before the House, especially the amendments in dealing with unfair dismissal and allowing more workers to be eligible to be heard in the Labour Court.

However, there are some areas that the Bill should be more specific about. I am concerned about the wages for contract workers. I share the same concern of Mayor Zainudin. Contract workers play an important part in our

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economic development. They are like the booster to an engine. Whenever the economy picks up, companies would turn to contract workers to supplement their full-time workforce to cope with increased production. These contract workers are not always unskilled or inexperienced hands. Sometimes, these are workers who have good experience except that they are not able to get full-time employment for one reason or another. In fact, it is not uncommon for contract workers to eventually work their way to become full-time employees. Presently, some of these workers have no minimum wage, no medical/hospital benefits, no insurance coverage and no CPF. These contract workers, most of the time, have agreed on these unfavourable terms as they need the extra cash because of financial hardship. Circumstances make these contract workers to fall into the temptation of accepting such job offers. Now with older workers joining the ranks of contract workforce, in view of the poor economic situation, we should see to it that they are not exploited because of their difficulty in seeking re-employment. For many years, the Manpower Ministry has been trying to resolve these employment conditions for the contract workers and has yet to give them a good employment package. I hope the Ministry would take this opportunity of the amendment to the Bill to enhance the employment terms for the contract workers.

My next concern is that there should be paternity leave in the Employment Act. We often speak of the need to be family-oriented, and for fathers to play a greater role in minding the child and helping their wives by playing a bigger role in the family. Previous polls have shown us that many Singaporean women would be more willing to have more babies if their husbands could share their duties. In line with our mission of getting more married couples to have babies, paternity leave

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should receive as much emphasis as maternity leave. Pregnancy is a shared responsibility between married couples. We should get the men to be responsible for the parenthood at the birth of the child.

Let me recount my personal experience. All my four babies were by caesarean birth due to medical conditions. I was in hospital for five days and needed another one week before I could really care for the baby properly. The best support I had was from my better half, who understood my needs and helped me to cope with the baby. This is especially crucial for the first baby as everything was for the first time, more consultation and support are needed. His presence meant much to me and the baby. Hence, I could have four babies. And I asked for 10 days, at least, for paternity leave for our fathers.

While we are on the topic of babies, I wish to appeal for the Baby Bonus benefits to be extended to single parents. This is an issue that has created some controversy but has yet to be thoroughly explored. Single parents were excluded mainly because the purpose of the Baby Bonus scheme was to encourage Singaporeans to get married and have babies. It was emphasised that the children of single parents will not be disadvantaged as they will enjoy the same benefits as other children. But intentional or not, a child of a single mother will be deprived of many things from birth because the mother is denied maternity benefits that her lawfully-wed counterparts enjoy. Notably, the child will spend less time with his mother as compared to other children. The mother's spending power may be greatly compromised because she gets less paid leave on top of the fact that she does not have a husband to supplement the household income.

Whether a mother is a single parent or not does not escape the fact that she has

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contributed to the country by helping the population to expand. It also does not diminish her responsibility to give the child a good upbringing so that the child becomes a useful citizen one day. The role of the Government is to provide a conducive environment for a parent or parents to nurture their children. We should ensure that every child enjoys equality right from birth, especially if it is within our means to do so.

Mr Gan Kim Yong: Mr Deputy Speaker, Sir, I thank the Members for their comments and their support for the Bill.

The proposed amendments will ensure that Employment Act remains up to date and continues to provide our workers with adequate protection without compromising our labour market flexibility and competitiveness.

I shall now address some of the specific points that are raised by Members this afternoon.

Dr Lim Wee Kiat and Ms Denise Phua have expressed concern that the changes to increase business costs can add to employers' burden during the current economic downturn.

Sir, as noted by Mdm Halimah Yacob and Mrs Josephine Teo, while the Bill is intended to strengthen protection for workers under the law, it is not our intention to impose excessive burden on businesses, especially in the downturn. We understand the employers' concerns and have consulted Singapore National Employers' Federation (SNEF) and Singapore Business Federation (SBF) closely during the development of the proposals. The employers generally accept that the amendments are appropriate and necessary to ensure that the fundamentals are in place so that our labour market would be flexible and well-positioned to meet the challenges of the changing economy in the longer term.

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On Dr Lim's query on the reduction in sick leave qualifying period, the amendments were in response to the shorter employment tenure arising from an increased in the short-term employment contracts. Contrary to Dr Lim's observation, the qualifying period of three months would not be overly generous; in fact, some of the other countries have much shorter qualifying periods. Notwithstanding this, we have sought to mitigate employers' burden by phasing in the sick leave entitlement for new employees within the fourth to sixth month of their service.

With regard to Part IV on non-workmen salary ceiling, Dr Lim has asked how the ceiling was determined. The new salary ceiling of $2,000 was the outcome of extensive consultations between the tripartite partners, taking into account wage trends over the years and the need to balance between the enhancement of worker protection and keeping wage costs competitive.

I agree with Mdm Halimah that we should regularly review the salary ceiling to keep pace with the market, and we will do so in close consultation with tripartite partners. Employers would also benefit from the enhanced flexibility such as the redefinition of part-time employment and the imposition of a salary threshold of $4,500 for workmen under Part IV. In particular, as Mdm Halimah pointed out, the salary threshold for workmen was a significant step as no such ceiling existed previously under the Act.

Ms Cham and Mdm Halimah have appealed for the affected workmen to be fairly treated. We agree, and through SNEF and SBF, my Ministry has engaged and sought the understanding from employers that they would be fair and reasonable in the renegotiation of the employment terms and benefits. The affected workmen who earned above the salary threshold also tend to be highly

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skilled and would reasonably be able to negotiate for better employment terms, even on their own merits. Nonetheless, we will monitor the situation.

Ms Denise Phua asked how the $2,500 threshold for managers and executives was determined. It was determined also after consultation with unions and the employers. It will cover about 44,000 junior managers and executives. These are executives who generally work in the office. This also is a major step because previously they have never been covered under the EA. I would like to urge Members to take one step at a time. Let us introduce this threshold and we will review the threshold from time to time.

On Ms Cham's point about using the $2,500 salary ceiling as a criterion for limited representation for managers and executives under the Industrial Relation (IR) Act, I would like to clarify that the two Acts are separate Acts and in the IR Act we need to consider many other factors.

Mdm Halimah also voiced concern that employers may convert some of their existing full-time staff to part-time workers to take advantage of the redefinition of part-time employment. I would like to assure her that we are mindful of this and that is why we have stipulated that those working 35 hours or more, meaning equivalent to seven hours a day for five days a week, are classified as full-time. Furthermore, part-time work remains a small component in our labour market compared to many other countries, and therefore there is no sign of excessive abuse of part-timers so far. Nevertheless, we will monitor the situation.

On Mdm Halimah's other comment on the need for clear guidelines for waiver for employers to bear medical consultation

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fees, we note her concern and we will work closely with our tripartite partners in developing a set of guidelines.

We agree with Ms Cham, Mdm Cynthia Phua, Ms Denise Phua and Mr Zainudin Nordin on the need to protect the more vulnerable workers. In fact, many of the proposed amendments, such as the shortening of sick leave, qualifying period, are intended to benefit vulnerable workers such as contract workers. But I agree we need to work with our tripartite partners to reach out more effectively to such workers to help them understand better their rights under the Employment Act.

Mr Low Thia Khiang raised a concern on clause 13 with regard to working hours of shift workers. I want to clarify that these amendments are for shift workers. For non-shift workers, such provision is already there. We are just harmonising between the shift workers and non-shift workers. I also want to take this opportunity to assure Members that this provision is meant for really emergency, exceptional circumstances. It is not meant for ordinary day-to-day routines. So this will ensure that our workers will continue to have adequate rest.

To Mr Siew Kum Hong's query on domestic workers, as he has rightly pointed out – he has read our website and our answers – the domestic workers are excluded basically because the nature of the domestic work is quite different from normal work, whether they are foreign or local. So it would be very difficult to regulate the employment conditions. Nevertheless, foreign domestic workers are more vulnerable and therefore they are protected under the Employment of Foreign Manpower Act which requires employers to provide basic welfare for the well-being of the workers. For local domestic workers, if they have difficulties with their employers, MOM will be happy

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to help them mediate and find amicable solutions.

On rest day for FDWs (foreign domestic workers) raised by Mr Siew, MOM encourages employers to grant rest day for foreign domestic workers but we do not intend to legislate it at present because the nature of work differs from family to family. It is better for us to allow different families to work out practical solutions but the Act requires employers to ensure their domestic workers have adequate rest.

As observed by Mr Zainudin Nordin, strong enforcement is necessary for the Act to be effective in protecting workers. In this regard, we have enhanced the penalties and investigative powers to deter infringements and facilitate enforcement efforts. At the same time, we are mindful of Mrs Josephine Teo's comments on the need for enforcement to be fair and calibrated. I would like to assure Mrs Teo that the Ministry has been proactive in educating employers and employees of their employment rights and obligations. Nonetheless, we will not hesitate to enforce against errant employers who willfully contravene employment standards so that workers' interests are protected.

On a related issue, Mr Siew Kum Hong has requested for workers to be provided with assistance in enforcing Labour Court orders. Sir, the Labour Court orders are similar to Civil Court orders and should accordingly be enforced by the claimants. Nevertheless, the Ministry may take prosecution action against employers, such as if the employers are recalcitrant or if the employees are extremely vulnerable. Mr Siew has also suggested allowing foreign workers to stay in Singapore to enforce their Labour Court claims. In general, we allow foreign workers to stay in Singapore for a short

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period of time to allow them to enforce their claims. However, for complex claims that may require a longer time to resolve, the foreign workers may be asked to return to their home countries because if they stay on, they may create other problems and they may not have sufficient income to support themselves. For such cases, nevertheless, MOM will remit the monies when they are received from the employers.

Topping up foreign workers' salaries using the levy, as suggested by Mr Siew, I think this would not make sense as it would undermine the purpose of the levy which is to regulate employers' demand for foreign workers. Furthermore, employers may end up paying their foreign workers even lower wages since they know that these foreign workers will be given the top-up from the levy.

Mr Siew has also asked for a time bar on employment claims to be extended. Sir, the current one-year time bar is a reasonable length of time for employees to make representation to the Commissioner for their employment claims. It would be difficult for the Labour Court to verify longstanding claims if the one-year time bar is extended. And therefore, the one-year time bar is necessary to facilitate and expedite the dispute resolution process. Nevertheless, those who require more time to surface their employment claims may still do so through civil claims.

Mrs Josephine Teo suggested that the Government should provide more support for training during this downturn. Indeed, this is what we plan to do under the Skills Programme for Upgrading and Resilience (or SPUR), as announced by the Prime Minister last Sunday. MOM will release more details later this week.

On paternity leave proposed by Mdm Cynthia Phua, I think we have discussed this extensively in the last few sittings.

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Let me just say that we do recognise the contribution by fathers and that is why we have introduced the enhanced childcare leave for fathers as well as mothers, and we have also introduced no-pay infant care leave for fathers as well. I think I would not discuss this further, and would leave this for another occasion.

Sir, in summary, as highlighted by several of the Members, the proposed amendments to the Employment Act balanced the enhancement of employment protection with measures to keep our labour market responsive and competitive. With the support of unions and employers, I am confident that we can create a fair, progressive and flexible labour market that will benefit all of us.

Question put, and agreed to.

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

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.