EMPLOYMENT ACT

EMPLOYMENT ACT

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(Exemptions under section 41A): **

7.

Ms Sylvia Lim asked the Minister for Manpower if he will provide details of the operation of section 41A of the Employment Act, particularly (a) of the 280 and 10 exemptions granted respectively to employers in non-volatile and volatile businesses in 2005-2006, how many of these applications were supported by profit-sharing undertakings and how many of these undertakings were realised; (b) how many applications were rejected by the Commissioner for Labour and on what grounds; (c) how many applications had union objections recorded and how many exemptions were granted despite union objections.

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Dr Ng Eng Hen: There are two broad types of exemptions granted under section 41A of the Employment Act. The first type of exemption, which is granted under section 41A(1), allows companies to provide for working hours that differ from what is specified in the Act. In 2005 and 2006, a total of 280 employers were granted such exemptions, for a maximum period of 2 years. The second type of exemption, which is granted under section 41A(2), allows companies which experience high volatility or seasonal changes in the volume of work to introduce “flexible work schedules”, by instituting customised work schedules with calibrated payment terms for overtime work and work on public holidays and rest days. In 2005 and 2006, 10 employers were granted such exemptions, also for a maximum period of two years. In both categories, the companies are required to seek renewal if they wish to continue with the exemption beyond the two year period.

For the first type of exemption, companies have to show that they have obtained the agreement of their employees to the proposed working hours, or the union if the company is unionised. The Ministry conducts a physical inspection on the company and interviews employees concerned to ensure that the overtime work is voluntary. In granting approvals, the Ministry also takes into consideration the track record of the company concerned in relation to their employment practices, including their safety and health practices.

In relation to this type of exemption, 27 applications were rejected in 2005 and 2006. Most of the rejections were on the basis that the Ministry detected weaknesses in their employment and safety practices, such as failing to provide the statutory employment benefits or adequate safety measures. The Ministry initially rejected one application as the union had objected on the basis that the proposal was unfavourable to the workers. In response to the union’s objection, the company reviewed the proposal and made improvements, and the application was later approved by MOM with the support of the unions.

In relation to the second type of exemption which allows companies to implement flexible work schedules, approvals are guided by a set of Tripartite Guidelines, which were formulated by the Ministry in consultation with the Tripartite partners. In processing each application, the Ministry also consults a tripartite panel on the company’s proposals and seeks the agreement of the tripartite partners. So far, one application to implement a flexible work schedule has been rejected on the basis that the employees of the company did not support the scheme. Of the 10 applications approved, nine had profit sharing incentives built into their schemes. The remaining organisation is a non-profit organisation, which offers staff participating in the scheme fixed and variable bonus payments. Feedback on companies which have implemented flexible work schedules has been positive, and the Ministry has not received any complaints from workers regarding these schemes.

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