SECTION 41A OF THE EMPLOYMENT ACT

SECTION 41A OF THE EMPLOYMENT ACT:

(Grant of exemptions): 14.

Ms Sylvia Lim asked the Minister for Manpower (a) for which industries has the Commissioner of Labour exercised his powers under section 41A of the Employment Act to exempt employers from compliance with the Act since the enactment of that section; (b) how many employers have been granted exemptions; and (c) what obligations were exempted and what are the justifications for these exemptions.

The Minister of State for Manpower (Mr Gan Kim Yong) (for the Minister for Manpower): Mr Speaker, Sir, section 41A of the Employment Act allows the Commissioner of Labour to grant two types of exemptions.

The first type gives flexibility to 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 two years. They include security guard agencies, manufacturing, logistics and printing companies. To safeguard the well-being of workers, MOM will only approve such exemptions if the employer has obtained the consent of the employees to extend their overtime hours, demonstrated

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compliance with other Employment Act provisions, shown a good track record in maintaining safety, health and employment standards, and secured the agreement of the unions in the company, if any.

The second type of exemption applies to a smaller number of employers who experience high volatility in the volume of work. For them, the requirements of the Employment Act, which assume a standard number of hours to be worked on a daily basis, would not be practical. For the workers, it is also not in their interest to earn a very low basic salary, but have a very high component in overtime pay, as their monthly income becomes highly unpredictable. The exemptions granted under section 41A enable these employers to pay the workers even when they are not needed to work, and to offset such payments against any overtime pay that may arise when the volume of work is high. In 2005 and 2006, 10 employers were granted such exemptions, also for a maximum period of two years. They were involved in activities, such as aerospace, the performing arts, manufacturing and logistics.

Ms Sylvia Lim (Non-Constituency Member): Sir, in the parliamentary debates in 2004, when this section was debated for passage, the Minister had indicated to the House that the Commissioner of Labour would require the employers applying for exemption to show how the profits which they have made from more efficient use of manpower would be shared with the workers. I would like to ask the Minister of State how the Commissioner of Labour monitors this, what does he require the employers to submit, and what is the follow-up to ensure that these benefits are shared with the workers.

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Mr Gan Kim Yong: Mr Speaker, Sir, when an employer submits an application for exemption, the employer would be required to submit the whole scheme of arrangement, including how it intends to share the profits or savings out of this flexible arrangement. Once that is established, the Ministry of Manpower will continue to monitor and to get feedback from the employer, as well as from the union, if the company is unionised, to ensure that this scheme is adhered to. For companies and employers who violated the Employment Act or the approval given by the Commissioner of Labour, action would be taken against them.

Ms Sylvia Lim: Sir, could the Minister of State also tell us whether the Commissioner of Labour has actually rejected any applications from employers, and also whether there have been any objections from unions in relation to any particular application?

Mr Gan Kim Yong: Mr Speaker, Sir, of course, the Commissioner of Labour has received many applications from time to time and, where the applications do not warrant special consideration, these applications have been rejected, and every time when an application is submitted, the unions involved in that company have always been consulted. When the schemes do not warrant special consideration, the unions would also voice their objection.

Ms Sylvia Lim: Sir, just to follow up. Could the Minister of State please elaborate on whether there have been objections from unions and, if so, how many objections have there been? Also, in terms of the applications, which the Minister of State says were rejected by the Commissioner of Labour, do we know how many had been rejected in the last few years since the enactment of the section?

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Mr Gan Kim Yong: Mr Speaker, Sir, I do not have the specific number in hand. If the Member is interested, we will obtain the number for her.