PROFIT-SHARING BETWEEN EMPLOYER AND EMPLOYEES (MALAYAN AIRWAYS LIMITED)

5.03 p.m.

Mr Lee Kuan Yew (Tanjong Pagar): Mr Speaker, I move the motion standing in my name which reads:

That this House supports the principle of profit-sharing between employer and employees and urges Malayan Airways Limited to share 15 per cent of their accumulated net-profits with their workers at the end of their 10-year franchise.

Hon. Members in this House know that since 24th December last year, members of the Malayan Airways Local Employees' Union have been on strike for a goodwill bonus claim to be paid at the end of the company's ten-year franchise.

Before I urge the merits of this claim on the House, I would like to give the House the background of this dispute. First, the facts of the company's position: Malayan Airways Limited is a company with $2½ million capital running internal air services in Malaya and Borneo on a franchise given by the Malaya/Singapore/Borneo Governments. In other words it is a Government monopoly given to the company. Of this $2½ million capital, $1½ million is owned by the Straits Steamship Company Limited, about $500,000 is owned by some shipping company in Liverpool and the rest by Mansfield and Company Limited and a few other private individuals. From a share capital of $2½ million, the company's books today show that it is worth $7¼ million. In the meantime, the company has been paying profits at approximately three per cent per annum. The union has been able to obtain accurate figures of what the company considers its capital to be worth, and these figures have not so far been challenged by the company. But the union says that there has been a great undervaluation of the assets; that, in fact, the accumulated profits plus the original capital amount to much more than $7½ million. For instance, the union says that the aircraft - eleven Dakotas - are now book-valued at $81,000 and by the end of the franchise, each Dakota would be valued at $1, whilst motor-vehicles owned by the Company are valued at $184,000. If one were to look purely at the accounts of the company, one might be led to the conclusion that it is a transport company, not an airline. However, members of the union, who are in a position to know the price of Dakotas say that each Dakota would cost somewhere around $300,000, not $8,000. Let us assume that it is not as high as the union pitches it but that it is somewhere around say $100,000. Even at that figure, the company is now worth about $10 million from a capital of 2½ million. In the years 1951 to 1956, the company paid the following dividends: 1951, $105,000; 1952, $140,000; 1953, $140,000; 1954, $52,500; 1955, $70,000 and 1956, $175,000 and these were out of profits made from 1951 to 1956 as follows: 1951, $1,128,000; 1952, $l,823,000; 1953, $1,318,000; 1954, $201,000; 1955, $345,000 and 1956, $1,407,000. Now, Sir, it may be claimed by the company that they risked their capital - their $2½ million - to make these profits and, having paid their workers the wages they contracted to pay them, a bonus is therefore out of the question. The union's claim is that the company should pay them one month's salary for each year of service; they have helped to make the company these profits; without them, the company's capital would not have produced these profits. In the boom years of 1951 to 1953, when the union approached the management for bonuses - and bonuses were given by all good employers then who were cashing in on the boom - the company's reply was that these profits were being accumulated to purchase new aircraft so that, at the end of the franchise, there will be better aircraft and further employment provided for union members. At that time, sister companies of Malayan Airways, like Mansfield and Straits Steamship, were paying bonuses. Malayan Airways was the one company that never paid any bonus.

Sir, in July 1956 it was announced that the major shareholders of the company would not wish to retain their shareholdings in the company and were selling out. It was announced also that the management of the airline would, although still in the name of Malayan Airways, be, in fact, vested in B.O.A.C. The union approached the Managing Director of the Company in September last year, on two occasions, the 12th and the 27th, and asked the management if they were prepared to consider the payment of a goodwill remuneration to the employees for their past services to the company. The Managing Director then replied that he was not opposed to the payment and went as far as to discuss the various ways and means of distributing payment. He agreed that the union should put in a formal claim. The union did this on 17th October. Later the union notified the company that if the company insisted on refusing to consider the payment of their claim, the union would have to consider taking action. There was a final meeting between the union and the company on 18th December. The union asked for an assurance from the Management that consideration would be given to share with the men at the end of the franchise a part of these accumulated profits, which are hidden away in written-off assets. Four Directors of the company were present. They were evasive and they refused to give any assurance whatsoever. All they were prepared to say was that if, at some time in the future, they were in a position to make any such statement, they would, but it depended upon whether they would be getting this new franchise, whether they would be getting a good price from B.O.A.C., and oh so many other factors. The union and its members were not prepared to wait for some indefinite reply at some indefinite future date. As the franchise was running out, they took strike action. They decided to take strike action on the 20th and took strike action on the 23rd and 24th.

Now, Sir, what does all this come to? It is a fight against an employer who has, showing on his books, accumulated reserves out of profits of $2,850,000 in cash. They said it was to purchase new aircraft. They have other assets which together with this $2,850,000 total, according to the company, $7½ million but, according to the union, at least $10 million. In other words, having paid approximately three per cent dividend every year, it has quadrupled its capital and now proposes to sell out, i.e. those of the shareholders who want to sell out, to B.O.A.C. or such other purchasers as the Government may come to terms with for a new franchise. The union says, "Give us one month's pay for every year of service." This would amount, including all expatriate staff, to $1¼ million, approximately 15 per cent of the accumulated profits - hidden and shown profits.

Sir, if Malayan Airways were an ordinary commercial company, this might be termed an unusual claim; although in certain countries like Japan, at the end of every year, unions negotiate with employers for bonus payments on the showing of the past year's transactions. But there are two features which make Malayan Airways a special case. First, it operates on a Government monopoly - a franchise. No person can open an airline to compete with it, and the Member for Cairnhill (Mr Marshall) will know how, when he urged on behalf of Nanyang Airways the opening of another competitive airline, it met with strenuous objection from Malayan Airways Limited; and no competition was allowed. Second, the Hon. the Chief Minister will remember that when he asked a question in the Legislative Council then in March 1954, he was informed by the then Colonial Secretary that the Government had subsidised Malayan Airways to the tune of $850,000. These are two extraordinary features which take Malayan Airways out of the ordinary run of European concerns in this country. First, it operates on a Government franchise - a monopoly; second, it has received subsidies from the Government. If this House has the right to discuss the question of whether subsidies should be paid to this company, to maintain an internal airline, I submit this House has the right, to urge this company to share 15 per cent of its accumulated profits showing in the books of the company, with its local employees - $7½ million.

Sir, the first half of my motion may, to orthodox Socialists, sound very conservative. In a mild motion, I urge,

"That this House supports the principle of profit-sharing between employer and employee."

In more politically literate countries, employers have discovered that if they want to preserve the free enterprise system, they had better offer the workers a greater share of the profits, and profit-sharing is, in fact - and I repeat this for the benefit of my Liberal-Socialists who sit on this side of the House - a principle advocated by the British Conservative Party in order to preserve British Conservative Party members' interests. There is nothing revolutionary in this principle. It is just a method by which you keep your workers contented. Those in favour of violent revolution, of course, oppose this policy. It is a retrograde step because it tends to make the workers get involved with the interests of the management. For instance, if you get a "good" employer like Henry Ford who gives you shares in the company you begin to have an interest in the profits the company makes, and the class conflict weakens. You will not be fighting the employer but you will be working harder to make profits for the employer and for yourself. So, it will be interesting to know whether our local Conservative Party, namely, the Liberal-Socialists, support this principle, as I am urging them to do. If they do that, I would like to know further whether, as a logical outcome of that, they would urge Malayan Airways - I am not saying we are compelling Malayan Airways; all I am asking is an opinion, the opinion of the elected representatives of the people of Singapore - that they consider that 15 per cent of the accumulated net profits of the company should be shared with the workers at the end of the 10-year franchise. That, in brief, is the issue. The union are still on strike and they, in my opinion, have made a morally just claim. It may not be a claim that one can enforce in any court of law, but it is a fair and reasonable claim. The company has made these profits out of their labour and has never paid any bonus for the past ten years on the grounds that they were accumulating these profits to buy new aircraft. Furthermore, every year, when the company complimented its workers by a notice on the notice-board, it drew attention to the fact that all these profits that they were making were, in fact, to ensure the happiness and employment of the employees because the company could then carry on with new aircraft. Sir, the management, I am told, is alarmed at the principle, not because, in this particular case, it is an unjust claim, but because the Directors of the company are also Directors of other sister companies connected with Malayan Airways, such as Straits Steamship, Mansfield, and so on. But unlike Straits Steamship and Mansfield, Malayan Airways is in a special position with regard to this Assembly. If any Liberal-Socialist is frightened of keeping away foreign capital, may I remind them of this: we are concerned here with British capital employed on a Government monopoly, in which the Government had thought fit to subsidise by the year 1954 the sum of $850,000. If we could do that surely we can do more for its workers.

In a way, this particular dispute spotlights a much wider issue - namely, that after the transfer of political independence from the British to Malayans, will come the question of economic independence. I would not like today to discuss generally the question of foreign investment in Malaya, but I would ask this House to make it quite clear that if foreign capital comes to this country to operate Government monopolies and expect security not only of capital but also against losses, and are paid subsidies by the Government against losses, then it must be prepared to adopt a liberal profit-sharing attitude towards its workers. I urge the House to support my motion.

5.23 p.m.

Mr Goh Chew Chua: Mr Speaker. Sir, I rise to second the motion. Malayan Airways Limited was formed in 1947 with a paid-up share capital of $2½ million and a 10-year franchise. The franchise ends this year and the major shareholders, Mansfield and Company Limited and Straits Steamship, are selling out their shares this year to the B.O.A.C. On the company's own figures, Malayan Airways started with a share capital of $2½ million and had on April 1954 assets valued by the company at $7,300,000. Among the assets included in the $7,300,000 are the eleven Dakotas of the company valued at $81,512, that is about $7,500 for each Dakota plane. In spite of this absurd undervaluation of its assets, the company's figures show an increase from a share capital of $2½ million to over $7 million worth of assets. The net profits earned by Malayan Airways over the six-year period from 1951 to 1956 alone amounts to over $6 million. Other commercial firms also made large profits over this period but many of them paid bonuses to their employees. It is well known, Sir, that employees in the rubber industry were paid large bonuses in 1951 and 1952, especially by local employers, but when the employees approached Malayan Airways in the boom years for a bonus, their employer, while agreeing that the workers should get a bonus, claimed that they were setting aside the profits for reserves to buy new aircraft and equipment. The workers accepted this explanation and have received no bonus whatsoever from the beginning of the company till now. The company has not, in fact, bought any new aircraft. The accumulated net profits are still there for reserve and now that the company is selling out, the workers feel quite justly that a small proportion of these profits, which in other commercial firms would have been distributed to the workers and which were put aside by the Malayan Airways for reserve, should be paid to them. The workers helped to make the profits. This principle of sharing a part of the profits is recognised in all good local commercial firms. A bonus of one month's salary, Sir, for one year is nothing exceptional in commercial firms. In the case of Malayan Airways, no bonus was paid to the workers on the pretext that the company would have to purchase expensive aircraft which were never, in fact, bought.

Now that the franchise is coming to an end, to give 15 per cent of the accumulated profits to the workers who made the profit for the company is only fair and reasonable.

Question proposed.

5.30 p.m.

The Chief Minister: Mr Speaker, Sir, the motion before the House is divided into two parts. The first is in regard to the principle of profit-sharing between employer and employees; and the second part is in connection with the claim of the local employees of the Malayan Airways Limited who are now out on strike.

Sir, in regard to the first part of the motion, the principle of profit-sharing between employer and employees, it has been said by the mover of the motion that it was a Conservative Party device to retain workers to remain loyal to their employers. Sir, it is the view of many trade unionists that the most important aim is to secure adequate regular wages and salaries for all workers. According to their view, profit-sharing and bonuses after the requirement of adequate wages has been met, are really matters for employers to decide. If they choose to offer bonuses as additional inducement to their workers, everyone will applaud it, though some shareholders may have reservations. Sir, the position in Singapore with regard to profit-sharing and bonuses is undoubtedly complicated by Chinese custom. The Chinese New Year bonus has become, in Chinese firms and also in many other firms, hallowed by tradition, and it is because of this tradition, and only because of this tradition, that the Government is prepared to support the first part of the motion.

With regard to the second part, Sir, which refers to the claim of the local employees of the Malayan Airways Limited, since my return from London only a fortnight ago, I have endeavoured to bring about a settlement of the strike. I have met the employers five or six times, and the union representatives, Sir, also about five or six times, but in spite of all my efforts, I feel that I have to say in this Assembly that I do not see any possibility of a settlement. My frank view is that, Sir, if the workers will return to work, I will give an assurance that the Government will do everything possible to secure for them a suitable token payment by the employer at the end of the franchise period. I feel, Sir, that if they would go back, it would strengthen my hand in my further discussions with the employer. I would therefore urge the hon. mover of the motion to advise the union that it is in their best interests to return to work immediately on my assurance that the Government will do everything possible to secure for their members a suitable token payment at the end of the franchise period. I have, Sir, a letter which I will be sending to the union to this effect, and I repeat again, Sir, I hope the hon. mover of the motion will advise the union accordingly.

In view of what I have said, Sir, it is clear that the Government can only support the first part of the motion and cannot support the second part for the simple reason that there is a dispute on. I am not saying anything about the merits or the demerits of the strike in order to pacify feelings on either side. I feel, Sir, there is a solution to this strike, and that is for the workers to listen to my plea that they should return to work in their own interests and in the interests of the country.

Sir, I therefore beg to move an amendment to the motion,

To leave out all the words after the word "employees" appearing in the second line.

Amendment handed in.

Mr Speaker: The amendment is in order.

The Chief Minister: Thank you, Sir, I have already said all that I wanted to say on the subject.

Inche Abdul Hamid Bin Haji Jumat: Mr Speaker, Sir, I rise to second the amendment and reserve the right to speak at a later stage in the debate.

Mr Speaker: The original Question was,

"That this House supports the principle of profit-sharing between employer and employees and urges Malayan Airways Limited to share 15 per cent of their accumulated net-profits with their workers at the end of their 10-year franchise."

Since which an amendment has been moved to leave out all the words after the word "employees" in the second line. The Question now before the House is, "That the words proposed to be left out, be left out."

5.39 p.m.

Inche Ahmad Bin Ibrahim: Mr Speaker, Sir, at the last sitting of the Legislative Assembly the Government and its supporters on the Opposition side of the House were only too glad to shower the fantastic sum of $23 million on prematurely retired expatriate officers. This was in recognition of the services they have rendered and would have rendered had they stayed on. In the case of the Malayan Airways Local Employees Union, the sum involved is, compared with the abolition bounty, a mere flea-bite; but I wonder how many of those who voted for the spectacular abolition bonus would have trembled at the thought of having given a mere million as goodwill bonus to local employees. We shall no doubt be told that the demand of the workers for a small share in the profits the Malayan Airways Limited has accumulated during the last six years is unreasonable and not in accordance with the commercial practice. But is the demand of the Malayan Airways workers unreasonable?

Let us look at the facts. Malayan Airways is a private limited company. It has had virtual monopoly of air transportation in Malaya. It is not surprising that this lucrative monopoly should have been handed over to the British controlled firms like the Straits Steamship Company (which holds $1,500,000 of the issued capital of $2,500,000), the Ocean Steamship Company of Liverpool (which holds $545,000 worth of shares), and B.O.A.C. (which holds about $545,000). The rest is held by the Hongkong and Shanghai Banking Corporation and a few private individuals. Malayan Airways is a big British business and the former colonial Government was very conscious of this. Between 1947 and 1953 the Government helped these private firms with considerable subsidies. I beg to quote from the hon. mover of the original motion that the present Chief Minister should recollect the answer given to him in the old Legislative Council by the then Colonial Secretary in March 1954. This is what the Colonial Secretary then said:

"Between 1947 and 1953 Government subsidy to Malayan Airways amounted to over $850,000."

That was presumably goodwill payment to the shareholders of Malayan Airways. That was all right by the Government. That was sound business. That was all right because of the services which the shareholders were rendering in this country. Let us not, however, be misled into thinking that Malayan Airways was living a hand to mouth existence. Between 1951 and 1956 the net profit of the company totalled about $6 million; but even more important is this: this Company, which began with a share capital of only $2,500,000, has, on the basis of its old conservative estimate, exceeded three times the value of its original share capital. It is a debatable point, Sir, whether the shareholders of the Straits Steamship Company, the Ocean Steamship Company of Liverpool, and the shareholders of the Hongkong and Shanghai Banking Corporation contributed anything by way of labour and skill to treble the assets of Malayan Airways. But what cannot be doubted are the decisive contributions made by the employees of Malayan Airways towards increasing the assets of the company; and what is not in doubt also is the fact that Malayan Airways has made profits which during the last six years it never once shared with its employees. At least many other private firms in the colony have shared their good fortune with their employees by way of a yearly bonus; but not Malayan Airways - a private company enjoying not only the monopoly protection from the Government but even subsidies. But now the company is to sell out its shareholdings at its present enhanced value. The workers are naturally resentful that only the shareholders of the Straits Steamship and their friends should share out among themselves the $3 they would get for every dollar they invested, this in addition to the dividends they have got so far. In other words, Sir, not only will the shareholders get back their $2,500,000 capital and enjoy dividends during the last six years, but they will, when they sell out, have a million more as profit from the sale. All that the Malayan Airways employees are asking is that a small part of this profit from the sale should be siphoned off to them. After all, it was their efforts and skill and not those of the shareholders which increased the value of the company. All that the workers are asking, Sir, is for a small share of what would have got into one of the small side-pockets of the British capitalist company.

5.46 p.m.

Mr G. A. P. Sutherland: Mr Speaker, Sir, I do not actually oppose the motion, as amended, if the granting of bonuses by employers to their employees means profit sharing

Mr Speaker: Order. The motion has not been amended at the moment. We are still dealing with the amendment.

Mr Sutherland: Sir, I am speaking on the amendment.

Mr Speaker: I understood the hon. Member to say "the motion, as amended". It is really the amendment.

Mr Sutherland: I beg your pardon, Sir. I am speaking on the amendment. Sir, I cannot agree that the question of entitlement arises. I do not deny that profit sharing may exist in other countries on a mutually agreed basis between employer and employee but not as an accepted practice, which seems to be what many local employees want. Sir, local companies have come under a great deal of fire from politicians recently and I think I will take this opportunity of saying something in their defence. They are singled out for dishonourable mention because of their splendid profits. I say "splendid profits" because I do not think it is possible to make excessive profits except when monopolies exist.

Mr Marshall: This is a monopoly.

Mr Sutherland: But what on earth can be wrong with making good profits? It is what the companies are in business for and most of them have very little to feel ashamed of in their records. Indeed many of them can be very proud of the balance sheets they present, revealing, as they do to the initiated, a record of good management and stewardship. If they were bad employers, there might be some cause for complaint, but they are not. Many of them are, in fact, model employers.

Mr Speaker: Order. Perhaps I did not make myself very clear. We are now on an amendment which urges that the following lines in the motion be left out:

"and urges Malayan Airways Limited to share 15 per cent of their accumulated net-profits with their workers at the end of their 10-year franchise".

We are now concerned merely with Malayan Airways Limited. It appears to me that the hon. Member is probably speaking on the general principle of profit sharing.

Mr Sutherland: I am afraid I was, Sir. It is my fault.

Mr Speaker: The hon. Member will have an opportunity later on to speak on the general principle of profit sharing.

Mr Sutherland: Thank you, Mr Speaker, Sir.

5.50 p.m.

Mr Lee Kuan Yew: Mr Speaker, Sir, I am disappointed to see that in a House of 25 elected representatives, other than two P.A.P. Members, one Independent and the Chief Minister who cannot escape from having to speak, no stalwart representative of the people has had the courage to declare his stand.

When I started speaking on this motion, I had every intention of pitching my speech in a moderate tone. I did not wish to embarrass the Government because the Government may have certain intentions as to the franchise it will grant after this one expires. I did not wish unduly to give grounds for criticism that, on an occasion like this, I took the opportunity to slosh up European capital in general. But I am disappointed that when this Assembly is asked to express its opinion as to what a company should do with regard to its employees on accumulated profits, it should have nothing to say, though in the past the Legislative Council thought fit to give $850,000 of the people's money to Malayan Airways Limited.

We all like foreign capital provided it is fair and just. It has not been fair and just. In this particular case it has been very unfair and very unjust. The risk of loss was minimised to the barest minimum-

(1) By the monopoly:

(2) By subsidies from the Government.

It is now going to continue - God knows for how long - but I hope the present Government will honour the pledge given by the last Chief Minister that the franchise will be debated in this Assembly.

Sir, we do not know what role European capital is going to play in this country after merdeka. The Economic Bank Commission did not think that many European investors would want to come into South-East Asia, and they said so in their report. We do not want to chase away the European capital that is already here. But we would like to remind European capital, particularly those companies dependent on government monopolies and goodwill, such as the Singapore Traction Company and the Malayan Airways Limited, that if its purpose is to make profits on the basis that it had been making in prewar years, then it will come to a sorry end.

There are two ways in which European capital comes to an end in Asia. One, as in India where it took in Indian capital with it and gradually went into partnership with Indian capital; and with a benevolent government, no exploitation of Indian workers is allowed. Second, it comes to a sticky end, as it did in Shanghai and Tientsin and the other China ports. It was not a question of sharing profits there. It was a question of paying for the exploitation they had done in the past, until finally, quite legally and quite properly, the Government of the Chinese People's Republic squeezed the last ounce of capital out of these foreign companies and drove them out of China. We do not want to do that here, but we would like to remind these companies that unreasonable attitudes towards their workers, bad working conditions, poor wages and the desire to get the most out of the workers will lead to a situation which will make it very difficult for them to do business, as most people would like them to do business, in this country, but on terms fair and just to local workers.

I oppose this amendment to my motion and I deplore the fact that the Government did not have the courage to declare its stand. That it did not do what it wants to do, namely, to endorse the workers' claims because it knows it is just. The Government has the power, in the granting or withholding of the franchise, to support the workers' claims. The Chief Minister has given the assurance that he will do everything in his power. Sir, if the Chief Minister means that, then I am confident there will be a settlement, because the Chief Minister and his Government have the power. It is quite true that his is not the only government involved in this franchise, that Malayan Airways can, presumably, ply between the Federation and Borneo and bypass Singapore, and move its operational headquarters to Kuala Lumpur. But I should hardly think many people would want to fly to Kluang or Johore Bahru. If the Chief Minister, with this knowledge that the franchise is coming up, gives the assurance, in all seriousness, that he will do everything possible to secure for the union - not quite the words that the union would like, "a suitable token payment" - but a fair and just portion of these accumulated profits, then at least the workers would not say that the Government - a "Labour" Government - sold them out.

I cannot tell the Chief Minister what the union will do with regard to the plea he has made and the letter which he proposes to send. For my part, I would be more satisfied if the Chief Minister would confirm, in full knowledge of the powers of the Government in this matter, what he has said that "if the workers will return to work, the Government will do everything possible (the operative words are 'everything possible', because a lot of things are possible with regard to Malayan Airways Limited) to get a token payment at the end of the franchise." If that is confirmed, for my part, I will try my best to get his plea answered. I would remind the Chief Minister that 600 men, most of them local-born (40 per cent of them English-educated and the rest Malay-educated), are involved and they will not forget this assurance. If this is meant seriously and taken seriously, there should be a settlement, because the Government has the wherewithal to see that there is a settlement.

5.59 p.m.

Mr Marshall: If it please you, Mr Speaker, Sir, I had not intended to speak on this motion because, whilst my friend the hon. and learned Member for Tanjong Pagar was away on his Christmas holidays, I had the privilege of acting for the union in its efforts to obtain a settlement of its claims, and I felt that to speak would be to speak with bias from their point of view, since it is their point of view which I had studied. That Sir, is the misfortune of the second part of the motion before this House, that it seeks to bring before this House a matter in dispute at the moment and seeks to bring it from one point of view only. There is my friend from Tanjong Pagar who is the legal adviser of the union who can speak and speak well on their behalf; but there is nobody to meet the other side if the other side, in fact, has any reasonable defence, which is not admitted. But it is unfortunate, Sir, that this type of motion should be brought and this Assembly be made the forum for discussion of disputes current outside this Chamber and thereby biasing their proper negotiation procedure. But whilst I understand, sympathise and support the attitude adopted by the Government from the point of view that it cannot accept a motion which interferes with the normal procedure for negotiation and which seeks to bias negotiation, I would like to say for myself that I find myself in complete sympathy with the second part of the motion moved by the Member for Tanjong Pagar.

Malayan Airways has had a monopoly. I believe the monopoly was an illegal monopoly - the point is not now in issue. It has had it and although we were very near to challenging the monopoly in the court, unfortunately that challenge was not pursued. But the important thing to recognise is that when a government grants a monopoly, whether legal or otherwise, and when a company receives a franchise for monopolistic services, the emphasis is on service to the people of the country. Now in fairness to Malayan Airways it has given service to Malaya a hundred per cent free from any accident. That is a magnificent record. But the service has not been efficient from the point of view of the excessive fares they charge and which they could extract, because they are a monopoly. The service has not been efficient from the point of view of excessive profits - repeat, excessive profits - that they make, and their service is not efficient in that, having made these fantastic profits over the years, they do not see fit to give a portion thereof to the people who work for them.

Sir, socialism, of which I am not a pandit but which I seek to understand, as a basic philosophy tries to obtain a minimum adequate for the decent livelihood of a human being and compatible with the fact that he is a human being. The emphasis is always on salaries and conditions of service. Bonus as such does not come in, but it has been recognised over the years that where an employer has more than a modest profit, it is only right and proper, as an encouragement, as an inducement, and also as part of its humanitarian duty to its employees, to share those profits. But the conduct of Malayan Airways is inhuman. They are gorged and bloated with profits year by year and they cannot and will not pay just that little which even commercial companies, with commercial morality (or immorality) in this territory pay - even banks have the decency to pay bonuses to their staffs. Why should Malayan Airways, with a monopoly granted by the people of this country, be permitted to act as Scrooge? Why should Malayan Airways seek to refuse what is a moral obligation now recognised by every decent company in this country? Year after year it makes profits. Not one year does it give just one month's salary which every reasonable employer has learnt is traditional and fair in the treatment of its employees. I would like to say, Sir, that though I support this amendment, I support it with a heavy heart on the basis of the principle that motions of this character should not be brought to the House in order to bias proper negotiating machinery, but my whole sympathy is with the Malayan Airways employees - and may they win!

6.03 p.m.

Mr Lim Cher Kheng: Sir, before I speak on this amendment, I wish to answer the remark made by the Member for Tanjong Pagar that he was ashamed to observe that only his P.A.P. clique had dared to touch on this controversial issue and champion it. I wish to point out, Sir, that while the Member was moving his motion, I was not here because I had a very urgent appointment elsewhere, but I tried to rush back in time to speak on this debate.

Sir, I take a keen interest in this issue because I fight for the principle of the thing. The Chief Minister has divided the motion into two parts -

Mr Speaker: Order. It appears to me that the hon. Member is speaking on the general principle, but at the moment we are debating whether Malayan Airways Limited should be urged to share 15 per cent of their accumulated net profits. If the hon. Member will speak about that, he will be in order.

Mr Lim Cher Kheng: Sir, actually I wish to oppose the amendment and I will say why I oppose it. As I have said, Sir, the Chief Minister has divided the motion into two parts - that I fully agree. The Chief Minister is quite contented with the first part and maybe it can win the approval of this House, even of the Opposition. But, Sir, I think it is wrong in that the Government has no courage to comment on this issue, whether it is right or wrong. The principle of profit sharing between employer and employee, according to the main speaker, derives from a Chinese tradition -

Mr Speaker: Order. I think if the hon. Member will assume that the principle is accepted, then we can go a little faster. He can assume for the moment that the principle has been accepted and debate the second part of the motion, namely:

"That this House urges Malayan Airways Limited to share 15 per cent of their accumulated net-profits with their workers at the end of their 10-year franchise."

Mr Lim Cher Kheng: I will make it short, Sir. I am sure the House agrees with the principle of profit sharing between employer and employee. The various Parties in this House have put this in their programme. So to me it seems rather silly and a waste of time to debate this. To the people of Singapore, this makes no sense at all. By tradition, the employer shares his profits with his employees.

Sir, I oppose this amendment because I do not think this is the right time to introduce it. If this House has no power to compel an employer to share his profit with his employees, what is the use of our coming to this Chamber and debating this issue? It is a waste of time. Sir, I think the mover of the amendment has not the courage to face the issue. I also fully agree with the Member for Cairnhill that an issue like this should not be debated in this Assembly but should be debated at a public forum. The passing of this motion in this Assembly does not carry any weight at all at the present time, even the passing of the amendment supporting the principle of profit sharing between the employer and the employee, is it doing any good at all?

Mr Speaker: Order. I must rule the hon. Member completely out of order. If he wishes to speak on the principle, he will have to wait until we have disposed of the amendment. The amendment is merely to leave out the words relating to Malayan Airways Limited sharing 15 per cent of their profits.

Mr Lim Cher Kheng: I am sorry, Sir. In conclusion, I would like to say that I oppose the amendment because it is at present impracticable.

6.12 p.m.

Mr Lim Choon Mong: Mr Speaker, Sir, in Singapore today we are all agreed I think, that profit-sharing is recognised as being right. We will examine how companies share their profits in Singapore. I will quote cases which I know are prevailing in Singapore

Mr Marshall: Point of order, Mr Speaker, Sir. Is the hon. Member speaking on the amendment?

Mr Speaker: I take it the hon. Member is going to relate profit-sharing in other companies with Malayan Airways.

Mr Lim Choon Mong: Absolutely, Sir. I was saying just now, Sir, that in Singapore we have profit-sharing. Let us take Market Street, as an example. There a large number of companies are run by Hokkiens. They put in capital and they manage the business. Every year they find out how much net profit they make and they usually divide it up this way: 80 per cent of the profit will go to those who invest in the business. 10 per cent of the profit goes to the managerial staff, and the balance of 10 per cent to the labour force.

Then along Circular Road and the New Bridge Road area, every year they allow at least one or two shares out of 12 shares of the profit to be given to the employees. In other areas in Singapore the percentage ranges from 5 per cent to 25 per cent. As a matter of fact, Sir, even if a company makes no profit at all and, in fact, is running at a loss, that company will still have to give a little bonus in the form of angpows. Sir, this has been the practice in the East for a very long time. However, with European firms they prefer to calculate it on a salary basis. Many companies give their employees one month's salary as a bonus. Other companies are more generous. I have heard one or two companies have given their employees something like six months' salary as bonus.

In all these cases, Sir, the bonus is not given at a fixed rate. A bonus is a matter between the employer and the employee. There is a dispute today. I think Malayan Airways are morally bound to give their employees a bonus. How much it should be, I am not prepared to say. If they are not generous, they will, I suppose, earn a not so good name as an employer, if they are more generous, the employees will be more grateful and will co-operate with them more. But for us to prejudice the case and say that they should only give 15 per cent and not 20 per cent or 25 per cent or even 10 per cent - that, I think, is wrong.

Mr Lee Kuan Yew: Make it more if you like.

Mr Lim Choon Mong: I suggest that the employer and the employees should come together. A bonus must be given, but how much we will not say because we do not wish to prejudice the dispute.

6.16 p.m.

Mr R. Jumabhoy: Mr Speaker, Sir, I rise to support the amendment moved by the Hon. the Chief Minister. He has ably explained that, by tradition, the companies do give bonuses and we agree with him on that.

Then, Sir, the Member for Cairnhill rightly pointed out that this type of motion should not be brought before this House. The reason is this: how can we, without knowing the facts advanced by both sides, pass a motion that so much should be paid to so and so? It is impossible for us to pass judgment.

We are in sympathy with the employees of Malayan Airways and I am glad to note that the Chief Minister has given an assurance that he will try to settle the dispute amicably.

Sir, the leader of the P.A.P. always quotes India. I wonder whether he follows what is going on in India. What I know is that he constantly quotes India. One Indian company works on the basis of sharing profits between the employer and the employee. Does the hon. Member know that this is done voluntarily and not as a result of legislation? India is advancing towards socialism and doing it in a very liberal manner

Mr Lee Kuan Yew: That is why you are a Liberal-Socialist!

Mr R. Jumabhoy: Exactly! India is not forcing the issue but doing it in a way which suits the country, and she is not doing it by legislation or making empty speeches. So let me point out to the Member for Tanjong Pagar that he should follow the Indian example which he is always quoting.

6.20 p.m.

Mr Lim Koon Teck: Mr Speaker, Sir, I rise also to support the amendment to the original motion on the question of principle. It is not within the province of this Assembly to interfere with any dispute that is going on in Singapore between the employer and the employee

Mr Lee Kuan Yew: But we can give $850,000 away.

Mr Lim Koon Teck: It is not within our province to put pressure on any party to a dispute, be it in favour of the employer or the employee. When a dispute arises and negotiations are going on, we here in this Assembly can only svmpathise and I think in this case all of us are in great sympathy with the employees of the Malayan Airways, but

Mr Lee Kuan Yew: Say so.

Mr Lim Koon Teck: I do say so, but it is another proposition altogether for us to approve a motion to request Malayan Airways to come to a settlement with its employees, particularly, as the Member for Telok Ayer has pointed out, we have only heard one side of the story.

6.21 p.m.

The Chief Minister: By way of explanation, Sir. I know I have no right to reply on an amendment, but by way of explanation, I should like to say this. The Member for Tanjong Pagar has asked me whether I meant what I said, Sir. I always mean what I say in this august gathering, and I repeat what I said: if the workers will return to work immediately, I will do everything possible to see to it that they get a suitable token payment at the end of the franchise.

Mr Lim Cher Kheng: On a point of information, Mr Speaker, Sir. From the Chief Minister's statement, Sir. Why must the Chief Minister wait until the workers go back to work before he can settle this dispute?

The Chief Minister: Sir, in moving my amendment to the motion earlier on, I said that I had met the employers five times and the workers' representatives also five times, and I feel that if I keep on meeting them again, there could be no possible solution. I said my frank view was that if the workers would return to work immediately, I think I could do something.

Mr Lee Kuan Yew: Stop the franchise.

Question put, "That the words proposed to be left out, be left out."

Mr Lee Kuan Yew: Division, Sir.

Mr Speaker: Clear the Lobbies.

The House divided: Ayes, 19; Noes, 4; Abstentions, Nil. Ayes Noes Abdul Hamid Bin Haji Jumat Ahmad bin Ibrahim Butterfield, C. H. Goh Chew Chua Chew Swee Kee Lee Kuan Yew Goh Tong Liang Lim Cher Kheng Goode, W. A. C. Hart, T. M. Abstentions Jumabhoy, J. M. Jumabhoy, R. Nil Lim Choon Mong Lim, R. C. H. Absent Lim Koon Teck Lim Yew Hock Braga, A. J. Mak Pak Shee Ede, John Marshall, D. S. Lazarous, A. R. Mohd. Sidik Bin Haji Abdul Hamid Lee Choon Eng Tan Theng Chiang Lim Ching Siong Tan, William Nair, M. P. D. Thomas, Francis Ong Piah Teng Wong Foo Nam Seah Peng Chuan Sutherland, G. A. P.

Question on the amendment accordingly agreed to.

Main Question, as amended, proposed, "That this House supports the principle of profit-sharing between employer and employees."

6.29 p.m.

Mr Lim Cher Kheng: Mr Speaker, Sir, before this House went into a division just now, I really believed in the sincerity of the mover of the motion in that he was acting in the interests of the people, especially for the workers. But, Sir, the motion seems to me now to be a Party issue. The mover of the motion has an eye on the 600 votes, because I see the Malayan Airways union leaders are present in the gallery now. Opportunist leaders speak in this House on issues in order to win the support of the people, but I feel I must discharge my duty to the people and say this. When the debate was going on just now, I thought that the whole thing was a farce, that all this debate was just a waste of time. Although the motion says that this House urges the Malayan Airways to give 15 per cent of their accumulated profits-

Mr Speaker: Order. We have finished with Malayan Airways Limited, and are now on the principle of profit sharing. If the hon. Member agrees with this, he can say that he does. If he does not agree, he can speak against the principle.

Mr Lim Cher Kheng: Sir, I am against the principle of sharing profits during this transitional period. We are still under the Crown and this is still the Colony of Singapore. Sir, the Chief Minister said not so long ago that we are going to fight for merdeka, a merdeka which is only for self-government and not even independence. The fight for merdeka has come to the stage

Mr Speaker: Order. The Question now before the House is, "That this House supports the principle of profit-sharing between employer and employees." Will the hon. Member confine himself to that?

Mr Lim Cher Kheng: I am sorry, Sir. But the principle is still there. We have not yet come to the stage where we can frame policy and compel employers to share their profits with their employees. Although I support the principle of this motion - the first part and the second part - wholeheartedly. I think that it is introduced at the wrong time and not in the right way. The motive of the mover of the motion is not truly fighting for the interests of the people. It is to seek the 600 votes from-

Mr Speaker: Order. That, of course, is imputing an improper motive to a Member of this House. It is completely out of order.

Mr Lim Cher Kheng: I am so sorry, Sir. Can I say his Party then? The Party which seeks to move this motion is not sincerely seeking a solution to this controversy between Malayan Airways and their employees. I say this is not the right time. For example, I know a legal firm called Lee and Lee and I wonder whether the proprietors of this company are sharing their profits with their employees at this time. I think the principle of profit sharing at the moment is out of place, Sir. Sir, to me the point at issue is whether Malayan Airways has been given a monopoly

Mr Speaker: Order. If the hon. Member does not keep in order, I will have to request him to stop.

Mr Lim Cher Kheng: Sir, in view of the many difficulties crossing my path, I will not say more. However, I give my sympathy to the workers of Malayan Airways. I support the actual intention of the motion, but because of the motive behind this motion and in view of the present situation. I beg to oppose the motion.

6.35 p.m.

Mr Lim Koon Teck: Mr Speaker, Sir, after hearing the speech by the Member for Changi, I must confess I do not know whether I am sitting or standing! I cannot understand why he is now opposing this motion, even on principle. One thing I do agree with him, however, is that the original motion as framed by the leader of the P.A.P. does appear to be meant as a vote-catching stunt.

Mr Speaker: Order. I have ruled that out already.

Mr Lim Koon Teck: I apologise, Sir. I do confess that I have been confused by the Member for Changi. By supporting the motion as it stands now after it has been amended, however - "That this House supports the principle of profit-sharing between employer and employees" - we are, in fact, supporting the claims of the employees of Malayan Airways, and definitely all Members here, by expressing their approval and voting for this motion, are in fact telling all employers in Singapore that they approve their generosity towards their employees. After all. Sir, profit-sharing is actually a bonus and is something that has to be given freely, to be given as an inducement for the employee to give better service, and it must be left to the employer to judge at the end of the year the performance of his employee and how much he has contributed towards the success of the business in making profit for that year. To attempt to legislate for any profit-sharing between employer and employee would be a very wrong move and I am quite sure it would frighten away capital from this already frightened country.

I therefore, Sir, have pleasure in supporting the motion as amended and I am quite sure that, by supporting the motion, this House will go very far towards helping in a settlement of this unhappy dispute.

6.39 p.m.

Mr Lim Choon Mong: Mr Speaker, Sir, when the amendment was proposed. I was surprised to hear from the leader of the P.A.P. that the Liberal-Socialists did not support the principle of profit-sharing between employer and employee. Sir, I think the hon. Member knows full well that one of the platforms of our Party is that there should be profit-sharing between employer and employee. But I am a little surprised to hear that the P.A.P. is adopting this attitude, because their attitude, I think, was "Down with capital!" and anything that has to do with capital must be destroyed. This, I think, is a change for the better and I congratulate the P.A.P. for coming round to this moderate line which we have been taking.

On the question of profit-sharing, I think it is important for all employers to realise that, in order to make greater profits, there must be greater goodwill towards their employees, because then the employees will respond favourably towards such treatment, work harder and make more profit for the employers. If employers try to be stingy and grudge a fair share of their profit for the employees, then they will be faced with such things as go-slow tactics, and finally, a strike which will bring no benefit to either party whatsoever. Employers giving a share of their profits as an incentive to their employees, employees working harder for their employers - all this will create a much better situation. This motion, I think, deserves the support of every right-thinking person and we support it, as amended, unreservedly.

Main Question, as amended, "That this House supports the principle of profit-sharing between employer and employees," put, and agreed to.

Resolved,

That this House supports the principle of profit-sharing between employer and employees.