INDUSTRIAL RELATIONS (AMENDMENT) BILL

Order read for resumption of motion, "That the Bill be now read a Second time," [31st July, 1968].

Question again proposed.

3.13 p.m.

The Minister for Foreign Affairs and Minister for Labour (Mr S. Rajaratnam): Mr Speaker, Sir, at the moment of interruption yesterday, I explained clause 7. I am now going to speak on clause 8 of the Bill which amends section 34 of the Ordinance by providing that the Industrial Arbitration Court shall not inquire into disputes relating to the dismissal or reinstatement of an employee unless such an employee has been dismissed in circumstances arising out of the contravention of section 79 of the Ordinance. I have already mentioned, in connection with clause 5, the remedial action that may be taken by an employee if he considers that he has been dismissed without just cause or excuse. I would, however, add here that the Minister's decision in this regard is final and conclusive and shall not be challenged in any court, and that the Minister may direct the employer to reinstate the employee in his former employment and to pay him an amount that is equivalent to the wages that the employee would have earned had he not been dismissed by the employer, or to pay such amount of wages as compensation as may be determined by him. If the employer does not comply with the directions of the Minister, then the employer shall be guilty of an offence under the Ordinance and shall be subject to the punishment prescribed.

Clause 13 amends section 57 of the Ordinance by extending the circumstances whereby the powers of the Industrial Arbitration Court can be exercised by the President sitting alone. The inclusion of sections 24A, 34, 37 (4) , 39, 42, and 79 is consequential upon other amendments in this Bill and is intended to expedite the proceedings in the court.

Clause 14 amends section 77 of the Ordinance by substituting a new proviso for the existing one. This new proviso enables an employer to require, as a condition for the appointment or promotion of a person to a managerial or executive position, that that person shall not continue to be an officer or member of a particular trade union, unless the trade union is a trade union whose constitution and rules restrict its membership to persons in managerial or executive positions. This amendment is consequential upon the amendment in clause 4 of the Bill which requires separate representation by employees in managerial or executive positions as distinct from other subordinate employees. The existing provision merely states that an employer can object to his employees being members of a particular trade union. This by itself does not prevent an employee in a managerial or executive position from joining another trade union catering for employees in these grades. I have already explained why separate representation is necessary in the course of my discussion in clause 4 There is, therefore, no need for me to repeat it here.

Clause 15 of the Bill amends the Ordinance by introducing a new section 78A which sets out the circumstances under which a trade union officer may obtain paid leave of absence from his employer to attend to trade union duties. It provides that a trade union officer shall apply in writing to his employer for leave of absence stating the duration of and the purposes for which such leave is applied. It further provides that an employee shall not be entitled to paid leave unless the purpose of his leave is to represent members of his trade union in relation to industrial matters affecting his employer.

Hon. Members will appreciate that there have been considerable difficulties in this regard. For instance, where a trade union represents employees in more than one establishment, it is not unusual for the officers of the union to come from one and the same establishment. In such an event, the employer is penalised in that he either loses the services of his employees for the duration of their business for reasons quite unconnected with his own establishment, or he incurs additional costs by having to employ additional staff to cover the duties of his absent employees. This, it will be appreciated, is most unsatisfactory. There must be reason and logic in such circumstances and it is precisely to regularise matters that this amendment has been made.

Paragraph (b) of clause 16 of the Bill amends section 79 of the Ordinance by the addition of a new subsection (6) which allows the Industrial Arbitration Court to commence proceedings in respect of the reinstatement of an employee who is alleged to have been dismissed in contravention of section 79 of the Ordinance before proceedings have been commenced in a District Court. At present, allegations in respect of such cases are heard before a District Court which also has the power to order reinstatement. However, thorough and time-consuming investigations must necessarily precede such proceedings. This has caused long delays which are frowned upon both by the unions and the employers.

Mr Speaker, Sir, the amendments to the Industrial Relations Ordinance, particularly in the context of management rights, have evoked fears among some trade unionists. The principle of collective bargaining is in no way impinged. Collective bargaining is of the essence in a free and democratic society but vital management rights must not be eroded if we are to create the necessary climate of stability for investors to come in. There are, however, built-in safeguards, for safeguards there must be if abuses are to be minimised both by employers and trade unions. Some wise person has stated that private rights may become public wrongs. There is, therefore, the urgent necessity for both parties to make responsible decisions - decisions which are compatible with the well-being of the country. It is, therefore, in the interest of all concerned to ensure that rights are related to functions.

Employers have their functions just as trade unions have, and it is imperative that their respective rights have a, correlation with their respective functions. The amendments embodied in this Bill are obviously designed to correct wrongs, balance rights and functions and equate responsibilities so that an independent Singapore can move through the crucial years ahead without coming to grief. The Government will, however, keep a very close watch on the workings of the law on industrial relations in the light of the amendments that are being made. If there are abuses, the Government will not hesitate to make the necessary adjustments. We hope, however, that employers will exercise their rights with responsibility, and that they will take a far-sighted view of their real interest. It is in their long-term interest not to abuse, as they can, this Bill, because then I think there can be no expectation on their part that the trade unions themselves will act with the restraint and responsibility which they have so far shown. We hope, therefore, that employers will exercise their rights with responsibility and that it will not be necessary to take corrective action.

The objectives of these two pieces of legislation - the Employment Bill and the Central Provident Fund (Amendment) Bill - are, as it should be very clear by now, to help Singapore as an independent nation not only to meet the storms ahead but also to ensure that we ride them successfully. I hope that co-operation will be forthcoming from the employers in this regard and that the trade unions will make the necessary adjustments in face of the new situation. The delineation of management functions and trade union functions will do away with the "Heads I win, tails you lose" attitude. Let us resolve to replace this with "Heads we all win, tails we all lose".

Mr Speaker, Sir, I beg to move.

Question proposed.

3.25 p.m.

Mr Seah Mui Kok: Mr Speaker, Sir, I rise to comment on the Industrial Relations (Amendment) Bill which is now being read for the Second time.

As the Secretary-General of the National Trades Union Congress, I am very pleased to note that the Government has incorporated into the Bill some of the suggestions made by the N.T.U.C. When we were first informed by the Government of its intention to amend the Industrial Relations Ordinance, 1960, we were very much taken aback by the rather drastic scope and extent of the amendments intended by the Government. We then strongly represented to the Government that its objectives could still be achieved by modifying its intended amendments so as to minimise the adverse effects on the workers. Evidently, as it appears from the Bill, the Government has given heed to our representations.

[Mr Deputy Speaker in the Chair]

3.26 p.m.

Mr Seah Mui Kok: For instance, it was intended that the power of the Industrial Arbitration Court to reinstate in employment an employee who has been wrongfully dismissed was to be confined to cases where the employee had been allegedly dismissed for trade union activities. We pointed out that such a provision restricting the power of reinstatement in employment would give rise to many malpractices or abuses by unscrupulous employers. At present, such employers are deterred from dismissing their employees summarily without justification because of the protection given to employees under the Industrial Relations Ordinance. It would have been unduly and unnecessarily demoralising to an employee to have been deprived of the protection given to his employment under the Industrial Relations Ordinance. Not every one who has been wrongfully dismissed by his employer can claim to be a trade union officer or a member actively engaged in trade union work. Paragraph (d) of clause 8 of the Bill, however, takes care of cases of dismissal arising out of circumstances other than those in contravention of section 79 of the Ordinance by amending section 34 thereof to provide for such cases of dismissal to be referred to the Minister who may himself, or through the Commissioner of Labour, inquire into the dismissal and who is empowered to order the reinstatement or payment of compensation to an employee who is found to have been wrongfully dismissed.

I am also happy to note that clause 7 of the Bill has given effect to the N.T.U.C, representation that the provision cutting across collective agreement should not be unduly wide. The original intention of the Government was to enact that no collective agreement should contain provisions with regard to terms and conditions of service more favourable to employees than those contained in Part IV of the Employment Act, 1968. The N.T.U.C., however, pointed out that since the intention of such an amendment was to stimulate and promote industrial expansion in Singapore and that since the existing collective agreements relate to employees in existing firms and factories, it was only logical and reasonable that such a drastic amendment should be made applicable only to firms or factories which have not yet been established. We note here with satisfaction that an acceptable compromise has been made by the Government in proposing that only employees in certain specified industries which are established on or after 1st January, 1968, are to come within the scope of the proposed section 24A. We also note that the proposed section 24A provides that the proposed restrictions on collective agreements governing the employees within the specified industries are to be valid for the first five years of the existence of the specified industries. Such measures, though they may appear to be rather drastic to employees engaged in the new industries, are necessary to stimulate new industries and will then lead to the creation of more job opportunities.

While we are happy that the Government has taken into consideration our representation by incorporating some of our suggestions into the provisions of the Bill, as I have just mentioned, we cannot help noticing that the Bill also contains provisions which appear to be unnecessarily unfavourable to workers. For instance, in clause 4 of the Bill, by which a new subsection (3) is to be added to the existing section 16 of the Industrial Relations Ordinance, it is provided that any trade union representing subordinate staff may seek recognition in respect of employees in managerial or executive positions or serve a notice under section 17 of the Ordinance in respect of those employees. We are apprehensive of the position of such trade unions at present representing employees who may be considered to be in managerial executive positions. These unions, whose members consist mainly of employees in non-managerial or non-executive positions, have been given recognition in respect of employees in managerial or executive positions and have concluded collective agreements on behalf of such employees. If such unions are not to be allowed to continue to represent employees in managerial or executive positions on the expiry of the existing collective agreements, then these employees would be placed in a most untenable position. It must be emphasised here that the Industrial Relations Ordinance gives protection to workers only if they are members of a trade union which has been accorded recognition by an employer. Where an employee does not belong to any trade union, or belongs to a trade union which has not been accorded recognition by his employer, he has no effective remedy or redress against victimisation by his employer under the Industrial Relations Ordinance.

The position is complicated by the fact that there are few trade unions to cater for managerial or executive employees. In fact, there are, as far as I know, only two unions catering for employees in managerial or executive positions in the private sector. It is inconceivable that these two unions would be in a position to cater for all the employees in managerial or executive positions engaged in the various industries in the private sector in Singapore. Even if they are, there has to be an inevitable lapse of time before a union can be given recognition in respect of employees in managerial or executive positions who have been formerly represented by a trade union consisting mainly of non-managerial or non-executive employees.

While we appreciate the principle that employees in supervisory positions should belong to unions different from those of the subordinate employees, we are rather apprehensive that, in view of such a radical change to prevailing practices, the Government has not made any transitional provisions to safeguard the interests of employees who are in a managerial position and who happen to be members of the trade unions representing mainly employees in non-executive positions. If such managerial or executive employees have nothing to fear from their employers, they would never have found it necessary to be members of the trade unions representing employees in non-managerial or non-executive positions. It is a fact which should be duly noted by the Government when implementing tile proposed amendment to the Industrial Relations Ordinance.

The other point which I wish to comment on concerns clause 5 of the Bill which seeks to amend section 17 of the Ordinance. A new subsection, which seeks to make certain managerial functions non-negotiable between an employer and the trade union representing his employees, has been proposed. The managerial functions refer to the rights of an employer in relation to (a) promotion, (b) transfer, (c) employment, (d) retrenchment, (e) dismissal and reinstatement, (f) assignment or allocation of duties. We must point out that it seems most dangerously lopsided to enact that such managerial functions are exercisable at the absolute discretion of the employer without providing for adequate safeguards for the workers. In the first place, such managerial functions exist in common law and it appears rather unnecessary and superfluous to give statutory protection to such managerial functions. But granted that it is necessary from the Government's viewpoint to give statutory protection to these managerial functions, the failure to provide ample safeguards for the workers does not appear to be justifiable.

To be more specific, in respect of the management functions pertaining to promotion and recruitment, no attempt has been made to spell out the criteria or limits within which an employer can reasonably exercise his rights. Thus it is open to an employer to adhere most rigidly to the publicised conditions for promotion or employment of persons he does not like and to waive such conditions on any pretext in respect of applicants favoured by him. It all boils down to whether an employer can he relied upon to exercise his management functions in good faith. Although the provisions pertaining to the rights of an employer to transfer, retrench, dismiss or order his employees contain certain safeguards for the employees, such safeguards are effective only if the assumption that an employer always acts in good faith is justified.

On this point, we in the N.T.U.C., being used to seeing the uglier side of the employer's face, do not share the .optimism of the Government that employers can be depended on to behave responsibly and decently towards their workers. We are fully aware that industrial or commercial organisations are profit-making organisations and that it is in the own interest of the management, whether it be professional management divorced from the ownership of tile business or otherwise, to employ the best talents available or to deploy staff in the most advantageous manner. But the fact remains that employers and managers are only human and may occasionally behave in an irrational and perverse manner. Our concern is that such behaviour may have adverse repercussions for the workers and that the Ordinance does not seek to safeguard the rights of the workers.

The Minister for Foreign Affairs and Minister for Labour in his speech yesterday referred to the incidence of 389 work-stoppages involving a loss of 1,284,029 man-days during the period from 1960 to 1967. The impression that appears to be given is that the trade union movement has been irresponsible in the past and cannot be relied upon to ensure that work-stoppages of such magnitude would not occur again so as not to prejudice Singapore's future industrial expansion programme. I wish to point out that work-stoppages must necessarily arise out of trade disputes and that it takes two parties to make a trade dispute. It is not fair and correct to blame the occurrence of each and every dispute on the union involved. For in the first place, if an employer can be trusted to give a fair deal to his workers, it would never have been necessary for the Government to enact employment legislation such as the Industrial Relations Ordinance.

I also wish to point out that the reference to the period, 1960 to 1967, whether intentional or otherwise, was extremely misleading, to say the least. The fact is that the Industrial Relations Ordinance was enacted in 1960 to meet the need for promoting peace and stability in the field of industrial relations in Singapore. It takes a few years for the Industrial Relations Ordinance to be in operation before its effect becomes evident. This is substantiated by the published data of the Statistics Department pertaining to work-stoppages. For the period 1964 to 1967, the second half of the period referred to by the Minister, there were only 94 world-stoppages involving the loss of 11,715 man-days which do not amount to even one per cent of the total for the whole period. The only conclusion I can draw from this comparison of figures is that the Industrial Relations Ordinance has become increasingly effective during the last few years even without the gift of managerial functions to employers.

Even now as we are discussing this Bill, there are employers who are seeking to exploit the provisions of the Bill to their best advantage, regardless of the intention of the Government. I have been given to understand that one commercial organisation, which has previously applied for the extension of a collective agreement to which the trade union concerned has indicated its agreement, now seeks to oppose its own application before the Industrial Arbitration Court. The reason for its action appears to be that the employer anticipates certain provisions to be superfluous in a collective agreement in view of the Government's gift of management functions. Such being the case, workers cannot be blamed for feeling nervous that some employers are clearing the decks for wholesale exploitation of workers.

While it is heartening to know that the Government has given an assurance that it will not hesitate to cane the naughty employers, it is our hope that the Government will not be found wanting in decisiveness and firmness when it comes to dealing with recalcitrant employers. The N.T.U.C. will not be silent if it finds that some employers take undue advantage of the powers of managerial functions given to them under this Bill.

[Mr Speaker in the Chair]

3.43 p.m.

Inche Abdul Aziz Karim (Kallang): Mr Speaker, Sir, what is the true industrial relations situation? Are the workers suppressed or are the employers terrorised? Neither proposition describes the real situation. But apparently the former Minister for Labour has quite suddenly come to think that the workers have gone out of hand and must be straightened up by harsh administrative and legal sanctions. It is also apparent that he has not given a factual account of the real situation. Those who are deeply involved and concerned with industrial relations will readily say that labour and management have matured since the turbulent years of the 1950s.

From Labour Department sources we gather that there are fewer and fewer strikes and lock-outs. The number of work-stoppages for each year since 1955 are as follows: - 1955 - 275 1962 - 88 1956 - 29 1963 - 47 1957 - 27 1964 - 39 1958 - 22 1965 - 30 1959 - 40 1966 - 14 1960 - 45 1967 - 30 1961 - 116 In the first five months of 1968 there have been only two work-stoppages.

Although there were 18 more strikes, in 1959 than in 1958, there were fewer man-days lost in 1959 than in 1958 due to work-stoppages. In the 1950s the work-stoppages were mainly politically motivated, and so were those in the early l960s. Whatever the laws might have been, they would not have made any difference to the trend and line of action in those years. However, since those days, industrial relations have gradually progressed and found their own balance, and restrictive laws will not at all be conducive to the further development of better industrial relations.

Industrial relations have made a marked improvement in the last few years, and this is eloquently stated in the Singapore Year Book 1966, which is published by authority. In Chapter Eight, page 189, it states:

'The marked improvement in industrial relations noted in 1965 continued throughout the year. There were only 14 work stoppages during the year - the lowest since 1961, the peak year for work stoppages when there were 116 strikes. For the first time, at the end of the year there were no outstanding strikes.' In the same chapter, in page 200, it states:

'The two noteworthy features in the fields of industrial relations were firstly, that there were only 14 work stoppages - the lowest since 1961 - and, secondly, the short duration of these work stoppages. Nine stoppages lasted from 1 to 5 days, four from 6 to 40 days and only one lasted for more than 40 days, which altogether involved 1,288 workers as against 3,374 in 1965 and 43,584 in 1961. The number of man days lost as a result of the 14 work stoppages was 17,807.'

Mr Speaker, Sir, surely there have been disputes - disputes on union recognition, dismissal and retrenchment. Some were settled by direct negotiations, some were settled in the Labour Department, and some were settled in the industrial Arbitration Court. The cases brought up to the Labour Department were settled under the very eyes of the former Minister for Labour, and in some of the cases, the employees' objections were upheld. It was true also that the Industrial Arbitration Court has ruled in favour of the trade unions in some dismissal and retrenchment cases. These decisions of the Labour Department and the Industrial Arbitration Court prove the point that employers can abuse their powers, and that employees should be allowed to protest, to object and to dispute the actions taken by management which they consider are prejudicial to their own interests. The very fact that an employer can act, intentionally or unintentionally, against the present or future interests of his employee, should be convincing enough to any man with common sense and, more, with a sense of justice, to accept the plea that an aggrieved employee should be allowed to have the full protection of his trade union against the high and heavy-handed action of his employer. If we accept the concept of a free society, and a society of law and order, then we must accept accordingly the democratic right of an individual to protest, to object and to dispute an action which he considers is against his own interest.

I firmly believe that an aggrieved employee should be given the right to seek justice in the Court, and it would be a shame to clip the powers of the Industrial Arbitration Court. The Industrial Arbitration Court is a sound industrial relations procedure, and any attempt to circumscribe the jurisdiction and function of the court is unacceptable. The Industrial Arbitration Court has obtained the respect of the workers because it operates on sound principles. In this connection, I quote Chapter Eight, page 202 of the Singapore Year Book, 1966:

'The principle upon which the Industrial Arbitration Court operates is that of offering to employers and trade unions of employees an award or decision which will fairly and justly reflect not only the interests of both parties to an industrial dispute but also to the community as a whole, as well as the economy of the Republic.'

With these words of the Labour Department in mind, it is hard to understand the move to take away the powers of the Industrial Arbitration Court to hear cases on dismissal and retrenchment, and the contingent powers to reinstate dismissed or retrenched employees and grant suitable reliefs. It is imperative to note that all dismissal or retrenchment cases that came up before the Industrial Arbitration Court were either disputes arising out of the operation of collective agreements or disputes jointly referred to the court, or disputes directed to the court by the Minister, and included in the latter category would be cases which his Ministry had failed to mediate successfully. In all these cases, the trade unions have more than accepted the awards of the Court. In fact, they have come to respect the court as a place of wisdom and justice. Notwithstanding this realisation, the trade unions have discreetly settled their disputes out of court. The records of the court show this attitude. In 1967, the Court heard four dismissal cases, three union recognition cases and five retrenchment cases; and in 1966 the court heard 13 dismissal cases, five union recognition cases and two retrenchment cases.

The Labour Department, however, still have the monopoly of dismissal and retrenchment cases referred by the trade unions for conciliation and arbitration. Of the 702 disputes referred to the Labour Department in 1966 for conciliation, 34.9 per cent were dismissal cases; and according to the same Report (Command 7 of 1968), "Retrenchment was again a minor cause amounting to only 6.6 per cent." Is the former Minister for Labour suggesting that trade unions are also terrorising him, his officials and the court when they were defending their members in the Labour Department and in the court? Is the former Minister for Labour claiming that there is a free-for-all situation with organised workers terrorising the employers? I think it is a figment of his imagination. If anything is true, it is that he possesses the quality of a fiction story-teller quite common among some reporters who rub in highly sensational ideas to make a no-story a tall story.

I wish to point out to the Minister that the general consensus of opinion of workers, not just trade union members, is that clause 5 and clause 8 of the Industrial Relations (Amendment) Bill to amend section 17 and section 34 of the Industrial Relations Ordinance, 1960, is an open invitation to wield the axe. However, much depends on who the Minister is, and if the Bill is passed, I think workers will have to cross their fingers, and wait and see how he plays his hand in dealing with the bully-boys amongst unenlightened employers.

This attitude, rightly or wrongly, arouses the hopes and fears of workers, because the proposed labour legislation is brimming with prejudice. The fear created by the new labour legislation in the worker is that if he is unfortunate to be sick for too long, he will not get a vacation leave, and probably he will leave his family destitute. The fear created in the worker is that if he proves, in the opinion of his employer, to be not so useful any more, he will lose his job. The worker is told if the new labour legislation is not introduced, there is the prospect of a grim future for him, and when the economic situation becomes bad, unlike money and managerial men, he is stuck fast here. It is fear, fear, fear without limit.

I think it would be more sensible to invoke the patriotic spirit to work hard to be more efficient and productive, and to make the necessary sacrifices. I think the workers must be made to feel they are important, useful and effective digits in society. They must be allowed to decide the future of the country, and feel that they do not get the worst deal, whether the circumstances are favourable or poor. Some may be inclined to believe that the workers in Singapore have never had it so good, and if things are going to be bad, they must have the worst. This is not the correct attitude to take towards the workers. I firmly believe that there will be greater participation by the workers in the affairs of the undertakings if they are to understand most clearly, to give out the most and receive the best in return.

The common assertion that it is the employers' right to make business decisions free from collective bargaining is based on property rights. Such a contention is valid as far as the right to organise and to direct machinery, materials and money is concerned, but never men. As far as men are concerned, the property basis of management carries no legal duty, and no legal compulsion to co-operate.

An authority on industrial relations has this to say:

'While property rights carry with them a power of disposition of goods, they do not carry an equal power to use those goods if the co-operation of others is necessary to that use. Co-operation, without which the property right is reduced to a power of disposition, cannot be commanded. It can be won only by consent. And there is no legal compulsion upon the workers to cooperate. There is no legal statement of the terms on which co-operation must take place. The definition of those terms is left directly to those parties involved, and there is nothing in law to stop the union from demanding as the price of the co-operation of its members a voice in some matter previously independently determined by management. Since the property rights do not mean that one has command over others, management may find it essential to share its authority as a means of inducing co-operation, in order to maintain the value of a going business. Over a period of time, it becomes customary to share authority in order to win co-operation in certain recognised areas of business decisions - for example, wages, hours, or perhaps the speed of assembly lines.'

The only institution where a man can be managed and ordered about is the military institution where authoritarian relationship exists by consent. However, a military-like regime can never run an undertaking successfully for long.

I have strongly emphasised the need for greater participation by workers in the management of undertakings, because this is a world-wide phenomenon. The International Labour Organisation's Recommendation 130 lays down that workers' representatives should participate in the framing of personnel policy and the solution of social questions within the undertaking. The problems that require the workers' participation cover conditions of work, welfare services, safety, employment and discipline, training and a range of matters involving the workers and having social consequences.

I think it is clear now that the introduction of clause 5 to prohibit collective bargaining on procedures on promotion, transfer, employment, termination, dismissal, re-employment and assignment of work is a denial of the workers' right to participate in the affairs which immediately affect his life and that of society. Let me be explicitly clear that trade unions have never desired to arrogate to themselves the functions of management in directing the affairs of the enterprise. Labour only wants the establishment of rules for management to follow in exercising their functions. This must necessarily be so, for workers will suffer if the undertaking is managed inefficiently or may have to suffer if the undertaking is to be run more efficiently. In the former case, it is clear how all those involved in the enterprise will suffer, but in the latter case, because of the workers' own productivity, some of them might be dispensed with. Arising from the points I have just made, I think no self-respecting worker and trade unionist will agree to the matters listed in clause 5 being withdrawn from the field of collective bargaining.

Mr Speaker, Sir, clause 8 of the Bill seeks to remove from the Industrial Arbitration Court the power to hear and decide upon claims by unions for the reinstatement of employees and to order the reinstatement where the court is satisfied that the dismissal was wrongful. Perhaps we in this House should try to trace the events that led to the amendment that was made to the previous section 38 of the Industrial Relations Ordinance (now section 40 of the Reprints Supplement). A glance at the original provisions contained in section 38 of the Ordinance seems to indicate that the court had extremely wide powers. Section 38 gave the court the power to make an award on any matter or thing for the purpose of settling a trade dispute or of preventing any further trade dispute even though the matter or the thing was not one of the specific reliefs claimed by the parties before the Court. My trade union colleagues, who had occasion to appear before the Industrial Arbitration Court in cases for reinstatement, had on every occasion been told by the senior representative of the Singapore Employers Federation, who had argued against the unions, that the court did not possess the power to reinstate. His main argument was that, in the absence of a specific provision empowering the court to order the reinstatement of a dismissed worker, the court could not order any reinstatement. Also, he had, on occasion, compared the powers given to industrial tribunals in Australia where the tribunals were specifically given the power to reinstate and he had proceeded to emphasise that without such a power the court could not reinstate any dismissed employee.

The present provision contained in section 40 of the Reprints Supplement of the Industrial Relations Ordinance was a direct result of certain proposals put forward by the National Trades Union Congress following the adoption of a resolution urging the Government to amend certain sections of the Industrial Relations Ordinance, particularly those contained in section 38. This took place on the 4th of April, 1964, at the Victoria Memorial Hall, at its first Annual Delegates Conference. The Recommendations of the N.T.U.C. on the amendment to section 38 of the Industrial Relations Ordinance were as follows:

'The powers of the Court are very wide as set out in this sub-section. There ought to be a provision here ensuring that before the Court makes any award, especially in relation to a matter which does not come within the specific relief originally claimed by any party, the Court must first bear in open Court the submissions thereon of all the parties who are eventually to be bound by the award.

A specific clause ought to be included here stating that the Court has the power to order the reinstatement of employees no matter for what reason they have been dismissed if for any good and sufficient reason the Court thinks it fit that such employees should be reinstated.'

It was as a result of this proposal that the Government decided to amend section 38 (now section 40 of the Reprints Supplement) giving the court specific powers to reinstate an employee who is dismissed.

I have already stated my objection to clause 5, but my opinion on clause 8 is quite neutral because it does not matter very much whether general termination cases are dealt with in the Industrial Arbitration Court or the Ministry of Labour. However, I give my support not to withdraw the jurisdiction of the District Court to hear cases subject to section 79 of the Industrial Relations Ordinance.

Mr Speaker, Sir, at this juncture I wish to make an observation on the futility of clause 5 and clause 8. Even if the matters listed in clause 5 are non-industrial matters, as defined in the Industrial Relations Ordinance, there can be disputes not arising from the terms of the collective agreement. Such disputes are not necessarily bound to be referred to the Minister under clause 8. That is the defect I wish to point out. I come now to the crucial point where it may be necessary to take extra remedial legislative measures to make it unlawful to take industrial action over "non-industrial matters". Sad is the day when more restrictive laws are adopted. Let there not be such a day.

Mr Lim Soo Peng (Havelock): Mr Speaker, Sir, the Industrial Relations (Amendment) Bill must not be considered in isolation. It is to be taken together with the Employment Bill and the Central Provident Fund (Amendment) Bill as each is part and parcel of a deal designed to achieve new norms in industrial relations, terms and conditions of service and to increase domestic savings which will benefit our people.

The Government has already explained fully that, in connection with the Employment Bill, the purpose is to strengthen our economy and ready us to face the economic challenges ahead. The other Members of this House, leaders of industry, commerce and labour have expressed their views. Academicians and economists have studied and debated it and the general consensus of opinion has been that the Government is not only right but indeed has no other choice. It has to take stringent measures even at the risk of being unpopular.

The Industrial Relations (Amendment) Bill sets industrial relations in its true perspective. This Bill may appear to the superficially minded and the superficially inclined as a move against the interests of labour, but in reality it is not so. What it seeks to do is to rationalise the position to prevent in-roads into functions which properly belong to management. These inroads, whether made consciously or unconsciously, have led to aberrations in industrial relations which in turn have dampened the incentive for some employers to continue in business, have made them hesitate to expand business and, worst of all, discouraged potential new investment.

Mr Speaker, Sir, the function of management is to manage and workers must accept this fact. It is only under such conditions that we can hope to maintain the present buoyancy in our economy and promote a climate of stability for further expansion of our economy so that more jobs can be made available for our people. The Government's measures are an attempt to establish a balance between the needs of the workers and the requirements of entrepreneurs in the context of our national interest. The Central Provident Fund (Amendment) Bill, for example, will enable our workers to own houses and have a stake in our country. Although the employers will have to pay more under the new rate of Central Provident Fund contributions, I am sure none will grudge the extra payment when the money is put to good use.

Mr Ho See Beng: Mr Speaker, Sir, I rise not to oppose the Industrial Relations (Amendment) Bill; neither do I completely support it. It is obvious that the Government has good intentions for moving the amendments. I think the Industrial Relations (Amendment) Bill has the same motivations as the new Employment Bill. It would, therefore, be superfluous for me to go into the whys and wherefores for the introduction of this amendment Bill. But I will not be discharging my duty as a Member for Parliament with labour interests at heart if I do not point out the objectionable portions of the Bill as they appear to me. These amendments seek to vest in the management absolute power and a completely free hand in dealing with the employees without any real safeguards for the interests and welfare of the workers. Such are the provisions of this Bill that even the most scrupulous of employers would be stupid not to take advantage of them to the detriment of their employees. In the overall interest of the working class, the dangers and threats posed to their security by this amendment Bill must be squarely faced in the hope that employers would also rise to the occasion and not abuse the absolute managerial functions handed to them in this "silver statute".

I wish to seek a further amendment to this Bill, but it is obviously not possible because neither I, nor my colleagues from the unions, have given notice. However, I would like to bring to the notice of the Minister the necessity of further protective measures in the provisions of clause 5 of this Bill.

Sir, I refer to new subsection (2) (d) of section 17 of the Industrial Relations Ordinance relating to termination of service on the grounds of redundancy and reorganisation. I do not wish to imply that all employers are anti-labour; neither are they pro-labour. It therefore stands to reason that there must be some employers who will not hesitate to exploit the provisions quite blatantly and, under the guise of reorganisation, create redundancy where none exists in order to retrench some of their employees. Here I would like to quote an example to the Minister for Foreign Affairs and Minister for Labour who was an editor of a newspaper before. He knows that if a sub-editor is made to read the proof, at the stone, there will be redundancy in the proof-reading department. That kind of reorganisation cannot be justified. If a part of the proof-reading job is taken over by the "stone" editor, the proof-readers will lose their jobs. I do not doubt that the Minister knows all about this. There is nothing in this Bill to prevent such employers from engaging their relatives or friends a few months after their alleged reorganisation to fill the positions previously held by the retrenched employees.

Mr Speaker, Sir, I have no intention to take steps to negative this clause, but I do ask the Government to qualify this clause with protective sub-clauses so that no employer may be able unjustly to exploit it. As the proposed amendment now stands, an employer may effect a retrenchment and the union may only discuss the terms of severance pay for those retrenched employees who have more than three years' service.

The Employment Bill, which was read a Third time yesterday, makes provision for the payment of such retrenchment benefits should the union and the employer agree on the benefits to be paid. The issue can obviously be referred to arbitration. It is the criterion for the termination of service which only is precluded from the purview of negotiation or arbitration. In some ways, it may be even cheaper for an employer to retrench his serving employees and save whatever compensation is due to them, because the amount so paid up will be more than recouped by the subsequent savings from employing new and cheaper labour. Further, the employer can always retrench employees every two years and eleven months and thereby pay no severance benefits. Such a situation is not as far-fetched as the Government would have us believe. It is because of the distinct possibility of such malpractices and abuses that I urge the Government to provide more safeguards for workers. The protective clauses I seek are:

'(1) Where the union feels that the retrenchment is justified, both employer and union make a joint application to the Arbitration Court to determine the issue. This should be determined by the President sitting alone. While the issue is under the Court's jurisdiction, the employer may go ahead with the implementation of the re-organisation or retrenchment. The Court's decision, when handed down, will determine whether the retrenchment was justifiable or not.'

Sir, it will neither cost the employer anything nor will retrenchment be delayed, but such a provision will prevent abuse.

'(2) Where retrenchment has been effected and upheld by the court or where the union has agreed that it was justifiable, the employer is free to engage new staff to fill the vacancies within six months from the date of retrenchment. If the employer finds it necessary to recruit staff, then he shall offer the appointments to those who have already been retrenched.'

Sir, I do not believe that any enligtened employer will object to these protective provisions, because he will not abuse the powers that are, as the Minister has said, restored to him.

Sir, in the case of dismissal, there is an avenue for appeal under the pro-visions of the Employment Bill when it becomes law. The dismissed employee may appeal to the Minister through his union. If the employer feels that the dismissal cannot be justified and in order to obviate the risk of ministerial intervention, he will effect the dismissal as "retrenchment" it is only calling it by another name - on the pretext of "reorganisation". This can happen. As the amendment stands today, the Minister will be in no position to intervene and wield the much publicised "big stick".

Sir, these are my reasons for asking the Government to consider giving some form of protection to workers by means of restrictive clauses designed to prevent abuse of the provisions by employers.

4.23 p.m.

Mr Teong Eng Siong: (In Mandarin): Mr Speaker, Sir, I am of the view that the introduction of the Industrial Relations (Amendment) Bill is mainly for the purposes of creating a climate that is conducive to investments in Singapore. It will also allay the doubts and fears of foreign investors who intend to set up business here. If a wrong impression is created, it will be detrimental to our policy of encouraging more foreign investors to come here.

As a result of our pro-labour policy of industrial peace with justice, the industrial relationship between employer and worker has been very good in the last few years. Many trade disputes have been resolved by arbitration. There has been a marked reduction in the number of strikes and trade disputes. We must try to maintain the present good relationship between employer and worker. This Bill is quite fair to both employer and worker because it provides that the transfer of any employee must not be detrimental to his existing terms and conditions of service. It will therefore prevent unscrupulous employers from exploiting their employees.

The Bill also provides that in the case of an employer who abuses his rights by sacking an employee, the latter can, within a month, appeal to the Minister for Labour for a withdrawal of the notice of termination of service and for reinstatement.

Mr Speaker, Sir, the trade union leaders in the National Trades Union Congress look after not merely the interest of labour but also that of the nation as a whole. In doing so, they seldom interfere with the rights of employers. They merely advance advisory opinions and this is not construed as interference with the rights of employers.

I hope that the introduction of this Bill will not affect our policy of industrial peace with justice and that this policy will be maintained. The present era is not the time for employers to increase their wealth at the expense of the workers. The employers should treat the employees fairly and, at the same time, the employees should work harder. It is only in this way that we can contribute to our economic development.

I support this Bill for all these reasons.

4.29 p.m.

Mr Low Guan Onn (River Valley): Mr Speaker, Sir, with the enactment of the new Employment Bill into law, a new chapter in the history of labour legislation in the Republic will have been written with the complete overhaul of three previous Acts which were legacies of the colonial past. It engenders a fertile and attractive investment climate for both local and foreign capital. But even with these new terms and conditions of employment as set out in the new Bill, investors will still be wary about investing in our Republic unless certain management functions such as employment, promotion, transfer, dismissal, retrenchment and reinstatement are restored to the rightful party. These are the inalienable rights of a company's management. In other words, the Industrial Relations (Amendment) Bill, 1968, is a natural follow-up of the Employment Act. These two pieces of legislation are just like Siamese twins and cannot be separated if they are to produce the desired objectives which the Government has in mind.

During the years before 1966 when the history of our industrial relations was nothing to be proud of, the unions encroached upon the management functions of commercial and industrial companies. For instance, it was almost impossible in those years to get rid of a malingering and bad worker because he could take shelter and protection under the umbrella of his union. Very often if a single worker was dismissed on strong and legitimate grounds, it would result in protracted negotiations between union and management, and if the negotiations came to nought, it usually ended in a strike resulting in heavy losses of revenue to the company. Very often, if it was a foreign concern and the losses were too heavy to bear, the concern would just fold up and go away.

Mr Speaker, Sir, I have to remind the trade union Members of this House that no sensible and responsible management will try to get rid of a trained and exemplary worker when he is a manpower asset in the viability of the company. The profits of the company depend on his productivity and skill and the effort he puts into his work. How then can an employer afford to dismiss such a worker? Instead, management has to think of incentives to reward his contribution to his company and to induce him to work as long as possible for the company, because a worker takes many years to be trained before he is really effective in his contribution.

Moreover, provisions are incorporated in the Bill by which wrongful dismissals, as stated by the Minister, can be referred to him, and his decisions to redress any wrong are final. This is a more satisfactory procedure to avoid time-consuming dialogues between the two parties to justify each other's actions. Therefore, these two Bills will provide a solid foundation to woo local trading companies, which are now hesitant, and foreign industrialists to invest in our island state, as investment is necessary for our economic survival.

The presence of the British military bases provides almost 20 per cent of our national income. This 20 per cent income comes from abroad. With the British withdrawal by 1971, the whole of this source of income will be reduced to zero. We will face a cruel world which does not owe us a living. We must make up for the loss of this income derived from the presence of the British military bases here. We also face competition with other industrial countries in Asia. We must also maintain our present standard of living which is the second highest in Asia. To succeed in all this, we must raise the quality of our goods and improve the efficiency of our services to the maximum.

Workers, like any other Singapore citizen, will no longer be in a privileged position. They will be called upon to make sacrifices in the national interest by increasing productivity and efficiency. Therefore, the trade unions will now have to play a more positive role in educating their members to respond to these changes of circumstances which are crucial in the years ahead for our existence as an independent and sovereign nation.

The Industrial Relations (Amendment) Bill, 1968, merely re-establishes the status quo between labour and management which is long overdue in industrial relations. With an enlightened attitude and positive co-operation on both sides, our nation will co down in the annals of history that we have achieved the impossible by the enactment of these two Bills. Our labour will earn the hallmark of being the most hard-working, intelligent, responsible, skilled and industrious in Asia. When this objective is reached, these two Bills will have generated the establishment of more and more industries. This will mean more avenues of employment for our citizens. With that, Mr Speaker. Sir, I beg to support the Bill.

4.35 p.m.

Mr Rajaratnam: Mr Speaker, Sir, before I deal with some of the points raised by the hon. Members opposite, I think I should correct the misapprehension of one of the hon. Members that I had quoted statistics relating to strikes to blame the workers. If he will re-read my speech, he will see that that was not the intention. The intention was to show that during the period in the early 1960s, something like 57 per cent of the disputes arose out of quarrels over management rights, retrenchment, the right to hire workers and so on. This was the basis on which this Bill was introduced, because obviously there is considerable misunderstanding between workers and management about what are management rights.

The Industrial Relations (Amendment) Bill now, for the first time, spells out something which hon. Members, and especially the trade union themselves, admit are common law rights. These rights have been there. They are accepted as such. The rights of the management to manage have not been queried, except by the Member for Kallang who has suggested that workers should also participate in the management of industries. That is something for the future. But, at the moment, there is no dispute and no quarrel over the essence of the Bill.

Where there is misgiving is in regard to the abuse of these rights by certain employers. Of course, if one assumes that all employers are madcaps, then not only this legislation but all other pieces of legislation go by the board. But employment laws are normally made on the basis that employers are reasonable and we frame legislation to suit reasonable conditions. But where it appears to us that the number of madcap employers becomes very substantial, then, as I made it quite clear in my speech, we will reconsider amendments to our Industrial Relations Act with a view to controlling unreasonable employers. But as things are at the moment, we work on the assumption that most employers are reasonable, as most trade unionists are reasonable. If that feeling prevails and if employers and trade unionists work on the basis that both parties are reasonable men, then I think this Bill, when passed into law, will achieve what we really want to achieve.

In the debate not only on this Bill but also on the Employment Bill, there are different objectives or immediate objectives. Naturally for the trade unionists, they are only interested in the trade unions and the workers. The employer is concerned only with his own sectional interest. But, as a Government, our interests are national. We are interested in the welfare of Singapore as a whole - workers, employers and professional men.

One of the main objectives of the Industrial Relations (Amendment) Bill, as with the Employment Act, is to resolve serious and real problems of economic expansion, new investments, increased productivity. And the overriding test to which we submit any legislation is, will it help to bring about these objectives - economic expansion, new investments, increased productivity? If it can or if it gives a reasonable assurance that it can, then the legislation must over-ride the sectional interests, whether of employers or workers or any other groups. And this, I am convinced, will help and definitely bring about industrial expansion, economic expansion, new investments. If we do not achieve these objectives soon enough before 1971, at least in the 1970s, then the arguments about the right to hire and fire and retrenchment would become superfluous and unreal, because there would be massive unemployment. Employers would be checking out and concerns would be closing down right and left, in which case even the exercise of the need for unions would become problematical. My colleagues and I, and I am quite sure Members opposite also, are convinced that this Bill will, when enacted into law, bring about new investments, industrial expansion and, in the long run, bigger, more prosperous and stronger unions.

Question put, and agreed to.

Bill accordingly read a Second time.

Mr Speaker: Mr Rajaratnam, before we get to the Committee stage of this Bill, I propose to suspend the sitting now. I will take the Chair again at 5.00 p.m.

Sitting accordingly suspended at 4.42 p.m. until 5.00 p.m. Sitting resumed at 5.00 p.m.

[Mr Speaker in the Chair]

Bill committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr Rajaratnam].

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