WORKMEN'S COMPENSATION (AMENDMENT) BILL

Order for Second Reading read.

3.46 p.m.

The Minister for Labour (Mr Ong Pang Boon): Mr Speaker, Sir, I beg to move. "That the Bill be now read a Second time."

Mr Speaker, Sir, the present Workmen's Compensation Ordinance was enacted in 1955, that is, about 16 years ago. Since then, we have progressed from a colony depending principally upon entrepot trade for our livelihood to a sovereign and independent nation with industrial activities assuming an increasingly dominant role in our national economy In striving for rapid industrialisation, we have encountered many problems, including that of a shortage of skilled and semi-skilled labour, the need to upgrade the skills of our workers as well as introducing them to new skills to meet the demands of higher and more sophisticated technology. We are, however, not deterred by the immensity of the problem. On the contrary, we have taken various concrete steps to overcome it. On a short-term basis, we have embarked upon crash training programmes as well as adopting a more liberal immigration policy to attract the entry of foreign skilled labour into Singapore. As a long-term measure, we have restructured our educational system so as to give technical and vocational education the proper emphasis and recognition demanded by our current industrial and economic policies. We firmly believe that ultimately we must be in a position to supply the skills required by our own industries instead of having to depend largely upon immigrant skills.

Mr Speaker, Sir, it grieves me to say that, despite the fact that skilled labour is one of our most important assets, insufficient efforts have been made to ensure that there is no unnecessary wastage of labour through accidents. This careless and irresponsible attitude is reflected in the upward trend in industrial accidents. According to statistics compiled by my Ministry, there were 9,682 accidents reported under the Workmen's Compensation Ordinance for the year 1970 as compared with 8,714 for 1969, that is, an increase of 11 per cent. Of these, 159 were fatal and 866 resulted in permanent disablement as against 132 fatal cases and 731 permanent disablement cases for 1969. As a matter of fact, the total number of accidents reported under the Workmen's Compensation Ordinance has been steadily increasing from 7,850 cases in 1964 to 9,682 for last year. In 1970, a total of 302,800 man-days were lost in factories alone as a result of accidents compared with 202,876 man-days lost for 1969. In terms of workmen's compensation, the amount paid in 1970 was $1,611,504, which is approximately three times the figure for 1960.

Mr Speaker, Sir, monetary compensation paid out to workers or their immediate families is only a part of the cost to the country arising out of accidents. There are other costs involved, such as cost of wages paid for working time lost, medical costs borne by the employers and the Government, cost of `damage to the premises or machines in the case of fire, costs of education and vocational or industrial training which could amount to several millions of dollars. Based on the 1969 rates, it has been estimated that the financial loss to the industrial economy was almost $23 million in that year. It can thus be seen that, apart from the sufferings of the persons concerned as well as the anxiety and hardship caused to members of their immediate family, relatives and friends, industrial accidents are costly to the economy of the Republic.

Obviously, no responsible government can afford to sit tight and watch the situation deteriorating. Although we cannot completely prevent accidents from happening, it is possible, through education of the employers and employees, coupled with strict enforcement of minimum safety measures and enhanced rates of compensation, to arrest the upward trend of industrial accidents. The recent promulgation of the Building Operations and Works of Engineering Construction Regulations, 1971, is the first of many such safety regulations to be introduced to provide safety guidelines to employers and employees. Extensive amendments to the Factories Act are being drafted to provide for a higher standard of industrial health and safety and to give more teeth to the Factory Inspectorate. The Workmen's Compensation (Amendment) Bill will have the effect of compelling the employers to pay more attention to the safety of their workers, while at the same time providing a greater amount of compensation to alleviate the sufferings of those unfortunate victims and their immediate families.

The main provisions of this amendment Bill are detailed in the Explanatory Statement to the Bill. I would like, however, to draw attention to some of the more important changes. Firstly, clause 2 of the Bill seeks to amend the proviso to subsection (1) of section 2 of the Ordinance and to extend the scope of the Ordinance to cover non-manual workers who earn up to $750 per month as against $400 per month at present. This is a logical sequel to the Employment Act, 1968, which covers all employees, other than those belonging to certain excepted categories, who are earning less than $750 per month. Clause 2 of the Bill will also bring all non-manual Government employees earning less than $750 per month within the ambit of the Ordinance, many of them for the first time.

Mr Speaker, Sir, the most important amendment to the Ordinance relates to the quantum of workmen's compensation. I would like to stress that the Ordinance is an essential piece of legislation which assures the workers that, in the event of accidents arising out of or in the course of employment, they or members of their families would be compensated financially. The compensation payable is related to the earning capacity of the person concerned. The compensation payable under the existing Ordinance has become inadequate. When it was fixed in 1955, the average monthly wage of a workman 18 years of age and above was $160 as compared with $197 for July 1970. Although the average wage rate has increased, the maximum compensation payable has remained static. Besides, the purchasing power of the dollar has decreased to some extent during this period. In view of this, clause 6 of the Bill will increase the maximum compensation prescribed under section 8 of the Ordinance to three times their present amounts, that is, from $7,200 to $21,600 for fatal cases, from $9,600 to $28,800 in cases resulting in permanent total incapacity, and from $65 to $195 for every 15 days in cases resulting in temporary incapacity. In order that the workmen or their dependants will in fact obtain increased compensation, the multiplying factors for computing compensation have also been raised considerably. Moreover, provision is made to ensure that in fatal cases, the minimum amount of compensation payable shall not be less than the present maximum of $7,200.

Where the earnings of a workman cannot be determined, the minimum wages are fixed by section 9 of the Ordinance for the purpose of computing the amount of compensation. Clause 7 of the Bill increases these minimum wages from $80 to $120 if the workman is 18 years of age and above, from $65 to $105 where he is 16 years and above but below 18 years of age, and from $45 to $90 where he is below 16 years of age. This amendment will, therefore, increase the quantum of compensation due to any workman so affected.

Also, to ensure that the interests of the workers are adequately covered and protected, subsection (1) of section 26 of the Ordinance is being amended by clause 15 of the Bill to provide for compulsory insurance against the employer's liability under this Ordinance. However, power is given to the Minister to exempt employers from this requirement.

Mr Speaker, Sir, the First Schedule to the Ordinance is also being amended by clause 17 to provide a more comprehensive and definitive list of injuries which result in permanent incapacity and to clearly specify the corresponding percentage of loss of earning capacity. This amendment will facilitate the task of the medical officers in recommending the quantum of award to be given in respect of industrial injuries.

Another important amendment is effected by clause 18 of the Bill which seeks to add silicosis and asbestosis to the list of occupational diseases specified in the Second Schedule to the Ordinance. One immediate effect of this amendment is that workers who are engaged in occupations involving exposure to asbestos dust or fine particles of silica generated by industrial processes, for example, granite crushing, sand blasting, kaolin grinding and ceramic works, will be eligible for compensation under the Ordinance if, as a result of their occupation, they contract the disease of asbestosis or silicosis. In this connection, medical boards and panels will be established to determine matters relating to medical evidence.

Mr Speaker, Sir, in drafting the Workmen's Compensation (Amendment) Bill, we have also considered the views and comments of the Singapore Employers Federation, the National Trades Union Congress, the General Insurance Association as well as those expressed by Members earlier in this House. Employers will, as a result, be required to take out compulsory insurance at a higher premium. However, insurance companies will, no doubt, offer rebates for no accidents or low-accident records and this will be an incentive to management to provide a healthier and safer working environment for their employees. Hence, the additional premium can be offset in the long run against less accidents, better productivity and profits.

Mr Speaker, Sir, the amendment Bill is only one of a series of legislation to encourage more safety consciousness among employers and employees. However, these legislative measures in themselves will not be completely effective in reducing industrial accidents if the employers and employees do not co-operate whole -heartedly. Hitherto, most employers and employees have paid scant regard to the safety and well-being of labour. In their desire to maximise profits, employers tend to neglect the need to provide the minimum requirements for safety of their workers. Some unions themselves appear to be preoccupied with bargaining for more dollars and cents to the exclusion of safeguarding the lives and limbs of their members. Even in the odd instances where employers had provided helmets and safety belts in construction projects and factories, it was found that the workers were not willing to make use of them, In our urgent drive to industrialise rapidly to provide jobs for the unemployed whose number was augmented by those retrenched from the British bases, and, in the long run, to build up a strong and viable economy capable of self-sustaining growth thereby ensuring a rising standard of living, the Government has had to be content with what rudimentary devices the employers are prepared to install.

It may be said that some loss in human assets is inevitable irs the present stage of industrialisation. Nonetheless, the number of serious accidents is unnecessarily high, particularly when about the only valuable asset we have is human resources. I would therefore urge both employers and employees to be more safety conscious and exert more discipline in ensuring that safety regulations are scrupulously observed.

Sir, I beg to move.

Question proposed.

4.05 p.m.

Inche Abdul Aziz Karim (Kallang): Mr Speaker, Sir, while I rise to support the Workmen's Compensation (Amendment) Bill, I must say that I have certain reservations about it. In so far as it confers increased benefits on workers who may have been incapacitated in one way or another as a result of accidents arising out of or in the course of their employment, the provisions of the Bill are, of course, to be welcomed.

As I see it, the amendments to the Workmen's Compensation Act as proposed by the Bill can be divided into three main categories

1. Raising of the salary ceiling for non-manual workers to come within the ambit of the Act.

2. Tripling the maximum amount of compensation payable under the Act.

3. Compulsory insurance by employers against liabilities under the Act unless it is waived by the Minister.

The first principal category of amendments is presumably to bring the Workmen's Compensation Act into line with the Employment Act (Chapter 123 of 1970 Edition) and the other associated legislation. I, however, must comment that the raising of the salary ceiling for non-manual workers is more apparent than real. It should be noted that the class of non-manual workers who earn a salary of $400 at the time when the Workmen's Compensation Act was first brought into operation in 1954 may possibly correspond to a class of non-manual workers earning a salary higher than $750 per month at present in view of the rise in the general wage level and the decrease in the real value or purchasing power of money during the intervening period.

As regards the proposals relating to the triple increase in the rates of monetary compensation under the Act, I wholeheartedly agree that such increase is timely if not long overdue. The principal Act, however, contains certain anomalies which, far from being dealt with, are being propagated without the slightest alteration or rectification under the proposed Bill. I shall be touching on this point in greater detail later on in my speech.

As regards the question of compulsory insurance by employers against their liabilities under the Act, it makes a welcome change from the prevailing provision. Under the prevailing provisions of the Act, it is not obligatory for any employer to insure himself against his liabilities under the Act. Under the Bill, it is proposed that an employer should be compelled to insure himself unless he is exempted by the Minister. Presumably the Government will exempt itself. While I shall be touching more on this point later on, for the present I wish to comment that it would be desirable if the Bill indicates, at least generally, the basis on which the Minister may exempt an employer from the requirements of compulsory insurance under the Bill.

Coming to the specific provisions of the Bill, I wish to direct the attention of Members of this House to clause 4 which seeks to amend section 4 of the Act by deleting section 5 thereof and replacing it with a new provision. On the face of it, the amendment does not seem to involve any fundamental principle and appears to be of little practical significance. But there are two points which should be considered by this House before approving the amendment now under reference. One point is that while the amendment seeks to reduce the period under which no compensation is payable under the Act from four consecutive days to three consecutive days, the amendment also abolishes the saving clause in relation to such period. Under the prevailing provision of the Act, the period of four days for which no compensation is payable is clarified by the condition whether the total period of incapacity exceeds 14 days or not. But under the proposed amendment the period of three days is an absolute period for which no compensation is payable. In other words, a worker would not be entitled to any compensation for the first three days of his incapacity, irrespective of whether he may be ultimately incapacitated for a period of 14 days or more. I have always been under the impression that the intention of including the provision of an initial period for which no compensation is payable, together with a saving clause, is apparently to prevent any possible abuse of the provision. The proposed amendment, by excluding the qualifying condition, takes on a punitive character in relation to workers. The Government may have strong reasons for putting forward such an amendment. It may well be that by reason of the provision for compulsory insurance it may not be administratively convenient or practical to include the first few days of any period of incapacity for the purpose of paying compensation under the Act.

In proposing the amendment, it may be also possible that the Government is influenced by the consideration that it may be more practical for workers as well as their respective employers to treat the initial first few days of any incapacity as sick leave under the Employment Act. This leads me to the other point which I wish to bring to the attention of Members of this House. There are two main considerations to note in respect of the understanding that workers can utilise their sick leave benefit in relation to the first few days of any period of incapacity. One consideration is that unless a collective agreement expressly provides for such period of incapacity to be treated as sick leave, an employer may raise difficulty when a worker wishes to claim such period as sick leave. Even if such a defect in a collective agreement can be remedied in respect of all organised workers, the fact remains that the vast majority of workers are not organised and, therefore, cannot claim to have the benefit of any collective agreement. The net result is that it is more likely that workers may have to bear the full cost of the first few days of incapacity rather than the employers by reason of such a provision as proposed under the Bill. I, therefore, suggest that if the Government considers it necessary to have such an amendment to subsection (5) of section 4 of the Act, then it is only fair and reasonable that the initial first few days of any incapacity should be treated as sick leave under the provisions of the Employment Act.

Clause 6 of the Bill, by amending section 8 of the Act and thereby trebling the maximum amount of compensation payable thereunder, has attracted the most comments from the public. The comments of workers on the proposed amendment are favourable and so are `the comments of most employers, apart from the few die-hard exceptions. I do not believe that any sane person, whether inside or outside this House, would grudge the increase in the amount of compensation to be paid to a workman or his dependant's in the event of his death or incapacity within the ambit of the Act. Under the proposed subsection (2) of section 8, the amount of maximum benefit payable to the dependants of a workman who died is $21,600 as compared to the existing maximum of $7,200. In subsection (3), the amount of compensation payable to a workman who suffers permanent total incapacity is a maximum of $28,800 or, if he is incapable as well of performing the essential actions of life by himself, a maximum of $36,000.

I am concerned, however, that the basis of computing compensation under the proposed section 8 may give rise to anomalies which may in turn result in the dependants of the deceased workman being better off than those of a permanently and totally incapacitated workman. Comparing, for instance, the compensation payable under the proposed subsection (2) (a) (i) with that payable under the proposed subsection (3) (a), on the basis of the stipulated minimum wage of $120 per month for a worker who is 18 years of age and above, it would appear that the compensation payable under the proposed subsection (2) (a) (i) would amount to 72 x 120 or $8,640, and that the compensation payable under subsection (3) (a) would equal to 60 x 120 or $7,200. It has been the practice for any court of law to award higher damages to a workman incapacitated by injury resulting from an accident than to the dependants of a deceased person. The basis for such practice is that the person who is injured but survives would logically have greater suffering and would be likely to incur more expenses by way of his own maintenance than the person who died as the result of the accident. Such practice seems to have been adopted by the Government because the maximum benefit payable on the death of a worker is $21,600 as stated in subsection (2), and the maximum compensation payable to an injured worker is $28,800 as stated in subsection (3). On the basis of a workman earning the minimum wage of $120 a month, the dependants of an injured workman who is unable to perform the essential actions of life without the constant attention of another person, however, the total compensation payable on the basis of 60 months' earnings will amount to 75 x 120 or $9,000, which is barely $500 more than the sum awarded to the dependants of a deceased workman. Insufficient consideration seems to have been given to the fact that a permanently and totally incapacitated worker, though able to perform the essential actions of life without the constant attention of another person, poses a continuing and additional burden upon his dependants, which would not have been the case if he had died instead of being permanently and totally incapacitated. Such calculation may be branded as being callous and unduly cynical, but the fact is that we are a pragmatic people living in a pragmatic society. To my mind, the persons responsible for drafting the proposed amendment to the Workmen's Compensation Act seem to have contented themselves with merely trebling the various amounts of compensation payable under the Act and leaving the infrastructure of the Act untouched. For instance, under the proposed subsection (3), a necessary distinction seems to have been made as to whether a worker is over or under the age of 16 or 18 years. The fact that such distinction is contained in the present Act is not sufficient justification for its reproduction in the Bill. I would have thought that a proper distinction should have been made as to whether the incapacitated worker has any dependants or not. 1 would therefore suggest that subsection (3) of section 8 of the Act should be amended to provide for the payment of compensation to a workman who is incapacitated but who has no dependants a sum of $28,800 or equal to 108 months' earnings, whichever is the less, and the payment of compensation to a workman who is incapacitated and who has dependants a sum of $36,000 or equal to 135 months' earnings, whichever is the less.

The provision of clause 15 of the Bill amending section 26 of the Act to provide for compulsory insurance by an employer of his liability under the Act is in the general interest of the worker for whose protection such a provision is intended. While I appreciate the move by the Government in this direction, I am of the view that it is not sufficiently effective. For instance, the proposed subsection (2) and subsection (3) of section 26 contain provisions prohibiting any avoidance or evasion by an employer of his liability under the Act. The Act is not sufficiently comprehensive. The whole provision of subsection (2) of section 26 as stated in the Bill revolves around the word "deduction" in relation to the earnings of a worker. But to my mind if an unscrupulous employer desires to evade this particular provision, he would not have been so foolish as to deduct from the wages of his workers the premium payable under an insurance cover in respect of his liability under the Act. With his absolute prerogative to hire and fire under the Industrial Relations Act, it would have been a relatively simple matter for an employer to dismiss his workers and offer them re-employment with slightly lower salaries. It should be noted that most manual workers in the construction industry, which often hits the headlines with fatal accidents, are employed or paid on a daily-rated basis. It would be perfectly legitimate for an employer to pay a wage of $10 a day before the introduction of compulsory insurance under the Workmen's Compensation Act and to offer a wage of $9 a day to a worker under a new contract the day after the introduction of such provision for compulsory insurance. Even if it is possible for the Government to succeed in its prosecution of such an employer under `the proposed section 26 as presently worded, it would be scant consolation to a worker who has been previously dismissed for objecting to an attempt by his employer to so avoid his liabilities under the Act, that such employer is convicted for so contravening the Act. I suggest the phrase "or any reduction off" should be included after the phrase "any reduction from". As it is, the proposed provision contains a sufficiently large enough loophole for a bulldozer to plough through.

Clause 17 of the Bill gives effect to a long overdue amendment of the First Schedule to the Act. The proposed First Schedule is generally more comprehensive than the existing Schedule. I feel, however, that in making such an amendment the Government has not gone as far as it should have in revising the scope of the First Schedule. Not sufficient consideration seems to have been given to the circumstance that a person ordinarily makes greater use of one hand than the other. In the proposed Schedule as well as in the existing Schedule, the computation of loss of earning capacity is based on the assumption that every person is ambidextrous, that is, has equal facility or agility in the use of either hand or arm. I am of the view that in all cases of permanent incapacity involving the loss of an arm or a hand, a distinction should be made whether it is an arm or a hand that i's habitually used or otherwise.

Under the proposed Schedule the quantum of incapacity in relation to the loss of a hand or an arm appears to be determined by the degree of reduction in earning capacity in every employment which the injured worker was able to undertake at the time of the accident and which requires the indiscriminate use of both arms and hands. Where the range of employment open to the injured worker at `the time of accident is such as to enable him to use one hand or arm more than the other or in preference to the other, the reduction in earning capacity ought to depend on whether the hand or arm lost is habitually used or not. Moreover, the older the injured worker the harder it would be for him to adjust to the loss of an arm or hand habitually used whether for the purpose of working or performing the essential actions of life. On the basis of my comment, I suggest that items No. 8 to 20 in the proposed Schedule relating to the computation of loss of earning capacity in respect of an arm or a hand should be amended to take into consideration whether such arm or hand lost is one which is habitually used by the worker affected.

A further comment I wish to make iii regard to the First Schedule to the Workmen's Compensation Act is that the injuries which are deemed to result in permanent incapacity as listed therein seem to be of a purely physical character without any exception. The Bill itself does not envisage any change in the nature of the contents of such First Schedule, apart from the revision of the percentage of loss of earning capacity in relation to the listed injuries. In fact, the basic assumption runs throughout the Act that any injury resulting in permanent Or temporary incapacity must be of a physical nature. Yet increasing cognisance has been taken in certain parts of the world of the possibility of a worker sustaining mental illness or injury in the course of his employment resulting in permanent or temporary incapacity.

The main difficulty of or objection to including mental illness within the scope of any workmen's compensation legislation lies in the fact `that, with our present level of knowledge, the etiology of any mental illness may give rise to a controversy which cannot be satisfactorily resolved. One way of cutting the Gordian knot of mental illness is to adopt the ratio decidendi of the United States Court of Appeals in the District of Columbia which has ruled that the onus is for an employer to disprove, rather than for an employee to prove, a causal connection between employment and disability in the case of mental illness related to the job. If such a basis for bringing mental illness within the ambit of workmen's compensation legislation is accepted in Singapore, it would mean that a worker need only prove that his mental illness is caused by work to collect whatever benefits are payable under the Act.

Some Members in this House may be of the view that such sophisticated development of the concept and practice of workmen's compensation is a luxury which Singapore cannot afford in the present stage of its industrial development. While it is true that the inclusion of injuries of a mental character for the purpose of determining incapacity under the Act may introduce a whole wide range of complexities with their accompanying confusion, I am of the view that this House should take note of the need to bring mental illness within the ambit of the Act some time in the not too distant future. It is already `the prevalent view of a section of the medical profession in Singapore that the gathering momentum of economic development has brought about with it an increasing tempo of life and a heightening of social tension.

I am hardly qualified or in any position to comment any further on the various medical aspects of the problem of relating mental illness to the purpose of the Workmen's Compensation Act. But I sincerely think that it is a matter that the Government should look into, not merely for the sake of the workers but also on account of the possible repercussion of `the problem of mental illness on the further development of Singapore. Perhaps the proposed Board for occupational illnesses and diseases may be directed to look into this problem.

I have so far dealt with the specific provisions of the Bill amending the Workmen's Compensation Act. While the Bill is most commendable in its intention and attempt to revise the Act and bring it up to date, it is to be regretted that no attempt has been made to revise the basis or scope of the Act.

The term "compensation" seems to have given rise to the impression that whatever compensation or benefit that is to be conferred under the Act must necessarily be monetary. I am inclined to the view that the purpose of any such Act is not merely to provide for the payment of monetary compensation to workers who have suffered injury or accident arising out of or in the course of their employment, but also to compensate in any manner for the loss of or reduction in the working capacity of such injured person.

The emphasis of the Act is actually directed at the loss of working capacity, whether totally or partially, and whether permanently or temporarily. And such loss of working capacity is related to the range of employment open to the injured worker at the time of the accident. The payment of monetary compensation is only one of the means, granted a convenient and practical method of helping the injured worker to adjust to the loss of or reduction in his working capacity. While such payment undoubtedly serves to compensate the injured worker and his depend-ants for the loss of wages, it does not in any way prevent or minimise the loss to society of skilled manpower through industrial accidents or even the demoralising effect of enforced idleness upon the injured workers themselves.

The recent publicity given to the need for providing sufficient employment opportunities for persons suffering from various physical disabilities serves to underline the fact that disabled persons can perform useful and constructive functions in the `society in which they live, provided they are given the opportunities compatible with their physical condition. What has prevented such disabled persons from obtaining gainful employment in the past, and even today, is not the fear of the potential employer that the disabled persons are not able to justify whatever salaries or wages are paid to them but the irrational prejudice of employers to equate any physical disability with the total loss of earning capacity. If it is accepted that disabled persons who have no previous experience of gainful employment deserve reasonable opportunities of gainful employment, then it should be beyond any question of doubt that an incapacitated worker who has not only previous experience of gainful employment but also varying degrees of skill or experience in a specific field of employment, should be accorded a reasonable opportunity of continuing any gainful employment.

I would therefore suggest that the compensation for the loss of earning or working capacity through industrial accidents should be made on the basis of the rehabilitation of the injured workers as well as `the payment of monetary benefit to such workers and their dependants. Similarly, provisions should be included in the Act, as far as it is consistent with the scope of the Act, to prevent or minimise the loss of working capacity through industrial accidents. Under the Act as it stands at present, medical examination is prescribed only after the workers have suffered injuries. I am of the view that, taking into consideration the provision for compulsory insurance under the Act and the nature of the occupational diseases or injuries as set out in the Second Schedule thereto, it may be desirable that a provision be included for the yearly or periodical medical examination of workers at the expense of their employers for the purpose of preventing unnecessary injury and facilitating the determination of the nature of the degree of the injury in the event of an accident occurring.

It may also be desirable, in conjunction with any scheme for compulsory and regular medical examination of workers at the expense of their employers, to require any employer to provide workers who are found unfit for regular employment as a result of such medical examination with lighter or alternative duties within the means and capability of the employer. Otherwise such a scheme for compulsory and regular medical examination of workers would turn out to be more of a curse than a blessing, as some employers may prefer to take the easy way out by callously dismissing workers who are found to be medically unfit for their usual employment.

4.36 p.m.

Mr Cheong Yuen Chee (Toa Payoh): Mr Speaker, Sir, I rise in support of the Bill in principle. The provisions of this Bill provide for desirable amendments to the Workmen's Compensation Act, particularly those amendments regarding the maximum amount of benefits variously obtainable under the Act. I find it necessary to seek clarification in respect of some of the proposed amendments.

Under clause 3 of the Bill, among the various amendments proposed therein, the new definition of "earnings" is worded to include "overtime payments or other special remuneration for work done" for the purpose of computing the compensation payable to a workman under the Act in the event of injury or death. Such overtime payments and other allowances are qualified by the phrase "if of constant character or for work habitually performed". While the provision contained in this definition of "earnings" appears to be reasonably clear as to the intention of this legislation to provide for an equitable basis of computing the compensation payable to a worker in the event of an industrial accident, it is not so clear as to how to determine the basis in a satisfactory manner. As a trade unionist, it has been my experience that overtime payments and other similar allowances may be of a constant character or for work habitually performed, but the actual amount of such overtime payments or allowances may greatly vary from month to month, from week to week, or even from day to day. The indication in the Bill seems to be that such overtime payments or allowances should be determined in respect of the period immediately preceding the industrial accident for which compensation is payable under the Act. The difficulty is that it is not clear whether such period should be the last few years, the last few months, the last few weeks, or the last few days before the industrial accident. The importance of having a standard period for the computation of earnings for the purpose of quantifying the compensation properly payable is unquestionable in those cases where the amount of compensation to be paid is below the maximum limit specified by this Bill. Thus, if earnings are to be computed on the basis of a worker's total' remuneration during the last month preceding his industrial accident, the' amount of compensation determined in accordance with the provisions of section 8 of the Act may vary by as much as 20 per cent, depending on the actual amount of overtime payments or other' allowances he received during that last month. Thus an anomalous situation may arise where two workers, receiving the same amount of wages and normally the same amount of overtime payments or other allowances, may actually receive widely different amounts of compensation for the same type and degree of incapacity, simply because during the last month preceding their respective industrial accidents one worker might have received more overtime payments or other allowances than the other-worker.

I therefore suggest that some formula or other guideline be incorporated into the definition of "earnings" for the-purpose of standardising the computation of overtime payments or other allowances for the purpose of determining the amount of compensation properly payable under the Act. In the absence of such formula or guideline, there is a possibility that the proposed basis of computing such earnings may give rise to misunderstanding and friction between the workers concerned and their respective employers.

Under the same clause 3 of the Bill, a new definition of "employer" is proposed in place of the existing definition. The new definition is substantially a reproduction of the existing definition and seems to be mainly dictated by the need to provide for the radical changes in the political situation of Singapore since the enactment of the Act more than a decade ago. It is to be regretted that the opportunity has not been taken to widen the scope of the definition of "employer" in relation to the phrase appearing therein, i.e.:

"where the services of a workman are temporarily lent or let on hire to another person by the person with whom the workman has entered into a contract of service or apprenticeship".

The situation covered by this phrase applies to the practice of contract or subcontract for labour as prevailing in the Republic. Such a phrase would not conceivably cover a situation where a person may enter into a contract for services in contradistinction to a contract of service on his own behalf or on behalf of a group of other persons. The reason, as I see it, for making a principal liable under the Act in respect of the employees of a contractor or subcontractor of labour is that, in the event of the insurer disclaiming liability under the Act, the principal is more likely to be a person or organisation of substantial means with the necessary capacity for giving effect to the provisions of the Act governing the payment of compensation thereunder.

With the proposal to make it compulsory for an employer to insure against liability under the Act, it is likely for an unscrupulous person or organisation employing contract labour to attempt to evade the application of the Act after the coming into operation thereof by converting all contracts of service into contracts for services. It may well be argued that the contractor or subcontractor for labour may be a person or organisation of sufficiently substantial means to be able to give satisfactory discharge to his liabilities under the Act. My point is that as long as there is a possibility of evading the application of the Act by converting the contract of service into a contract for services, the evasion of the applications of the Act may have disastrous consequences for a worker injured in an industrial accident if the contractor who is deemed to be the employer under the Act is a man of straw and fails for one reason or other to have a valid insurance cover against his liabilities under the Act. I will be dealing with this in greater detail when I comment upon the provisions of the Bill regarding compulsory insurance. For the present I wish to emphasise that the prosecution of an employer for contravention of the Act will in no way resolve the question of payment of compensation properly payable under the Act to a workman who has been injured in an industrial accident.

Mr Speaker, Sir, clause 15 of the Bill, by repealing the existing section 26 of the Act and replacing it with the new provision, introduces a significant and vital element to the Act. Under the existing Act there is no obligation for an employer to insure himself against his liabilities under the Act. The result is that the tragedy of the' worker who had an industrial accident is possibly compounded by the further tragedy of his inability to obtain any compensation as provided for under the Act by reason of his employer being uninsured and being incapable of meeting his liabilities under the Act. The proposed provision for compulsory insurance by the employer against his liabilities under this Act is, therefore, very commendable.

I have, however, certain doubts about this particular provision which I hope the Minister will be able to clarify for me. It is very well to provide for the punishment of an employer who contravenes the provisions of compulsory insurance in any manner. But what this Act has failed to make clear is the position of the workers of an employer who has been convicted of such contravention of the Act. The situation may arise where an employer, either through wilful and deliberate action or negligent omission on his part to insure, has sufficient cause to disclaim liability for the payment of full or any compensation to an injured worker under the Act by reason of his failure to comply with any of the conditions in the contract of insurance covering his liability under the Act. A likely cause for such a situation would be an instance in inaccurate declaration by an employer of the actual number of employees for the purpose of insurance coverage. Should one of his employees subsequently meet with an industrial accident and be entitled to claim compensation under the Act, the insurer concerned may very well claim that as the employer has made a fraudulent declaration for the purpose of paying less insurance premium than would otherwise be payable by him, the insurer can accordingly exercise the right to disclaim any liability under the insurance contract as a result of such a wrongful disclosure by the employer. While there is some controversy about the correctness of the judicial precedent for the doctrine that a contract of insurance should be treated differently from any other contract on the ground that full and frank disclosure of any relevant particulars is an essential element for the validity of the contract of insurance, there can be no doubt that, as the law stands at present, any failure of an employer to comply strictly with any of the conditions of contract of insurance would have the effect of invalidating such a contract. The tragedy of the subsequent invalidation of a contract of insurance, as I have said earlier, lies in the effect on the claim of an injured worker to whatever compensation is payable under the Act. If the employer is a person or an organisation of substantial means, not much harm would have resulted from the disclaimer by the insurer of his liability under the Act. But if the employer is not in such a fortunate position, the plight of the injured worker, needless to say, would be beyond any legal or legitimate recourse. If there are any doubts whether the nightmare I am painting may not be over-exaggerated, I need only call your attention, Mr Speaker, Sir, to the identical situation arising in the event of a traffic accident where the relevant insurer disclaims all liability for the action of the party solely or principally to be blamed for the action. Over the years there have been several cases where the victims, after obtaining judgment for the injuries arising from accidents, find that there are no ways or means of enforcing the judgment, since the relevant insurers have disclaimed liability and the judgment debtors are persons of straw. I have, however, been given to understand that all insurance companies have voluntarily formed a pool for meeting the claims of third parties who have suffered injuries as a result of any culpable act by persons in respect of whom the respective insurers have disclaimed liability. While it is true that a similar pool may be organised by insurers to meet claims under the Workmen's Compensation Act in the event of any individual insurer disclaiming liability under the Act by reason of any breach of contract or faith by the respective clients, I think it is more desirable that there should be a provision to require an insurer to be primarily responsible for the claim of the injured workman under the Act and subsequently to recover the money paid out under such claim from the defaulting employer. It is pointless to provide compensation in respect of the death or injury of a worker as a result of an industrial accident when at the same time the Act makes it possible for an insurer to disclaim any liability for the payment of such compensation.

The fundamental purpose, as I see it, of making it compulsory for an employer to insure against his liability under the Act is to ensure that such compensation would be paid, as the insurer would be, by reason of the nature of his business, in a comparably better and stronger position to effect the discharge of liability under the Act than any employer. For those employers who are persons or organisations of substantial means and who are able to meet their liability under the Act, there is provision for the Minister to exempt them from the provisions of compulsory insurance. Such being the case, I sincerely think that it is advisable that a provision should he incorporated into the Act to the effect that any question of any breach of contract or faith by any employer should be a matter to be resolved between the insurer and the employer concerned, and should not operate in any manner that would justify the withholding of or delay in the payment of compensation to an injured worker under the Act.

4.50p.m.

Mr Hwang Soo Jin (Jalan Kayu): Mr Speaker, Sir, it gives me satisfaction to rise in support of the Bill as I am among those in the House who have pressed for an upward revision in the workmen's compensation benefit over the past few years. Apart from the increase in monetary benefits, the Bill incorporates a number of fresh features. One of these is that it is now a compulsory requirement for an employer to insure his liability under the Act. To my mind, this is an important safeguard, as has already been pointed out by the two Members who spoke before me. I have personally come across at least two cases recently in my constituency where, because of the absence of insurance, the dependants of the deceased workmen were left without any compensation, as the employers were apparently men of straw and were in no position to honour their statutory obligation.

However, Sir, the provision in the Bill as regards insurance leaves much to be desired in so far as the safeguarding of the workmen's interest is concerned. This has already been pointed out by the Member for Toa Payoh, it is not clear whether it is the intention of clause 15 to require employers to insure their liability under the common law also. As you are aware, an injured workman has the right of option either to claim for statutory benefit or take action against his employer under the common law where negligence can be proved against the employer. The Bill also does not provide any safeguard to the injured parties when either because of defective insurance arrangements or other reasons liability is repudiated by an insurer.

In this regard, it is, to my mind, essential that a central fund be established by all the insurers - the suggestion has already been made by the Member for Toa Payoh - to ensure that all claims falling within the scope of the Act, but which for technical reasons cannot be paid tinder an insurance policy, are met out of the fund.

There are unscrupulous insurers, and there are also unscrupulous legal practitioners. Quite often in exercising their rights under the law to recover compensation, it becomes necessary for the injured workmen to enlist the help of lawyers. When this happens, the expenses involved are often costly. In cases where unscrupulous legal practitioners are involved - some of them have come to be known as "ambulance chasers" - the payment of fees is calculated on what is called the "No cure no pay basis". In successful cases, the fees payable can come to as much as 40 to 50 per cent of the quantum of compensation recovered, leaving only negligible amounts for the poor dependants. Sir, evidence against such malpractices is unfortunately hard to come by, but its existence is common knowledge. I think the Bar Council have been trying their best to prevent this malpractice, but so far they have not been particularly successful. To prevent the exploitation of our workers by such unscrupulous parties, I urge that our Legal Aid Bureau should consider the setting up of a separate unit specialising in the handling of all such cases.

Finally, Sir, whilst the increase in the quantum of compensation is a necessary step, it is only a negative way of looking after the welfare of our workers. There is only one positive approach and that is for all interested parties, be they employers, workers or the Government, to work hand in hand toward a higher standard of accident prevention.

Mr Speaker: Order. I think we can take the suspension now. I shall take the Chair again at twenty-five minutes past Five.

Sitting accordingly suspended at 4.55 p.m. until 5.25 p.m. Sitting resumed at 5.25 p.m.

[Mr Speaker in the Chair]

Debate resumed.

Mr Teong Eng Siong: (In Mandarin): Mr Speaker, Sir, I fully agree with the amendment Bill which undoubtedly is a progressive piece of legislation. This is a Government measure to ensure the safety of the workers. In this respect, it is necessary. Many of my colleagues in this House and I have all along been paying much attention to the problem of industrial accidents. Over the past few years we have urged the Government to adopt more effective measures to reduce the number of industrial accidents. One of the main provisions in the Bill is the provision to increase the rate of compensation. This will be an added benefit to the victims and the members of their families. They can henceforth be better looked after. However, what is more important is that we should try to devise methods by which industrial accidents can be prevented. That is to say, we should urge all employers to provide adequate safety precautions either in the factories or at the building sites. There should also be an adequate number of inspectors to go round and inspect the sites. If they find that the safety precautions there are inadequate or if anything is amiss, they should then instruct the employer concerned to take measures to remedy the situation so that the lives of the workers will be safeguarded and tragedy is thereby prevented.

Sir, when a worker dies as a result of an industrial accident, it will be a tragedy not only to his family -causing members of his family to be derelicts - but it will also be a loss tX our country. At the present stage of our industrialisation programme, we need young and capable workers who can make their contributions. At the moment we are short of labour. We are now allowing thousands of labourers from neighbouring countries to enter Singapore. So if we can safeguard the lives of our own workers, we will he contributing not only to their welfare hut also to our country's welfare.

This reminds me of our contract system. As we know, many large contractors have subcontractors working under them. If there is no adequate provision in our laws regulating the relationship among the contractors, the subcontractors and the workers, then once an industrial accident happens to a worker, it would be difficult for him to get any adequate compensation unless we implement a scheme whereby all contractors are registered to ensure that victims of industrial accidents are adequately compensated. Sir, I hope the Minister will look into this suggestion.

5.31 p.m.

Mr Tay Boon Too (Paya Lebar): (In Mandarin): Mr Speaker, Sir, I would like to give some views on the Workmen's Compensation (Amendment) Bill. In view of the increase in the number of accidents in the industrial sector, the construction industry and other fields in recent years, the amendment Bill provides for an increase in the maximum amount of compensation from $7,200 to $21,600, which is treble the original amount of compensation. Judging from the present standard of living, this amount of $21,600 cannot be said to be not a considerable sum of money. Therefore, I am in full support of this amendment Bill. However, Sir, everybody hopes to be able to work in safety and to be able to enjoy his full span of life without any mishap. Nobody wants to encounter any mishap in order to claim compensation. If a workman is seriously disabled and also loses his sight, even the increased amount of compensation would not adequately compensate him. Therefore, I am of the opinion that though the increase in the quantum of compensation is one aspect of the matter, the more important point is to try to prevent industrial accidents or reduce their number.

According to the statistics given by the Minister who spoke about the increase in the number of industrial accidents without informing us of the measures to remedy the situation, I feel that there is some defect in the Bill. According to the statistical report, in 1970 there were 9,682 cases of industrial accidents. In the first seven months of this year, there have already been 5,966 cases of industrial accidents. Judging from this trend, by the end of this year the number may well exceed 10,000. If there are no appropriate safety measures to prevent this situation from developing further, then every year we will be losing tens of thousands of workers in this way. If this trend were to continue, then after eight or 10 years many of our factories might have to close down because of the acute shortage of skilled workers. The Social Welfare Department and our other resources might also be heavily taxed because of the increase in the number of disabled persons. This can be said to be a great burden on our country. Industrial accidents will affect not only our national economic life, but also our social security. To provide for safeguards for our workers and to maintain our continued prosperity and national progress, we should take active measures to prevent or to reduce the number of industrial accidents. This is the basic solution.

Sir, we are now actively promoting `the policy of rapid industrialisation. We are also engaged in full-scale urban renewal schemes, and, in the private sector, the building industry is also prospering. All this indicates prosperity and progress. However, it cannot be denied that this also has brought about many more industrial accidents. This is mainly because many businessmen in the industrial and commercial sectors, in order to meet the pressing needs of the hour, resort to economising on their budgets and instituting makeshift provisions wherever possible, and neglect to provide safety measures for their workers. In addition to this, there is a shortage of skilled workers, thus leading to frequent industrial accidents. I think the immediate need is to enforce stringent provisions stipulating that all factories and building contractors should provide adequate safety measures and facilities for their workers. And the Government should send out inspectors to make regular checks. Furthermore, there should be active training of technical personnel to shoulder the task of supervision. Only with this sort of precautionary measures may we reduce, if not avoid, industrial accidents. If we do not take immediate measures to provide for stringent measures to reduce the numerous dangers faced by the workers-hut allow industrial accidents to happen now and then, our country will suffer great losses. As we all know, we do not have any natural resources and the capital for nation building is not just our good geographical position. Our main asset is our human resources and our wisdom. So we should try to make full use of our human resources and use our wisdom well to treasure, preserve and protect our limited human resources. Only then can our country and society continue to progress and prosper.

5.41 p.m.

Mr Ong Pang Boon: Mr Speaker, Sir, I am very much cheered by the keen interest shown by Members on this subject of workmen's compensation. When the time comes for action to be taken against the people concerned, 1 can be assured of their support.

The criticism of the Member for Paya Lebar is that I dwelt mainly on the quantum of compensation and not on the basic issue of industrial safety. However, I wish to remind him that we are now dealing with the Workmen's Compensation (Amendment) Bill and not the Factories Act. But as I pointed out earlier, I am proposing to introduce extensive amendments to the Factories Act and, when the amendment Bill is ready, I am sure the Member for Paya Lebar will have another opportunity to air his views.

I shall now deal with the various points raised by the Members for Kallang, Toa Payoh and Jalan Kayu. As I pointed out earlier, the proposed Workmen's Compensation (Amendment) Bill was circulated to the National Trades Union Congress for its comments. Some of its suggestions have been accepted and incorporated in the present amendment Bill, while others for various reasons have not been accepted. And what Members have raised today refers mainly to those suggestions that have not been accepted by the Ministry.

The point has been made that in clause 6 - section 8 (3) (a) - anomalies may arise and the dependants of a deceased workman may be better off than those of a permanently and totally incapacitated workman. I think Members have been informed that to prevent this from happening, we have decided that a proviso be added to section 8 (3) (a) which will read as follows:

`Where permanent total incapacity results from the injury, the amount of compensation shall be - (a) in the case of a workman who is eighteen years of age and above at the time of the accident, a lump sum of twenty-eight thousand eight hundred dollars or equal to sixty months' earnings, whichever is the less: Provided that the amount of compensation payable shall not be less than the amount to which his dependants, assuming that such dependants exist, would be entitled if death had resulted from the injury.' I think this will take care of the Member's concern.

Mention has also been made of clause 15 relating to amendment of section 26 (2) of the Act. We do not think there is a need to amend this section as proposed, because any workman who thinks that he has been dismissed after objecting to an attempt by his employer to avoid liability could be adequately looked after by invoking the provisions of the Industrial Relations Act, in particular subsection (2) of section 35 thereof.

Mention has also been made of clause 17 relating to the amendment to the First Schedule of the Act. Again. I think we cannot agree that the amount of compensation payable to cases of hand injuries should be governed by the consideration whether the hand is habitually used. The reasons are:

(1) The adoption of a single scale makes for smooth administration.

(2) In all occupations, workers are required to use and do use both their hands, although there may be some difference in the degree of such use between one hand and the other.

It would be very difficult in practice to determine which hand is more habitually used than the other, and disputes are bound to arise over the interpretation of what is meant by "habitually used". It will be better if we leave this matter to those who are more qualified. For example, medical officers can prescribe a higher percentage of award in favour of the worker. In any case, the suggested amendment can only benefit a few workers who are employed in occupations where there is clear evidence that one hand is more habitually used than the other. I do not think that at this stage it is necessary to make that kind of amendment.

The Member for Kallang has suggested that there should be yearly medical examinations. First of all, I cannot see in what way yearly medical examinations can prevent accidents from happening. Accidents simply happen, whether the workmen are medically examined yearly or not. What is needed is a more concerted effort to instil safety consciousness into the workers and the employers. Medical examinations can be useful only in certain industries, for example, the petroleum and chemical industries, where occupational diseases can be detected in their early stages. The provision of yearly or periodical medical examinations is feasible only in the bigger industries or establishments. The reasons are obvious. Not all employers can afford to offer such facilities to their workmen and occupational diseases are not found in all industries. Several Members have dwelt on the point of compulsory insurance and have expressed the fear that it is possible that the insurance companies may disclaim their liability because of some fault in the insurance policy taken up by the employer. The Workmen's Compensation Act has been in force for a number of years and, to my knowledge, no cases have yet been reported of insurance companies disclaiming their liability. Nevertheless, the point has been made and we will keep that in mind. Should cases of this nature happen, we shall reconsider the provision of compulsory insurance and take appropriate steps.

As I pointed out earlier, Mr Speaker, Sir, legislative measures alone cannot bring down the number of industrial accidents, unless there is strict enforcement of the law and greater consciousness of industrial safety among employers and employees. In this respect, 1 think the National Trades Union Congress and the Singapore Employers' Federation as well as other public-spirited individuals can play a part in promoting industrial safety by giving the subject more publicity, so that the losses both to the economy of the country and the workers can be better appreciated. As far as the Labour Ministry is concerned, there is no doubt that the Factory Inspectorate, as it is now, is not only understaffed but also inexperienced. Take, for instance, the construction industry. It has the highest number of fatal accident cases, and yet in our Factory Inspectorate there is not a single civil engineer. We have, instead, mechanical engineers. To bring down the rate of industrial accidents may require effort on the part of everybody - the Government, the employers and the employees. When the Factories Act has been tightened up and strengthened, we will carry out an industrial safety campaign to drive the lesson home, and follow it up thereafter by strict enforcement.

Inche Abdul Aziz Karim: Mr Speaker, Sir, I could hardly agree more with the Minister that medical examinations would not prevent industrial accidents, but what I did suggest was that if there were periodical medical examinations - whether yearly, biyearly or bi-yearly there could be early detection of industrial diseases. That was my suggestion.

The second point I wish to raise is that the Minister has not yet answered whether he would agree to widen the scope of workmen's compensation to include mental illnesses which are caused by a person's employment. The Minister is silent about it. I am not sure whether he is avoiding the issue now.

The last point I wish to raise is that at the present moment the Workmen's Compensation Section in the Ministry of Labour deals only with claims. When insurance is introduced, it will have to see to it that employers do really insure their workers. In this case, the Workmen's Compensation Section must be strengthened. The Factory Inspectorate has been strengthened. So I hope the Minister for Labour will not forget to look into this matter.

Mr Ong Pang Boon: Mr Speaker, Sir, I certainly agree with the Member for Kallang that the Workmen's Compensation Section should be strengthened. I am sure that when this matter comes up before this House again in the next budget, we can get the support of the Member for Kallang.

Mr Speaker, Sir, about the mental cases I think that requires further consideration and consultation with the medical authorities. I am not saying that I will not agree to include mental illness in the Second Schedule, but I think this subject requires further consideration before a decision is made.

Inche Abdul Aziz Karim: Mr Speaker, Sir, I hope the Minister will also see to it that the Workmen's Compensation Section in the Ministry of Labour is headed by someone who is more qualified. Now the section deals only with claims, its functions will be broadened and definitely we need a man of higher calibre to look after this section. I assure the Minister that I will raise this subject again at the right time during the budget debate if it is not done between now and then.

Another point is that the Workmen's Compensation Section works in the dark. 1 know of cases where workers do not know why they were or why they were not given compensation. Therefore, there should be a Workmen's Compensation Board on which the workers can be represented at hearings, inquiries and so on. I hope the Minister will not forget about this. Everything is in the dark!

Mr Ong Pang Boon: Mr Speaker, Sir, I think the last suggestion is a good one and I certainly will take note of it. I cannot agree with the Member more that the Workmen's Compensation Section should be staffed by more qualified people.

Question put, and agreed to.

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

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

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