EMPLOYMENT (AMENDMENT) BILL

Order for Second Reading read.

3.35 p.m.

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

As the Employment Act stands at present, no provisions have been provided therein to safeguard the rights of the workers vis-a-vis their retirement, retrenchment or other similar benefits. Such benefits are usually agreed upon between the employer and the workers in collective agreements whereby the employer agrees to pay gratuity or other sums of money to the workers on the termination of the latter's services. However, it has been discovered that in the event of an employer's company or business being in financial difficulties or is wound up or foreclosed, no legal protection is afforded to the workers to recover their gratuity or other benefits provided in the collective agreements. Such a situation is clearly untenable, because it is not right or just that these workers, having put in long years of faithful service, are suddenly denied their right to the entitlement of the gratuity or other benefits through no fault of their own.

It is, therefore, proposed that the Employment Act be amended to ensure that the workers' expectations of receiving some monetary compensation to tide over their twilight years are not needlessly dashed by circumstances outside their control.

The amendment to section 45 of the Act will ensure that, in the event of the employer winding up his company or business, the rights of the workers to gratuity and other benefits would attract priority of payment over other unsecured debts. That is to say, when a company is wound up or foreclosed, the payments due to the employees in respect of retirement, retrenchment or other such benefits would be payable in the first instance before the claims of other unsecured creditors are met.

The Bill also seeks to rectify another anomaly currently found in the Act. Subsection (2) of section 95 of the Act provides for maternity benefit entitlement to a female workman who has worked for an employer for not less than 180 days within the period of one year immediately preceding her confinement. The maternity allowance payable under this section is at the rate of $4 a day or at her ordinary rate of pay for one day, whichever is less during the benefit period. It would appear that this restriction on the maximum of $4 a day is outdated and unfair in the light of the present-day wage structure and economic conditions.

According to a survey on wages carried out by my Ministry, it has been found that in several industries a large number of female manual workers are already in receipt of more than $4 a day as wages. We are of the view that where a female workman is paid more than $4 a day, there is no reason why she should not be entitled to a full day's pay whilst on maternity leave. It is, therefore, proposed to remove the maximum of $4 a day set in the Act.

Sir, I beg to move.

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.

[Mr N. Govindasamy in the Chair]

3.41 p.m.

Clause 1 ordered to stand part of the Bill.

Clause 2 -

Mr Ong Pang Boon: Sir, I beg to move,

In page 1, line 10, after "or", to insert "other".

Due to an oversight, the word "other" was left out in the draft.

Amendment agreed to.

Further amendment made: In page 1, line 14, after "or" to insert "other". [Mr Ong Pang Boon].

Mr Ong Pang Boon: Sir, I beg to move,

In page 1, line 16, to leave out "debt" and insert "debts".

This is purely a typographical error.

Amendment agreed to.

Mr Ong Pang Boon: Sir, I beg to move,

In page 2, after line 5, to insert -

"(2) Where a collective agreement or an award, whether made before or after the date of the coming into operation of this Act, contains a provision for the payment of a gratuity or other sum of money to an employee on his retirement and no provision is made for the payment of a gratuity or other sum of money on the termination of the employee's services by reason of his employer ceasing to carry on business for whatever reason, every such collective agreement or award shall, notwithstanding anything contained in any written law or rule of law or collective agreement or award to the contrary, be deemed to contain a provision that in the event of the employer ceasing to carry on business for whatever reason an employee who ceases to be employed by the employer by reason of the happening of such a contingency shall be paid such sum of money as he would have been entitled to receive under the terms of the collective agreement or award if he had retired from the service of the employer on the day the employer ceases to carry on business.

(3) The provisions of subsection (2) of this section shall not apply where an employer has set up a fund under a scheme for the payment of pensions, gratuities, provident fund or other superannuation benefits to his employees on their retirement from the service of the employer whereby under such scheme the benefits of the employees shall be safeguarded in the event of the bankruptcy of an employer or, if the employer is a company, on the winding up of the company or in the event of the employer ceasing to carry on business for any other reason.

(4) Any sum of money payable under subsection (2) of this section shall, for the purposes of subsection (1) of this section be deemed to be a payment to an employee on his retirement and shall be included among the debts referred to in paragraph (a) or (b) of that subsection.".

Sir, the amendment as now proposed is to provide safeguards to employees who are entitled to receive retirement benefits under collective agreements or awards. As the Bill stands, such an employee is not protected if his employer ceases to carry on business for whatever reason, since he would not be able to seek monetary compensation for the number of years of faithful service rendered. Such a situation would be patently unfair and unjust to him. The proposed amendment, therefore, seeks to provide that where the services of an employee are terminated on account of his employer ceasing to carry on business for whatever reason, he would be entitled to receive, under the terms of any collective agreement in force at the time of the cessation of employment, a compensatory amount as if he had retired from the service of the employer on the day the employer ceases to carry on business.

Mr Sia Khoon Seong (Moulmein): Sir, I wish to propose an amendment to the new sub-clause (2) as proposed by the Minister for Labour. I have here copies of my amendment to the amendment for distribution to Members.

Typed copies of the amendment to the amendment distributed to Members.

Mr Sia Khoon Seong: Sir, I wish to commend the Minister for Labour for having the interest of the workers so close to heart. It can be seen from the proposed amendment that the retirement and other benefits of the workers provided under collective agreements would be safeguarded if an employer were to cease business. It is as a further safeguard to provide such protection of workers' interests in the event of an employer transferring the whole or part of his undertaking or property that I beg to move,

In line 8 of new sub-clause (2), after "reason,", to insert "or by reason of the employer transferring the whole or part of his undertaking or property, as the case may be,".

Amendment to the amendment agreed to.

Further amendments to the amendment made:

In line 13 of new sub-clause (2), after "reason", to insert "or transferring the whole or part of his undertaking or property, as the case may be,". [Mr Sia Khoon Seong].

In last line of new sub-clause (2), after "business", to insert "or transfers the whole or part of his undertaking or property, as the case may be". -[Mr Sia Khoon Seong].

In last line of new sub-clause (3), after "reason", to insert "or transferring the whole or part of his undertaking or property, as the case may be".- [Mr Sia Khoon Seong].

Original amendment, as amended, agreed to.

The Chairman: There is a consequential amendment:

In page 2, line 6, to leave out "(2)" and insert "(5)".

This will be done.

Clause 2, as amended, ordered to stand part of the Bill.

Clause 3 ordered to stand part of the Bill.

Bill reported with amendments; read a Third time and passed.