EMPLOYMENT (AMENDMENT) BILL

3.26 p.m.

The Minister for Labour (Mr Ong Pang Boon): Mr Speaker, Sir, I beg to introduce a Bill intituled "An Act to amend the Employment Act (Chapter 122 of the Revised Edition)."

Bill read the First time.

Second Reading

Mr Speaker: Second Reading, what day?

Mr Ong Pang Boon: Now, Sir.

Certificate of Urgency signed by the President in respect of the Bill, laid upon the Table by the Minister.

Typed copies of the Bill distributed to Members.

Mr Ong Pang Boon: Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

As hon. Members are aware, the National Wages Council, a tripartite body comprising representatives from labour, management and the Government, put forward certain recommendations for wage increases and on bonuses. Members are also aware that at the NTUC May Day Rally held last month, I had announced that the agreed recommendations of the Council had been accepted by the Government. However, I emphasised in my speech that "in accepting the recommendations of the National Wages Council, the Government would like to underline the fact that they are guidelines. They are not hard and fast rules." I pointed out that:

`The employers' representatives represent established medium and large size businesses. The unions reflect the interests of the NTUC affiliates. In arriving at the guidelines, the National Wages Council has used the bigger employers as the norm. Even within this norm, there can be wide variations between commerce and industry, and between different companies within the same category. Some will be able to meet much more than the 8 per cent recommended. Others may barely be able to meet even half of it.

Variations will be even wider in the case of the smaller employers.'

I also struck a note of caution that: `as this is the first year of the work of the National Wages Council, many problems and anomalies may arise out of their recommendations. They will have to be sorted out with goodwill and good sense also as guides.'

To enable the recommendations of the National Wages Council to be implemented, certain amendments to the Employment Act and the Industrial Relations Act would have to be made.

Meanwhile, certain misunderstandings had arisen with regard to the interpretation of these recommendations and with regard to the Government's general acceptance of the principles enunciated in the National Wages Council's recommendations. On the 23rd of May, the National Wage Council and representatives of the Chambers of Commerce, Singapore Employers Federation, National Employees' Council, Singapore Manufacturers' Association and the NTUC met the Prime Minister and myself to discuss ways in which the recommendations of the National Wages Council could be given effect. Hon. Members would recollect the press statement issued by these bodies after the meeting.

`It was unanimously agreed that the recommendations of the National Wages Council should not be approached in a legalistic way. The recommendations should not be converted into legislation. Insofar as the National Wages Council recommendations were contrary to any existing legislation, such legislation should be amended, to remove any legal impediment to the implementation of the recommendations. Further, where enabling provisions were necessary, for example, to make it possible for an employer to opt for either the 13th annual payment and a bonus, or 13th annual payment and an annual wage revision, such enabling legislation should be passed.

It was agreed that where in any particular case no agreement could be reached between employer and union and a dispute was referred to the Industrial Arbitration Court, the Industrial Arbitration Court should take into account the recommendations of the National Wages Council and the special circumstances of that particular employer,'

The Employment (Amendment) Bill now before the House was drafted in the light of the agreements as contained in the said press statement. The Bill had been commented upon by the National Wages Council whose suggestions were incorporated in the present Bill.

Mr Speaker, Sir, the Bill seeks to repeal and re-enact section 46 of the Employment Act to enable an employee or a trade union of employees to negotiate for the payment of any of the following or a combination thereof, as is referred to in the following paragraph:

(a) an annual wage supplement of an amount not exceeding the equivalent of three months' wages of an employee;

(b) an annual bonus of an amount not exceeding the equivalent of three months' wages of an employee;

(c) annual wage increases.

A trade union of employees is entitled to negotiate for the payment of either both an annual wage supplement and an annual bonus or both an annual wage supplement and annual wage increases. An employer has a right to make an option between negotiating for the payment of both an annual wage supplement and a bonus or both an annual wage supplement and annual wage increases. An employer who cannot afford to pay any of the aforesaid combinations may offer to negotiate to pay an annual wage supplement or bonus or annual wage increases. An employer who cannot afford to pay any of these benefits is not compelled to pay. The provisions of the Industrial Relations Act shall apply to these negotiations.

The terms "annual wage supplement" and "annual wage increases" are defined in the Bill. The annual wage supplement is intended to have the same meaning as the 13th month payment recommended by the National Wages Council.

The annual wage supplement that shall be payable by an employer who has paid annual bonuses to his employees prior to the commencement of this Act shall be equivalent to the average of the bonuses paid in respect of the last three years preceding the commencement of this Act or to the last annual bonus paid, whichever is the greater, subject to a maximum of an amount equivalent to three months' wages of his employees, except that where such bonuses were based on exceptional trading results, etc., which the employer finds have diminished to a significant degree, the employer may negotiate for a lower quantum of the annual wage supplement to be paid. If an employer has not paid any bonus to his employees or has paid a bonus of less than one month's wages before the commencement of this Act, the annual wage supplement payable by him shall not exceed one month's wages of the employee.

Where a notice is served under section 17 of the Industrial Relations Act by an employer or a trade union of employees in respect of the annual wage supplement, annual bonus or annual wage increases referred to in subsection (I) of section 46, or a combination thereof as is referred to in subsections (2) and (3) of that section, and no agreement is reached between the parties on any of those matters, either of the parties may, notwithstanding the provisions of the Industrial Relations Act, refer the matter to the Court which may make a decision thereon.

Provisions are inserted in the Employ, ment Act which enable an employer to invite a trade union of employees, and for the latter to invite an employer to negotiate for the variation of a collective agreement or award made before or after the enactment of the Bill by including a provision for the payment of either an annual wage supplement or an annual bonus or annual wage increases, or a combination thereof as is referred to previously. Where no agreement is reached between an employer or trade union to vary a collective agreement or award in accordance with subsection (1) of section 46A, either of the parties may, notwithstanding the provisions of the Industrial Relations Act, apply to the Court to vary the collective agreement or award, and the Court may vary the collective agreement or award as the Court thinks fit.

Any variation of a collective agreement or award shall be incorporated into the collective agreement or award, and any of the parties bound thereby may apply to the Court to vary the collective agreement or award so as to give effect to their agreement, and the Court may accordingly vary the collective agreement or award. The collective agreement or award so varied shall continue in force for the period of the collective agreement or award, or until the collective agreement or award is further varied by the Court, whichever first occurs. A collective agreement or award that is so varied shall have effect from the date of the variation.

Mr Speaker, Sir, opportunity is also taken to amend section 38 of the Employment Act to raise the limit imposed on overtime work by employees from 48 hours per month to 96 hours per month. This amendment is necessary in view of the near full employment situation in Singapore resulting in serious shortage of certain categories of workers.

Sir, the Government has acknowledged time and again that the present favourable state of the economy is in great measure due to the hard work and effort put in by the workers, by the sacrifices they have made and by the restraint which they have shown. The Government is aware of the needs and aspirations of the workers and the underlying purpose of this legislation is to ensure that workers in Singapore may have their fair share of the prosperity that has been generated by the present buoyant economic conditions. Employers generally recognise that workers should have an increased share in the profits of their undertakings. However, all this does not mean that excessive and unbridled demands should be made upon employers - such demands must be tampered by reasonableness and moderation. By the same token, employers are expected to exercise the quality of reasonableness in meeting the claims of their workers.

Mr Speaker, Sir, I beg to move.

Question proposed.

Mr Low Guan Onn (River Valley): Mr Speaker, Sir, the Amendment Bill now introduced by the Minister for Labour has come about because of the recommendations of the National Wages Council. This has a very important bearing on the future economic growth of our industrial programme. The introduction of this Bill may affect the viability of many companies which have been established during the last few years as a result of our attractive financial inducements and good industrial relations, and other favourable investment factors.

However, I wish to point out to the House that not all these industrial firms are making profits and many of them are still struggling hard to keep on an even keel. Therefore, it is vital that an opportunity should be given to employers to study the Bill more thoroughly, and at the same time unions must keep a level-headed attitude in their demands arising from the recommendations of the National Wages Council, and not to kill the goose that lays the golden eggs. The workers are the first to suffer if their demands are so exacting as to hasten the company to become less able to break even, or force the company to close down and fall into the arms of the receivers. As an employer, I am all in favour of workers getting a fairer share of the cake.

Mr Speaker, Sir, in view of what I have said, the Bill has a serious implication on our Republic's economic survival. I would move that the Bill be referred to a Select Committee instead of passing the Bill on a Certificate of Urgency today so that employers may have a chance to study the Employment (Amendment) Bill in depth and in detail.

Mr N. Govindasamy: Mr Speaker, Sir, I support the Member for River Valley only in respect of sending this Bill to a Select Committee, and not on the part where he talks of level-headed unionists and so on and employers not making profits.

Sir, this Bill has been introduced on a Certificate of Urgency. When the Minister made a lengthy speech on the Second Reading, I was trying to make notes of his speech, and at the same time I was thinking whether it was really necessary and urgent that we must take this Bill through all its stages in today's sitting.

Sir, the Minister was right when he said that the National Employees Council, the Manufacturers' Association, the NTUC, the Government, as well as the Chambers of Commerce met on the 23rd May. We decided that, irrespective of legislative changes, we should go ahead with the recommendations of the National Wages Council. Sir, you must have read in the newspapers that a number of unions have submitted claims and have invited the employers to negotiate on the Wages Council's recommendations. We have not come across any hitch as yet.

Listening to the speech made by the Minister just now, Sir, I myself, having been associated with trade unions, am confused with a number of terms that he referred to, such as "annual wage supplement", a phrase which I hear for the first time. If I can be confused, other union members will be more confused with such terms as "13th month wage", "annual bonus", "annual wage increases", and he also mentioned "a combination of all three".

Sir, this Bill does not only put into effect the recommendations of the National Wages Council, but it also recommends some other changes. One of the changes that he proposes to introduce is increasing the limit of overtime, from 48 hours to 96 hours per month. This will have further implications. 1 have spoken on at least two occasions in this Chamber about the problems of limiting overtime, especially in the essential services. Therefore, I support the Member for River Valley that we submit this Bill to a Select Committee instead of hurrying its passage today. On that note, Sir, I hope the Minister will reconsider his decision to carry this Bill through all its three stages today.

3.45 p.m.

Mr Seah Mui Kok (Bukit Ho Swee): Mr Speaker, Sir, I am very glad that the Government has accepted the recommendations of the National Wages Council. 1 believe this is in appreciation of the hard work, the sacrifices and the restraints on the part of the workers, thus helping the employers to make the best possible profits. We have just heard from one of the employers' representatives, who is also a Member of Parliament, making recommendations that this Bill be sent to a Select Committee.

The workers have been making a lot of sacrifices. As far as we are concerned, we would like to get the Bill implemented as soon as possible. We are interested in an increase of wages for the workers and also in a bigger bonus. We have done our part, and we hope the employers will also do their part. With the help from the Government side, I hope the implementation of the Bill could be done as soon as possible, without any further delay.

Mr P. Govindaswamy: Mr Speaker, Sir, flue Bill which the Minister for Labour is introducing is a good one. However, I wish to bring up some points regarding the payment of more than three months' bonus. Some employers are willing to pay more than three months' bonus because of the low salaries of their employees. Will the Minister consider introducing a minimum wage in the Bill? if a minimum wage is introduced, the bonus will probably be restricted to three months.

The Minister was very interested about the private sector. However, nothing is being done about the public sector. What does the Minister propose to do about the public sector? Is he proposing that the unions should negotiate with the Government, or does he propose to introduce another Bill for the public sector? I hope the Minister will look into this matter. It is very important that we also look after the public sector because it is the backbone of the Government. Therefore, I hope the Minister will look into this matter.

Mr Ong Pang Boon: Mr Speaker, Sir, the Member for River Valley has expressed concern that there may be many employers who barely manage to survive and, therefore, are unable to comply with some of the recommendations of the National Wages Council. 1 think the Government appreciates their position and also that of the unions and management. That is why representatives of the NTUC, the management and the National Wages Council met the Prime Minister on the 23rd May. They have agreed that the recommendations of the National Wages Council should not be translated into legislation, so that there will be flexibility for negotiations on both sides.

The Bill has, in fact, been considered by the National Wages Council many times, and there has been no disagreement on the principles of the Bill. It is for that reason that the Bill was introduced today on a Certificate of Urgency. However, since Members have expressed the wish that they would like to have some time to study the Bill, the Government has no objection to send the Bill to a Select Committee.

As for the public sector, I think the Member for Anson is aware that the 13th month payment was given to the employees in the public sector a few months ago, including Members of Parliament. I think next year the Government would also be considering the conditions of service in the public sector, if the Member for Anson will be a bit more patient, the matter will be sorted out.

Question put, and agreed to.

Bill accordingly read a Second time.

Resolved,

"That the Employment (Amendment) Bill be committed to a Select Committee consisting of Mr Speaker as Chairman and the following Members:

Mr Ch'ng Jit Koon, Member for Tiong Bahru,

Mr N. Govindasamy, Member for Telok Blangah,

Mr Hwang Soo Jin, Member for Jalan Kayu,

Mr Ong Pang Boon, Minister for Labour,

Mr S. Rajaratnam, Minister for Foreign Affairs,

Mr Sia Kah Hui, Minister of State for Labour,

Mr Sia Khoon Seong, Member for Moulmein."-[Mr Ong Pang Boon].