EMPLOYMENT (AMENDMENT) BILL

Order for Second Reading read.

3.42 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".

Hon. Members will recall that the Employment (Amendment) Bill was introduced in the last session of Parliament. It was committed to the Select Committee after its Second Reading on 2nd June, 1972. In my Second Reading speech then, I have explained the events leading to the Bill. I have also drawn attention to the more important provisions of the Bill which, together with the Industrial Relations (Amendment) Bill, are designed to give effect to the recommendations of the National Wages Council which have been accepted by the Government. However, for the benefit of new Members of the House, I shall recapitulate.

Mr Speaker, Sir, in April this year, the National Wages Council, a tripartite body comprising representatives from labour, management and the Government made certain recommendations on wage increases and bonuses. In announcing the Government's acceptance at the NTUC May Day Rally this year, I emphasised that the recommendations should remain as guidelines for negotiations between employers and their employees, or trade unions representing the employees. We cannot make the recommendations mandatory because there are some employers who are genuinely unable to grant the increases recommended by the Council. To compel them to do so would tantamount to forcing them out of business. However, it is necessary to amend those provisions of the Employment Act and the Industrial Relations Act which would otherwise prevent the full implementation of the National Wages Council's recommendations particularly in regard to bonus which, under the present Act, is negotiable up to a maximum of one month's wages.

On the 23rd May, the National Wages Council and representatives of the Chambers of Commerce, Singapore Employers Federation, National Employers Council, Singapore Manufacturers Association and the National Trades Union Congress, met the Prime Minister and myself, to discuss ways in which the recommendations of the National Wages Council could be given effect. The parties concerned unanimously agreed that the recommendations of the National Wages Council should not be approached in a legalistic way. However, in so far as the 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 month payment and a bonus, or 13th month payment and an annual wage revision, such enabling legislation should be passed.

The parties also 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 the3e agreements. It also incorporates those suggestions and proposals made to the Select Committee before the dissolution of the last Parliament and accepted by the Government.

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: -

(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. However, he shall be bound by his choice of option for the duration of any award or collective agreement which may be made regarding these payments. 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. The provisions of the Industrial Relations Act shall apply to these negotiations.

The terms "wages", "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 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 or increased productivity, 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.

For computation of annual wage supplement payable by an employer, all ex-gratia payments, salary supplements and other such payments paid by him in the last three years preceding the commencement of this Act to an employee as an incentive to enter into a collective agreement or to increase his productivity or as a reward for his services, shall be deemed to be bonuses paid in respect of the last three years preceding the commencement of this Act.

It is an offence for any person or a trade union of employees to invite negotiations for the payment of an annual wage supplement or annual bonus of an amount which exceeds the equivalent of three months' wages of an 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 (1) 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 these matters, either of the parties may notwithstanding the provisions of the Industrial Relations Act, refer the matter to the Industrial Arbitration Court which may make a decision thereon.

Provisions are made in the 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 72 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 accepted that the recommendations of the National Wages Council shall take effect from 1st July, 1972. It is, therefore, necessary for the Act to come into force from this date.

Sir, to sustain and accelerate our present pace of economic development, we must continue to pursue the policy of industrial peace with justice. This calls for closer co-operation and greater understanding between labour, management and Government. It also calls for an orderly and equitable distribution of the additional wealth created by the joint efforts of the tripartite partners. So long as the employers are fair and reasonable and the trade unions do not make irresponsible and excessive demands, the outlook of our future will always be bright.

Mr Speaker, Sir, I beg to move.

Question proposed.

Mr N. Govindasamy: Mr Speaker, Sir, there are three important Bills tabled for Second and Third Readings today. The Employment (Amendment) Bill and the Industrial Relations (Amendment) Bill are, in my opinion, very important legislations on employment, which should be implemented in the spirit in which they are passed. We are all well aware of the need for the introduction of the Employment Act in 1968. The trade unions have co-operated fully to make the Bill workable. Since the implementation of the Employment Act, there has been so much talk of tripartism in industries and we have made all efforts to make tripartism work.

Even in the Addendum to the President's speech, a call has been made to unions, employers and the Government to work together for the national interest. Greater emphasis is to be given to the prevention or elimination of, and I quote the Addendum, "nascent points of friction between labour and management before they assume ominous proportions". Similarly, in an address at the annual dinner of the Singapore Employers' Federation, the Minister for Labour has soundly rebuked those employers whose sluggishness in negotiations is not conducive to harmonious industrial relations with their workers.

The purpose of these references which I have just made is to remind Members of the House that, despite the countless exhortations by the Government to both employers and unions to co-operate with one another in the interest of the Republic, there are still employers or their managerial representatives who regard trade unions as necessary nuisances to be tolerated rather than desirable partners to be co-operated with. I wish to bring to the attention of the House a regrettable but nevertheless true, instance of the medieval attitude of some employers or professional managements towards trade unions. One well-established and otherwise reputable employer in Singapore, whose workers are represented by an affiliate of the NTUC, recently decided in a mood of paternal benevolence to revise slightly upwards the salaries of their employees. But without previously consulting or even notifying the trade union concerned, the employer informed their employees on 20th October of this year that their salaries were to be revised with retrospective effect from 1st October. Members of this House may very well wonder what my grievance is, or rather what is the grievance of the trade union concerned, since the workers have been given a slight increase in pay by their employer. The matter, however, is not simply a question of pay increase. In the process of revising upwards the salaries of the workers, the employers have also changed the salary scales of the employees concerned, resulting in the need for a conversion exercise in the placement of employees from the old salary scales to the new salary scales. It is natural that with employees previously receiving different salaries under the old scales being grouped together on the same incremental point in the new salary scales, some employees receive disproportionately greater increases than others. The trade union concerned has informed the employer that its members are not happy over the basis of conversion in that the increases in salaries have been unnecessarily disproportionate and inequitable from an objective point of view, and that the conversion has been implemented without prior consultation with the union. The new scheme also does away with promotion grades.

The managerial representative to whom the dissatisfaction was conveyed, however, replied that the revision of the salary scales was approved and sanctioned by the relevant person in charge of finance, who had not given any instruction or indication that the revised salary scales were to be implemented in consultation with the trade union representing the workers. In the circumstances, the managerial representative bluntly informed the union that there was no question of any discussion as to an alternative and fairer basis for conversion from the old salary scales to the revised salary scales. Another managerial representative, a very senior official of the establishment, also added that none of the workers had directly voiced any dissatisfaction with the revised salary scales and that it was the "damn trade union" which was seeking to create a dispute between the workers and their employer.

The incident which I have just related may seem to be the kind to be expected of an unusually recalcitrant employer in the private sector of Singapore. I think Members of this House would be I surprised to learn that the trade union concerned is the Amalgamated Union of Public Employees (AUPE) and that the employer is none other than the Ministry of National Development and the Ministry of Finance of the Government of Singapore. Members of the House would be also interested to learn that the trade union concerned has served a notice, in writing, as far back as October 1962, to the Government to negotiate for better terms and conditions of service. The official side, in accepting the invitation to negotiate, had stated that such acceptance was "intended to promote goodwill and good relationship between your union and this Ministry". During the intervening 10 years between 1962 and 1972, the Ministry has never revoked the recognition accorded to the union to represent the employees of the Ministry. It is, therefore, a gross violation of all accepted norms of sound industrial relations practice for the Ministry unilaterally and arbitrarily to revise the salary scales and conditions of service and to proceed to implement such revised salary scales and conditions of service without prior consultation with, or even notification to, the trade union concerned.

The retort of the Ministry, in response to the complaint by the union of such improper and arbitrary change in the terms and conditions of service, to the effect that no employees have expressed any dissatisfaction was irrelevant and mischievous. In the first place, no employee would himself wish to be singled out for the dubious attention of his supervisors or superior officers by voicing his dissatisfaction with the increase of pay accorded to him, when the same superior officer obviously considers such an increase in pay as a generous gesture on their own part. In the second place, since the employees are members of a registered trade union which has been accorded recognition by their employer, it is natural for the employees to voice their dissatisfaction to the union in the expectation that the union would take up their grievance with their employer.

A point that should be remembered by Members of the House is that the Government has accorded to civil servants and other public employees, except those in the Singapore Police Force and in the Singapore Armed Forces, the right to organise and bargain collectively. Such civil servants and public employees may or may not have the right to bring their disputes before the Industrial Arbitration Court, but there is no law in Singapore to preclude or to prohibit trade unions representing civil servants or public employees from entering into negotiations with the respective ministries and departments on the terms and conditions of service of their members. Once recognition has been accorded to a trade union in respect of a particular group of employees the employer, whether it be a Government department or a private company, is expected to treat such union with some courtesy and respect as befitting a collective bargaining agent on behalf of such group of employees. Where the employer seeks to vary or change the terms and conditions of service of the employees, it is only proper that the employer secures the agreement of a trade union representing such employees to avoid any misunderstanding and friction. In the particular incident which I have related earlier, the revised salary scales may be beneficial to some of the employees concerned, but the conversion from the old salary scales to the new salary scales is a highly controversial matter and the immediate promotional prospects have been altered. These should have been referred to the trade union concerned for their views before the Ministry proceeds to implement such a proposal on the basis it arbitrarily decides upon.

I do not doubt or question the integrity of the Ministry officials concerned. But even with the best of intentions, any individual person cannot be expected to be infallible in any matter or in every matter. Otherwise, there would have been no need for the tripartite basis of consultation so fervently advocated by the Government and implemented in relation to the National Wages Council, and there would have been no need for a trade union movement in Singapore at all.

4.08 p.m.

Mr Sia Khoon Seong: Mr Speaker, Sir, the Employment (Amendment) Bill before this House is a logical consequence to the setting up and operation of the National Wages Council. It is to provide enabling provisions in the employment legislation to give effect to the implementation of the recommendations of the National Wages Council.

However, there is a legal loophole in this exercise whereby some mischievous employers may take advantage of by denying their employees the benefit of the recommendations of the National Wages Council on the ground that they are technically not covered by the Employment Act. Recently, three NTUC affiliated unions received negative response from the employers to their invitation to negotiate wage increases along the national guidelines of the National Wages Council in respect of their members who are drawing monthly salaries exceeding $750. The immediate reply from these employers was that those drawing $750 and above do not come within the scope of the Employment Act, and therefore, are not entitled to receive any increments on the basis of the 1972 national wage guidelines laid down by the National Wages Council.

The general understanding, when the National Wages Council was set up and when its recommendations were made this year, was that the National Wages Council's recommendations would apply to all workers, whether they are paid more or less than $750 per month. It will not lead to harmonious industrial relations if employers are to deny some of their employees the benefits of the recommendations of the National Wages Council, simply because their employees are drawing more than $750. You will be surprised, Sir, that in modern Singapore, we still have a few employers adopting a medieval approach to industrial relations. The Member for Telok Blangah has just given an example of one such employer.

I would, therefore, like to seek the assurance of the hon. Minister for Labour that he would exercise his good offices to ensure that unenlightened employers do not frustrate the objectives of the Government in setting up the National Wages Council, by refusing to honour the National Wages Council's recommendations on technical grounds.

The Parliamentary Secretary to the Minister for Labour (Mr Fong Sip Chee): Mr Speaker, Sir, I would just like to get some information from the Members for Telok Blangah and Moulmein. I want to know how many employees of the NTUC are members of trade unions, and which unions do they belong to. Are they getting the 13th month payment?

Mr Sia Khoon Seong: Sir, if the Parliamentary Secretary to the Minister for Labour wishes to get an answer from the, I say that all employees of trade Unions receive whatever is recommended by the National Wages Council.

Mr Fong Sip Chee: Mr Speaker, Sir, my question is whether the employees of the NTUC are members of any union at all?

Mr Sia Khoon Seong: Sir, this is a democratic country, and the right to join or not to join a union lies with the worker himself. There is no restriction laid down by the trade unions that their employees cannot join a trade union. In fact, some of them are members of unions.

Mr Speaker: Mr Sia, I think it is better to carry on this private conversation in the tea room.

4.13 p.m.

Dr Tan Eng Liang (River Valley): Mr Speaker, Sir, as pointed out by the Member for Moulmein, there is some confusion in the interpretation as to whether or not the general recommendations of the National Wages Council should I only cover those whose salaries are below $750. There are many employers, both in the Singapore Manufactures Association and the Singapore Employers Federation, who queried the interpretation of the recommendations of the National Wages Council, but there is no clarification from anybody. It has been implied initially that since this is an amendment to the Employment Act, which covers employees whose salaries are up to $750, some employers take the view that it is not applicable to employees whose salaries are above $750. Other employers who are more generous perhaps feel that what you give to the lower grades should be extended to those in the higher grades. But the difficulty from the employers' point of view is that if you stretch it above $750, where do you draw the line? Is it above $750 up to $2,000, or what?

I would therefore like to seek the good offices of the Minister for Labour for some guidance to the employers on this matter, because at the moment there is definitely - I would not say confusion- but a misunderstanding of where the line should he drawn, as has been queried by the Singapore Manufacturers Association itself.

Mr Seah Mui Kok (Bukit Ho Swee): Mr Speaker, Sir, in the recommendations of the National Wages Council, there was no specific mention that wage increases should not be given to employees whose salaries are above $750. I presume that some employers will take the line that employees whose salaries are above $750 are not entitled to enjoy wage increases as recommended by the National Wages Council. I think this is their deliberate intention. I would strongly suggest that either the Government or the National Wages Council should clarify as to whether or not the recommendations on wage increases are meant for all workers irrespective of what their salaries are.

4.15 p.m.

Mr Ong Pang Boon: Mr Speaker, Sir, in recounting the events leading to the introduction of the Employment (Amendment) Bill, I have explained that the purpose of the Bill was to give effect to the recommendations of the National Wages Council.

I have been listening patiently to the Member for Telok Blangah for the last 10 minutes, thinking that he was going to comment on the salient features of the Bill. It would appear that I have been mistaken. He has instead taken the opportunity to launch an attack on a matter which has nothing whatsoever to do with the substance of the Bill under discussion. I am afraid I am in no position to comment on the particular instance raised by him as I have neither been acquainted with the facts by the union concerned nor have I the opportunity of listening to the other side of the story. No doubt, my colleagues, the Minister for National Development and the Minister for Finance, will take note of the Member for Telok Blangah's complaint and deal with it in due course. In any case, the Member for Telok Blangah is well aware of the established grievance procedure governing civil servants, and I have no doubt that he will take advantage of such established means of settling grievances to mutual satisfaction.

The principle of tripartism is the correct approach to industrial relations in our situation today. I have again reiterated this view at the annual dinner of the Singapore Employers Federation referred to by the Member for Telok Blangah, and the Ministry will continue to advocate such a policy.

I have reiterated earlier that the recommendations of the National Wages Council should not be approached in a legalistic way. Even though the Employment Act does not cover workers drawing more than $750 salary per month, there is nothing in the Act or in any other law to prevent employers from granting salary increases to such workers, in accordance with the recommendations of the National Wages Council. The main constraint will be the maintenance of good employer/ employee relations, as it affects the productivity of the firm and the ability of such employers to med the increased cost, without seriously affecting the firm's competitive position. The good offices of the Labour Ministry is always at the disposal of both unions and employers. The Members for Moulmein and Bukit Ho Swee can always avail themselves of the service when the need arises.

Mr N. Govindasamy: I thought the Minister was going to give way, Sir, in a matter of explanation.

Mr Speaker: Do you want to clarify, Mr Govindasamy?

Mr N. Govindasamy: Yes, Sir. The Minister just mentioned that he would allow his good offices to he used in the matter of tripartite difficulties. Perhaps he would use his good offices in a problem between the union and the Government itself, that is, the Ministry of Finance.

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.