WORKMEN'S COMPENSATION BILL

Order for Second Reading read.

6.35 p.m.

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

This Bill seeks to repeal and re-enact the Workmen's Compensation Act, 1971 (Cap. 130). The spirit of the 1971 Act has been retained and reinforced by a number of innovations which I will dwell upon in greater detail later.

Sir, any workmen's compensation scheme must provide for expeditious and adequate payment of compensation. But the procedure laid down in the 1971 Act has been found to be time-consuming, causing long and unnecessary delays in the payment of compensation. Under the 1971 Act, the Commissioner for Labour will assess the amount of compensation payable and this assessment is then sent to the parties concerned. Since the Act does not provide for a time limit for the employer to either object to the assessment or to pay the compensation, a great number of employers have in the past deliberately ignored the notice of assessment. It is only after repeated reminders that we get a response from the employer. The employer may further delay payment of compensation by disputing either the extent of his liability to pay compensation or the extent of dependency of the claimants on the earnings of the deceased worker. Under the Act, full compensation is payable only if there has been full dependency and proportionate payment if there is partial dependency. In either of the cases that I have just mentioned, an inquiry has to be held by the Commissioner for Labour which is often a long-drawn affair. If no agreement is reached at the conclusion of the inquiry, then the dispute is referred to the Arbitrator. More time elapses before the disputed case is finally settled by the Arbitrator.

Even in cases where there is no dispute over the assessed quantum and degree of dependency, the claimants cannot be compensated immediately until a Memorandum of Agreement has been signed by both parties. Here again, the employer can delay payment by not completing the Agreement. To crown it all, the Act requires that a waiting period of seven days be observed before the Memorandum of Agreement can be registered.

Mr Deputy Speaker, Sir, the House will agree that this long delay is not only undesirable in that it works to the detriment of the injured worker or his dependants but wholly unnecessary. My Ministry has therefore decided to replace the time-consuming procedures with a new system of administration and enforcement providing for expeditious payment of workmen's compensation. Also in the new Bill dependency will no longer be a bone of contention. The assessed compensation will be paid in full regardless of whether the dependency is full or partial.

Sir, my Ministry has also found that the provision for insurance coverage for employer's liability is unsatisfactory. Under the 1971 Act the insurer is not required to pay directly to the Commissioner for Labour the assessed compensation on behalf of the employer. My Ministry has found that insurance companies also often delayed payments, or in some cases even refused to pay, on the ground of alleged breach of insurance policies taken out by the employers. The House might like to know that in one case an insurance company took eight months to investigate before informing the Ministry of its refusal to pay on grounds that the policy was under-declared. This Bill also seeks to remedy this situation.

Sir, the House is fully aware of the rise in the cost of living over the last few years as a result largely of inflation originating from overseas. The level of compensation payable under the 1971 Act is, however, not proportionate to the margin of increase in the cost of living today. My Ministry, therefore, has taken the opportunity to increase the quantum of workmen's compensation in the new Bill to a more realistic level.

With the increased use of different types of chemicals, resins and other irritating substances in modem production processes and the prevailing high noise levels in industries like textile, shipbuilding and ship-repairing, building construction and metal container manufacturing, the Ministry finds it necessary to add industrial dermatitis and noise-induced deafness to the list of diseases for which workmen's compensation is payable. The listing of these two diseases besides forming part of our continuing efforts to improve the health and welfare of workers is also a step forward in bringing our legislation more up-to-date and in line with present day working environment.

My Ministry has also taken the opportunity in the new Bill to provide for the establishment of a new Workers' Fund. The objectives of the Fund are, inter alia, to finance rehabilitation schemes for injured workers so that they can return to productive labour and to finance other projects for the general advancement of the welfare of workers in Singapore. The establishment of this Fund will underline the importance we in our Republic attach to the role workers play in our national economic development. It is my hope that, once it is established, firms and other organisations will be forthcoming with their donations which will enjoy exemption from income tax.

Sir, the Workmen's Compensation Act merely compensates but can never remove the sorrow and anguish suffered by the bereaved families. Important and necessary as workmen's compensation is, my Ministry is more concerned with the prevention of industrial accidents. As our Republic develops rapidly towards a higher industrial and technological base, the injection of more sophisticated machineries in the manufacturing sector is unavoidable. Consequently the methods of production and material handling have also undergone revolutionary changes. Most of the industrial accidents occurred under these new working environments and exposures to machineries hitherto unfamiliar to our new generation of workers. In 1970, the total number of industrial and occupational accidents was 9,682. This figure gradually climbed to the peak of 13,094 in 1973, registering an increase of 35%. During the same period, the amount of compensation paid out also recorded an increase of 287.5% from $1.6 million to nearly $6.2 million. In 1974 the total number of accidents registered was 12,639, representing a decline of 455 cases or 3.5% over the previous year. However, the number of actual fatalities registered an increase of six cases or 3.8% over the previous year's figure of 160. The amount of compensation paid out as at December 1974 was $5,834,000 not including outstanding claims. The final figure for the year, therefore, might well match that of 1973. It can be seen that although the overall number of accidents dropped by 3.5% the amount of compensation paid remained almost the same because there were more severe injury and fatal cases. As human resources constitute our only natural resources, a special responsibility rests on employers to maintain a safe and healthy working environment and to ensure that their workforce observe all the safety regulations.

Sir, this is not a legislation intended to prevent accidents or to offer remedy to the problems of safety and health regulations. Separate legislation, principally the Factories Act and its subsidiary regulations, will cover this particular aspect. There should be no doubt now in the minds of everyone that nobody gains in an industrial or occupational accident. The employer loses manhours and productivity, throwing production line off-gear and upsetting production schedule; the insurance company loses in compensation, but most important of all, the worker loses his life and his family loses a breadwinner.

Sir, the increase in the quantum of compensation under this new Bill should not be looked upon as a punitive measure but rather an attempt to strike a reasonable balance between the needs of the victims and their families and what the industry can bear. The House may be interested to know that the contractors' organisations and the General Insurance Association, under the guidance of my Ministry's Building Construction Safety and Health Committee, are now exploring the possibility of working out a new incentive-orientated insurance rebates scheme. I hope that this will be extended to all other employers as there is more reason now to have this incentive scheme in view of the increase in the quantum of compensation. The net result can only be savings all round. As there are extensive amendments and in view of the Bill's importance, it is proposed to commit the Bill to a Select Committee of Parliament so that views of all interested parties can be considered.

Sir, the main provisions of this Amendment Bill are detailed in the explanatory statement to this Bill. Let me now elaborate on some of the salient features of the Bill.

A new provision establishes the Workers' Fund in clause 6 and pro- vides that where a deceased workman has no dependant, compensation is nevertheless payable to the Workers' Fund.

Clause 7, which is to be read with the Third Schedule, provides for increased compensation to an injured workman. The maximum compensation payable in fatal cases has been raised from $21,600 to $35,000 and in permanent incapacity cases from $28,800 to $45,000. In temporary incapacity cases, from one-third wages paid half-monthly to full wages for 14 days if there is no hospitalisation and 60 days where hospitalisation is involved. To ensure that the injured worker and his dependants will in fact obtain the increased quantum of compensation, the multiplying factors for computing compensation have also been increased. For fatal cases, it is 108 months' earnings in the ease of a workman below 40 years of age; 84 months' earnings in the case of a workman who is 40 years of age and above but below 50 years of age; 72 months' earnings in the case of a workman who is 50 years of age and above. For permanent incapacity cases, it is 144 months' earnings in the case of a workman who is below 40 years of age; 120 months' earnings in the case of a workman who is 40 years of age and above but below 50 years of age; 96 months' earnings in the case of a workman who is 50 years of age and above. The percentages of loss of earnings used to calculate compensation in permanent incapacity cases involving traumatic injuries have also been revised upwards.

The most important feature of the Bill is the elimination of time-consuming procedures and the introduction of a new system of administration and enforcement providing for expeditious payment of workmen's compensation. This is achieved by clause 24 of the Bill. Under this clause, the employer, unless he has grounds for objection, is required to deposit the assessed sum of compensation with the Commissioner for Labour within 21 days of the service of the notice of assessment. If the employer fails to do so, an interest of 1�% per month will be levied on the late payment. If he disputes the assessment, in accordance with clause 25 he must state in writing the grounds of his objection to the Commissioner within 14 days of the service of the notice. Where the employer disputes liability, under clause 25 of the Bill, the Commissioner is vested with the powers of the Arbitrator to hold a hearing and make the final decision on the case. There can be no appeal to the High Court under clause 28 unless a substantial question of law is involved and where the amount of dispute is not less than $1,000.

Clause 32 makes payment of compensation even more expeditious in that it enables proceedings to be brought directly against an insurer who has issued a policy of insurance covering an employer against liability for workmen's compensation. Insurers can no longer dispute liability to pay workmen's compensation purely on ground of alleged breach of insurance policies as under clause 35 (1) (k) regulations will be made for the prohibition of conditions and exceptions in policies of insurance issued or renewed for the purpose of workmen's compensation.

Sir, I beg to move.

Question proposed.

6.55 p.m.

The Parliamentary Secretary to the Minister for Education (Mr Ahmad Mattar): Mr Deputy Speaker, Sir, noise is the symphony of the machine age and a permanent part of our life. As such, it should be controlled like an orchestra. With that note, Sir, I rise in support of the Workmen's Compensation Bill standing in the name of the Minister for Labour.

I wish to specially congratulate the Honourable Minister for his wisdom and foresight to include noise-induced deafness as one of the occupational diseases listed in the Second Schedule of the Bill. This, in my view, is an appropriate complement of section 58 (Part VII) of the Factories Act (No. 6 of 1973) which states:

`Where in any factory persons are employed in any process involving exposure to excessive noise or vibration which may constitute a danger to their health effective means shall as far as practicable be provided for the reduction of such noise or vibration'.

I think, Sir, the time is opportune to include basic requirements on noise control in occupational safety and health legislation. There may be authoritative codes of practice on noise control, but their influence, sad to say, is unlikely to have a sufficiently rapid effect unless underpinned by legislation.

Noise pollution, like air and water pollution, is largely a consequence of the man-made environment, the result of the application of technology without first considering fully the impact upon people. To the extent that it is manmade, it is not likely to go away, but will undoubtedly become more serious unless effective strategies are developed for its control.

With the introduction of this Bill and the enactment of the Factories Act of 1973, Singapore, like many other industrialised and high-density urban societies, is beginning to join battle with noise. It is very encouraging to see that we are joining battle before the problem reaches the proportions of a crisis. We are in a relatively early stage of noise pollution and any control imposed now is therefore very timely.

Most technically well developed countries exhibit, or have exhibited for a number of years, a degree of concern towards the problem of environmental noise. In the past decade or so, an increasing number of countries have transformed their concern into concrete action, developing specific methods for controlling the problem to a sensible level. Of the arsenal of weapons at their disposal, most of them have chosen the legislative process as their prime method of control.

Industrial noise has recently become a live issue in the field of compensation. For instance, in Britain in 1971 an action for damages was brought by one F. R. Berry against his employers, Stone Manganese & Marine Ltd., for their alleged failure to provide adequate protection against excessive noise in a chipping workshop. As a result of his work, Berry's hearing deteriorated gravely. The judgment was that the employers were negligent in failing to supply ear-muffs to him when he first started in the industry. The plaintiff was accordingly awarded �1,250. In this respect, Sir, I am glad to note that the amount of compensation, as detailed under the Third Schedule of the Workmen's Compensation Bill, in the case of an injury causing the loss of hearing of one ear is 30% of the compensation which would have been payable in the case of permanent total incapacity.

Very few countries provide stiff penalties for non-compliance with the law. Certainly penalties do not seem to be framed in terms of criminal and civil punishments; rather fines are levied on the offender. Perhaps the stiffest penalties are to be found in the USA where non-compliance with the requirements of the Occupational Safety and Health Act can result in fines up to US$10,000 and, indeed, in the worst case, in the possible forced closing down of a plant. And, if the plant in question falls under the Walsh-Healey Public Contracts Act, the Company in question may be denied the right to bid on US Government contracts for a period of up to three years.

With some exceptions. Sir, countries that are now tackling the problem of noise-induced deafness define a noise criterion equivalent to 90dB (A) as a standard which must be met over the course of a working day if undue risk of damage to hearing is to be avoided. A notable exception is the USSR which defines a - noise criterion equivalent to 85dB (A). And, a still more remarkable exception is France which, in a decree of April 1969, stated that a noise level of 80dB (A) should not be exceeded in all factories.

Provision is generally made, too, for the effects of impulsive noise. Here, the various laws existing today tend to differ considerably, but this, however, is an indication of the less than adequate state of knowledge in this area. In another action for damages, in Great Britain, for example, a certain W. Derby was awarded �27,000 against his employers, Short Brothers & Harland, for causing his instantaneous deafness. A weapon was being fired which deafened the man instantly. It was stated that if there had not been a 10% contributory negligence, the plaintiff would have been awarded �30,000. The same accident in the Australian Capital Territory would have entitled the plaintiff to a maximum claim of A$9,450 while in Queensland (Australia), he would, under the Queensland Workers' Compensation Act, be awarded a meagre A$5,330.

Sir, it is also my opinion that the measurement of the hearing levels of each employee likely to be exposed to excessive noise forms an essential part of a hearing conservation programme, and should be practised by all `noisy' industries in Singapore. These tests should be carried out by a medical practitioner who is able to interpret the results in conjunction with a medical history of each individual and a knowledge of that individual's work environment.

Audiometric tests should be made at the commencement of the hearing conservation programme, repeated in three months from the commencement, and thence every six months for a period of two to three years depending on the noise environment, and then annually. In this way, the success of the programme can be measured by demonstrating that no further loss of hearing is occurring in any exposed workman. These periodic tests also detect the occasional employee who is more susceptible to noise than the average person, or the employee who is receiving inadequate protection due to poor-fitting ear plugs or muffs, or failing to use the protection supplied.

Tests should also be made on each new employee as part of a engagement examination at the time of engagement. Pre-existing ear disease or deafness may make it desirable to place a new employee in a less noisy environment for his own sake. Replacement examination and testing also provides opportunity to educate the new employee in the hazards associated with excessive noise exposure and to provide him with ear protectors if necessary.

On the question of personal hearing protective equipment, I wish to stress to industries contemplating using them that they be used only as a last resort, when there is no apparent feasible means of controlling industrial noise by engineering or administrative processes.

When introducing personal hearing protection devices, it is important to ensure that both management and employees have a full and thorough understanding of the aims of and the need for the programme. If hasty decisions are made or if the programme is presented to employees without adequately preparing them for participation, co-operation is difficult to achieve. My own observations, Sir, have shown that insufficient efforts, on the part of the employers, to educate employees have, in the past, led to misunderstanding of the employer's motive and objectives, to discontent and to the eventual rejection of the protection. My message to the employers is: they are under a duty to take steps by propaganda and persuasion to see that hearing protection equipment is used.

Sir, the objective of safety and health legislation is to safeguard life and limb and to promote health. But the mere enactment of words on the statute book will by no means achieve this result. In the final analysis, everything depends on the actions of the individual people -both management and employees. Major reliance must be placed upon line managers or supervisors to control the day-to-day performance of the work. It is essential, therefore, that members of the line management are able to understand their legal duties and act upon them. Safety officers and specialists, Sir, have important roles to play, but they cannot be ever-present.

Encik Abdul Aziz Karim (Kallang): Sir, the Bill before the House is more modern and progressive than the existing law. However, I have some reservations in respect of certain clauses of the Bill professing to serve the interests of workers. But since it has been indicated that the Bill will go to Select Committee, I reserve my comments on the Bill. If I do say my piece here, my views will not be melodious or in harmony with the Member for Leng Kee who is an acoustics expert in his own right. I support the Bill that is going to a Select Committee.

Mr Ivan Baptist: Mr Deputy Speaker, Sir, I rise to share the views of the Member for Kallang and support the Bill that is on its way to a Select Committee.

Mr Seah Mui Kok (Bukit Ho Swee): Mr Deputy Speaker, Sir, I rise to support the Workmen's Compensation Bill. As it will go to a Select Committee, I sincerely hope that the Select Committee will not take too long to deliberate on it. And as soon as the Select Committee makes its report to Parliament, I hope Parliament as well as the Minister would implement it as soon as possible. There should not be any unnecessary delay in this matter.

Question put, and agreed to~

Bill accordingly read a Second time.

Resolved,

"That the Workmen's Compensation Bill be committed to a Select Committee consisting of Mr Speaker as Chairman and the following Members: Mr Fong Sip Chee Mr N. Govindasamy Mr Hwang Soo Jin Mr Ong Pang Boon Mr Ong Teng Cheong Mr Phey Yew Kok Mr L. P. Rodrigo." -[Mr Ong Pang Boon].