EMPLOYMENT (AMENDMENT) BILL

Order for Second Reading read.

3.00 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."

Sir, the Bill seeks to introduce a number of amendments to the Employment Act, details of which are summarised in the explanatory statement. I now propose to elaborate on some of the more important clauses in the amendment Bill.

Hon. Members will no doubt recall that in April 1972 the National Wages Council recommended that the existing bonus system in the private sector be converted into a system of an annual wage supplement supplemented by either a negotiable bonus or annual wage increases and that the maximum in regard to bonuses be raised from one to three months' wages. These recommendations were accepted by the Government in the interest of rational and orderly wage increases. Section 46 of the Employment Act was then amended in July 1972 incorporating these recommendations.

Under the present section 46 of the Act, 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 is given the 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 increase. He will, however, be bound by his choice of option for the duration of any award of 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 increase.

The level of annual wage supplement payable by the employer who has paid annual bonuses to his employees prior to 1972 is to be the equivalent of the average of the bonuses paid in respect of the three years preceding the commencement of the Act, that is, 1972, or to the last annual bonus paid, whichever is the greater, subject to a maximum 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 his employees.

However, contrary to the provisions of section 46, a number of employers have at the request of unions attempted or in some cases even paid annual wage supplements in excess of the levels prescribed under section 46. In a number of cases the additional annual wage supplements paid took the form of ang pows and ex gratia payments.

This is an undesirable situation which, if unchecked, can lead us back to the pre-1972 situation of disputes over bonuses and ex gratia payments and disorderly wage increases. In fact, the Secretary-General of the National Trades Union Congress, in a speech to the NTUC Ordinary Delegates Conference in December 1974 said that, and I quote:

`To take the lid off on bonus payments once again, would only be to provide a recipe for an industrial free-for-all.'

He went on to tell the Conference that "this must not be allowed to happen, least of all in the current climate of the economy".

Mr Speaker, Sir, it is essential for us to develop a sound national wage system based on the one recommended to us by the National Wages Council in 1972. A system of orderly wage increases will contribute greatly to a right investment climate in our Republic. Members are all too well aware of the need for us to make greater efforts to attract investment into Singapore. The years ahead are going to he different from the last five years. We are unlikely to be able to repeat our years of double digit economic growth. We simply cannot afford undisciplined and chaotic wage increase demands to hamper our efforts to achieve maximum development in a period of comparatively reduced growth.

Mr Speaker, Sir, clause 2 of the Bill is, therefore, aimed at preventing the situation of the type I have just described. There are three important aspects of clause 2 of the Bill. Firstly, it is now mandatory for employers and trade unions of employees to observe the levels of annual wage supplement which have been frozen on 1st July, 1972. Secondly, employers may choose to pay either both an annual wage supplement and an annual bonus or both an annual wage supplement and annual wage increase. It will be an offence if the annual wage supplement, annual bonus and annual wage increase are all paid or asked to be paid at the same time. The employer alone shall decide which of the two combinations he shall opt for. It is an offence for a trade union or anyone to ask for payments in variance of the option which the employer has chosen.

Lastly, employers may only, with the prior written permission of the Minister for Finance, pay any additional annual wage supplement in excess of the frozen quantum.

Since the introduction of the Bill in the House on 19th August, 1975, 1 have received a number of representations from organisations like the Chinese Chamber of Commerce, the National Trades Union Congress and the Singapore Employers' Federation. As a result of some of these representations I have decided to introduce an amendment to clause 2 of the Bill. The amendment will be dealt with later at the Committee stage. At the moment I shall only deal with the other representations.

The National Trades Union Congress has requested that amendments be made to the Bill to allow for the continued payment of signatory bonuses and ex gratia payments which are made upon the signing of a collective agreement. The NTUC has argued that such payments are not really intended to evade the provisions of the Employment Act relating to the payment of the annual wage supplement or bonus. My Ministry is of the view that such onetime lump sum payments are not an annual wage supplement or bonus payments and are, therefore, outside the ambit of section 46 of the Act. I see no objection to such payments being made if they are for good reasons, such as compensation for change of annual incremental date, or payment in lieu of actual amount of arrears of wage adjustments, or payment in lieu of arrears of overtime arising from backdating of new salary scales. However, such payments should not be made for the purposes of inducement for signing the collective agreement.

Mr Speaker, Sir, I shall now deal with clause 8 of the Bill. The Report of the Committee on Crime and Delinquency reveals that juvenile crime and delinquency has increased in the Republic during the period 1968 to 1972. The Report also discloses that the majority of youths who flout the law are school leavers and that the tendency towards criminal or delinquent behaviour is negligible until the age of 13 and strongest at the ages of 15-16, 17-19 and 20-21. The Committee is of the view that one of the solutions to this problem is the adoption of measures to enable our school leavers to be trained and be gainfully employed. This will not only benefit the youths concerned but also provide a source of supply of trained workers for the economy. The Government has since taken note of this

recommendation of the Committee, and the proposed amendments to the Employment Act is to allow youthful school leavers to be trained and be gainfully employed.

Under clause 8, children who are 12 and below 14 years old will in future be allowed to be gainfully employed in industrial undertakings as apprentices under any apprentice schemes approved and supervised by the Industrial Training Board. Under the existing provisions of the Employment Act, young persons between the ages of 14 and 16 are required to obtain certificates of registration from the Commissioner for Labour before they may be allowed to work in industrial undertakings.

Clause 9 of the Bill seeks to repeal Part IX of the Employment Act dealing with such registration so as to facilitate the speedy employment of young persons in the 12-16 age group. While measures are proposed to provide for the training and gainful employment of the young, it is necessary to continue to protect the health, safety and welfare of the young in the 12-16 age group who will be working in industrial undertakings.

Clause 6 empowers the Minister for Labour to make provisions to that effect in the form of regulations to be gazetted after this Bill has been passed. It is therefore proposed to repeal all sections relating to conditions of employment of children and young persons in the Act and incorporate them in the regulations.

The National Trades Union Congress has written to the Ministry pointing out that with these amendments the number of workers between the ages of 12 and 18 will become greater and suggesting that an amendment be made to the Trade Unions Act to allow such workers trade union membership but without the right to hold office or to vote at general meetings of members. My Ministry is presently looking into the question of amending the Trade Unions Act and will take this suggestion into consideration.

Under Part XVI of the Employment Act, the Commissioner is empowered to conduct inquiries into claims lodged by employees in respect of matters relating to terms and conditions of their employment. Such inquiries are informal. Legal technicalities and forms are avoided as far as possible. This is in order to achieve speedy settlement in the interests of the parties concerned. In the experience of the Ministry, employers are usually represented by lawyers whereas the employees are not. We have found that the presence of lawyers at these informal inquiries has tended to formalise the character of the proceedings leading to unnecessary procedural complications, thereby delaying the completion of the hearings. In many cases it has also made the parties involved less amenable to conciliation and amicable settlement of claims. It must be emphasised that, in the majority of cases before the Commissioner, the dispute is purely one of facts. Points of law are not usually at issue and therefore the presence of legal counsel at such inquiries is not necessary. There are also similar provisions prohibiting legal representation under sections 27 and 63 of the Industrial Relations Act which include representation in negotiations at conciliation meetings chaired by conciliation officers of the Labour Ministry.

Clause 13 of the Bill therefore seeks to achieve this but allows an employee to be represented by an officer of the trade union of which the employee is a member and an employer to be represented by one of his employees who will usually be the Personnel Manager.

The Singapore Employers' Federation has requested that if an employer chooses instead to be represented by an officer of the trade union of which he is a member in the proceedings before the Commissioner, he should be allowed such representation. The Ministry sees no objection to this proposal and will administratively allow an employer this option.

Sir, I beg to move.

Question proposed.

3.20 p.m.

Mr Teong Eng Siong (Sembawang): (In Mandarin): Mr Speaker, Sir, I support this amendment Bill. This Bill will look after the interests of our workers better. It is a judicious measure because there is provision for employers to continue to pay their employees more than what is normally paid so long as they do not go against certain restrictions contained in the Act. Sir, this situation is just like what happened in the past. In those days it was the traditional practice of commercial establishments to give extra bonuses to their employees if they had made large profits in the financial year under review.

Therefore, if employers want to give their employees more bonuses than normally provided, we should afford them this privilege. In fact, the Minister mentioned in his speech that, provided the employers do not go against the restrictions contained in the Act, they are allowed to give the employees extra bonuses. In this way we can give our workers more benefits, and I certainly will lend my full support to the Bill because it will not only promote better relationship between labour and capital but it also will encourage the workers to work harder to increase productivity. So this is a very good measure. Although there are certain provisions, generally speaking we should support those which are beneficial to the workers.

As regards the provision for the training of our young people, this is also a very good measure because our young people will become a new force in our industrial development. From being semi-skilled workers at the end of their training, they will finally become skilled workers able to contribute to our national economy. I feel sure that all parents and guardians will welcome this Bill which provides for the training of young people.

3.24 p.m.

Mr Phey Yew Kok (Boon Teck): Mr Speaker, Sir, this Employment (Amendment) Bill affects, among other things, the provisions of section 46, 46(A) and 46(B), which were first enacted to give effect to the implementation of the recommendations of the National Wages Council. The NTUC is not only a party to the NWC's deliberations but it has also actively worked for the setting up of a system of regulating orderly increases in wages. In making my comments on the present Bill, I have discussed with my colleagues in the NTUC, namely, the Members for Moulmein, Telok Blangah, Bukit Ho Swee, Kallang, Toa Payoh, Aljunied and Potong Pasir, and they have agreed with what I am going to say.

My concern, whether as a Member of this House or as the President of the NTUC, is that certain provisions in this Bill may be unduly prejudicial to the interest of the trade union movement and to the rights of workers to be organised into trade unions. It is appreciated that the present Bill is consequential to the earlier amending Act of 1972 and seeks to clarify and define further the respective rights of workers and employers in relation to payment of annual wage supplement, annual bonus and annual wage increases now contained in the Act. My fear is that certain provisions in the Bill may, without the intention of the Government, work to the serious disadvantage of the trade union movement. The provisions of the Bill I am referring to are those set out in clauses 2, 4, 5, 6, 7 and 8 of the Bill.

Clause 2 of the Bill proposes to include a new subsection (13) to section 46 of the Employment Act, making it obligatory for an employer to apply to the Minister for Finance for written permission whenever he desires to pay any sum of money additional to the prescribed annual wage supplement. In other words, an employer who desires to pay more than one month or three months of annual wage supplement, as the case may be, must obtain the permission of the Minister for Finance to do so.

That requirement, in itself, is not a radical departure from the present law regulating the payment of annual wage supplement and other benefits. If an employer is willing and can afford to pay over and above the prescribed limits of annual wage supplement under the Employment Act, it is a simple matter for such an employer to write to the Minister for Finance for the necessary permission to do so. For such an employer and his employees, the provision of the proposed subsection (13) of section 46 may not make any practical difference.

But where an employer is not willing to pay or admits that he cannot afford to pay and seeks to embarrass the trade union representing its employees, the provision of the proposed subsection (13) may provide him with an opportunity to create mischief and misunderstanding at the expense of the trade union movement. It is not too difficult to imagine a situation where such an employer would protest to the union in negotiations over wages and other terms and conditions of service that he would like to pay more than the prescribed annual wage supplement except that he is prevented from doing so by the Employment Act. And as a gesture of his sincerity, he would even send a letter to the Minister for Finance, carbon copied to the union, but it would be so worded as to convey the impression that the application is made with reluctance.

A more serious situation may arise where an employer may be willing and can afford to pay a more generous annual wage supplement or an additional sum of money to his employees, so long as they are not represented by any trade union. A trade union, of course, in anticipating the reaction of such an employer against the representation of his employees, can claim for higher wages to offset whatever loss its members may suffer by way of annual wage supplement or any other additional payments. The snag is that the workers may allow themselves to be provoked or irritated by insinuations that they would not have lost such benefits if they had never joined a trade union.

As I see it, one of the more serious defects of this Bill is that it seeks to prohibit employees from asking for payment of and to prohibit employers from paying any sum of money over and above the prescribed limits of annual wage supplement or annual bonus. But there is nothing in the Bill to prevent an employer, who is unwilling or unable to afford to pay over and above the prescribed limits for annual wage supplement or annual bonus, from falsely claiming that he is willing or can afford to pay over and above the prescribed limits only if it were not for the Employment Act. Such malice or mischief by some unscrupulous employers can have a demoralising effect on workers.

The provisions of clauses 4, 5, 6, 7, and 8 of the Bill seek to make it easier for young persons and children to be gainfully employed in the Republic. Though the Government is repealing certain provisions for the protection of the interests and welfare of young persons and children, I have no doubts in my mind that the Government will reproduce corresponding provisions in the Regulations to be made under the Bill.

The provisions of the various sections to be repealed by the Bill have become outdated and their continued retention may work against, rather than for, the general interest and welfare of young persons and children. In that respect the relevant provisions of the Bill are to be welcome. I do not think that any person, whether inside or outside this House, can validly object to any statutory provision to make it easier for young persons and children to receive proper training and acquire suitable experience to become skilled artisans or technicians under the supervision of either the Ministry of Education or the Industrial Training Board.

From the trade union's point of view, the provisions of the Bill governing the training or apprenticeship of young persons and children are desirable in themselves, except for the nagging anxiety regarding the question of trade union representation for young persons and children. It may be contended that any training or apprenticeship scheme duly approved by the Ministry of Education or the Industrial Training Board would not lend itself to abuse by employers and that the terms of an apprenticeship agreement are incompatible with the principles of collective bargaining. If it is the fear of any person, inside or outside this House, that representation by trade unions would upset the proper conduct of any apprenticeship scheme, I can assure him that the NTUC would not tolerate any attempt by any of its affiliated unions to meddle with the terms of service set out in an apprenticeship agreement duly approved by the Ministry of Education or the Industrial Training Board. But it should not be forgotten that under the Employment Act apprentices have been accorded the right to be represented by a trade union, even if such representation may be confined to safeguarding the safety and welfare of apprentices.

The concern of NTUC is not directed so much to the young persons and children who enjoy the benefit of a training scheme or apprenticeship scheme duly approved by the Ministry of Education or the Industrial Training Board, but to those young persons and children who are employed in small private establishments without the benefit of any proper training scheme or any apprenticeship agreement. Such young persons and children would be completely at the tender mercy of their respective employers. I have no doubts that the Ministry of Labour may include suitable provisions in the proposed Regulations and instruct the Labour Inspectorate especially to look after the interest and welfare of such young persons and children. It would, however, make matters easier for all concerned if the trade unions are permitted also to look after the interest and welfare of such young persons and children.

As the law now stands, it prohibits trade unions from representing workers below the age of 18 years. But with the enactment of this Bill, it is envisaged that the number of workers between the ages of 12 and 18 years may considerably increase in proportion to the total number of workers in the Republic. It is, therefore, desirable that such workers should be allowed to be represented by trade unions. Any fear that young persons and children, because of their tender years, may lend themselves to exploitation by trade unions with ulterior motives, may be put at rest by the imposition of conditions that young workers below the age of 18 years may not participate in the management of a trade union or in the conduct of any industrial action.

As it is, if this Bill is adopted by this House without a corresponding amendment to the Trade Unions Act to reduce the minimum age of trade union membership from 18 years to a lower age, a situation may arise which may lend itself to exploitation by unscrupulous employers. There is nothing, for instance, in this Bill or in the Employment Act to prevent an employer from retrenching or terminating the service of young workers as soon as they have attained the age of 18 years. In this way, an unscrupulous employer may assure himself a constant supply of sweat-shop labour which cannot be organised into trade unions. In making this request to the Minister for Labour to consider more seriously the reduction of the statutory minimum age for trade union membership, I have been encouraged by the provision of clause 13 of the Bill which seeks to rule out the participation of advocates and solicitors in proceedings before the Commissioner for Labour and which seeks to assure a trade union the right to represent its members in such proceedings.

3.38 p.m.

Mr Seah Mui Kok (Bukit Ho Swee): Mr Speaker, Sir, I rise in support of the Member for Boon Teck, who is also the President of NTUC. I agree with what he has said, but I wish to make a further comment on the Bill.

In clause 2 of the Bill, the proposed paragraph (c) of subsection (10) of section 46 of the Employment Act seeks to make it illegal for any sum of money to be paid in addition to the annual wage supplement as set out in a contract of service or in a collective agreement. I have no doubt that this particular provision is intended to rectify the provision in the amending Act of 1972 regarding the upper limits for the payment of annual wage supplement. But the fact is that between 1st July, 1972, and today many contracts of service and collective agreements do provide for the payment of additional sums of money over and above the prescribed annual wage supplement. There are many reasons for such a situation to arise. One reason is that an employer wishing to expedite the signing of a collective agreement may propose an ex gratia payment to induce a trade union to forgo some of its claims and so conclude the negotiation for the collective agreement. Another reason is that an employer may prefer giving such ex gratia payments to committing himself to a permanent modification of the wage scales of his employees.

The point I wish to make is that whatever sum of money that has been agreed to be paid in a contract of service or a collective agreement in addition to the prescribed annual wage supplement is not deliberately made for the purpose of avoiding the relevant provision of the Employment Act regarding the payment of annual wage supplement or annual bonus. That being the case, it will be rather difficult for a trade union to explain to its members how the situation has come about, that it is permitted for such an additional sum of money to be paid in October 1975 but not in December 1975, since such additional sum of money has been freely and voluntarily agreed to in the course of negotiations between the employer and the trade union. I express the hope that the Minister will give serious consideration to the effect of the provision of the proposed paragraph (c) of subsection (10), section 46, in clause 2 of the Bill, on the morale of workers who have conscientiously and rigorously conducted themselves within the framework of legitimate industrial relation practices in the Republic.

Sir, I feel strongly on the points that I have just expressed. It is not because of the possible effect of the proposed provision on the members of my own union but because of its effect on organised workers in general, particularly those working in the pioneer manufacturing establishments. I am given to understand that a considerable number of such firms, because of their healthy financial position and their willingness to provide incentives to the workers and not because of any pressure brought to hear upon them by the union, are willing to pay and have, in fact, paid more than the prescribed limit of annual wage supplement to their employees. It will require no effort for the management to reconcile itself to any statutory prohibition against the payment of such additional sum of money and to apply for permission to make such payment. But for the workers to reconcile themselves to the suspense of waiting again for the employer to pay the additional sum of money previously negotiated for and agreed to may require super-human efforts.

In the light of that consideration, I hope that the provision of the proposed paragraph (c) of subsection (10) be reworded to make it more equitable to workers who have legitimately come to enjoy such greater benefits than would be permitted in the Bill as it stands at present.

3.44 p.m.

Mr Ng Kah Ting (Punggol): Mr Speaker, Sir, I rise to speak in support of the sentiments expressed by the Member for Boon Teck as well as to give my support to the Bill.

However, Sir, I would like to elaborate a little on clause 6 of the Bill which seeks to repeal and to re-enact sections 68 and 69 of the Employment Act. Clause 6 seeks to allow children of 12 years and above to accept gainful employment in any industrial undertaking. Sir, I have had on several occasions both inside and outside this House mentioned that there is a dire need for the Ministry of Education to look into the question of accommodating students, who could not go beyond the primary or secondary level, in vocational training institutions. Sir, today we are faced with a situation in which there are many thousands of children whom we call school dropouts. But I would not term them as "dropouts" if, in the light of this Employment (Amendment) Bill, children above the age of 12 years may obtain gainful employment.

Sir, in this respect I would like to suggest to the Minister for Education that in the various courses organised by the Industrial Training Board and conducted by the vocational institutes there should be full encouragement for the mastering of skills at the basic level. This point has been amply elaborated on by my Friend, the Member for Boon Teck. However, what I cannot understand is that when I made the suggestion that the ITB should conduct courses leading to certain levels of skills, it was flatly turned down almost the day after my suggestion was made. And here, Sir, we have this Employment (Amendment) Bill which seeks to do just that.

The Member for Boon Teck mentioned just now that he and his trade union colleagues are concerned with this provision for children above the age of 12 to be gainfully employed in any industrial undertaking. I too am concerned. To me, this would mean that certain skills have got to be acquired at a tender age, and there are various types of skills available to fit into this particular scheme. I do not think there will be exploitation of young labour by employers because certain skills are rather specialised in nature and its supply may be limited. In the long run, the child concerned will benefit from his apprenticeship or from his course of training. It is the ultimate that Singapore looks forward to because we do not have, apart from human resources, other sources to rely on. Therefore, every person in Singapore, especially the so-called dropouts and their parents, should realise that everyone must, work for a living and, as the Prime Minister has said, "The world does not owe us a living."

Mr Ho See Beng (Bras Basah): Mr Speaker, Sir, I have a very minor point to make on this amendment Bill. If this Bill is passed, it appears that if an employer wishes to pay a bigger bonus or a bigger annual wage supplement he should apply for approval from the Finance Minister to do so. The Finance Minister is in charge of the economy of the State. If the economy is bad, the Finance Minister might say, "All right, this year we allow the workers an increase of 5%." But why should the Finance Minister be in charge of the economy of a commercial organisation? If at all approval is necessary, I would say that they should get approval from the Prime Minister who heads the Cabinet. Industrial matters come within the portfolio of the Minister for Labour. So it appears to me that it is a case of passing the buck from one Minister to another. I do not see why this particular matter has been passed on to the Minister for Finance.

Mr Cheong Yuen Chee: Mr Speaker, Sir, I rise in support of the Member for Boon Teck, and I agree with the points raised by the Member for Bukit Ho Swee.

I would like to add that from my own personal knowledge I am aware that in quite a number of establishments the managements and the respective trade unions have agreed on the payment of additional sums of money over and above the prescribed limits for annual wage supplement or bonus. Such payments have not been made for the purpose of nullifying the provisions of the Employment Act regulating the payment of annual wage supplement or annual bonus. They have been made solely for the purpose of giving effect to the interests of the employer rather than the interests of the workers. For that reason, Mr Speaker, Sir, lam of the view that if it is not possible for the Minister for Labour to accede to the request of my colleague to modify the provision of paragraph (c) of subsection (10) as set out in clause 2 of the Bill, then perhaps the Minister would consider changing the cut-off date from 1st July 1972 to, say, 1st July 1975.

As it stands now at present, the Bill if adopted by this House without any changes at all would undoubtedly have a retrospective effect in relation to the payment of such additional sums of money as contained in collective agreements. In other words, the moment this Bill is adopted without any modification, any provision in a collective agreement to pay an additional sum of money over and above the prescribed annual wage supplement would be nullified, regardless of the fact that the agreement had been concluded two years before the implementation of this Bill. If the provision of paragraph (c) of subsection (10) can be adopted without any retrospective effect, it will help to soften the impact of the Bill on the workers even if there had been no modification whatsoever to this provision.

Mr Ong Pang Boon: Mr Speaker, Sir, the various points raised by the Member for Boon Teck have, in fact, been covered in my speech earlier on.

I think he is unduly concerned over the fact that some employers may seek refuge behind the proposed amendments for their unwillingness or inability to pay a higher annual wage supplement to members of a union. Any employer who is foolish enough to resort to such a tactic will find that he will have a lot of questions to answer and an unsympathetic Government to contend with.

The Member has also expressed concern that some unscrupulous employers may offer their workers a more generous annual wage supplement in return for not joining a trade union. I am afraid this is a problem that all unions have to face up to at all times. This is not a problem peculiar to Singapore. Unions must expect such divisive tactics from anti-union employers. It is up to union officials to expose the true intentions of such employers and to convince the workers that their long-term interest lies in joining the union.

I wish to reiterate once again that the question of bonuses has been disposed of in 1972 when amendments were made to the Employment Act based on the recommendations of the National Wages Council. The quantum of bonuses then prevailing was converted into annual wage supplements and frozen at various levels as prescribed in section 46. The Government has no intention to reopen the whole question of bonuses again as it would, in the words of the Secretary-General, NTUC, mean "the resurgence of the previous bonus chaos in Singapore's wage structure by providing a recipe for an industrial free-for-all". Instead of labouring on the question of bonuses or additional payments or ex gratia payments, it would be more helpful if the unions would dwell more on the question of a decent wage for an honest day's work rather than expecting extra payments without putting in extra efforts. If, as it is claimed, there are generous employers who are willing and can afford to pay a more generous wage supplement or ex gratia payment to their employees, the initiative for such payments should come from the employers themselves.

Concerning the interests and welfare of young persons, I can assure the Member for Boon Teck that the Government is as interested as he is to see that there is no exploitation of young persons in employment. In a small compact country like Singapore, with a highly literate and well informed population and a vigilant Government, it is doubtful that any employer can get away with exploitation of young persons without being discovered and punished. However, this does not mean that the trade unions cannot play a useful role in keeping a check on possible abuses by unscrupulous employers. I shall, therefore, take the suggestion of the Member for Boon Teck into consideration when amending the Trade Unions Act.

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 Speaker in the Chair]

4.00 p.m.

Clause 1 ordered to stand part of the Bill.

Clause 2 -

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

In page 3, line 40, at end, to add -"(15) Nothing in paragraph (c) of subsection (10), or in subsection (13), of this section shall he construed as applying to any payments made by an employer to an employee under a productivity incentive scheme."; and ".

Since the introduction of the Bill in this House on 19th August, 1975, 1 have received a number of representations on matters covered therein. The Chinese Chamber of Commerce expressed concern that, under the proposed amendments to section 46 of the Employment Act, the Chinese business community would not be able to continue with its traditional wage system, which is characterised by relatively low wages and high bonuses. The National Trades Union Congress has also made several proposals with regard to the Bill. One of these is that the amendments proposed to section 46 of the Employment Act should not be extended to payments made under any productivity incentive scheme. It was of the view that unless this was done employers would be prohibited from operating an incentive or productivity scheme. This would frustrate Government's policy on productivity of labour and deprive employees of accrued benefits relating to existing incentive payments.

Mr Speaker, Sir, it has never been the intention of the Ministry to bring the traditional Chinese wage system or productivity incentive schemes within the proposed amendments to section 46 of the Employment Act. The continued operation of the traditional Chinese wage system, especially in business based on family or kinship ties, would in my view not disrupt orderly wage developments.

As regards productivity incentive schemes, the Government has consistently urged that firms and factories must seek to increase their productivity. The Ministry has, through the National Productivity Board, already begun work with employers and unions on this objective. However, it is necessary that some incentives should be provided for increased productivity. The proposed amendment to clause 2 will therefore meet the concern of the Chinese Chamber of Commerce as well as of the NTUC. Bonus payments made by Chinese firms under the traditional wage system will be deemed to be payments made under a productivity incentive scheme.

In regard to the usual productivity incentive schemes in unionised establishments, they will follow the usual process of direct negotiation between employers and unions, conciliation by the Ministry, if necessary, and upon agreement delivered within seven days to the Industrial Arbitration Court for certification under section 24 (1) of the Industrial Relations Act.

Amendment agreed to.

The Chairman: There is a consequential amendment.

This will be done.

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

Clauses 3 to 7 inclusive ordered to stand part of the Bill.

Clause 8 -

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

In page 4, line 30, to leave out "younger" and insert "young".

This is to correct a printing error.

Amendment agreed to.

Clause 8, as amended, ordered to stand part of the Bill.

Clauses 9 to 13 inclusive ordered to stand part of the Bill.

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