EX GRATIA PAYMENTS FOR EMPLOYEES

Mr Ho See Beng asked the Minister for Finance whether he has any objection to management rewarding its employees with ex gratia payments because of good profit made in 1979 as a result of the workers' increased productivity and efficiency.

Mr Hon Sui Sen: Mr Speaker, Sir, employers wishing to reward their employees for higher productivity and efficiency may do so through payments under productivity incentive schemes. Incentive payments, tied to properly defined schemes, will enable employers to reward workers who have specifically contributed to higher efficiency and productivity. Employers wishing to make such payments could seek the advice of the Ministry of Labour in devising appropriate productivity incentive schemes. Alternatively, employers confident of sustained good profits can pay higher annual wage increases.

Mr Ho See Beng: Sir, where a company has not got any incentive scheme, is there any way for the employer to reward his employees as a result of a good year of business? The company has made a good profit. In what way can the employer reward his employees in the absence of an incentive scheme?

Mr Hon Sui Sen: Sir, I have already said that if the employers are sure that they can keep up these profits, then they can pay higher wages to their employees. They can always pay higher than the NWC guidelines. There will surely be no objections to their doing so.

Mr Ho See Beng: Sir, if the employer pays higher wage increases, these increases will be incorporated into the employees' wages and it will mean a higher recurrent expenditure for the employer. Let us say in 1979 an employer makes a good profit and he wants to reward his employees, only for that particular year when he has made a good profit. But for future years, whether the employer will go on rewarding his employees will depend on whether or not the company makes a profit.

Mr Hon Sui Sen: Sir, if that is the preferred method of payment, then the employer, instead of paying wage increases, should have opted for payment of bonuses in which case he would not have to pay wage increases based on NWC guidelines but can negotiate on the bonuses every year.

Mr Ho See Beng: Sir, I think the Finance Minister did not get my point right. I want to know how to advise an employer who makes a good profit and wants to pay his employees more in terms of reward? Can he pay more than the annual wage supplement?

An hon. Member: Pay hong bao!

Mr Hon Sui Sen: He will have to apply to the Minister for Finance to pay more than the prescribed bonus. But there is no guarantee that approval will be given.