REGULATION OF EMPLOYMENT (AMENDMENT) BILL

Order for Second Reading read. 7.04 p.m.

The Minister of State for Labour (Dr Wong Kwei Cheong): Mr Deputy Speaker, Sir, on behalf of my Minister I beg to move, "That the Bill be now read a Second time."

Sir, it is the Government's plan over the next 10 years to minimize our reliance on foreign workers and, as far as possible, to build up a wholly Singaporean workforce. Therefore, work permit holders, other than those who are likely to be absorbed into our permanent workforce, will gradually be phased out over that period.

For those foreign workers who are not likely to be part of our permanent workforce, there is no need for them to contribute to the Central Provident Fund. However, to exempt these foreign workers from the CPF Scheme will make it cheaper for employers to hire such foreign workers. To discourage employers from indiscriminate recruitment of cheaper foreign workers instead of upgrading through automation and mechanization, a new Levy Scheme for foreign workers was announced early this year, and implemented with effect from 1st April, 1982. Under this Levy Scheme, employers are required to pay a monthly levy of 30% of the monthly wages of their foreign workers subject to a minimum of $150 per month. The minimum levy, however, does not apply to domestic help.

Along with the move to discourage indiscriminate recruitment of foreign workers, it is logical to step up enforcement against illegal employment and enhance the penalty for such offences. The present penalty for employing a foreign worker without a work permit and for working without a work permit is a fine not exceeding $1,000 or a term of imprisonment not exceeding six months or both such fine and imprisonment. This penalty was fixed 16 years ago. It is no longer adequate to deter employers and illegal workers from contravening the Act and must therefore be enhanced to serve its purpose.

The purpose of the Bill is therefore to provide for the imposition of a levy on employers and contractors employing certain classes of foreign workers and to enhance the penalties for employing foreign workers without work permits and for working without work permits.

Clause 3 of the Bill seeks to enhance the present penalty for employing a foreign worker without a work permit and for working without a work permit to a fine not exceeding $5,000 or a term of imprisonment not exceeding one year or both such fine and imprisonment.

Clause 4 of the Bill seeks to empower the Minister to make an Order to provide for the imposition of a levy on employers of certain classes of foreign workers. Any

Order made by the Minister can apply to employers who employ foreign workers with work permits as well as those who employ foreign workers without work permits. This is to ensure that employers do not avoid the levy by employing foreign workers without work permits. The clause also seeks to provide for the imposition of a penalty interest on any employer who fails to pay the levy within the prescribed period. The penalty interest shall be calculated at the rate of 2% per month, or the sum of $5, whichever is the greater, but the total penalty shall not exceed 20% of the amount of levy outstanding. Any levy and penalty due from and payable by an employer can be recovered as a debt to the Government.

Sir, I beg to move.

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. - [Dr Wong Kwei Cheong]

Bill considered in Committee; reported without amendment; read a Third time and passed.