WORKMEN'S COMPENSATION (AMENDMENT) BILL

Order for Second Reading read. 4.30 pm

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

In March this year, I announced in this House various adjustments to the work- men's compensation rates. This Bill seeks to amend the Workmen's Compensation Act to effect these adjustments, which are:

(a) an increase in the compensation for death from the existing range which is $15,000 minimum to $45,000 maximum to the new range which is $26,000 minimum to $78,000 maximum;

(b) an increase in the compensation for permanent total incapacity from the existing range which is $20,000 minimum to $60,000 maximum to the new range which is $35,000 minimum to $105,000 maximum. (The actual compensation for death or permanent total incapacity depends on the age and salary of the workman at the time of the accident);

(c) a revision of the compensation in percentages of loss of earning capacity for thumb, finger and toe injuries; and

(d) removal of the cap of $390 on monthly wage compensation for temporary and permanent incapacity and limiting the maximum period for such payment to one year. Henceforth an injured workman will be entitled to medical leave with full pay of up to 60 days if he is hospitalised and 14 days if he is not hospitalised and thereafter to medical leave at two-thirds of his salary (without the previous cap of $390 per month) up to a maximum of one year medical leave.

The adjustments in the compensation rates are necessary because of the 73% increase in the median wage of workers since the last revision in 1980. The compensation for thumb, finger and toe injuries have to be revised to correct the anomalies of some of the existing rates.

I will now highlight the main clauses in the Bill. Clauses 6 and 7 will provide for the above-mentioned changes. Clause 9 will apply these amendments to accidents which occurred on or after 1st May 1990.

A new provision is included in clause 7 to empower the Minister to vary by order the maximum or minimum amount of compensation payable. This provision will enable future changes to the compensation limits to be made expeditiously to keep pace with changes in income levels of workmen.

Other minor amendments are proposed to the Act to facilitate its administration and to enhance the penalties for certain offences.

Clause 2 of the Bill will remove ambiguities concerning how the monthly earnings for a workman who had worked for less than a month should be calculated.

Clause 3 will allow greater flexibility in the reporting of minor accidents. Employers will be allowed to submit monthly summary reports for minor accidents instead of having to report each accident within 10 days. The clause also raises the penalty for not reporting an accident within the prescribed time limit from a fine of $1,000 to $2,000. This is to preserve the punitive effect of the fine, which has not been adjusted for many years.

Clause 4 will increase the fine from $4,000 to $10,000 for an employer who fails to insure himself against the contingent liability of having to pay workmen's compensation.

Clause 5 will empower the Commissioner for Labour to require the attendance of any person to answer questions or produce documents concerning any injured workman. This will facilitate the assessment of compensation.

Sir, I beg to move.

Question proposed.

Dr Wong Kwei Cheong (Cairnhill): Mr Deputy Speaker, Sir, I speak in support of the Bill.

This Bill is very necessary as the Minister has just said that adjustments in the workmen's compensation rates were last revised in 1980, whereas the median wage of worker has increased by some 73% since 1980. Moreover, in spite of the regular factory inspections made by the Ministry of Labour, industrial accidents have remained on the high side. According to the Ministry of Labour 1988 report, in 1988, 15,197 accidents were reported to the Workmen's Compensation Department. These accidents were for workmen who were injured, killed or afflicted in the course of work. 13,615 workmen were awarded compensation amounting to $28.8 million and $3.9 million was paid out to the families of 93 workmen who died in the course of employment.

The Minister for Labour has emphasized in March this year that rate increases this round are balanced out by rate reductions for thumb, finger and toe injuries to correct anomalies. I am therefore surprised to learn that an insurance association has advised its members to increase the workmen's compensation premium by 10% arising from the changes in the workmen's compensation rates. I wonder if this increase in premium is justified, and hope that the Minister will look into this matter and discourage insurance companies from making such cost increases.

A more positive approach will be to encourage insurance companies to work closely with employers in improving industrial health and safety measures so as to reduce the number of industrial accidents.

I also fully support the new provision of clause 7 which was included to empower the Minister to vary the maximum or minimum amount of compensation payable for death and permanent incapacity. This provision will enable future changes to be made quickly in order to keep pace with changes in salary levels of workers. However, I hope that the Minister will also try to make sure that changes in compensation rates will not be followed by corresponding increases in insurance premium rates.

Sir, I support the Bill.

Encik Othman bin Haron Eusofe: Mr Deputy Speaker, Sir, I rise to support the Bill.

My labour MP colleagues and I have previously raised the concern of the gross inadequacy in the workmen's compensation rates, and I am glad that the Minister, soon after his announcement in Parliament in March this year, has now put in the legislation to bring the new and increased rates into effect.

Sir, with clause 7, there will be provision in the Act to enable compensation rates to be adjusted more regularly in the future to keep pace with changes in the income levels of our workers. Here, Sir, I would like to ask the Minister to assure this House that his Ministry would, at regular intervals, say, every two to three years, review the compensation rates to ensure that they are fair and reasonable.

Mr Deputy Speaker, Sir, I have also asked the Minister previously to look into the implementation of the workmen's compensation scheme, especially at the way the claims for compensation are processed, to ensure that they would be expeditiously settled. By doing so, we will be able to alleviate the hardship of those who are unfortunate to be involved in accidents during their work and their family members as well.

Sir, I note that clause 5 of the Amendment Bill will help the expeditious settlement of a claim. There are also other reasons why there can be delays, for example, in the medical reports to assess injuries suffered by the claimants.

Sir, I hope that the Minister will also ask his officials to regularly monitor the way the claims for compensation are processed to ensure that there are no unnecessary delays.

Sir, on this note, I support the Bill.

Dr Lee Siew-Choh: Mr Deputy Speaker, Sir, when the Minister made the announcement in March, I had not compared the new rates that he mentioned with the existing rates of the principal Act, and therefore I could not even ask him any question at that time. Nevertheless, I support the Bill which in fact has been long overdue. But with increasing inflation and higher cost of living, it has been evident that old compensation rates have been unrealistically low.

Every year, thousands of workers have paid dearly for the success of industrialisation in Singapore. Because of numerous industrial accidents and occupational hazards, thousands and thousands of workmen have suffered from various forms of industrial diseases, chemical poisoning, traumatic injuries resulting in partial or permanent physical disability and, not infrequently, in untimely deaths, causing great distress and hardship to their families.

Compensations given for disablement or death of the workmen have been scandalously low, and though bosses have made huge profits, compensations have not been raised all through the years. We frequently hear of reports of workers having been diddled of compensation, due to them according to law, by unscrupulous employers who do not insure themselves against workers' injury and accident, and so do not report accidents to the Labour Department, and in some cases do not even pay for adequate medical treatment of the injured workers.

There are also reports of cases where, though full compensation is finally paid to the injured worker, the worker is nevertheless assailed by unnecessary delays, anxieties and uncertainties about whether or not payment of compensation for injuries will be paid.

It is therefore important that employers be made to observe and carry out compensation laws to the letter. Penalties for offences by employers under the present Act should also be suitably heavy. For example, clause 3(b) of the Bill proposes that the penalty for failure of the employer to report an accident to the Commissioner be increased from $1,000 to $2,000. The sum seems ridiculously low. It is indeed derisory, as employers who deal in large sums are not likely to be deterred by a penalty of a meagre $2,000. The penalty should therefore be substantially increased to $10,000 at least, if it is to have a deterrent effect.

Similarly, clause 4 of the Bill should also increase the penalty for an employer, who makes deductions from the earnings of a workman to defray the cost of insurance (in the present section 23(2) of the principal Act) from $2,000 to $10,000.

At this stage, I might ask, have employers who have violated provisions of the present Act been prosecuted in Court? If so, how many have been prosecuted over the last few years? Would the Minister enlighten the House?

Similarly in clause 5 (proposed section 24(9)) of the Bill, the proposed fine of $2,000 should be suitably increased. I suggest that all fines and penalties for violations of provisions in the Act by employers be increased.

I might add, Sir, that it is important also to cut red-tape and simplify compensation procedures, as has already been mentioned by another speaker, to help injured workers so that they may be paid compensations as provided in the Act in the shortest possible time. Perhaps workers should be frequently reminded of their rights, and the employers of their obligations and responsibility, in the matter of workmen's compensation now and again by the Ministry.

In the Amendment Bill, Sir, we are indeed pleased to see that the Government has at last taken steps to increase both the minimum and maximum amounts of compensation payable in cases of death and permanent incapacity. But we cannot help pointing out that the new minimum and maximum amounts listed in the Third Schedule are still on the low side. The amounts in the present Act are fixed at a maximum compensation of $45,000, where death results, and a minimum of only $15,000. This shows how lowly the life of a worker is rated in the eyes of the Government.

Now the Bill proposes to increase the amount to $78,000 and $26,000, which are just increases of 70% over the past amounts. They are certainly improvements, but the amounts are hardly sufficient compensation for the loss of life of the workers.

According to the proposed Third Schedule, maximum compensation for the death of a worker aged 48 would be $78,000. This is equivalent to only 6(r) years earnings of a worker who earns $1,000 per month, that is, the amount he would have earned if he had lived to 55 years of age. Many people do not agree that this is a sufficient and fair compensation for the death of a worker who could have worked until he is 60 or 65, and who would normally have a life-span of more than 70 years of age.

Clearly to be fair, Sir, the maximum and minimum amounts of compensation payable in the event of death, as proposed in the Amendment Bill, should be substantially increased.

Similarly, the lump sum paid as compensation in the case of permanent total incapacity should also be further increased, especially in these days of rising inflation and high cost of living. In fact, workers' compensation should be computed, not only according to age and the multiplying factor in the First Schedule, but also according to the type of work which the worker has been equipped and trained to do. Thus, a telephone operator who has incurred a total loss of hearing should be compensated with an amount more than the 60% of earning capacity as provided in the First Schedule.

I am also somewhat puzzled as to why the compensation based on percentages of loss of earning capacity for thumb, finger and toe injuries should be reduced as proposed in the amendment Bill. We know that there have been great advances in microsurgery and hand surgery in Singapore. But should the Minister assume that the loss of function following loss of part of the thumb and fingers by a worker will be sufficiently restored by surgery, and that he will be able to perform his job almost as well as before the injury? And therefore the percentage loss of earning capacity may be reduced, and so less compensation be paid to the worker? Is that what the Minister thinks?

A few simple examples to show how wrong such an assumption is. Will a musician, for example, be able to play the instruments just as well and provide just as sweet music if he should have unnaturally shortened thumbs and fingers? Will a cook, disabled by injuries with parts of the thumb and fingers removed, be able to hold a wok in cooking? Or will electricians, plumbers, ordinary construction and factory workers, be able to work as well or half as well to the satisfaction of the bosses and themselves? My guess is that such workers will probably be replaced or given less paying jobs. The proposed amendments to the First Schedule in the principal Act should therefore not be a reduction of but instead an addition to the percentage of the loss of earning capacity, so that the injured worker may be compensated more. If that should happen, then it explain Dr Wong's complaint about insurance companies increasing the premiums. Thus, the present 50% for loss of earning capacity for the loss of two phalanges of the thumb should not be reduced by 30%, but instead be increased to 70%, in determining the quantum of compensation payable to the injured workman.

I hope the Minister will pay heed to what I have just said or give us a satisfactory explanation.

Mr Chay Wai Chuen (Brickworks GRC): Thank you, Mr Deputy Speaker, Sir, for allowing me to join in this debate. I would like to speak in support of the Bill. However, there is one point which I would like the Minister for Labour to perhaps review and that concerns the ceiling rate at which we peg the workman's compensation. For example, right now workers who earn below $1,250 per month are bound by the Workmen's Compensation Act, ie, employers have to provide payment for premiums for this category of workers. However, as the economy progresses and more and more workers are earning more than $1,250 per month, it may be necessary for the Minister to review or perhaps come up with some suggestions on how to cover that category of workers whose salaries have exceeded this $1,250 ceiling. In particular, I realise that workers who earn above $1,250 per month may be covered under personal accident policies of the companies. But there is no regulation which says that they must be covered. So it is left to the whims the judgment of the employers. I would like to hear the Minister's view on this and perhaps to incorporate certain decisions.

Mr Lee Yock Suan: Mr Deputy Speaker, Sir, I would like to thank all the Members who have spoken for supporting the Bill.

Firstly, concerning the point raised by Dr Wong Kwei Cheong, as I explained in March, my Ministry has done a study of the factory accidents which occurred last year based on the new rates. The conclusion was that, based on these new rates, the ceilings have been raised but, at the same time, the percentage of compensation has been lowered for thumb, finger and toe injuries. The net effect is no increase in cost for insurance companies. So there appears to be no justification for the insurance companies to raise their premiums across-the-board. Of course, it will depend on the type of industry they are operating in and their experience on actual claims. So the premiums will have to be negotiated between the insurance company and the insured party on a case-by-case basis without any interference from third parties. But in general there should not be an increase across-the-board arising from these revisions in the rates.

Encik Othman Haron Eusofe raised the point that my Ministry should make regular reviews of the rates. Yes, we will do that, perhaps every two or three years.

He also asked that we expedite the processing of claims under the Act. I am very conscious of this point. I have been chasing my staff to make sure they expedite all the claims. As he has said, there are some delays because of assessment by doctors and so on. But to the extent possible, we should try and process the claims quickly to minimise hardship for the injured members and their families.

Turning to the points from Dr Lee Siew-Choh, I am glad to note that he too supports the Bill but, as usual, with his frame of mind in wanting us to do more and more, he wants us to raise all the ceilings and, if possible, pay everybody a lot of money for doing very little. It is true that with inflation the ceilings have to be raised and that is why we have raised the amounts by a hefty 73%. It was unfortunate that there was this long period when the rates were not changed. But during that period, what has happened is that those who suffered more serious injuries and death, they were not compensated to the levels that they deserved. But those who suffered minor injuries like finger, thumb and toe injuries were in fact over-compensated. I did explain in March this year the reason for lowering the rates for toe, thumb and finger injuries. It is because these rates are out of line with those paid by countries like UK, Germany, Hong Kong and so forth and in fact they give rise to anomalies. For example, a workman who loses a thumb and a few fingers will end up getting more compensation than another worker who loses an entire arm. So we have to correct the anomalies.

The compensation ceilings are based on the median salary of our workmen. The new rates are based on the median salary of $716 per month, as compared to the old basis which was about $400 or so. Besides the compensation under this Act, there is also compensation, for example, in the case of death and permanent total incapacity under the Dependants' Protection Insurance Scheme of the CPF Board. So I think our workers are now better protected, not only under the Act but also under other insurance schemes.

He suggested that we enhance penalties for various infringements by employers. I take his point. I think we will proceed with these amendments and assess the situation. So far, most employers have insured their workmen. For example, we did a study recently. In a survey of about 2,400 employers carried out last year, only three employers were found to have failed to insure themselves under the Act, and these three will be prosecuted in court. So I want to emphasise to employers that it is very important for them financially and, of course, for their employees that they have proper insurance under the scheme.

Finally, concerning the point raised by Mr Chay Wai Chuen, I did explain this too in March, but he might not have been present, that the Workmen's Compensation Act insures all workmen, meaning all manual workers regardless of salary levels. These are the people who are most exposed to industrial accidents. The ceiling of $1,250 is more applicable to, say, clerical staff and others who are not manual workers. We have found from experience that of the injured factory workers, 95% are already covered under the Act. So for the time being anyway, there is no need for us to review this ceiling.

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 Lee Yock Suan].

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