EMPLOYMENT OF FOREIGN WORKERS BILL

Order for Second Reading read.

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

In recent years, a buoyant economy and the slow growth of our local labour force have resulted in a tight labour market and an increasing demand for foreign workers. To ease the labour market, the Government has since March this year gradually liberalised the foreign worker policy for those sectors which hitherto were not allowed to employ foreign workers. At the same time, to encourage upgrading of the economy and minimise the social and economic costs of a large foreign workforce, the Government must continue to regulate the inflow of foreign workers through the foreign worker levy and other measures.

To circumvent these controls, some employers have resorted to employing foreign workers illegally without work permits. With the enhancement of penalties under the Immigration Act, the illegal workers are now mostly foreigners with valid social visit passes but no work permits. Some have valid work permits but are deployed illegally to other sectors or companies. Such illegal employment has to be checked as it undermines our economic strategy.

The Employment of Foreign Workers Bill seeks to repeal and re-enact with amendments the Regulation of Employment Act, which is the current legislation for regulating the employment of foreign workers. The Bill provides enhanced penalties and powers to enable the Ministry to deal more effectively with the problem of illegal foreign workers.

I will now highlight the significant provisions of the Bill.

Definition of Foreign Workers

Clause 2 includes the definition of a foreign worker. The Bill will apply to any non-citizen of Singapore who works for a monthly salary of $1,500 per month and below or any other non-citizen whom the Minister may specify.

Penalty for Illegal Employment

Clause 5 deals with the offence of illegal employment and its penalties. An employer is considered to have employed a foreign worker illegally if the foreign worker is found working in his premises without a valid work permit.

The penalty for illegal employment under the existing Act is a maximum fine of $5,000 or imprisonment of up to one year or both. This applies to both the employer and the employee. The penalty is inadequate to deter employers from engaging in illegal employment. The fines imposed by the courts range from $800 to $2,500 per illegal worker. The average is about $1,200 per worker. Based on the existing levy of $300 per month, a dishonest employer is able to gain from illegal employment if he escapes detection for four months or longer.

The Government has therefore decided to raise the penalty for illegal employment such that any economic gains will be more than offset once the dishonest employer is caught. The penalty for an employer convicted for the first time will be revised to a minimum fine equivalent to two years of the foreign worker levy and a maximum fine equivalent to four years' levy, or imprisonment up to one year or both. Based on the current levy rate of $300 per month, the minimum and maximum fines will be $7,200 and $14,400 respectively. For the second and subsequent convictions, the penalty will be a mandatory jail sentence of one to 12 months in addition to the stipulated fines.

For corporate offenders, clause 5(6) of the Bill provides that where the illegal employment is committed by a company with the consent or connivance of, or is attributable to any neglect on the part of an officer of the company, both the officer as well as the company will be guilty of the offence. The officer could be the director, manager, secretary or any other officer acting in a similar capacity.

An employer will be charged for each illegal worker employed. He could therefore be convicted at the same trial of several charges for the illegal employment of several foreign workers. To protect a first offender from the mandatory jail sentence provided for second and subsequent offences, clause 5(8) of the Bill provides that all convictions at one trial will be considered as one conviction.

Our enforcement target is the employer since the foreign worker will not be able to work here if no employer offers to hire him. The penalty for a foreign worker convicted of working illegally will therefore remain unchanged.

Presumption Clause

Under the current Act, proof of illegal employment rests with the enforcement officers. Their efforts are often frustrated by the employer and the illegal worker colluding to deny employment. The Act therefore has to be amended to put the burden of proof on the employers through a presumption clause. Clause 6 is similar to that in the Immigration Act. It will put the onus of proof on an occupier who will be presumed to have employed a foreign worker found working in his premises until he proves the contrary. To safeguard innocent occupiers, clause 22 enables them to absolve themselves from liability by helping to bring in the actual offender as a party to the Court proceedings.

Abetment

From my Ministry's experience, some firms do not employ illegal workers directly but engage subcontractors who resort to illegal workers. It is important that firms take sufficient precautions to ensure that foreign workers are not employed illegally in their premises. If they collude in the illegal employment of foreign workers, they could be charged for abetment and it will not be sufficient for the firms merely to show that they have instructed their subcontractors not to employ foreign workers illegally.

Other Penalties and Compositional Fine

The penalties for other offences will also be raised. Clause 11(4) stipulates that for late payment of the levy, the penalty interest remains unchanged at 2% per month but the cumulative penalty is increased from a maximum of 20% to 30% of the levy outstanding. Clause 18(1) seeks to raise the fine for certain general offences from $1,000 to $5,000. The maximum amount of compositional fine that may be imposed will also be raised from $100 to $1,000.

Powers of Employment Inspectors

Currently, my Ministry's enforcement officers have been hampered by the inadequate powers under the existing Act. Foreigners suspected of working illegally often refuse to hand over documents such as identity cards or passports to the enforcement officers. Clause 16 of the Bill will enable enforcement officers to enter and search premises suspected of having illegal foreign workers and to retain any documents, including travel and identity documents. Clause 17, which is modelled on a similar provision in the Immigration Act, will confer the power of arrest on the enforcement officers.

Sir, I beg to move.

Question proposed.

Mr Charles Chong (Sembawang GRC): Mr Speaker, Sir, I support the objectives of the Bill moved by the Minister for Labour.

Illegal foreign workers in Singapore face serious consequences on conviction. Many of them are also exposed to exploitation by some unscrupulous employers who are aware that these workers would be reluctant to seek redress due to their illegal status. It would not be equitable if only the illegal foreign worker is made to face severe penalties while his abettor, the employer, gets away lightly.

It is therefore hoped that the enhanced penalties provided by this Bill would deter employers from using illegal foreign workers. I am gratified to note that the Minister is well aware of the tight labour market situation currently existing in the country. Although there has been a gradual liberalisation of the foreign worker policy, as pointed out earlier by the Minister, I would like to urge the Minister to consider the plight of some employers who, despite vigorous advertising for workers and offers of competitive salaries, are still unable to get enough Singaporean workers. Perhaps the foreign worker policy could be made sufficiently flexible to accommodate the needs of this group of employers.

In supporting the objectives of the Bill, I would like to seek clarification and perhaps express reservations at some of the provisions in the Bill.

Clause 6 of the Bill, among other things, specifies that a person found in any premises in possession of any tool or implement would be presumed, until the contrary is proved, to be employed by the occupier of the premises. Sir, if a house-breaker in possession of any tool is apprehended by an enforcement officer on my premises, clause 6 of the Bill would presume that I am his employer until I can prove otherwise.

I can understand the rationale for the presumption clause and the frustration of the enforcement officers. However, I would like some assurance from the Minister that this clause would be applied judiciously in order not to transfer the frustration of the enforcement officers to the occupier of the premises.

Although clause 22 provides that the occupier of the premises could exempt himself from liability if an illegal worker is found in his premises, the conditions that must be satisfied are indeed difficult to achieve. In order to absolve himself of presumed guilt, it appears that the occupier of the premises must accomplish the role of an enforcement officer to produce the guilty person in court at the appointed time, after giving the prosecution at least three days' written notice. Hopefully, the guilty person, if he shows up at all, would incriminate himself by admitting to the offence. Otherwise, the occupier of the premises would have to assume the role of prosecutor and prove to the satisfaction of the court that the guilty person had indeed committed the offence in question without the occupier's consent, connivance or wilful default.

Sir, in my opinion, the possibility of obtaining much cooperation from the guilty party is very remote. Clause 19(2) of the Bill states that if an occupier of the premises is charged for abetting his contractor who has employed an illegal foreign worker, it shall not be sufficient for him to prove in his defence that he had instructed the contractor not to, or obtained from the contractor an under- taking not to employ a foreign worker illegally.

Sir, in cases such as that of a Town Council which may utilise the services of a contractor, who in turn may use the services of a number of sub-contractors, other than obtaining a firm undertaking from the contractors that they would not employ illegal foreign workers, it may be impractical for the Town Council Chairman, or his designate, to physically ensure that there are no illegal foreign workers employed by his contractors in providing services to his Town Council. Sir, I hope the Minister would take into consideration these difficulties and review clause 19(2) of the Bill.

Finally, I would like to seek clarification on clause 9(4) which appears to prohibit a trade union representing a foreign worker from seeking redress or negotiating on behalf of its member in the event his work permit has been revoked or suspended by the Controller. Clause 7(4) gives any person, who is aggrieved by a decision of the Controller to revoke his work permit, the right to appeal to the Minister. If a foreign worker, whose work permit is revoked by the Controller, requests his union to make representation on his behalf to the Minister, could the union do so without contravening clause 9(4) of the Bill? Similarly, if a foreign worker's work permit is revoked by the Controller as a result of the wrongdoing by his employer and through no fault of the foreign worker, could the union seek redress from his employer without contravening clause 9(4)? Perhaps, the Minister could provide some clarification on these issues.

With that, Sir, I would like to state once again my support for the objective of the Bill, ie, to discourage employers from having illegal foreign workers and I look forward to receiving the Minister's clarification.

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

In recent years, our economy continues to grow at a steady rate in spite of a tight labour market. It was because our employers have responded to the Government's call to increase productivity through automation and mechanisation, and to transfer labour-intensive operations to other countries where labour is cheap and in abundant supply.

As the need for workers continues to increase, the Government has, since March this year, tried to ease the labour market by gradually liberalising the foreign worker policy for those sectors which hitherto were not allowed to employ foreign workers.

In spite of this liberalisation, some employers continue to employ foreign workers illegally without work permits. Such illegal employment undermines our economic strategy and I support this Bill as it enables the Government to deal more effectively with the problem of illegal foreign workers. However, I would like to appeal to the Minister to review certain clauses of this Bill, especially clause 6, as emphasised by my colleague, the Member for Sembawang GRC, as it will put the onus of proof on an occupier who will be presumed to have employed a foreign worker found working in his premises until he proves the contrary. This has far-reaching consequences as we may have large companies employing hundreds or even thousands of workers. Employers of such companies will live in constant fear of fines and/or imprisonment, as clause 6 of this Bill states that any person found in possession of any tool or implement or engaged in any activity which may give rise to the inference that he is doing any work is presumed to be employed.

This presumption clause is open to abuse by enforcement officers from the Ministry of Labour, and may even discourage our employers from inviting foreign customers into their premises. Our trade will, therefore, suffer.

For small local entrepreneurs, clause 6 of this Bill may spell their doomsday. In spite of the liberalisation in the work permit policy, many small local entrepreneurs still find it difficult to obtain work permits for their foreign workers. They will be living in constant fear of raids by enforcement officers from the Ministry of Labour. May I appeal to the Minister to look into their plight and review the work permit policy, especially for small local entrepreneurs, before enforcing the provisions of this Bill.

Mr Lee Yock Suan: Mr Speaker, Sir, I wish to thank both Members for supporting the Bill. Firstly, I would like to clarify one point and it is that today we are dealing with the problem of illegal employment. Sometime ago, last year, we were dealing with the problem of immigration offenders for whom the penalties are tougher. For today, we are looking at the offence of illegal employment of people who usually have valid immigration papers. And for this group of foreign workers who work here illegally, the penalties under this Bill have, in fact, not been changed. We are really going after the employers who, we think, are the main culprits.

I am aware that the labour market is tight and that some small businesses in Singapore are having difficulties in recruiting local workers. That is the reason why the Government has reviewed the work permit policy and decided, in March this year, to gradually liberalise the policy to allow these sectors, which hitherto were not allowed to employ foreign workers to also have some access to foreign workers. However, we have to be careful not to open the floodgates and allow a great influx of foreign workers. Therefore, my Ministry has been very careful in initially having a 10% limit on the dependency rate of these firms. Strictly speaking, if a small firm employs less than 10 local workers, then it is not entitled to any foreign worker. But, in practice, my Ministry has allowed even smaller firms to employ foreign workers. For example, if a company has only, say, four local workers and is allowed to employ one foreign worker, then the dependency ratio is actually 20%.

We are monitoring the situation and, if need be, we will gradually liberalise further. But the fact that the market is tight is no reason for anybody to blatantly violate our laws. Firstly, we have to be clear that there must be a control on the total number of foreign workers we allow into Singapore in view of the long-term social and economic costs. For one thing, if you are too liberal, then they will depress the wages of our local workers and there will be no incentive for employers to upgrade and automate and so on. So the whole economy has to adjust, not only the Government in relaxing the policy but also the employers, in terms of upgrading, changing the line of business, or, in the extreme, maybe even moving to Batam or Johor to take advantage of the growth triangle concept that we are now promoting. For the small employers, it is obviously not possible to satisfy everybody. One record shows that there are about 53,000 small employers with less than 10 workers each. If we allow each of them two foreign workers, we will already be having 100,000 additional foreign workers. Therefore, we have to be clear about our objectives and strike a balance between the entry of foreign workers and the need to upgrade the economy and protect our local workers as well.

I would, therefore, urge all employers to upgrade their operations and reduce their manpower requirements. They should, for example, consider tapping the pool of older Singaporeans, raise their retirement age and also make use of the pool of housewives - there are several hundred thousands of - on a part-time basis. My Ministry has been promoting this but the response has been quite slow so far. There is certainly a lot of scope in this area for an increase in local employment.

Next, I turn to this question of the presumption clause. This presumption clause is actually not new. It is similar to the one in the Immigration Act. We have also this similar clause in other Acts, like the Betting Act, the Common Gaming Houses Act and the Arms Offences Act. We will be very careful in the way we implement this clause because we realise that when you presume, then you must have proper evidence. I want to assure the House, as well as members of the public, that my Ministry will consider all the evidence first. The problem is that, without this presumption clause, it is almost impossible for my Ministry's officers to work because it is very simple for the employer and the worker to deny employment and then all our efforts would have been wasted. In many cases, it is obvious that the workers are there to work. They may even be wearing the uniform of the company. So the evidence must be there. They must be in possession of tools, they must be caught working, and we will be examining all the circumstances before we take action to make sure that we do not punish innocent people.

Having said that, I think it is the responsibility of employers, big or small, to have proper checks on the people going into their premises. For example, most factories have security guards and I would like to see them checking the workers or visitors who go in to make sure they have a proper purpose to go into the factory. And if they are foreign workers, they should have proper immigration papers and valid work permits. It is not enough just to say, "Look, I told my sub-contractor not to hire foreign workers." That is too simple. Then obviously they have a very useful shelter. What we want is for the employers to be responsible and to do what they can within the limits of practicality and within the resource constraints. For example, in the case of Town Councils, I know Members are worried about this. But if the town councillors have done their best to make sure that the sub-contractors are forewarned, checks have been carried out, and we are convinced that the sub-contractors are the ones actually responsible, then they are the ones who will be charged, not the town councillors. On the other hand, if it is found that some agents of the town councils, for example, have been abetting this offence or have been negligent in checking on this area, then I am afraid the full force of the law must fall on these people.

Mr Charles Chong asked about clause 9, which applies in a situation where the Government has to cancel work permits, for example, maybe because of a change in policy, or because the work permit conditions have not been followed. Under those circumstances, it is not possible for the matter to be represented by the unions. It is the prerogative of the Government to decide that the work permit should be cancelled for various following reasons, and there will be no recourse to the courts or to the unions. However, if the employer is at fault, if he sacks the worker for no reason and cancels his work permit, then the normal recourse will apply. The employee can appeal to the union, and the union can take it up with my Ministry, or with me personally. We will look into those cases and, if the employer is at fault, we will allow the foreign worker to continue working, perhaps with another company.

Sir, I think I have covered all the points raised by Members.

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.

Mr Speaker: Order. I suspend the Sitting and will take the Chair again at 2.15 pm.

Sitting accordingly suspended at 1.32 pm until 2.15 pm. Sitting resumed at 2.15 pm