EMPLOYMENT ACT (Raising of salary ceiling)

Mr Chiam See Tong asked the Minister for Labour, in the light of higher salaries paid to workers, whether the salary ceiling for workers' eligibility for assistance from his Ministry will be raised from $1,500 to $1,800 per month.

The Minister for Labour (Dr Lee Boon Yang): Mr Speaker, Sir, the monthly salary ceiling in the Employment Act was last raised in July 1992 from $1,250 to $1,500. The salary ceiling applies only to non-manual employees, and is used to decide whether they are entitled to the statutory benefits stipulated in Part IV of the Employment Act. Based on this salary ceiling, non-manual employees whose monthly salary does not exceed $1,500 are entitled to these benefits which include: payment for overtime work, work on rest day and public holiday, annual leave, sick leave and maximum hours of work allowed. For non-manual employees with a monthly salary exceeding $1,500, the benefits stipulated in Part IV do not apply to them. Their entitlement to such benefits is dependent on what is agreed upon in their contracts of employment with their employers. For other protection and benefits such as claim for arrears of salary, termination of service and maternity benefit, they are covered under other provisions of the law.

Sir, manual workers, on the other hand, are covered by all provisions of the Employment Act regardless of their salaries, similar to that of non-manual employees with a monthly salary not exceeding $1,500.

The revision to the salary ceiling in 1992 allows more workers to be protected by the law. About three-quarters of the workforce are now given basic protection. Those covered include: employees holding junior positions such as administrative and clerical staff, service and sales personnel, production workers and machine operators. New graduates from the polytechnics are also protected by the higher ceiling. Managers, executives and professionals who are able to negotiate their own terms and conditions of employment are excluded from the coverage.

As the salary ceiling in the Act was raised only less than two years ago and those who need statutory protection are already covered by this new ceiling of $1,500, the Ministry is of the view that there is no need to raise it further at this juncture. The Ministry will regularly review the 2salary ceiling to ensure that those in need of protection would not be left out of the Act.

Mr Chiam See Tong: Sir, from my experience at the meet-the-people sessions, there are many cases of workers whose salaries exceed $1,500. And when they are dismissed, they have really got no recourse, except the Ministry of Labour. Because, firstly, if they go to lawyers, they find that the lawyer's and court fees are now too high. Secondly, if they try to approach their employers, they find that their employers are adamant, because the termination is always under a very sour note.

The Minister says that there are other provisions for those workers who earn more than $1,500, but I am not aware of these provisions. Can the Minister please highlight these other provisions of law that he mentioned?

Dr Lee Boon Yang: Sir, permit me to explain. The salary ceiling is also applicable to section 115 of the Act. Currently, section 115 empowers the Commissioner for Labour to adjudicate claims arising from the provisions of the Employment Act and from employment contracts by non-manual employees who fall within the prescribed salary ceiling of $1,500 and all manual workers.

It has been the practice of the Ministry to settle their disputes through conciliation. When they have problems with their employers, they can come to us and we will try to conciliate between the aggrieved employee and the employers. It is only after our conciliation has not been successful and we cannot find an amicable settlement that we take one step further by registering their claims for adjudication in the labour court. They could proceed to seek adjudication of their claims if they cannot resolve it amicably through conciliation.

For the non-manual employees earning more than $1,500 per month, up to now, we can only provide them with our conciliation service, because the Commissioner, as the law stands, has no jurisdiction under section 115 to adjudicate their claims. Should the conciliation fail in such a case, ie, a non-manual employee earning more than $1,500 and has a problem with the employer and we cannot resolve it through conciliation, under the present situation, he would have to seek legal recourse on his own at the courts.

If the Member recalls, on 13th July, the Tripartite Review Committee on the Employment Act released its findings and recommendations. This was widely reported. The Tripartite Review Committee, in fact, had particularly reviewed section 115 of the Employment Act. It has recommended that claims from non-manual employees with a monthly salary exceeding $1,500 should also be eligible for adjudication as long as their claims fall within the provisions of the Act which apply to them or arise from their employment contract with their employers. This would remove an anomaly where non-manual employees with a monthly salary exceeding $1,500 are covered by the provisions in the Act outside Part IV.

The proposed amendment which has been accepted by the Government will enable such employees earning more than $1,500 and are non-manual in the nature of their work, to pursue their claims through conciliation, leading on to adjudication in the labour court, instead of having to engage their own lawyers for such purposes in the civil courts.

Mr Chiam See Tong: Has this provision been accepted by the Government? My case is quite recent. His salary exceeds $1,500.

Dr Lee Boon Yang: Sir, as I said, the Tripartite Review Committee on the Employment Act released its report and recommendations on 13th July. The Government has indicated that it accepts the recommendations of the Review Committee and will initiate the procedures of amending the Act in due course.