UNION REPRESENTATION FOR EXECUTIVES

Mr Yeo Guat Kwang asked the Minister for Manpower whether he will consider amending legislation to allow executives the right to union representation in case of retrenchment, dismissal or other workplace problems.

The Minister for Manpower (Dr Lee Boon Yang): Mr Speaker Sir, let me first explain the rationale behind existing labour legislation. Executives, regardless of seniority, are not covered by the Employment Act. It is assumed and our law takes the position that executives should be able to look after their own interests, as they are usually better educated, and professionals who can negotiate their terms and conditions of employment. They can negotiate and enter into employment contracts by themselves, and do not need to rely on collective bargaining by unions on their behalf. To include them under the Employment Act will create unnecessary rigidity and hinder the free operation of the labour market.

Sir, nevertheless, executives who need help to resolve employment disputes with their employers can seek the assistance from the Ministry of Manpower, which provides conciliation service. If their disputes cannot be resolved amicably through conciliation, they need to file a suit under the common law to seek remedy, because employers are not legally obliged to accept the Ministry's advice.

With more employees becoming executives, and more jobs being classified as executive jobs, the assumption that all executives are sufficiently well-informed and experienced not to need any protection from the Employment Act may be questionable. Indeed, during the past two years, for example, several executives have sought the help of my Ministry, the unions and MPs at their meet-the-people sessions. We may need to extend part of the provisions in the Employment Act to executives. However, we should do so only to the extent necessary. The Government will study this carefully.

Sir, current labour laws do not prevent executives from forming or being represented by their unions. However, they may not be represented by trade unions whose membership consists of rank-and-file employees. Over the years, NTUC has argued for both executives and rank-and-file employees to be allowed to join the same union as it is better for team-work. Thus, frontline supervisors who were promoted from the ranks have been allowed to join rank-and-file unions under the Tripartite Guidelines on Eligibility to Join Rank-and-File Unions, introduced in 1992. In addition, some employers have, on their own accord, allowed their executives to join rank-and-file unions, but this is a voluntary arrangement. Junior and middle level executives can join rank-and-file unions as general branch members, but only to enjoy the social benefits the unions provide.

Our trade unions have played a crucial role in maintaining industrial harmony, and cooperating with employers and the Government to promote economic development and workers' welfare. The growing proportion of new entrants to the labour market joining executive ranks, rather than the rank-and-file posts traditionally represented by trade unions, means a potential shrinkage of the unions' support base. This would have major implications for the NTUC and for the strength of our tripartite relationship.

We should review the Industrial Relations Act, especially section 16(3), to see how it can be amended to suit the very different circumstances that prevail today. We should consider allowing the same union to represent both rank-and-file workers and junior and middle level executives, instead of having the two groups in separate unions. We may, as the Member has suggested, allow rank-and-file unions to represent junior and middle level executives in some employment matters, such as retrenchment, dismissal and grievances, although not in collective bargaining.

Employers' organisations have expressed to my Ministry their concerns over the possible difficulties that such a change may cause. They are concerned with the potential for a "conflict of interest" when executives become members of rank-and-file unions. Employers are also concerned with the impact on management's control, disciplinary and grievance procedures and lawful termination of contracts of employment of executives. In reviewing the Industrial Relations Act, we will take into account not only the desirability of widening the membership base for trade unions, but also employers' legitimate concerns.

Sir, my Ministry has called for a tripartite meeting with the NTUC and SNEF to discuss this issue. We will table a preliminary proposal to the meeting, for full discussion with the unions and employers. I look forward to forging a tripartite consensus on how we can bring our laws on union membership up to date, strengthen harmonious labour relations, and create a more competitive workforce.

Mr Yeo Guat Kwang: Sir, as the Minister has said that he is likely to accept my suggestion, will he set a timeframe for the tripartite committee? And would he agree that if there is a clear disciplinary procedure in a company, there should be no conflict of interest for executive staff to join the rank-and-file union of the company?

Dr Lee Boon Yang: Mr Speaker, Sir, we will try to resolve this matter as soon as possible. As I have said in my main answer, my Ministry has already called for a meeting with both the Singapore National Employers' Federation and the NTUC. I hope to achieve a consensus as soon as possible to resolve this issue.

With regard to the other point about grievance procedures, I think this is an issue that the committee will have to discuss. I understand the trade unions' perspective on this issue and their desire to be involved in some way, but I also have to be aware of the employers' concerns. The purpose of the tripartite committee is for all three parties to sit down and work out a consensus which can allow us to move forward from the position today.

Mr Jeyaretnam: Sir, may I ask the Minister whether the Government will now consider bringing in an Unfair Dismissal Act and setting up a tribunal to hear any grievances or complaints that executives may have against their company?

Dr Lee Boon Yang: Sir, again, as I have said, we should let the tripartite committee explore this issue and find which is the best way to deal with some of the problems that have cropped up as a result of the changes in the profile of our workforce.

Mr Jeyaretnam: Is the Minister aware that the Unfair Dismissal Act exists in most enlightened countries? Why can Singapore not have one?

Dr Lee Boon Yang: Sir, as I have said, we already have procedures where executives who feel that they have been unfairly dismissed can appeal to my Ministry, and we will try our best to resolve the problems. In most cases, we have been able to do so. As to whether an Unfair Dismissal Act is required or is there another approach to tackle this problem, I believe that the tripartite committee that we have convened is in the best position to discuss this and look at the problem from all angles. And we can come up with a workable model in our context.

Mr Inderjit Singh: Mr Speaker, Sir, having worked in a multi-national environment, I do know that some MNCs have concerns about setting up unions in Singapore. Part of the reason is that they operate in many countries and it may weaken their position. That is why they refuse to set up unions in some of these countries. I believe that some of these feedback have been given to the Economic Development Board.

Mr Speaker: Mr Singh, no speeches. Please ask your question.

Mr Inderjit Singh: Sir, can the Minister comment on some of these concerns that employers have, especially the MNCs?

Dr Lee Boon Yang: Mr Speaker, Sir, employers have many concerns over unionisation of their executives. We have to bear in mind that employers, especially the MNCs, operate throughout the world, and they may have very different experience with trade unions elsewhere. In some countries, they have very unpleasant and unhappy experience with trade unions, and this has in some way affected their mindset. So, some MNCs operating in Singapore see efforts to represent their executives as a failure on the part of management to look after the needs of the executives in their employ. Very often, when the union seeks to represent even their rank-and-file employees, the head office will question the local management by saying, "Have you done something wrong to cause the workers to be unhappy?" These are some of the examples that have been given to us in our discussions with employers.

Employers are also concerned that unionisation of their executives would give rise to rigidities, because it is natural for unions, once they start to organise the executives, to want to seek standardisation of rewards and benefits. And many MNCs operating in Singapore, like MNCs elsewhere, take a totally different approach in the remuneration package for their executives. There are a lot more individual components and there are different reward schemes for executives.

Other employers have given us feedback that they are concerned with union representation of their executives because they fear that it would give rise to more workplace disputes and could also affect labour-management relations at management level. As I said, a number of such feedback arose from the employers or the MNCs' prior experience or contacts with unions, sometimes in their home countries and sometimes from operating in other countries. Let me hasten to add that I do not entirely agree with all the feedback and their responses. I think the trade union movement in Singapore is very different from the trade union movement in many other countries. The trade unions in Singapore take a non-adversarial and non-confrontational approach. In fact, they have played a key role in helping employers to survive the recent economic downturn that we have just experienced. So we need to persuade such employers to change their mindset and attitude. But we must also bear in mind that where they have genuine concerns, we should be prepared to address these concerns and not force our way upon them. Lest they see Singapore as an unattractive place for them to do business.

Mr Jeyaretnam: Mr Speaker, Sir, I do not know whether I heard the Minister correctly. Did he say that executives can appeal to him if they feel that they have been unfairly dismissed? If so, I would like to know where the provision is to be found in the law.

Dr Lee Boon Yang: Yes, I did say that, Mr Speaker, Sir. In my main answer, I said that executives who need help to resolve employment disputes with their employers can seek assistance. We can provide conciliation. And in the vast majority of cases that we have to deal with, such conciliation had been effective and we have been able to help both employers and their executives reach a compromise and solve their problems.

Mr Cyrille Tan (Nominated Member): Mr Speaker, Sir, does the Minister agree that preventing workers of any grade from joining a union amounts to an infringement of human right, especially in Europe and in the US?

Dr Lee Boon Yang: Sir, I missed the question. Can he repeat, please?

Mr Cyrille Tan: Does the Minister agree that preventing workers of any grade from joining a union amounts to an infringement of human right, especially in the US and in Europe?

Dr Lee Boon Yang: Mr Speaker, Sir, under our law, we do not prevent any workers, including executives, from forming or joining a union. They can, including executives, form their unions. What we have is a situation where the law does not allow executives to join a rank-and-file union of workers within a company because of this concern of a conflict of interest in the past. As to whether it is an infringement of human right, of course, our law states quite clearly that there is a right to form and join a union.

Mr Cyrille Tan: Sir, I would like to ask the Minister, in the light of a recent High Court ruling on the overturning of an order by the Minister for Manpower that the business school owners should pay compensation to an employee for unjust dismissal, the High Court held that the Ministry has not given the business school sufficient opportunities to be heard and the way the investigation was conducted was not in line with the rules of natural justice. Since the said High Court decision had affected the confidence of ---

Mr Speaker: Mr Tan, I think your question is not related to this. I suggest you file it as a separate Question.

Mr Cyrille Tan: My question is whether the existing system provides sufficient opportunities for disputing parties to be sufficiently heard, including the case involving the business school, and how the current procedure can be improved to ensure that investigations into such disputes could be conducted fairly and that the rules of natural justice are observed by both employers and employees.

Dr Lee Boon Yang: Mr Speaker, Sir, I believe the Nominated Member was referring to the case of a lecturer who was employed by a commercial school. Permit me to address his supplementary question, although it does seem to be a little far from the main Question that was answered.

I will have to take a bit of time, with your indulgence, Sir. The lecturer, who was the subject of this court case, was dismissed on 6th May 1997, less than four weeks before his contract was due to expire on 31st May 1997. The contract provided for a gross monthly salary of $3,700 and a bonus or gratuity equivalent to at least one month's last drawn salary at the end of the contract. The school said that the lecturer was dismissed because of his poor performance. The lecturer appealed to me alleging that his dismissal was unjust and without valid ground, and here is the answer to Mr J.B. Jeyaretnam too. In fact, the avenue for such an appeal is provided for under the Employment Act. Pursuant to the Employment Act, I therefore asked the Commissioner for Labour to conduct an inquiry into the circumstances leading to his dismissal. This was done by an officer of the Ministry on behalf of the Commissioner.

Throughout the inquiry, the employer had refused to cooperate. They maintained that the Commissioner had no jurisdiction to deal with the case as the lecturer's employment contract with the school contained a clause for arbitration over any dispute relating to his employment, and that since the lecturer earned more than $1,600, the Employment Act did not apply. Sir, this is incorrect. The lecturer was clearly covered by the Employment Act.

The school participated in the inquiry only after much persuasion, even then, very reluctantly. The investigating officer extended four invitations to the school to present its case to the Ministry. The school only responded once by sending its executive director on one occasion. The executive director gave a statement to the investigating officer and left the Ministry hurriedly, claiming that she had to attend another appointment elsewhere. The school was given more than sufficient opportunities to state its case but, for reasons known only to the school, it chose to avoid participating in the inquiry. Sir, in one of the letters to the school, it was stated very clearly that the Ministry would proceed to evaluate the case based on whatever facts gathered so far, notwithstanding that the school's interests might prejudicially be affected by the Minister's decision.

Based on the facts and evidence he was able to gather, the investigating officer reported that the dismissal was wrongful and recommended that the lecturer should be compensated. The officer's report noted that the school did not conduct any investigation or inquiry to establish that the lecturer performed poorly as a lecturer. In short, he had no opportunity to defend himself. The complaints of the school against the lecturer had, in fact, occurred early in his employment. The lecturer had explained, and the school appeared to have accepted his explanation and did not pursue the matter. It was, therefore, surprising that just before his term of employment was to end, he was suddenly sacked. After considering the report, I concluded that the school had sacked the lecturer without just cause or excuse. The school was accordingly ordered by me to pay a sum of $6,800 to the lecturer.

The school challenged the order in the High Court. Initially, it argued that the Ministry had no jurisdiction to conduct the inquiry. Later, it shifted its stand and kept changing its grounds for challenging the order. They failed on almost all the new grounds they raised. But the Court accepted their arguments that the Ministry's inquiry failed to comply with the rules of natural justice.

Mr Chiam See Tong (Potong Pasir): I do not know whether this matter has gone on appeal. But if it has gone on appeal, it is sub judice. So we should not be discussing the case now.

Dr Lee Boon Yang: I will come to that.

Mr Speaker: Can you listen to the Minister?

Dr Lee Boon Yang: Let me repeat. The court accepted their argument that the Ministry's inquiry failed to comply with the rule of natural justice as the school was not given an opportunity to be heard. On this basis, the court gave judgment in favour of the school. The Ministry did give evidence that the school was given every opportunity to be heard. The school presented evidence to the opposite effect.

Sir, the court also criticised the Ministry for lack of procedures in dealing with complaints under the Employment Act. Sir, I would like to assure the House, employers, unions and workers that under the existing procedures to inquire into a dismissal, adequate steps are taken to ensure that all parties involved are given sufficient opportunities to present their case and to respond to arguments put forward by one party against the other. This process is evident in the case in question. The school was invited repeatedly to provide its side of the story. The school was given a copy of the lecturer's complaint letter to the Ministry and was invited to attend the investigation on four occasions. It was the school which chose not to attend the inquiry proceedings, except on one occasion, and even so, reluctantly.

My Ministry will not be appealing the court's ruling. We were advised by the Attorney-General not to appeal as the judge's decision was based on his findings of fact. Appeals must be on points of law and not findings of fact unless the factual findings are manifestly against the weight of evidence.

The court had focused on the inquiry procedure adopted in dealing with the dismissal appeal. My Ministry has, in fact, commenced such a review to refine and tighten the inquiry procedure in view of the court's ruling and observations. We will spare no effort to rectify any shortcomings. We will also take steps to minimise the opportunities for persons to present to a third party a distorted picture of what we did or did not do, when carrying out our statutory responsibilities.

I would, however, like to assure the House that the existing dispute settlement system administered by my Ministry is effective and efficient in resolving conflicts between employers and workers in an amicable manner. We have enjoyed three decades of industrial harmony with no major industrial conflict. The existing dispute settlement system has served us well for 30 years. In 1998, my Ministry had helped to settle the employment claims and disputes involving some 12,000 non-unionised workers and amicably resolved 291 cases of industrial disputes brought up by trade unions and employers. For the first half of this year, claims by about 6,200 non-unionised workers and 120 unionised dispute cases were handled by the Ministry.

Sir, my Ministry fully subscribes to the rules of natural justice. Indeed, as an arbiter of employment disputes, my Ministry has a duty and responsibility to evaluate each case thoroughly and objectively, and to uphold the principles of impartiality and fairness in dealing with employment disputes. I would like to assure the House that our employment dispute settlement mechanism is sound, as judged by the overwhelming number of resolved case. Notwithstanding that, my Ministry will not spare any effort to improve on the existing system.