TRADE UNIONS (AMENDMENT) BILL

Order for Second Reading read. 2.24 pm

The Minister for Manpower (Dr Lee Boon Yang): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, the Trade Unions Act (Cap 333) and its Regulations provide for the registration of trade unions and the regulation of their activities, including prudent management of union funds and the free and fair election of union officers.

The Trade Unions (Amendment) Bill before the House today seeks to amend the Trade Unions Act to improve and update its provisions so that unions can carry out their roles and responsibilities more efficiently. The amendments and new provisions in the Bill will enhance unions' decision-making procedures to enable delegates in unions with large membership to make prompt decisions and also ensure that union appointments will better safeguard the interest of members. Recognising the widespread use of Information Technology, provisions will also be introduced to enable trade union records to be submitted and maintained electronically.

The last major review of the Act was carried out in 1982. The 1982 amendment created the framework for trade unions to play a more constructive role by working closely with employers and the Government towards the raising of productivity and the promotion of economic growth. This has benefited our workers, employers and the economy of Singapore. The active engagement of trade unions in strengthening our economic competitiveness has brought enormous benefits to workers and contributed to their high standard of living and a better quality of life.

Trade Unions (Amendment) Bill, 2000

The views of the National Trades Union Congress and the Singapore National Employers' Federation have been sought and, where appropriate, they have been incorporated into the amendments in this Bill.

Sir, the details of the proposed amendments are covered in the Explanatory Statement to the Bill. I will now address the key features of the Bill.

Delegates System

Let me begin with the delegates system. Sir, the trade union movement in Singapore has bucked the worldwide trend of declining union membership by being able to maintain a steady growth in membership throughout the years. Over the last 10 years, union membership rose from 212,874 in 1989 to 289,707 in 1999, an increase of 36%. This increase did not come about by chance. The trade union movement under the leadership of the National Trades Union Congress works very hard to ensure that it stays relevant to meet the changing needs of the workforce, and to recruit and retain members through its vigorous recruitment campaigns. Smaller unions have reviewed their ability to expand membership and to serve the changing expectations and needs of members. Many have decided to merge with other unions to achieve critical mass and be transformed into more effective organisations to better serve the needs of their members. For example, the merger of the Jurong Shipyard Employees Union and Shipbuilding and Marine Engineering Employees Union. As companies merge or restructure to enhance their competitiveness, their unions will also have to take similar actions. For example, when the Post Office Savings Bank was merged with DBS, the Post Office Savings Bank Employees Union and the Development Bank of Singapore Staff Union merged into one union. This trend of mergers is likely to continue in order to expand membership base and to better serve workers in related industries.

Trade unions with large membership often provide in their union rules for the delegates to decide on various matters, as it would be inefficient and cumbersome for every such decision to be taken by all the members. These delegates are elected by the members of their union through a democratic process and have the confidence of members to safeguard their interest and well being. In these unions, decisions such as the election of union officers and the amendments to the union rules are taken by the delegates.

Larger trade unions face administrative difficulties in the implementation of existing sections 33, 34 and section 47(2) of the Act. Under these provisions, the trade unions are required to seek the consent of their union members on a change in the name of the trade union, which is covered by section 33; amalgamation with other registered trade unions, which is covered by section 34, and the change in the use of union funds, which is covered by section 47(2). There is no provision in the law to allow decisions on these matters to be made by the delegates. In other words, the existing law requires that these three areas be decided upon by the general membership of each trade union.

As the system of empowering delegates to make decisions on other affairs has worked well, we propose to extend the delegates' power to include decisions in the three areas which I have just mentioned. Hence, clause 2 of the Bill provides for a delegate system, including the definition of a "delegate" and how "requisite consent" can be sought to allow the delegates to make decisions on such matters. When a decision is made by the delegates, the number of union members involved in the process would inevitably be much smaller than having to convene a general meeting of the members of the unions. Hence, it would not be too onerous on the trade unions to require two-thirds majority when a decision is made through a vote by their delegates.

Accordingly, clause 8 of the Bill repeals and re-enacts sections 33 and 34 of the Trade Unions Act to allow a trade union to seek the requisite consent from its delegates to change its name or to amalgamate with other unions. Clauses 9 and 12 will introduce consequential amendments arising from the introduction of the new provision to allow decisions to be taken by delegates.

There are similar provisions in clause 2 of the Bill governing decisions made in these areas by a person, who is elected or appointed as a delegate to attend and vote at a meeting of a federation, on behalf of any of the constituent trade unions.

Appointment of Union Officers

Mr Speaker, Sir, over the years many trade unions have built up strong financial reserves as a result of prudent investments of surplus union funds in union co-operatives and other investments that are authorised by law for the investment of trust money.

Trade union funds and assets actually belong to the members of the trade unions and it is important that they continue to be managed prudently by officers of the unions. It will therefore not be desirable for an undischarged bankrupt to become a union officer and manage the financial affairs of the union. Clause 7 of the Bill amends section 30 of the Trade Unions Act to disqualify an undischarged bankrupt from acting as a union officer.

Appointment of Union Trustees

Under the Act, all union properties, either movable or immovable, have to be controlled and vested in the trustees for the use and benefit of the union and its members.

The appointment or election of the trustees and the filling of these vacancies are determined by the union rules. As unions accumulate financial reserves and other assets, the responsibilities of union trustees have become heavier. Clause 13 of the Bill amends section 43 of the Trade Unions Act to disqualify an undischarged bankrupt and a person convicted of an offence involving fraud or dishonesty or any other offence, which renders him unfit from being a union trustee. We should ensure that only persons of unimpeachable character and integrity hold such important position in the unions. Freeze on Union Funds

Sir, under the existing Act, the Minister is empowered to direct in writing a freeze on union funds during an investigation by a public authority into the improper use or misapplication of the funds of a trade union under section 16. However, the existing provision does not take into consideration funds that are kept in other financial institution besides banks.

Clause 5 of the Bill addresses this inadequacy by amending section 16 of the Act to replace the word "bank" with the words "financial institution". The term "financial institution" has been defined to mean "a bank, a finance company or any co-operative society carrying on the business of managing and investing funds." It will ensure that when the situation calls for a freeze, all of a union's assets will be protected.

Purchase of Land and Building

Section 46 of the Trade Unions Act allows a trade union to purchase or lease in its trustees' name any land exceeding 4,047 square metres in size provided it has obtained the approval of the Minister. There is no compelling reason today for us to restrict purchases of land based on its plot-size.

Hence, clause 14 of the Bill will repeal and re-enact section 46 of the Act to remove the requirement for Minister's approval in the purchase of land where the plot-size exceeds 4,047 square metres. It will also allow trade unions to purchase or lease any land or building outside Singapore provided the union has obtained the requisite consent of its members or delegates.

It is necessary for the union to obtain a clear mandate before the purchase of an overseas property as such a purchase may carry a certain amount of risk due to economic and political uncertainties apart from foreign exchange fluctuations.

Application of Union Funds

Mr Speaker, Sir, section 47 of the Act prohibits a union from using money received from its members or (in the case of a federation) its constituent trade unions, for a purpose other than the purpose for which it is given. Clause 15 of the Bill amends section 47 of the Act to provide that it can do so where the requisite consent has been obtained from its members or delegates. This will provide greater scope for a union to utilise its reserves without compromising the interest of its members.

Penalties

Mr Speaker, Sir, it may sound a bit jarring in the light of peaceful industrial relations climate and the close co-operation prevailing between the tripartite partners, namely, the trade union representing the workers, employers and the Government, for us to talk about enhancing penalties imposed under the Trade Unions Act. However, we feel that it is timely for a thorough review so that the penalties imposed under the Act would reflect the severity of the offences.

Those who have lived through the difficult periods of the 50s and 60s would recall that strikes were prevalent then. This resulted in the loss of thousands of otherwise productive man-days. The social disorder crippled the economy and caused tremendous hardship to the people. Although we have been almost strike-free for more than two decades, we should constantly guard against this brand of trade unionism so as to avoid its damaging effects.

The penalties imposed under the Act had remained unchanged for many years and are now no longer comparable to those for offences of a similar nature found in other laws. Take, for example, the offence under section 27(3) of the Trade Unions Act where any union member who takes part in an illegal industrial action shall be guilty of an offence and shall on conviction be fined a sum not exceeding $1,000. This offence is no less severe when compared to the offence under section 5(1) of the Trade Disputes Act (Cap. 331). Under this provision, ie, the Trade Disputes Act, any person who participates in an illegal industrial action can be fined a sum not exceeding $2,000 or to imprisonment for a term not exceeding six months or to both. So you can see the discrepancy - a union member taking part in an illegal industrial action only faces a penalty of a maximum of $1,000, whereas any other worker, meaning a non-union member, who takes part in an industrial dispute illegally faces a much more severe penalty which may or may not include a term of imprisonment. Hence, we have to rationalise these differences. Clause 6 of the Bill therefore increases the fine for this offence from $1,000 to $2,000 and also increases the fines for other offences under section 27 of the Act.

Likewise, clauses 10, 16 and 18 to 21 of the Bill seek to increase the amount of fines spelt out in sections 37, 53 and 56 to 59 of the Act respectively.

Clause 22 of the Bill introduces a new section to grant discretionary powers to the Registrar to accept from any person or the trade union reasonably suspected of committing an offence a compound fine for a sum not exceeding $200 for every offence. The offences where a compound fine can be imposed will be prescribed by regulations.

Electronic Register and Electronic Filing of Documents

Under section 7 of the Trade Unions Act, the Registrar of Trade Unions is required to maintain a register of trade unions. Clause 3 of the Bill amends section 7 of the Act to enable the written copy of the register to be replaced by an electronic register kept on the computer. For the purpose of maintaining and updating the electronic register, the Registrar may call for information that is deemed necessary.

Clause 17 of the Bill seeks to amend section 55 of the Trade Unions Act to empower the Minister to make regulations to allow for the manner in which applications, forms, notices, requests or returns required under the Act can be filed electronically. It will also provide for the payment of the prescribed statutory fees by electronic means. This amendment will facilitate the submission of such information by electronic means and enable unions to move to a paperless mode of record keeping.

Conclusion

Sir, in conclusion, the amendments proposed in the Bill will ensure that the Trade Unions Act will continue to promote the development of an effective and responsible trade union movement in Singapore. They will also enable our trade unions to respond to changing environment and to take advantage of information technology to better meet the needs of their members.

Sir, I beg to move.

Question proposed.

Mr Seng Han Thong (Ang Mo Kio): (In Mandarin): Mr Speaker, Sir, over the past one year, from the newspapers and the television, we read and heard a lot of news of companies involved in mergers, restructuring or buying over. These mergers, restructuring and buying over will affect not only the workers but also the structure and operations of the unions.

Over the past one year, many trade unions were also amalgamated or in the process of amalgamation. As a result, these unions will have to change their names to reflect their new status, otherwise the old names may no longer be relevant.

Mr Speaker, Sir, the NTUC supports this amendment, particularly the repeal and re-enactment of sections 33 and 34 of the Trade Unions Act. Under the existing provisions, the consent of two-thirds of the total membership of the union is required if it wants to change its name. Just imagine, if you have a union with 6,000 members, you will need to have 4,000 members voting in favour of the proposed change. With so many workers needed to go to the ballot, the factories may have to shut down, and many production hours will be lost. At the same time, if the unions were to be amalgamated, you need 50% of the members to vote, of which 60% must vote in favour. So if you have 6,000 members, you would need 3,000 people to vote. This is certainly a waste of resources.

Nowadays, many unions have adopted the delegates conference system whereby the ordinary members are represented by their branch leaders as delegates in the unions' conferences where resolutions can be carried by a simple majority for decisions to be made. As such, with the new sections 33 and 34, the delegates can attend the meetings on behalf of the general members, and decisions such as amalgamation or change of name can be made by a simple majority of votes.

The amendment to section 43 of the principal Act concerns the appointment of the trustees of trade unions. We all know that the trustees of the trade unions have to safeguard not only the interest of the workers but also to protect the assets of the trade unions. Under this amendment, undischarged bankrupts are not allowed to become trustees. The National Trades Union Congress supports this amendment. I do not think anyone would oppose this amendment. Those who are undischarged bankrupts are unable to resolve their own financial problems. How would they be in the right frame of mind to safeguard and protect the assets of the union? In addition, under the amendment, anyone who has been convicted of an offence involving fraud or dishonesty shall be disqualified as a trustee of the union. This is obvious.

The NTUC supports the spirit of this amendment because firstly it safeguards the assets of the trade unions and, secondly, it upholds the reputation of the union leaders.

Mr Yeo Guat Kwang (Cheng San): Mr Speaker, Sir, at present, undischarged bankrupts can hold office in trade unions. Apart from the requirement of age and nationality, the only other restriction imposed on any office holder is that he should not have any prior criminal conviction, especially those involving criminal breach of trust or criminal intimidation.

I support the amendment of sections 30 and 43 to disqualify undischarged bankrupts from holding office in trade unions or being appointed as trustees to the union. This is in line with other legislation, such as the Companies Act and the Societies Act, which impose similar restriction on office bearers. Our trade union movement supports this amendment which arose partly because of our own request made in the past. It gives greater protection of trade union funds.

Sir, under the current provision, any union that wishes to buy or lease any land which is more than 4,047 square metres must first obtain the consent of the Minister for Manpower. With the new amendment, there is no restriction imposed on unions on the purchase or lease of local land of any size. However, for purchase or lease of overseas property, the consent of the union members or delegates is now required. Although this is a new restriction, it will accord better protection to members from risky overseas investments.

On behalf of the labour movement, I also welcome the amendment on change in application of union funds. This amendment allows the trade unions to use the money received from compulsory contributions for purposes other than those originally intended. To make such a change, unions need only to seek the consent of their delegates, instead of having to get all members' consent as is currently provided. This amendment was made at the request of NTUC as it is administratively more convenient.

The amendment also allows unions to change their financial year to coincide with the calendar year rather than stick rigidly to the current financial year from 1st April to 31st March. The labour movement supports this change as it affords more flexibility into the system.

The amendment also allows for the register of trade unions to be kept and maintained in an electronic form. The labour movement supports the change as this facilitates the global trend towards data entry and captured in electronic form rather than in paper form only.

Sir, the review of penalties is long overdue as the existing fines imposed have not been reviewed for more than 30 years. However, by looking at purely the rate of increase, which in some cases by 100%, it is a significant jump. And I hope the Minister could clarify.

Mr Speaker, Sir, on the whole, these proposed amendments merely make technical modification to refine the system. It provides greater flexibility for unions with these changes and should therefore be supported.

Mr Speaker: Order. I suspend the Sitting and will take the Chair again at 3.15 pm.

Sitting accordingly suspended at 2.50 pm until 3.15 pm. Sitting resumed at 3.15 pm