INDUSTRIAL RELATIONS (AMENDMENT) BILL

Order for Second Reading read. 6.22 pm

The Minister of State for Manpower (Dr Ng Eng Hen): Mdm Deputy Speaker, I beg to move, "That the Bill be now read a Second time."

Madam, the Industrial Relations Act (Cap. 136) provides for the regulation of the relations of employers and employees and the prevention and settlement of trade disputes by collective bargaining, conciliation and arbitration.

Under existing laws, executive employees are already allowed to form their own unions to represent their interests and engage in collective bargaining with employers. However, the current Industrial Relations Act prohibits rank-and-file trade unions to seek recognition in representing employees holding managerial and executive positions. The Industrial Relations (Amendment) Bill presented to the House today would allow rank-and-file unions to represent certain executive employees in limited areas. However, representation will not be enabled for those executive employees entrusted with substantial managerial and decision-making responsibilities as the employer is granted the right to object to their representation by the rank-and-file unions. This is to avoid conflicts of interest and consequent loss of management effectiveness and flexibility.

Executive employees can only be represented by the rank-and-file unions in disputes concerning dismissal, retrenchment benefits and breach of individual contract. I also like to point out that representation is allowed only on an individual basis. There will be no collective bargaining rights for executive employees when represented by rank-and-file unions.

The last major review of the Act was carried out in 1968. The 1968 amendments restored certain management rights to employers and put in place a collective bargaining, conciliation and arbitration system which has enabled Singapore to achieve industrial harmony through tripartite cooperation for the past three decades. This Bill will further strengthen the harmonious labour relations that Singapore has enjoyed over the years.

The amendments presented in the Bill are in line with recommendations from the Tripartite Committee on Union Representation of Executives formed in September 1999 and chaired by the then Minister of State for Manpower, Mr Othman Haron Eusofe. During the months preceding the formation of this Tripartite Committee, our economy was in severe recession following the 1997 Asian financial crisis. That recession saw a higher incidence of retrenchment of both executive and rank-and-file employees. While their rank-and-file colleagues, especially those represented by trade unions, were paid reasonably good compensation by their employers based on the company's financial position, industry norm and years of service, some executives and managers received little or no compensation. Consequently, dissatisfaction among them grew. Since executive employees are not covered by the Employment Act, their only legal recourse was under the Common Law. Civil litigation is, however, a costly affair. The desire to form executive unions to provide them with a lower cost alternative for their disputes therefore increased.

It was against this backdrop that the Tripartite Committee on Union Representation of Executives was appointed. In its deliberation, the Committee noted that the profile of our local workforce had changed with more employees joining the executive ranks. Correspondingly, the rank-and-file membership would dwindle, giving rise to concern that the trade union movement led by NTUC might reduce in relevance, if that trend persisted. The Committee also noted that as the number of executives and managers grew larger, the formation of executive unions, and hence increase in the number of unions within a workplace, would be inevitable. This would be undesirable as multiple unions, by their very nature, tend to represent the interests of different groups of employees. Indeed, the experience of other countries confirms that the dynamics arising from many unions within a workplace hinders labour-management cooperation and teamwork resulting in lowered productivity. Within a single union, the interests of employees could be better harmonised.

Appropriately, the Committee recommended that certain executives and managers should be allowed representation by rank-and-file unions to provide them with an additional avenue to seek remedy for their disputes. To address employers' concern that such representation would give rise to conflict of interest and undermine management effectiveness, the Committee sensibly recommended that senior management staff and certain core management personnel could not be represented. These included those involved in hiring, firing, promotion, dismissals and disciplinary duties; those with access to confidential information, such as payroll and budgeting information; those who represent employers' interest in union-management matters and those whose union affiliation would give rise to conflict of interest. Executive employees could only be represented by rank-and-file union on an individual, but not for collective bargaining purpose. Representation should be limited to only three areas of disputes, involving dismissal, retrenchment benefits and breach of contracts. Further, these executive employees cannot be involved in industrial action although they would be allowed to hold union office to enhance the leadership of rank-and-file unions. The Committee's recommendations have been accepted by the Government and now form the basis of these legislative amendments.

The details of these legislative amendments are given in the Explanatory Statement at the end of the Bill. Now let me address the key features of the Bill.

Representation of Executives by Rank-and-File Unions and Procedures for Negotiation and Conciliation

Mdm Deputy Speaker, as mentioned earlier, the current Industrial Relations Act, specifically section 16(3), prohibits unions, the majority of whose membership consists of employees in non-managerial or non-executive positions, that is, rank-and-file unions, from representing employees in managerial or executive positions. As it is a departure from section 16(3), clause 5 of the Bill inserts a new Part IIIA to enable rank-and-file trade unions to represent executive employees.

Part IIIA consists of six sections, ie, sections 30A to 30F. While section 30A provides the required definitions to support the operation of Part IIIA, section 30B stipulates that an executive employee may be represented by a rank-and-file union only on an individual basis and limited to disputes pertaining to dismissal, retrenchment benefits and breach of contracts. Section 30B allows employers to raise objection to such representation on the ground that the executive employee performs, or exercises a function, duty or power that may give rise to a real or potential conflict of interest if he or she is represented by the trade union. The section further provides that, where an employer raises such an objection, the employer and trade union shall make a joint application to the Industrial Arbitration Court for arbitration, if the dispute cannot be settled through conciliation.

Sections 30C to 30F prescribe procedures to regulate negotiation and conciliation of disputes between executives who are represented and their employers.

Court to Take Cognizance of Trade Disputes

Clause 6 amends section 31 by inserting a new paragraph (ca) to allow trade disputes relating to retrenchment benefits and breach of contracts of executive employees to be submitted to arbitration. Paragraph (ca) empowers the Industrial Arbitration Court to take cognizance of a trade dispute related to the retrenchment benefits payable to an executive employee, or a breach of contract of employment by the executive employee, or his employer. To enable the court to take such cognizance of the dispute, either the employer or the trade union representing the employee may make an exparte application, or unilateral request, in writing to the Registrar.

Inducing Persons Not to Join Trade Unions

Currently, under section 79(2), an employer can require an employee who is to be appointed, or promoted, to a managerial, or executive position, to cease to be an officer or member of a rank-and-file trade union. This section will be amended to disallow an employer from imposing such a condition.

Consequential Amendments to the Trade Unions Act

Clause 10 of the Bill makes consequential amendments to sections 27 and 39 of the Trade Unions Act. Section 27 is amended to prohibit a rank-and-file union and its members from participating in, or taking any industrial action, in connection with any trade dispute between members employed in managerial and executive positions and their employer. The amendment will also prohibit members in executive and managerial positions from participating in or commencing any industrial action taken by the trade union.

Section 39 is amended by inserting subsection (1A) to prohibit rank-and-file trade unions from conferring to members employed in executive or managerial position the right to vote in secret ballot taken for the purpose of commencing a strike, or any form of industrial action.

Repeal of Section 25 of the Industrial Relations Act

Mdm Deputy Speaker, section 25 of the Industrial Relations Act has outlived its usefulness, and this would be an appropriate time for it to be repealed. The section prohibited collective agreements from containing terms and conditions that are more favourable than those contained in Part IV of the Employment Act. It was introduced in 1968 to impose a ceiling on certain employees' benefits which are contained in collective agreements. These benefits in the collective agreements are now in line with those in non-unionised sector and are determined by market forces. Hence, the prohibition is no longer necessary.

Clause 3 of the Bill is introduced to repeal section 25. Consequent on the repeal of section 25, section 42(b) is also deleted, while sections 42(a) and 59(1) are amended.

Conclusion

In conclusion, Mdm Deputy Speaker, the recommendations of the Tripartite Committee on Union Representation of Executives were formulated taking into account the concerns of employers, trade unions and executive employees. To prevent conflict of interest and ensure that management effectiveness would not be undermined, safeguards have been introduced by limiting the representation of executive employees to three pertinent areas on an individual basis and by allowing the employer to object to the representation of senior management personnel and certain categories of executive employees. Further, employees who can be represented and their unions as well as their rank-and-file colleagues are not allowed to commence, or participate in any industrial action in connection with a trade dispute affecting the executive employees.

The legislative amendments would serve the interest of the executive employees in that they will provide them with an additional and lower cost alternative to settle their employment disputes. The amendments will serve the interest of the rank-and-file unions as it would allow them to enlarge their membership and invigorate their leadership. The amendments also serve the interests of the employers as this will discourage the formation of multiple unions at the workplace since executives can choose to be represented by the rank-and-file unions, instead of forming executive unions. A multi-union workplace could subject employers to tedious collective bargaining processes, or costly and time-consuming civil litigation to settle disputes. As representation is limited to three areas and allowed only an individual basis with no collective bargaining rights, management effectiveness will not be undermined. Since the necessary safeguards are in place, we do not anticipate any major problems during the process of implementation. However, as with any new piece of legislation, teething problems could arise. It is envisaged that with close tripartite cooperation and the release of the tripartite guidelines to facilitate the implementation, such teething problems could be resolved amicably with the common goal of maintaining our industrial harmony for the benefit of executive employees, unions, employers and the economy.

Mdm Deputy Speaker, I beg to move.

Question proposed.

Mr Yeo Guat Kwang (Aljunied): Mdm Deputy Speaker, I support the Bill.

The road leading to this Bill has been a long one. The labour movement here has, for a long time, called for both executives and rank-and-file workers to be allowed to join the same union. Although the current law does not prevent executives from forming unions, and indeed there are already several executive staff unions in Singapore, executives however, under our law, cannot be represented by unions whose membership consists of rank-and-file employees.

Mdm Deputy Speaker, executives, like rank-and-file workers, are affected by restructuring in companies. Executives, like rank-and-file workers, also want fair treatment in the workplace. Therefore, executives in Singapore, like executives in all other countries, have felt the need to be represented by trade unions.

The labour movement has not made much progress on this in the past. Our current law takes the position that executives should be able to look after their own interests as they are better educated and can negotiate and enter into employment contract by themselves. We also face resistance from employers. The usual objection from the employers is that there will be "conflict of interest" on areas, such as management control, grievance and disciplinary matters.

Mdm Deputy Speaker, this concern is overstated. In Singapore, unions are not confrontational. They act in a very responsible manner. While the situation did not cause any major problems in the past, it was far from desirable. It became pronounced during the Asian financial crisis. We see more executives facing problems.

Let us take a look at some of the statistics. For the year 1998, the percentage of retrenched workers with post-secondary, diploma and degree qualifications was getting higher. It was at 20.8%. For year 1999, it went up to 27.4%. And for last year, as we were hit by another downturn, the percentage went even higher to 30.2%. And for this year, with only the first quarter's figure, the percentage is 31.8%.

Mdm Deputy Speaker, at the height of the Asian financial crisis, the labour movement found an increasing number of executives coming to us for help. They were mainly over retrenchments, dismissals, non-payment of retrenchment benefits and salaries. The problems they faced were no different from the rank-and-file workers that our unions represent. It was a clear sign that something must be done.

In August 1999, I filed a question in Parliament and the Manpower Minister, Dr Lee Boon Yang, agreed that we should review the law. And here, we are today debating on the amendments.

Mdm Deputy Speaker, much has happened since 1999 when the NTUC first started pushing for legislative changes of union representation for the executives. We recovered from the Asian financial crisis only to find ourselves in another downturn.

During the recession last year and even now, we again saw many executives looking for help, as I showed you the figures just now. Although executives can approach MOM to assist in conciliation, there is no law to compel employers to respond to requests for conciliation. Executives who feel aggrieved would have to resort to costly legal action. At that point, some union leaders wished the laws had been amended. They wished they could do more for the executives who were retrenched or faced dispute arising from breach of employment terms, but they felt helpless! They asked why the process took so long!

Personally, I have also wished that the laws had been amended before this recession so that we would have been able to do more for the executives who have been affected by the downturn.

Looking ahead, we can expect workers to get better educated and the proportion of executives will increase. The amendment to the Industrial Relations Act will thus be timely. It will achieve a win-win-win outcome for workers, employers and Singapore as a whole.

For junior executives, the amendment will allow them to join unions to protect their interest. This expands the scope of protection to those who are not protected under the current law.

For employers, they can continue to work with one union representing all their workers, rather than multiple unions. Having one union will strengthen industrial harmony, and more than one union in the workplace does not promote teamwork. This will expand the scope and depth of partnership between unions and companies further.

For Singapore, the amendment will strengthen industrial harmony. Executives can seek redress for their grievances through the unions. It avoids them having to seek legal recourse, which is costly and disruptive to industrial harmony. Strengthening industrial harmony will give us a greater competitive edge as we seek to attract more investments and create more jobs for Singaporeans.

Mdm Deputy Speaker, the changes to the Act is a positive step for industrial harmony in Singapore. Thus, I support the Bill.

Mdm Ho Geok Choo: Mdm Deputy Speaker, the changing landscape of the operating environment impacts us on many fronts. To be able to maintain an effective and value-add employment relations climate, it is important for both employers and employees to evolve a new engagement deal.

Increasingly, employers are having to deal with a more sophisticated and educated workforce. Singapore's unique tripartite formula and the increasingly professional and pragmatic HR practices have been instrumental in providing a congenial work environment and nurturing a productive and competitive workforce. These have contributed to attracting foreign investments into Singapore.

The purpose of the Bill is to address the outcry from the many executives, managers and professional staff. The last two recessions had seen many executives being unfairly treated by their employers, some of whom had even faulted on payments. These professionals, executives and managerial staff were and are without recourse to any institution other than the courts.

The Bill is supposed to give the executives, professionals and managerial staff an avenue of recourse at MOM, as well as the Industrial Arbitration Court, but via the trade union only. While the intention may be clear, the Bill, in fact, will still exclude many professionals, executives and managers. Representation is only by a "recognised trade union". But by defining the term to mean a union that "has been accorded recognition by an employed ...", an aggrieved professional, executive or manager still does not have a recourse, if there is no union at his or her workplace.

The effect of this amendment Bill is that it caters for only the junior executives who are in companies where there are unions that are already accorded recognition. As statistics show, union membership, as a percentage of the working population, is low, at about 16% and is declining. So, there will still be large numbers of professionals, executives and managerial staff who will be unprotected, ie, the more senior levels, as well as those lower level executives who are in companies where there are no unions. For these unprotected professionals, executives and managerial staff, going to court is not the solution when the outcomes are never certain, and the fear of exorbitant legal costs looms large over their heads. What is the solution then?

MOM today actively encourages "best" HR practices among employers. I would like to propose that MOM take the lead to establish a self-regulatory body to monitor and deal with cases which do not come within the ambit of the Bill. This will cover executives of all levels in a non-unionised environment, as well as senior executives in a unionised environment.

Perhaps the Employment Act should also incorporate a proviso that addresses salary claims. The last recession has borne out many cases of senior executives who were not paid for work carried out, and yet had no recourse except through the costly and protracted legal route. Other avenues that could be considered could be the Small Claims Tribunal for claims up to a certain amount. Such additional avenues would complement and supplement existing mechanisms to cater to the needs of executives who fall outside the ambit of the Bill.

Related amendments to the Trade Unions Act must also be considered. The amendments leave open for executives to be elected to the union's decision-making body, ie, the executive committee. Once there, they can bring influence to bear on the unions. Therefore, we should have an amendment that executives cannot serve on the decision-making body of the union.

With reference to the proposed repeal of section 25, the rationale given is that this section has outlived its usefulness and, therefore, it is appropriate for it to be repealed. This rationale is questionable for the following reasons. In the New Economy and global business era, Singapore will be attracting a new breed of investors. With the repeal of section 25, these investors may perceive themselves to be at a disadvantage, if the unions chose to invoke more favourable benefits than what the Employment Act provides. In the initial years of a new investment, no investor or his management would want to be engaged in unnecessary discussion or negotiation for enhancement of terms if the management could simply benchmark its terms to an existing piece of document, ie, the Employment Act. In other words, I do not see the main existing terms in section 25 making things worse off. So, if it ain't broke, why fix it? If the management feels that it could afford to give more, then let them do it on their own accord. What is important is to ensure that the minimum terms are specified.

In the light of this argument, section 25 should not be repealed for the reason given, ie, "outlived its usefulness". The purpose and intent of section 25 is still relevant. It is important to assure our investors that the amendment to the Industrial Relations Act serves to enhance the employment relations climate and promote Singapore's economic competitiveness.

On this note, I support the Bill.

Mdm Halimah Yacob (Jurong): Mdm Deputy Speaker, thank you for giving me the floor. I rise to speak in support of this Bill.

The Bill proposes two key amendments. The first one concerns section 25 of the Industrial Relations Act, which the Bill proposes that it be repealed. Section 25 was inserted by way of an amendment to the Industrial Relations Act in 1968. Under this provision, pioneer status companies are prohibited from giving benefits which are more favourable than that provided under Part IV of the Employment Act. In practice, though, exemptions are allowed from this provision which, in practical terms, apply only to the annual and sick leave entitlements under the Act. Most employers treat such leave entitlements as minimum standards, and the pioneer status companies that want to attract good staff cannot provide benefits which are less favourable than that provided by the market. So, many pioneer status companies had to ask the Ministry of Manpower for exemptions. The NTUC had for many years asked the Government to remove these restrictions, as they are no longer relevant and hinder the implementation of good human resource practices at the workplace. It is also impractical as good employers can give other forms of paid leave without violating the law, so long as they provide paid leave to their employees in the form of child-care leave, marriage leave or compassionate leave, for instance, they will not be breaking the law. Hence, it is nonsensical that an employer can provide other forms of paid leave but cannot provide more annual leave without approval.

So, for this reason, I would disagree with the point raised by my parliamentary colleague, Mdm Ho Geok Choo, because I think the amendment is appropriate, relevant and necessary, as it has very limited application and is really no longer relevant in the present context.

We are also very happy that the Government has acceded to our request to remove this anachronism from our law. I am also glad to say that by repealing this provision, our Government is bringing our law more in line with ILO Convention 98, which is on freedom of association and the right to collective bargaining.

Mdm Deputy Speaker, the second key amendment concerns section 16(3) of the Act. This provision was also inserted into our law in 1968 by way of an amendment. The original law did not restrict the right of executives to join and be represented by a rank-and-file union, so long as its constitution permits it. The law was amended in 1968 to prohibit unions representing non-managers and non-executives from representing managers and executives, to prevent conflict of interests. This restriction remains in our laws today. But what the present amendment seeks to do is to allow such rank-and-file unions to represent executives in their individual capacities on matters pertaining to retrenchments, dismissals and breach of contract. This amendment is a step forward and is beneficial to both executives and employers.

Currently, executives already have the right to form their own unions to represent their interests in the workplace, and have full collective bargaining rights. But, because of their small number, this is not a very practical solution. At the same time, as executives are not covered under the Employment Act, they cannot legally seek recourse through the Ministry of Manpower. The alternative for them is to pursue their claims through common law. Legal actions, however, are costly, time-consuming, and attract unnecessary publicity, which may be adverse to the executive as it could jeopardise his future employment prospects.

There is also a fundamental issue that we need to address. Do we prefer employment matters to be settled through the courts, or do we want them to be settled through union and management negotiations and, failing which, through conciliation by the Ministry of Manpower? The experience of other countries, such as the US, has shown that more litigation over employment disputes is disadvantageous to employers as well, as long protracted disputes affect productivity and increase the level of hostility in the workplace.

Mdm Deputy Speaker, the last recession was a turning point for many executives. Many were retrenched but find that they have little recourse, except through the courts. The Ministry of Manpower had rendered a great deal of assistance to such executives, but where employers are reluctant or unwilling to cooperate, not much can be done as there are no laws to compel employers to attend conciliation meetings. We, in NTUC, had received many requests for assistance, and we too had rendered as much help as we possibly could, considering the constraints. There is no reason why executives should be treated so differently from other rank-and-file employees, as they too have families to think of and loans to service. They, too, need protection and a voice to represent their interests.

Hence, Mdm Deputy Speaker, the NTUC strongly supports this amendment, as it is reasonable and fair, and would make it easier for us to assist executives who are in need of help in companies where there is a rank-and-file union. On the concerns expressed by some employers over union representation of executives under this Bill, I wish to state that employers, who treat their employees fairly and with respect, have nothing to worry about. On the other hand, I think it is not in the interest of employers to protect the errant ones among them.

Finally, Mdm Deputy Speaker, now that the Government is amending this law and, therefore, clearly sending its signal that it supports the principle of fairness at work, can I ask the Ministry of Education to review its policy of asking school principals to indemnify the Ministry of Education for losses of school assets or properties. One of NTUC's affiliated unions, the Singapore Teachers' Union, has raised this issue with us, and we think that it is unfair to impose such an onerous obligation on them. We know that principals cannot be represented by the Singapore Teachers' Union. But in line with this new amendment and the spirit of this amendment, I wonder whether we should now ask for principals to be represented, so that we can take up their grievances officially. We all know that principals who fail to discharge their duties will be subject to disciplinary action, which is, by itself, a very huge deterrent to irresponsible behaviour. There is, therefore, no need to go one step further and ask them to indemnify for the losses. Imagine the principal who, in addition to losing her job, has also to pay the Ministry of Education $1 million, for instance, if that is the total cost of the losses incurred.

I am not aware of any other employees in Singapore, not even other civil servants, who have to undertake such an indemnity. I hope that, once again, in the spirit of this amendment, the Ministry of Manpower, together with the Ministry of Education, can seriously look into this matter and allay the fears of our principals.

Mdm Deputy Speaker, in conclusion, I support this Bill, as it will further strengthen tripartite cooperation and partnership in Singapore, and ensure continued industrial harmony.

Mr Nithiah Nandan: Mdm Deputy Speaker, I agree with the amendments that will allow rank-and-file unions to represent employees in managerial and executive positions. These amendments will provide protection to these executives, and encourage greater bonding and cohesion amongst different categories of employees. This bonding will, in turn, promote harmony at workplaces and generate an increase in productivity.

I particularly support the intent of the Bill. It will avoid multiple unions in one organisation. A union representing executive and non-executive employees will be in a better position to understand the workings and needs of a company in the broader sense. It can work with the company to achieve its objectives without undermining the interests of all the employees.

In a knowledge-based economy, the composition of our workforce constantly changes. The new entrants into the job market are mostly diploma and degree holders. They have different needs and aspirations. The economy needs them. It is therefore in the interest of the nation that they be given fair and adequate protection.

Madam, as we are all aware, the only thing that is constant in the industry and business are the changes. Restructuring, liberalisation, mergers and globalisation become the norm in both the private and public sectors. These changes, if not handled properly, can destabilise the strong industrial harmony and stability that we have built and sustained through tripartie partnership. Hence, it is more critical now that we place a mechanism that can respond quickly and efficiently to address these changes, and minimise the impact on the workers. Therefore, I strongly believe that these amendments to allow the rank-and-file unions to represent the executives will pave the way to a smooth transition in effecting the changes. I say this with strong conviction because, as the Executive Secretary of the Union of Power and Gas Employees (UPAGE) and the Senior Officers Association of Singapore (SOASPOWER), a house union, I saw and experienced the practicality and effectiveness when one union represents both the executive and non-executive employees of the company.

Mdm Deputy Speaker, please allow me to elaborate a little on this experience. In April 2001, the power industry was liberalised. As a result, the generation companies, namely, Senoko Power Limited and Power Seraya Limited were divested and no longer form part of the Singapore Power group. They each became an entity of its own. The managerial and executive staff of the companies thus could no longer be represented by SOASPOWER, a house union. Jointly, UPAGE and SOASPOWER highlighted this difficult situation to the management of the two companies. The senior management of Senoko Power and Power Seraya saw the merit of having one union to represent both the executive and non-executive employees. They allowed UPAGE, a rank-and-file industry union, to represent both categories of their employees. Thus, UPAGE made parallel representations for both the executives and non-executives on industrial issues arising out of the divestment of the two generation companies.

The liberalisation and divestment process went very smoothly with no effect on the function and operation of the companies involved. Today, we have a highly productive workforce, working towards the betterment of the companies. Conflict of interest is a non-issue.

UPAGE and SOASPOWER are now in the process of merging into a single union, representing the interest of employees in the power and gas industries. This will further strengthen the union and its strong links with the companies. The senior managements of Singapore Power, Power Seraya and Senoko Power, acknowledging the benefits of such a pact, lend further support by joining as general branch union members.

Mdm Deputy Speaker, earlier on, Mdm Ho mentioned about repealing section 25. I disagree with her view. In fact, section 25 is no longer relevant. Besides that, she also mentioned about representation of non-union members. I think the way to go forward is for everyone to join a union. If there is no union in their workplace and if Members of Parliament are in senior positions in companies, they should encourage the formation of unions. I think that is the way to go forward and more should join the unions and representation of executives or even senior management can be properly handled through a union.

On this note, Mdm Deputy Speaker, I fully support the Bill.

Dr Warren Lee: Mdm Deputy Speaker, many of the points I wanted to make have been made by my esteemed colleagues. I rise in support of the Bill. I just want to say how happy I feel now that there is an amendment that would allow the representation, especially in retrenchment and business practices, for executives and junior managers because, previously, these people would have nowhere to go. At the same time, employers need not fear that there would be a conflict of interest in the proper functioning of the companies with respect to trade disputes.

On this note, I support the Bill.

Mr Ahmad Mohd Magad (Pasir Ris-Punggol): Mdm Deputy Speaker, last year's economic downturn has set a new precedent in terms of unemployment, in that it has affected many more mid-level executives in comparison to the Asian financial crisis or the 1985 recession.

It is my understanding that a large number of executives were retrenched by irresponsible companies and employers without any form of severance break pay or retrenchment benefits. This has resulted in many of them running into major difficulties owing to their high financial commitments, particularly in home and car purchases. To make matters worse, the prolonged downturn has made securing another job more difficult. Many prospective employers also took advantage of the soft job market by offering lower pay. In desperation to gain employment, many unemployed executives have to settle for lower paying jobs in comparison to their previous positions. They are suffering in silence. I therefore see this Bill as timely to allow executives to join the rank-and-file unions, so as to protect them in situations of dismissals, retrenchments and breach of employment contracts. It is important to stress that the areas for union representation for executives are limited to individuals in these three areas only and that collective bargaining, as a separate class, is disallowed. This should be reassuring to employers and provide for a greater expediency.

Speaking on this Bill, Mdm Deputy Speaker, I would like to give my perspective from an employer's viewpoint, considering the fact that I am also responsible for the operation of a multi-national company here. Generally, it is my opinion that this amendment Bill is well conceived and has provided for sufficient safeguards, particularly to prevent conflict of interest between the employer and the executive who chooses to join the union.

I am glad to note that new section 30B(2) clearly provides for an employer to object to an executive joining a trade union if the executive performs duties or exercises functions which, among others, involve access to confidential information and decision-making. I believe the stipulations in this section are detailed and therefore adequately stipulate the real and potential areas of conflict of interest. This should alleviate the concerns of the management of companies and preserve management effectiveness.

However, like Mdm Ho Geok Choo, my only concern is the repeal of section 25 which prohibits collective agreements in new selected business ventures to contain terms and conditions of service to be more favourable to employees than those permissible under the Employment Act, unless such provisions are approved by the Minister. I am afraid I have to disagree with both Mdm Halimah and Mr Nithiah with regard to the repeal of section 25. I believe the presence of this section has served us well throughout the years, and it has also been instrumental in attracting investors and putting them at ease from a standpoint that there would not be any surprise or sudden pressure by the unions to demand for unreasonable terms. In the light of us continuing and wanting to attract higher value-added and capital-intensive investments into our country, which was also stressed by Mdm Ho earlier on, I would like to suggest that section 25 not be repealed, or if it is to be repealed, it should be postponed to a later date. This would ensure that new investors and new undertakings feel protected with the presence of such restrictions.

Finally, Mdm Deputy Speaker, it is my hope that the intent of this amendment Bill is not aimed at primarily enlarging the membership of the trade unions, but to inculcate greater responsibility at the workplaces in tandem with the changing profiles of our workforce. As Mr Yeo Guat Kwang has said earlier on, this would be a win-win situation for all parties.

On that note, Madam, I support the Bill.

Dr Ng Eng Hen: Mdm Deputy Speaker, I am gratified by the response from Members speaking on behalf of employers and unions in supporting this Bill. They have very strongly endorsed that this is needed.

They have disagreed on section 25 and this is illustrative of the tensions that would arise in any negotiations between employers and unions. Those issues were extensively deliberated in the tripartie committee, and this is the best case scenario. We never get quite what we want but we have arrived at the best position, anyway.

Mdm Ho Geok Choo also argued that, in fact, junior executives should be even more protected, and that they should have even more avenues apart from unions. Yes, this is being studied. With the review of the Employment Act, we will be making more deliberations regarding whether protection is to be extended to junior executives as well.

Mdm Halimah spoke on principles and indemnity. She and I both know that this is quite a departure from the subject that is being discussed. But I would compliment her on her creativity and choose another time to answer them.

Mdm Deputy Speaker, this piece of legislative amendment, which allows limited representation of certain executives by rank-and-file unions, has no precedent in other countries. It is illustrative of the ability and the uniqueness of our relationships and the close tripartite consultation and cooperation that have allowed this. This implementation would benefit employers, executives, employees, trade unions as well as our economy.

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. - [Dr Ng Eng Hen].

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