HEAD S - MINISTRY OF MANPOWER

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_**** Head S - Ministry of Manpower _ ( cont. ) -

Resumption of Debate on Question [18th March, 2004].

"That the total sum to be allocated for Head S of the Main Estimates be reduced by $100." - [Mr Yeo Guat Kwang].

Question again proposed.

Work Permits

Dr Ong Seh Hong (Aljunied): Sir, we understand the need for hiring foreigners to fill in the gaps in our labour market to sustain our economic growth. The Acting Minister for Manpower illustrated this point very well. His Chart 2 brought home the message. Moreover, the statistics presented in this House by DPM Lee during his Budget Statement also showed that the foreign workforce in Singapore actually cushioned Singaporeans during economic downturns.

Sir, we welcome the Ministry's move to help our employers overcome their difficulties in filling up positions that require special technical skills where there is a shortage locally. In that aspect, S Pass should be seen as a positive move. However, with the WDA tasked to upgrade our own workers to take up higher skilled jobs, I urge the Ministry to time-stamp S Pass policy. The Acting Minister for Manpower told the House yesterday that by 2009, there will be nearly a million workers with secondary or

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lower education. At the same time, there will be a shortage of nearly 400,000 workers, the bulk of whom, 230,000, are those with post-secondary education. This will be the gap to be filled by the S Pass holders.

Sir, at the same time, the Minister also excited the House yesterday by the various initiatives taken by WDA to retrain jobs in various sectors used to be shunned by Singaporeans, eg, marine and healthcare sectors. There are really plenty of opportunities for WDA to retrain, reskill and upgrade our Singaporean workers. We have a pool of nearly one million workers to be retrained, and our WDA will never be out of jobs for a long time to come. However, based on the numbers revealed, I see that WDA might not have been aggressive enough. For example, the number of mid-career nurses to be trained is only around 100.

I am afraid that the message might be wrongly perceived by our unemployed and lower skilled workers that they are untrainable. This negative perspective must not be allowed to be propagated and must be corrected. Otherwise, it might be seen as an admission that WDA is not up to the task. To be fair, nearly a million workers to retrain is a gigantic task for the WDA. We must give them time. Therefore, I propose to date-stamp the S Pass policy. At the same time, we should measure how well WDA has done by the number of Singaporeans that they manage to retrain to fill the posts. Otherwise, they will be filled by the S Pass holders.

Next, Sir, I would like to comment on the levy for S Pass holders. S Pass will replace the existing Q2 Pass. However, S Pass attracts a $50 levy while a Q2 Pass does not. Imposing an additional levy will be unfair to existing employers of Q2 pass holders, as this will increase their business costs. Here, I must declare my interest as the Chief Operating Officer of Ren Ci Hospital. In the healthcare sector,

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hospitals, nursing homes and various step-down care facilities hire significant numbers of nurses and para-medical staff on Q2 Passes. Many of these services are run by Voluntary Welfare Organisations (VWOs), such as Ren Ci Hospital.

The Chairman: Please wrap up your speech, Dr Ong.

Dr Ong Seh Hong: I urge the Ministry to review and waive the levy for VWOs which depend on public donations and Government subventions for their operations.

Mr Low Thia Khiang (Hougang): Sir, currently, applications for man-year entitlements are allowed only by main contractors, and the sub-contractors of a project are not allowed to apply for such entitlements. It was reported in the Lianhe Zaobao on 3rd December 2003 that main contractors do make huge sums of money by renting foreign workers to sub-contractors who need workers for projects sub-contracted. I wonder whether it is the intent of the MOM's foreign worker permit policy to help main contractors make extra income.

I believe that this policy may be the result of MOM cutting down the need to monitor foreign workers. If too many contractors are allowed to bring in foreign workers, MOM will have more work to regulate. However, it should not be just for the convenience of MOM's enforcement. Sub-contractors are left with the consequence of unfair competition, as manpower resources are a critical factor in the construction industry. As a result, smaller contractors are now held ransom by bigger contractors and placed at a disadvantaged position. I would urge the MOM to rethink this policy, as it could hinder the development of entrepreneurship in the construction industry.

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Dr Mohamad Maliki Bin Osman (Sembawang): Sir, work permit holders have played a critical role in our economic and social life. They are in our homes, housing estates and construction sites. Our policy to them is very clear: "You are here to work, not to get married or set up a family." Those who intend to marry Singaporeans must seek the approval of relevant agencies. The relevant authorities would then make their own assessment as to whether the work permit holders can marry Singaporeans or not. If they proceed with the marriage without the prior written approval, the work permit holder will be repatriated back and banned from entering Singapore for an unspecified period of time.

Sir, many do not realise that such restrictions not only apply to existing work permit holders, but also to former work permit holders, ie, those who have completed their contracts and returned to their home country. The reason, as I understand it, is that the Government does not want foreigners to use the work permit as a backdoor way of getting into Singapore permanently. I have come across cases of Singaporeans whose foreign spouses have been banned from entering Singapore because they had not sought written permission to marry the foreigners who were former work permit holders. The usual explanation that they give is that they are not aware that they still need to seek permission, even if their spouses had ceased to be work permit holders.

I know this is a fine line that the authorities will have to strike, ie, to control the flow of lesser skilled foreigners into the country and meet some Singaporeans' desire to form families with these foreign partners. While there is merit in the former, we need to be fair to the latter too. I would like to ask the Minister if MOM will consider putting a period of time from the date that the work permit expires before the ex-permit holder

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can marry a Singaporean without having to seek prior approval from the authorities. Perhaps, maybe, five years, to overcome the concern that work permits are the backdoor way of getting into Singapore. After all, one does not need to seek approval if the partner had not been a work permit holder before. This is how I understand it.

Sir, there are Singaporeans who are currently separated from their spouses, as the latter are banned from entering Singapore because they have violated these immigration and employment rules. The question that they have is: how long is this ban going to last? Is it forever? Some do have children and, on the surface, the rules seem to counter our policy of keeping families strong and united. I would like to ask the Minister if he would consider making the criteria and guidelines more transparent for Singaporeans to understand and appreciate, especially in terms of what they need to fulfill to get the approval to marry, as well as to have this ban lifted.

Foreign Workers Policy

Mr Yeo Guat Kwang (Aljunied): Sir, in Singapore, we recognise and affirm the contributions of the foreign workers towards our economic development. Take the local factories and restaurants, for example. They would not have survived without the number of foreign workers who make up for the shortfall in our local workforce. In turn, these workplaces continue to provide our local workers with the employment opportunities.

However, with globalisation and the local unemployment situation, MOM should help industries that are heavily dependent on foreign workers to reduce their dependency by raising productivity and encourage these industries to adopt

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innovative methods to redesign and re-engineer their work processes to try to consider the local job seekers for all these jobs. Today, the number of foreign workers in Singapore is very large. We have about 500,000 foreign workers, including 140,000 foreign domestic maids in our 920,000 households. We should substantively reduce our dependence on foreign labour.

Many Singaporeans would like to know whether the Ministry would consider further tightening the man-year entitlement. Would MOM also review the present work permit allocation system, such as changing the existing sectoral approach and reclassifying foreign workers' needs and entitlement of the various industries by job requirements?

Sir, this House had debated previously on the plight of foreign workers in Singapore. I have asked the Ministry questions on housing for foreign workers and the actions taken against errant employers who do not pay foreign workers. The Minister has assured the House that the Ministry monitors this situation closely and it will not hesitate to take errant employers to task. I hope the Minister could give us some update on this.

I am very pleased that the Ministry has accepted the NTUC Foreign Workers Forum's suggestion to put in place a mandatory safety course for foreign domestic workers. But more will have to be done, as every fatal accident is one case too many. Another useful tool to safeguard and protect the interest of foreign domestic workers is a model employment contract. In the event of a dispute, a foreign domestic worker, with a fair employment contract, would be able to seek redress at the MOM Foreign Workers Unit. Would the Ministry make it mandatory for all employers who employ foreign domestic workers through employment agencies to adopt a model

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employment contract with specific core terms and conditions, including rest days?

Moving ahead, we also need to monitor and moderate the demand for foreign domestic maids and put in effort to raise the work quality. The Ministry should consider doing a study on how other countries are able to achieve high female worker participation rate than us without a heavy reliance on foreign domestic maids.

We should also not become too dependent on a particular country for the supply of foreign domestic workers. Instead of letting some surrounding countries to threaten us to cut off supply, I think it is time for us to also consider imposing a cap on the total number of foreign domestic workers from each country.

Work Pass System

Ms Olivia Lum Ooi Lin (Nominated Member): Sir, some Members in this House have already touched on the subject of the S Pass system. Mdm Halimah Yacob also expressed concerns that some employers may ask for a high quota, thus further reducing the job vacancies for Singaporeans.

Coming from the private sector, I would like to present the other side of the story. Take my company as an example, and here I declare my interest. We have always found it hard to attract skilled Singaporeans who are willing to roll up their sleeves and get their hands dirty working in the water and waste water treatment industry. Some will give it a try, but will quit once other job opportunities are available. This has wasted the effort and money we have invested in them. This is a reality. I am sure many other companies in Singapore face the same problem. We have no choice but to turn to foreign workers to remain competitive. We employ about

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300 staff in Singapore. Half of them are either Singaporeans or PR holders. Some of them are in R&D, and others in sales and product development. Over half of our profits from last year was from our China market. China is our chief focus, and if we do not find all ways to remain competitive, our company will suffer and the 150 locals that we employ may lose their jobs.

Though the private sector welcomes the S Pass system, we still feel that the 5% quota allocated is insufficient. I urge the Ministry to be more flexible and generous in granting the quota for S Pass holder, and evaluate each industry on its own merits. I also urge the Government to be more transparent in the criteria for approval of S Pass applications. Without clear and transparent approval criteria for S Pass workers, the industries will waste much time and cost in sourcing for foreign workers, submitting applications for approval and only to end up with rejections. I seek the Ministry to be upfront on the approval criteria, such as qualifications,

skill sets, experiences, age limits and limitation of duration of employment. In addition, I would also like to know whether the dependants of S Pass holders will be allowed to stay in Singapore for the period of employment.

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Lastly, I would like to urge the Ministry to review the guidelines on revised work permits for employment of accompanying mothers. Under the guidelines, accompanying mothers are not allowed to work during their first year here. The reason given is that the mothers should spend time with their children to supervise them. However, we know that the cost of living here is relatively high and these mothers will find it difficult to have sufficient savings to live reasonably without any income for an entire year. As a result, some will resort to illegal means out of desperation and, in fact, there were

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already such cases. It would be better if we were to allow them to work during their first year here, so that it is a win-win situation for all. They can work as chambermaids in hotels and in industries, such as the textile industry, where there are difficulties in employing locals.

It is presumptuous to think that their children will do badly if they were left alone unsupervised. When I was young, I had no one to supervise me in my schoolwork but I did not do too badly in life. These children from the PRC are mostly high achievers and they know that the money used to send them over is all hard-earned or borrowed. We need to make Singapore a conducive place to attract foreign talents, and what better time to start them than when they are young. Let us make it easier for the mothers to feel secure financially.

The Acting Minister for Manpower (Dr Ng Eng Hen): Sir, Members have asked a number of questions about our foreign labour policy. Let me address them.

Local and Foreign Manpower - an indivisible package

Yesterday, I explicitly articulated that one of the pillars of our competitive edge was to allow companies in Singapore access to foreign workers. In other words, it is a strategic asset. It is not something we can do without. I have given the House the numbers, in terms of the jobs that are required by our economy and the way that our local workforce is headed. DPM Lee showed earlier in his Budget round-up speech how foreigners helped to meet manpower demand when the economy did well and, yes, as Dr Ong Seh Hong said, buffered the losses when we are not doing so well.

I looked at the figures last year to see whether this was true as well, because it

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was a year where there was turbulence in the first half, and we recovered in the second half. For last year alone, because it was more acute, we understand it, and I want to press this point. Singaporeans gained 15,000 jobs. There was an employment gain of 15,000 jobs for locals. Foreign workers lost 28,000 jobs. It again shows that our policies are suitably calibrated, so that when there is an upside, when the economy goes up, we gain because of the addition. But when the economy turns bad, foreign workers exit in larger numbers.

But there is another point why having access to foreign workers is a strategic asset. Our companies become less competitive if we uncouple this local-foreign worker package. I hope to rid us of this mindset that it is "one foreign worker in, one local Singaporean out." Instead, in many companies, like Ms Olivia Lum has exemplified through that of her company, that it could very well be "one foreign worker out, two locals out." It is an indivisible package.

I want to emphasise that, thus far, at the overall level, foreign workers have helped augment our local workforce. They have helped our economy to grow, as they do jobs that Singaporeans do not want to do. An access to this transient pool of foreign workers allows companies to scale up and down quickly. Let us take aerospace, for example. Aerospace engineering companies tell me that during SARS, their hangers were empty, in terms of maintenance, repairs and overhaul. But after SARS, there was such a ramp up and their hangers are full to the third quarter of this year. They are trying to turn around aircraft as quickly as possible - not an easy thing to do because the aircraft are quite big. How do they ramp up suddenly? Having access to a transient pool of foreign workers gives them that flexibility. Who knows, when another Asian flu hits, they will have to adjust.

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Because companies can recruit from a larger pool, they can bring in workers with specific experience and skills they need. We will all end up as losers if we see this issue as locals against foreigners, because the economic reality is, from the numbers that I showed the House yesterday, we will always need foreign manpower. So if we always need foreign manpower, the strategy must be how do we maximise this.

Ms Olivia Lum has argued why businesses like hers could not survive without foreigners. Dr Ong Seh Hong asked whether we have done enough in terms of healthcare. He rightly pointed out that we have one million people to train, and a shortage of 350,000. It is an easy solution - why not train more? He is right. But I must explain to him that it costs to train. For each person that we enrol in a mid-career change, to train for a healthcare profession, for example, nursing, it is an expensive programme. It is $20,000 for course fees alone and another $20,000 for allowances and subsidies, ie, $40,000 to train one mid-career switch. We will do what we can and do more when we can, but there are limitations.

Other MPs like Dr Ong, Mdm Halimah, Mr Seng Han Thong and Mr Low Thia Khiang have asked why not just continue and intensify this effort to upgrade Singaporeans. In other words, do not loosen the tap for foreign workers, so that we can force businesses to look to Singaporeans. It is a valid perspective. While I was listening to Mdm Halimah yesterday and Ms Olivia Lum today, they are only seated one row apart, but their positions are poles apart. What is the reason? This is because of different perspectives.

My approach is that we need not take extreme positions. Training locals, upgrade them to get jobs, and allowing foreign manpower into our workforce are

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not mutually exclusive options. We can strike a productive and sustainable balance through the use of our dependency ceilings and levies, which are macro-economic levers. In other words, this policy, where a company must hire a certain number of Singaporeans before it can hire some foreign workers, and, on top of that, with an added levy imposed, has enabled companies to get their manpower and afforded some protection to Singaporeans at the same time. Yes, it is a delicate balancing act. If we squeeze companies too much too quickly, they will relocate or close down. Ms Olivia Lum said that the competition is in China, but her factory is in Singapore. If we do not allow businesses like hers to respond, they will do their calculations. We can say all we want, but they will look at their books and do their calculations.

On the other hand, if we do not focus on training Singaporeans and loosen the tap to access of foreign workers, and companies use that as a cost averaging at the expense of skills, they will lose their competitive edge. In the near term, Singaporeans will find it more difficult and, in the longer term, our companies will lose their competitive edge.

That is why MOM has introduced the S Pass, and I thank some Members who supported this. It allows businesses to grow and upgrade with more skilled workers. As I have explained, we are short of skilled workers. I want to highlight why we need a S Pass and why it is different from the previous Q2 passes.

Under the Q2 Pass scheme previously, MOM considered on a case-by-case basis workers who did not meet our Employment Pass salary criterion of $2,500 and acceptable qualifications. The business community has said: "You need to make these more transparent, so that we know what you require." So, we introduced the Q2, so that people who do

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not qualify for the Employment Pass could be allowed in on a case-by-case basis.

But in an increasingly fast-paced and changing economic landscape, new types of jobs are needed, some of which we have not thought about before. This old system of reacting to applications is too slow, and we are always one step behind the curve. Let me give you an example.

Recently, my family and I dined at a restaurant. I suppose restaurants have to use various means to attract clients. This particular restaurant brought in a chef, I presume he was from the PRC, whose skill was in slicing a loaf of wheat, and he was able to slice it such that each slice would hop about three metres and end up in the boiling pot. This is innovative. But could MOM have devised an occupational sector-specific scheme to see whether we can evaluate them? It is just not possible. It extends to many other companies. The need for a S Pass addresses this more flexible requirement which is less prone to micro management. Members may say that it is an anecdotal experience.

Let us take IT, for example. IBM, a large MNC, has a workforce in Singapore that includes foreign talents from some 25 nationalities now. Their areas of specialisation include managing large complex customer projects that extend way beyond Singapore into regional and global regions. They bring in staff from these various countries with in-depth expertise and they perform functions, ranging from business consultancy, project management, solution architecture to contract negotiations. And because they are able to tap on the resources of a global team, IBM is able to deliver solutions to clients in Singapore as well as to the region. That process strengthens our position as an info-communications regional hub. I doubt that MOM, or indeed any other agency, can guess what

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skills they need for their clients before they know it. If we did, then we should take over their business. It is better for us to create a system, a systemic solution like the S Pass, with some checks in place, and let companies bring in the type of talents they need. It is a smart way to generate growth.

But I also want to take into account MPs' concerns - Mr Yeo Guat Kwang, Mr Seng Han Thong, Mdm Halimah, Dr Ong Seh Hong and Mr Low Thia Khiang - on the impact of S Pass on local workers. I agree we need to balance industry growth with local manpower development. That is a fundamental assertion. I want to assure Members that we want to minimise the impact and we will monitor this impact.

Controls for S Pass

We have in place three main controls: firstly, the 5% quota; secondly, the skilled levy; and, thirdly, minimum salary criterion and other qualifications. Of all, the 5% quota is actually the most restrictive. In other words, you can talk all you want, if I draw the line, then that is it. You cannot go above it. I want to explain what this 5% quota means, because I do not think it is well understood. Actually, on how onerous it is for businesses, it is onerous. I accept that. The 5% quota means that a company must hire X number of Singaporeans before it can hire foreign workers. In America, recently in Netherlands, it is not so onerous. What they say is that the employer must show that it cannot get other US citizens or Dutch citizens, so companies resort to putting their advertisements, I suppose sometimes in an obscure newspaper, three times, and that is considered that it cannot get locals. In our case, we say, "Nothing doing. You can try as hard as you can and if you do not fill up the positions of Singaporeans, we just would not allow you to hire foreign workers."

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For a 5% quota, what does it mean? It means that you must hire at least 13 Singaporeans to hire one S pass worker, or 100 to hire eight. If you do not hire 100, you cannot hire eight. If you do not hire 13, you cannot hire a single one.

The second aspect - I have circulated the chart, and it explains in terms of what the services sector does - for manufacturing, we have acceded to Ms Olivia Lum's requirement that it is higher. It is a 50% quota. But the 5% quota exists for both services and manufacturing. For construction

and the marine industry, I have subsumed it under the overall quota. The other control is the 50% levy, and I would like to remind Members that the 50% levy is not only just to S Pass holders, but all skilled work permit holders. It helps to moderate the demand for such workers. It is not a big sum, but it is a lever, in case I need to bring it up or bring it down when economic conditions are difficult.

11.30 am

I am not keen, as proposed by Dr Ong Seh Hong, to waive this for VWOs. Why? Because I am also trying to reclaim with VWOs for jobs. Why should I not? It is one of our fastest growing sectors. When I was previously supervising special education in MOE, one of the things I lamented was that the special schools that I went down to, the VWOs and the principals said: "I cannot get enough Singaporeans to do these jobs." Dr Ong says that with the many-helping-hands approach, the Government must take the lead. But Singaporeans must respond to these needs as well. They must go into these sectors, because they are meaningful occupations - physiotherapists, speech therapists. Why should I not see this area as a possible area for jobs for Singaporeans? The financial aspect of allowing VWOs to meet that 50% levy can be met by other means, but

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I will hold it, if only just for a signalling device.

The third criterion is a minimum salary of $1,800. When we set it at $1,000, Mdm Halimah says, "Look, this level will push fresh polytechnic and ITE graduates out of the market." In the next moment, Ms Olivia Lum stands up in the Budget debate and says, "Hang on. This will raise wage expectations of these young school leavers." Ms Olivia Lum says it is too high and Mdm Halimah says it is too low. Between the two, I have got the salary figure right, because, even with the inclusion of employer's CPF contribution, the cost of employing a fresh local polytechnic graduate today is only $1,750, including CPF, and $1,500 for an ITE graduate. This is still lower than the $1,850, inclusive of levy, the cost of employing an S Pass foreign worker with equivalent qualifications but longer work experience. So, I think the balance is there. As I said, it is a delicate balancing act. We will adjust all these levers, when and if we need to.

Mr Yeo Guat Kwang said that we should reclassify foreign workers' needs and entitlements by job requirements in individual industries. Theoretically, he is correct. But, as I said, it is difficult to do. Sometimes, we just know after the fact. We never knew a job existed. So, I get many requests, as Acting Minister for Manpower, of particular restaurants who want to start new cuisines - Middle Eastern, Central Asia, some places that I have never heard of - and they say there is no one in Singapore that can cook those dishes. So, I think about it, and I say that is true. If you want a cook for a Kazakhstan restaurant, you cannot find that person. But should I allow a S Pass holder? It is difficult. So, we better just set the levers and then decide later on what we want to do. In other words, if you want to start a Middle Eastern restaurant, you go and hire 13

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Singaporeans, and then perhaps I will let you have that cook and then you can have the restaurant.

Mr Yeo Guat Kwang wants assurances that we will go after errant employers who do not pay their foreign domestic workers. We do. We debar them and sometimes jail them. We are serious about it. He also says we should not be too dependent, especially for foreign domestic workers from source countries. We actually allow households to get maids from various countries - Malaysia, Philippines, India, Thailand, Myanmar, Sri Lanka, India and Bangladesh. Setting distinct quotas for countries is a delicate aspect. Countries might object. And also the market place, ie, certain households just go for certain countries. So, I think it is better just to watch it and see what other levers we can pull before we do that, as they will invite other problems.

Questions have been asked about man-year entitlements for construction. I will tell you that the construction industry is very complicated, as you well know. But, by and large, the Man Year Entitlement (MYE) system has achieved the objective of reducing the industry's reliance on foreign workers. Let me give you the figures. In 1998, we had 200,000 construction workers. The current figure is 135,000. And, no, we did not reduce this number because MOM wanted to reduce the amount of work, as Mr Low Thia Khiang suggests. He says if we have more foreign workers, then we have more work and, therefore, we are trying to reduce the number of foreign workers. That was not the driver. The driver was really just the volume of work in construction. At the peak of the construction boom, it was worth about $24 billion per year. It has now gone down to $10 billion. And, just by sheer economics, the number of contractors will have to go down. It is the market place

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that is responding. But, together with BCA and MND, we will review the MYE system to best meet the long-term manpower needs.

Mr Low Thia Khiang asks if we can allocate MYEs directly to subcontractors. It is complex. The main contractor is ultimately accountable when he bids for completing the project on time and within budget, and he is in a better position to allocate. Mr Low says the main contractor is renting out these MYEs. That is an offence. If he knows of anyone who does it, let us know and we will prosecute. What I am trying to say is that it is difficult for any agency to take over this responsibility and micro-manage. However, I am not closed to the idea. We have been exploring how we can facilitate this. We understand it does cause problems on the ground, and we will discuss this with the relevant agencies and industry associations to see if we can improve this.

Dr Maliki says that we are too restrictive in our marriage restriction policies. He said explicitly that we tell foreign workers with work permits here that they come here to work and not to marry. I am sympathetic. But I have a problem of numbers. I have more than 500,000 work permit holders. I can meet each one individually to say, "Well, you are here to work, but if you fall in love then, maybe, on a case-by-case basis, I might consider allowing the marriage." But that means potentially 500,000 applicants. When people on the ground work, they meet, they socialise and they fall in love. Well, in Singapore, we wish they fall in love, get married and have babies, but that is what happens on the ground. So the signalling device needs to be strong upfront. When they do fall in love and apply for marriage approval, first of all, we tell them to be very careful because their application might not get approved, so, understand this. But, if they do, what we want to ensure is that

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they are able to take care of themselves and not become a burden to society or the state. And this is the rationale for this policy. I will tell you that we approved over 85%, although I am not sure I want that widely known. We are still restrictive. It is hard to be transparent.

Ultimately, whether it is a foreign worker policy or training, the issue is that we are doing all these for Singaporeans, and, yes, we will reclaim sectors, we will upgrade. Foreign workers help our economy grow. At the same time we will upgrade Singaporeans to upgrade sectors.

There were some questions asked on foreign domestic workers by Mr Yeo Guat Kwang. With his indulgence, I will take that later when other questions would be asked.

Mr Yeo Guat Kwang: Sir, the Minister mentioned that the 5% is on top of the original allocation of 30% or 50% of the respective sectors. But look at the response from the employers. Straightaway, before this has been implemented, they have already asked for more. So, how are we going to ensure that the management will really seriously look into how to employ local workers instead of just saying that they need more and more foreign workers? Would the Minister assure us that he will not give in?

Dr Ng Eng Hen: Sir, as I have said, we need these three levers to adjust, and that is the economic reality. We have to adjust it, depending on the economic conditions. Post-SARS, we quickly dropped the unskilled levy because businesses were really affected. So, to give an assurance, it is a bit too much to ask, and it is foolhardy for me to say so. How to get employers to be pro-Singaporean? I think the very fact that Ms Olivia Lum has a factory here is a significant indication. There are choices elsewhere. But we can assist. Government can assist by, as I said

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yesterday, giving access and funding to Singaporeans who want to upgrade. At the end of the day, it is Singaporeans themselves who have to market their skills and abilities. Trying to bolster and strengthen them by fiat, legislative administrative barriers, is not sustainable, and it does not build their own confidence. To do this, we will help them. We will find new ways to train them, and I think that is the best assurance.

Industrial Peace

Mr Heng Chee How (Jalan Besar): Sir, Singapore has done well in fostering industrial peace over the years. This has added to our attractiveness to investments and has helped to create the overall conditions that promoted job growth and retention. Compared to many other countries where industrial disruption makes regular news, I am sure that investors and companies appreciate the constructive and productive labour-management relations that prevailed at enterprise level and the strong tripartite ties at the national level. I must say that such industrial peace and harmony cannot, and must not, be taken for granted. The fact that Singapore has not experienced a strike for many years now is not the result of repression of labour rights, nor does it mean that there are no problems or issues between employees and employers at the company level. What has happened is that the overall relationship and the structure of problem-solving have enabled unions and employers to deal with and resolve problems at the earliest possible opportunity. As a result, most issues are effectively tackled to mutual satisfaction at the company level and do not even show up in the MOM statistics by way of conciliation and arbitration. That said, the conciliation and arbitration processes themselves further add to the effectiveness of fair problem resolution.

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This overall structure has held up well over the years, and has allowed Singapore to avoid the detrimental effects of industrial disruption. The end result is one of high employment, rising living standards for Singaporeans and a stable conducive operating environment for businesses.

Sir, going forward, I see that more must be done to foster trust and relationship between labour and management at the company level. I say this because the overall environment has become more uncertain. It is precisely in recognition of this increased uncertainty that instruments, such as flexible wage systems and portable medical benefits, have to be put in place. In such an environment, much more emphasis has to be placed on company-level decision making and consultation, because adjustments must happen and be made at company, rather than economy-wide level. Trust and a viable working relationship are the glue and lubricant that allow for quick and frequent adaptation. Without strength in these critical areas, companies and their unions and workers will find it harder to make quick enough adjustments to fast-changing circumstances. And, if they are not able to adapt quickly enough, then bottlenecks will form, and our ability to maintain industrial peace will be progressively undermined. Ultimately, we will suffer as a country and as a people. Conversely, if we are able to build strength in these critical areas, our economy will enjoy a degree of resilience and flexibility that can be an enduring competitive advantage. I would, therefore, like to ask the Minister what plans his Ministry has to further the cause of industrial peace in Singapore.

Dr Ong Seh Hong: Sir, with your indulgence, I would like to seek clarification from the Minister for Manpower before I move my next cut.

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The Minister just now lamented on the cost of retraining Singaporeans in upgrading themselves. Would the Minister not agree that by retraining Singaporeans, the benefits actually stay in Singapore as it enhances their long-term employability, help them to find jobs, help their families, and reduce their and their families' dependency on the state for social welfare and other assistance. The benefits actually far outweigh the cost we put into retraining Singaporeans. I would like the Minister to clarify on this.

Labour Relations

Sir, one of the strengths, and hence our attraction to foreign investors is our harmonious and stable labour relations. This is attributed to our strong tripartite effort by our Government, unions and employers. Sir, like the hon. Member, Dr Tan Cheng Bock, commented yesterday, I too have heard concerns from the ground lately, after the incident of SIA involving the union, management and the Senior Minister. Sir, people on the ground wonder if there was something really seriously wrong that the Senior Minister has to intervene personally. They also wonder what has happened to the long-term harmonious industrial relations, a strength that we have been praised for. Sir, this negative speculation should not be allowed to fester on the ground. May I ask the Minister to enlighten the House what his assessment is of current labour relations in Singapore and what his Ministry is doing to foster and strengthen our labour relations further?

And how does he ensure that, in doing all these things, the workers' interests are protected and balanced vis-a-vis that of the companies?

Dr Tan Cheng Bock (Ayer Rajah): Sir, I agree with Mr Heng Chee How that trade unions play an integral part in the tripartite relations between workers, employers and the Government. This has

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ensured industrial peace, thus encouraging more investors to come to Singapore and set up shops and, of course, create jobs and wealth. This reflects also well on our unions. It shows an understanding of the importance of industrial peace on the part of the union officials. This philosophy of quiet negotiation, as pointed out by Mr Heng Chee How, between the parties concerned to avoid confrontations has seen Singapore through many good years, and I am sure, many more good years to come.

I want to believe that one main reason why our workers and unionists adopt this stand together with the employers is because of our past history of industrial and union conflicts. They do not want to see it happen again. They saw what happened to our lives, our properties and the investors when strikes paralysed this country, not only our transport system (the Hock Lee bus strike), but also our school system where union conflicts brought students pitting against the authorities (the Chinese Middle School strike). Now, we want to avoid all such happenings again.

Today, I notice that our workforce has a big foreign element of at least half a million people. They have no such history of our past, and no roots here. They are no stakeholders. But they are coming in bigger numbers and they come from different parts of the world. They bring along their own value systems and some of them with historical baggage of their labour-management relations. Most settle down well and go along with the general sentiment of our local workforce. But a minority of them may be different. They may have separate agendas which we may not be aware of. So I have three questions for the Minister: Can foreign workers join our unions? If they can, are they allowed to hold office? Are there any OB markers?

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Companies Restructuring

Mdm Halimah Yacob (Jurong): Sir, in 1996, the Employment Act was amended to make it easier for companies to transfer their staff when they restructure. So when the business is sold, there is no need for companies to pay retrenchment benefits. They can transfer the staff to the buyer but the length of service and terms and conditions of service of the workers will be protected.

Sir, while this provision has generally worked well, there are implementation issues that have arisen which can give rise to prolonged disputes when companies restructure. For example, it is not clear to companies what kind of restructuring is covered under this provision. Some companies refuse to pay retrenchment benefits even when it is clear that it is not a situation under section 18A, making workers unhappy and frustrated. Other companies give inadequate notice to their workers before transferring them or refuse to share information about the transfer until the very last minute which makes it difficult for the unions to assess the financial viability of the buyer before agreeing to the transfer, or otherwise. Some companies comply with the letter of the law but not the spirit. In one restructuring exercise, the workers were transferred twice in a matter of two months. The first time they were transferred to another company, they were not told that two months later they would be transferred to yet another company. Examples like these make workers feel like they are some commodity being transferred from one hand to another. No doubt, at all, it helps the companies' competitiveness but workers' welfare in these instances is not taken care of if they are not properly treated. These and other issues, if not resolved, will weaken the effectiveness of this provision. It would also undermine our ability to protect workers' interests effectively when a transfer takes place.

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Sir, there is clearly a need for us to review this provision to remove the ambiguities so that companies can restructure smoothly and the workers' interests are better protected. In this connection, I would therefore like to suggest that the Ministry set up a tripartite committee to initiate discussions so that there is an agreement on some of these contentious issues. I would also like to ask the Minister to give a time-frame for the completion of the work of this committee.

Dr Mohamad Maliki Bin Osman: Sir, may I seek a clarification from the Minister?

The Chairman: You should have asked just now. All right.

Dr Mohamad Maliki Bin Osman: I asked the question about former work permit holders having to seek approval to marry Singaporeans. I think that was answered. Can I ask the Minister also in relation to that, they are supposed to serve a ban, but it is not clear how long that ban is to last? Is there any way that the former work permit holders can be relieved of the requirement to seek permission if they have not been holding the work permit for the next five years or so?

The Chairman: Mdm Halimah, yes, please do it quickly.

Mdm Halimah Yacob: Sorry, Sir, actually I put up my hand earlier even before Dr Maliki, but you did not see me. I also wanted to seek a clarification from the Minister. I said that the figure of $1,800 to be paid to the S Pass holders will be in direct competition to the university and polytechnic graduates here. I did mention that the polytechnic graduates with two to three years' experience would obviously earn much more than $1,800. When the S Pass

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holders come in, their salaries will be lower than our fresh graduates and polytechnic graduates with two to three years' experience. So there is a direct competition. There is a serious concern of Singaporeans on that.

The Chairman: Mdm Halimah, your clarification sounds like another speech. Prof. Ngiam.

Retrenchments

Assoc. Prof. Ngiam Tee Liang (Nominated Member): Sir, I would like to follow up on the hon. Member, Mdm Halimah's point about restructuring. As corporate mergers, restructuring and retrenchment exercises are becoming more common in the new global economy, and this is the new economic reality, it seems to me that the existing provisions of the Employment Act on retrenchment matters appear inadequate to help those who are out of work and have attendant family problems to deal with. The issue is how to get employers to have a greater sense of corporate social responsibility towards the well-being of retrenched employees. Often, it is left to the Government and the social service sector to provide remedial help, for example, interim financial assistance, counselling, care and support to the unemployed and their families. In this regard, I would like to ask the Minister if his Ministry is considering how to invoke a greater sense of corporate social responsibility amongst the employers, such that they do not feel that it is just to comply with the provisions of the Employment Act to provide the minimum, and that they have discharged their responsibility.

Wage Restructuring

Mr Gan Kim Yong (Holland-Bukit Panjang): Sir, earlier this year, the Government announced that the Ministry of Manpower would step up its efforts to

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push ahead with wage restructuring. In fact, DPM Lee mentioned that the Acting Minister's bonus would depend on its success. Perhaps, the Acting Minister could give us an update on the progress of the efforts by his Ministry.

Sir, I would also like to take this opportunity to share some of my views on this issue. Firstly, wage restructuring process must be fair and equitable. Many employees are sceptical of this proposal as they suspect this is another disguised form of wage cut. Sir, we must dispel such suspicion. Employers, therefore, must not take this opportunity to reduce the overall remuneration package for otherwise, there will be ill-will and the process will fail.

Secondly, the criteria for the proposed scheme must be well-defined and transparent. The greatest fear of the employees is the uncertainty of the variable component. The criteria on which the variable component may be reduced or removed must be clearly spelt out and made known to the employees so that there is mutual trust and confidence. This will also minimise the possibility of abuse.

Thirdly, communication is vital, not only at the macro level, but also at the micro level. At the company and the union levels, there should be extensive tripartite consultation before the system is introduced. The intent must be clearly explained to all the stakeholders so that they can buy in to the idea. Full commitment from all parties is vital to the success of this transformation.

Sir, I would like to ask the Acting Minister if he could share with us what his plans are in pushing ahead with wage restructuring. I certainly hope that the process would be smooth and successful, and the Acting Minister would get his much deserved bonus at the end of the

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year, but, more importantly, our economy will be strengthened.

Mr Seng Han Thong (Ang Mo Kio): (In Mandarin) : Sir, wage restructuring is a painful process as it involves structural changes. It is not wage improvement but wage reform to make us more competitive. In the process of the wage restructuring, the Government, the management and the workers have to work closely to share the bliss and adversity together.

Feedback from the ground is that, though workers are prepared to stick together with the management through thick and thin, when it comes to bliss, the management is not that willing to share the bliss.

Workers in general understand the disadvantage of our high production cost which includes the wage cost. They experienced it last year when we faced the threat of SARS. Many union leaders initiated the wage freeze and wage cut to save jobs. This is what we call - go through thick and thin. Workers understand that as long as they can keep the job with the basic pay which can cover their basic needs, they are prepared to share the adversity with the management.

The recommendations by the wage restructuring committee are not new. In the 50s and 60s when my father was employed, I knew that his take-home pay was just enough to cover our basic needs. We knew that, at the end of the year, if the company made good profit and if the employee performed well, he would get a big bonus in the range of a few months' salaries or even more.

In fact, in the process of wage restructuring, the problems we faced are that companies are not transparent enough, the performance appraisal system is not open enough and the management

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system is not sound enough. As a result, when it comes to wage restructuring, we can only see the downside but not the upside. Thus, the workers' perception is that wage restructuring means wage cut. We should have both the downside and the upside. I hope the SWAT team which was formed, as a result of the wage restructuring committee, can help companies instil a sound communications channel and, at the same time, instil this spirit of sharing the bliss and adversity together.

To conclude, I must say that my observation is that unionised companies move faster in their wage restructuring as they have the unions to work together with. Those non-unionised companies move slowly as the management is adopting a wait-and-see attitude.

Mr A Nithiah Nandan (Nominated Member): Sir, the hon. Members, Mr Gan Kim Yong and Mr Seng Han Thong, have mentioned about wage restructuring. But I think it is worth reiterating the points again as a lot of workers have raised concern on this. I hope the Acting Minister for Manpower will take these points seriously.

Sir, DPM Lee's call for wage restructuring was positively responded by the unions. We appreciate the need to implement a flexible wage structure. The principle and basis of this acceptance to go into flexi wage system is to help companies remain cost effective in case of an economic downturn. This, we believe, could also help to contain retrenchment. However, wage cost is not the only factor that would have an impact on the company's performance. There are also other related costs. What is important is that if wage restructuring is seen and deemed to be looked upon as a wage cut by the employees and the employers also take it as an opportunity

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to cut wages, it would have a negative impact on productivity. Workers may feel rejected.

Another factor in relation to wage restructuring is the monthly variable component. It is sometimes quite apparent that employers would seem to be reluctant and vague in their response when the introduction of MVC is mentioned. Sir, the Ministry of Manpower must enlighten the employers that such negative perception and conclusion on wage restructuring would not benefit them. As we are prepared to allow a substantial portion of our salary to be variable and to be cut, in the event of the company becoming unprofitable or in financial need, employers must not take advantage of this at the expense of the employees.

12.00 noon

I wish to also express a concern when implementing the scheme of tying the annual increment and bonuses to the individual worker's performance and the company's performance. It is an understandable fact that appraisal on performance of a worker can be subjective. In fact, the appraisal system is in its infant stage in Singapore. Unions have a tough time persuading the workers to accept it. I would urge the Acting Minister for Manpower and the tripartite committee on wage restructuring to work on formulating a standard guideline on the appraisal system, so that companies intending to introduce the appraisal system could use it as a guide. The Ministry must also have some form of mechanism to check on errant employers who may abuse or manipulate it to suit their gains. This is an important element as it relates to wage restructuring.

I call upon the Minister to give a clear indication to employers that the implementation of wage restructuring is not an opening for them to cut benefits

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and wages, but is an important instrument that would be useful in times of economic downturns. It must not undermine the principle of equitable and fair wages to workers. The Acting Minister for Manpower has a target to reach by the end of this year, whereby his bonus will be dependent on it. I believe DPM Lee will consider giving him a higher bonus if quantity is matched by quality.

Flexible Wage System

Dr Ong Seh Hong: Sir, I would like to speak on the teething problems related to implementing a flexible wage system on the ground.

Sir, there is much confusion on the ground regarding how to implement a flexible wage system. There are several different interpretations. I have heard someone interpreting it this way: now, instead of paying a salary of $4,000 to this worker, take away $2,000; then at the end of the year, if the company is doing well, pay the other $24,000 as a lump sum. Another talked about taking straightaway a certain percentage of the monthly salary as a variable component, then adjust it month by month, based on the company's performance. So, there are various forms of interpretations, resulting in low morale among some of these workers. I understand different sectors will have different flexible systems of implementing the wages. For example, the healthcare industry is very different from that of the manufacturing industry. I hope that the Ministry will provide clear guidelines to all these different sectors on what a flexi-wage system will mean for them and how they should implement it.

I also echo the calls by other Members here who say that it should not be taken as a wage-cut exercise, otherwise it will further affect the morale of our workers. As the Government is the largest employer, I hope the Government will also

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take the lead in implementing a flexible wage system. I understand that there are all sorts of monthly variable components, etc, in the civil servants' pay. But I just wonder how the Government has been using all these, and what the KPIs are for the different Ministries when the civil service implements it, and whether they really adjust the salaries accordingly. I hope the Minister will elaborate on these.

The Chairman: Dr Amy Khor and Mr Tan Soo Khoon are not here. Mr Low Thia Khiang.

Mr Low Thia Khiang: (In Mandarin) : Sir, soon after the economic crisis in the mid-1980s, the Government intended to push for flexi-wage system. In 1986, the Economic Review Committee led by DPM Lee emphasised in its report that wage reform to enhance wage flexibility was of great urgency that brooked no delay. But it eventually died a natural death. In the private sector, pushing forward this system is even more difficult, and it has made hardly any progress. Therefore, it can be seen that there are a lot of difficulties and limitations in the implementation of a flexi-wage system.

In my view, before the flexi-wage system is implemented, there should, first of all, be a sound system in place to protect the workers from unreasonable exploitation by the employers. The most basic question is: when can the employers invoke the mechanism to cut the monthly variable component under the flexi-wage system? Although the flexi-wage taskforce has suggested the so-called "Key Performance Indicator" (KPI) as a criterion, in the last three years we have already seen the introduction of the so-called "pre-emptive retrenchment" action. So, are we expecting to see the "pre-emptive pay cut" action launched, under frivolous excuses, if the employees invoke this mechanism unreasonably? How can the workers fight against it, particularly those who have no unions to

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protect them? Even the Secretary-General of the NTUC is also making allowance for the pre-emptive retrenchment action. If the workers are to face a pre-emptive pay cut system, would the union also show sympathy for the employers and give way to them?

When the employers are not doing well, they cut the pay of their employees. But, when they are doing well, do they plough back their profits to the workers to reward them for their sacrifices, or would they just play with the accounting system to avoid doing that?

Of course, the Government can say that the workers should not be unduly worried because we have this tripartite mutual trust relationship built up over the decades. However, even in a very good system, there should be clauses or procedures to provide for protection against abuses that the system may generate. We should not use the so-called mutual trust to take the place of protective mechanism in a system. If mutual trust can be regarded as a basic fundamental of a system, the PAP can always claim that they have already built up the mutual trust with the people and they can rule forever. That being the case, then why should the Constitution provide for General Elections to be held?

In the past few years, under the severe economic reality, this labour-employer relationship was often tested and it showed that the tripartite relationship was not exactly as firm as what we had thought. The SIA pilots' conflict with the management is a good case in point. Even professionals, like SIA pilots, have met with such an enormous obstacle when fighting for their rights. What about the ordinary workers? How is the Government going to protect these workers, particularly those who are not protected by unions? Before the system

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of flexi-wages and its implications are fully understood by workers, especially those who are not protected by the union; and employers, specifically SME employers, I think the Government should not rush into implementing the flexi-wage system. This is to avoid possible undesirable consequences in the future.

Mr Heng Chee How: Sir, employers often remind us that the cost of doing business in Singapore is high compared to various other countries. Many are also quick to add that wage cost is a significant proportion of that business cost. It must be so, because so many companies resorted to retrenching workers to cut costs during the downturn. Notwithstanding signs of an economic recovery, future conditions are more likely to be unpredictable rather than plain sailing. Hence, the need to manage all cost categories and, from the workers' perspective, to save jobs, must surely be a perennial business requirement rather than an option.

Against this background, I would have thought that as flexible wages could help companies align their wage cost to demand conditions more smoothly, the idea would be embraced immediately and without reservation. But far from it. Many still resist. If resistance had come only from workers, at least that would be understandable and can be addressed. For workers who have been used to more fixed wages, wages that do not vary, say, on a monthly, quarterly or annual basis, to the performance of their companies, then, indeed, moving to more flexible arrangements would raise concerns. These concerns would include: how would I know that the company would not take me for a ride? Is there openness in information sharing? What are the performance indicators, and what difference can I make to them through my work? Is the appraisal process fair and transparent? And in exchange for the flexibility, what exactly is the upside to

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me in all these? Do I earn more when the company does well? Is that clear? Do I reduce my risk of retrenchment? These would be the concerns on the workers' side, and these aspects would indeed have to be properly addressed, as companies customise and implement flexible wage systems for themselves.

What I find much harder to accept or understand is the resistance from companies. Some say that they do not see the need, maybe still banking on the Government to come to their rescue with a CPF cut, if the need arises. Others say that they do not know how to do it. Yet others say that putting in a flexible wage system is itself a complexity and rigidity that they can do without. For those who basically say that without clearly specifying a flexible system, they would enjoy the greatest flexibility of all because they can do as they please but when the time to cut pay and heads comes, they must be prodded to play it fair and be more responsible as corporate citizens.

Workers are not machines. While they understand that in this age of global competition there is no longer any point in talking about iron rice bowls, they do expect that the companies they work with deal with them fairly and with integrity. They are not against co-sharing risks and rewards with their companies in a more uncertain environment. But they will surely resent being taken for a fool, and be at the receiving end of "head-you-win, tail-I-lose" arrangements.

The Chairman: Mr Heng, you have taken more than your allotted time. Could you wind up, please?

Mr Heng Chee How: Adopting an opaque use-and-throw attitude in personnel management is not only callous but actually works against the interests of shareholders because of negative consequences of uncertainty on morale and productivity. I therefore ask the

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Minister to give an assessment of the efforts in wage restructuring so far, and what plans his Ministry has to move employers more quickly onto this.

Dr John Chen Seow Phun (Hong Kah): Sir, the Government has correctly led a reform to implement a flexi-wage system. This will enable employers to manage and reduce their wage costs without retrenching workers, and to stay in business when times are bad. However, for Employment Pass holders, especially those who are paid near the minimum salary imposed by MOM, the employer's flexibility to cut their wages may not be there. This will lead to a quandary for the employer. Does he cut the wages of only the Singaporean workers or does he cut the salary of every worker, which will imply that the Employment Pass holders may be paid less than the minimum salary?

Sir, feedback from businesses shows that the minimum salary requirement for Employment Passes is a heavy burden for companies, especially those in the IT services. Minimum salaries are determined by MOM and are not market-driven. Companies' competitiveness is therefore affected by such a requirement. And if there is a need to cut wages to stay in business, the question is whether MOM will allow such companies to pay their Employment Pass holders less than the stipulated minimum salary.

On another matter, Sir, feedback from grassroots expressed much concern that, with flexi-wage, the 13th month pay may be cut or removed in difficult times. Workers will find this hard to accept, as they depend on the 13th month pay for their year-end and new year expenses. Since monthly salaries can now be adjusted downwards in the event of a downturn, there is really no need to remove the 13th month pay. Can the Government assure the workers of this

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and take the lead in ensuring that the 13th month pay will not be removed?

Mdm Ho Geok Choo (West Coast): Sir, since the tripartite Taskforce on Wage Restructuring launched its report on wage restructuring for greater flexibility and competitiveness, there has been much debate, even confusion and reluctance, among companies and employees to embrace wage reform. For example, on a website poll by MOM, some 74% of respondents said that they would quit from their companies, if their companies embark on wage reform, and that they will change jobs to another company that is not implementing a flexible wage system. This, to me, is very alarming, especially after the big bang launch. Is the dismal poll result due to the fact that we have failed to convince the ground that, indeed, the process is a rational one and is fair and objective? Has the taskforce consulted the ground widely as it claimed it had done so?

Sir, under the wage restructuring, we are replacing the seniority-based wage system with a performance-based wage system, as well as introducing the MVC component. There are practical HR and people issues to consider in this process. In restructuring the wage system, we have to understand that issues arising cannot be addressed by statistical analyses and figures alone. These issues touch on fundamentals of trust,

sincerity, transparency and ability to forge unity in diversity. Can the Ministry comment on how these issues ought to be addressed differently in order to achieve our goals?

12.15 pm

Sir, I would also like to give some feedback from participants who have attended the wage restructuring workshops and consultants who were

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accredited by WDA. First, I was given to understand that incentives or subsidies have been offered by WDA for participants of workshops by SNEF and NTUC. Given that the features of wage flexibility are not new and that many companies have already some form of flexible wage structure in place, one wonders whether such grants are well spent and whether such action would achieve the intended purpose. Or would it contribute further to our already materialistic culture? Second, there is also the nagging question as to why only SNEF and NTUC should conduct the workshops and not other professional and expert bodies well-versed in compensation and wage systems.

Sir, some participants who have attended the workshops had fed back that the workshops seem to be indoctrination sessions. Apparently, much to their distaste, participants were asked to " sompah ", ie, commit or pledge themselves to wage reform after the workshop, something participants, who are HR practitioners, felt it is very contrived - a feeling that reinforces that there lacks sincerity and trust. On WDA's accreditation process for consultants on wage reforms, questions were raised on the process, the credentials of the WDA's officials who conduct the interviews and why the funding for companies embarking on the wage reform needs to be pegged to these consultants.

I urge that the Ministry address some of these concerns. Given our strong commitment to wage reform, would the Minister kindly give the House a status progress report on the implementation to-date and also provide the breakdown cost on publicity and promotion, training subsidies for workshops? And would WDA be extending the same conditions to other competing WDA partners and consultancy grants for companies and consultants?

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Dr Ng Eng Hen: Mr Yeo Guat Kwang and Mr Heng Chee How have spoken about labour relations and said that a harmonious industrial relationship should not be taken for granted. I could not agree with them more.

I had said yesterday that the fourth pillar of our competitive edge is harmonious industrial relations. The value of this partnership was amply demonstrated during SARS. It seems far away, but it is actually very close, not more than six months. For example, during then, if we remember, the NWC had to make special recommendations to enable companies in sectors badly affected by SARS, such as the hotel and airline industries, to implement wage cuts. It has resulted in companies remaining viable. Take the hotel sector, for instance. In May, during the peak of the effects of SARS, occupancy in some hotels was single digit. I have spoken about this story before, but it bears repeating.

During that time, many of the hotels' occupancy was down. We kept going, of course. The manager of the hotel brought me up, and in the lift I asked him what was his hotel's occupancy. He said 10%, and he was smiling. I asked him why he was smiling. He said that for the previous week, it was 6%. Despite that severe impact when occupancy went down, room rates had to go down. The hotel industry told me that very few were retrenched. How was that achieved? That was achieved because of the tripartite recommendations and relationships that NWC set for those companies which are not viable, if they do not make cuts. The food, drinks and airline workers unions, which represent the majority of the workers there, said that they would forgo $5 million in wages with the reduction in man days. In other words, they do not go to work and even if they go to work, they will forgo that $5 million. Because of that, the hotel

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industry kept their staff. It was a good thing that they did because in the third and fourth quarters, that industry added 3,000 jobs. Nobody expected the rebound to be so strong. Companies did not have to spend money recruiting. Without these measures, we would have more job losses and labour relations could have been adversely affected. There would be more disputes and these would have affected our investment climate and economic recovery.

I fully agree with Mr Heng and Mr Yeo that we must never take this for granted. We will continue to be vigilant. I assure them that this Ministry will not relax on our efforts to preserve this precious asset which we have carefully nurtured over the last three decades. Weekly, I will meet with unionists and employers to nurture this relationship.

Mr Yeo said that he wanted an update of disputes and what the unions have done. The number of disputes in the unionised and non-unionised sectors is another clear indication of what our unions have done. For the non-unionised sector, every year, we have about 10,000 disputes referred to MOM and, for the unionised sector, it is 200-300. It certainly reflects the ability of the unions to express the voice of their workers and to take into account their welfare.

Dr Ong Seh Hong asked if Government's intervention in the recent SIA incident would show that something was seriously wrong that we have to intervene. On the contrary, as we have said, we want to nip things in the bud. We really do not want to wait till something is seriously wrong before Government acts. It was specifically to stem losses that we intervened. MOM will continue to do so in this fashion, if need be.

Looking at all these aspects, and last year was a wrenching year but yet we did not have a disruption in labour relations,

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the question is not to ask why other countries are different from Singapore. The question to ask is why Singapore is different. We are the odd one out in terms of labour relations. We have been able to achieve this because for the past three decades, we have built on the strong relationships amongst three social partners. It allows an excellent opportunity for this tripartite partnership to exchange views, sometimes in formal settings, but many times, in informal settings, just to build that relationship and to formulate policies which have an impact on workers, employers and the economy. The building of this mutual trust and respect enables employer-employee, management and unions to achieve corporate goals, enhance job security and improve the standard of living of our workers.

Mdm Halimah asked whether we would review section 18A of the Employment Act which allows the employers to transfer their employees to another legal entity arising from company restructuring. She argues that since 1996, when this Act was introduced, business conditions have changed and with different forms of corporate mergers and alliances taking place, it makes the application of section 18A less clear. I agree with her. In some cases, the feedback is that both employers and unions are unsure when and how this provision should be applied. My Ministry, in consultation with the unions and employers' federation, will examine the need to review this section. We will also determine if tripartite guidelines will be needed to help ensure that the interest of workers is not compromised during corporate restructuring. As for the timeframe, my answer would be expeditiously.

Prof. Ngiam Tee Liang has asked what is being done to help retrenched workers transit over this period of unemployment.

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Yes, he is quite right. The Employment Act does not stipulate the quantum of retrenchment benefits, but most employers in Singapore pay some form of retrenchment benefits. MOM carried out a survey, which was in the first nine months of 2001, which showed nine out of 10 locals received some form of retrenchment benefits. Retrenched employees who face problems claiming retrenchment benefits from their employers may approach my Ministry for advice and assistance.

Let me now turn to the initiatives in wage restructuring. I thank the many Members who have expressed concern about my bonus. They have asked for updates and what are the chances of I securing some additional stipends in this. Mdm Ho Geok Choo expressed some disquiet that efforts have not been going on so well. I want to thank her for her concern. But I want to assure her, by many accounts, it seems that this particular exercise that we have launched, has worked well. Mr Seng Han Thong said that wage restructuring is nothing new. His forebears also had wage flexibility.

I am assured that this effort we launched in January this year has been particularly successful. Whom are we assured by? One, by the unionists who have been at this game much longer than I have, and, two, by my own staff, many of whom have also been involved in previous exercises. I attribute the success to two reasons. The last five years have had salutary effects on expectations and outcomes, both for companies and employees. We have understood that the situation is volatile and that we need that flexibility.

Second, I take success has been due to the practical approach. Yes, I agree with many Members who said that this is complex and to make it practically orientated, rather than just spouting

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platitudes and motherhood statements. As to whether I can give discreet measures of KPIs that I have achieved, I will try.

When we embarked on the January 30th exercise, we consulted four sectoral groups. These sectors were electronics, hotels, chemicals and land transport. These four sectors in total have 1,730 companies which employ about 300,000 employees. After that launch, we continued and since then, we have engaged some 450 companies which employ some 130,000 employees. In other words, we have engaged so far about 1,900 companies which collectively employ about 430,000 employees. Not bad for three months' efforts since the launch. As to whether that is enough to meet my KPI, I will leave it to my boss.

Members have spoken and asked for an explicit articulation by myself that the wage restructuring is not a cost-cutting exercise. Let me accede. The wage restructuring exercise is not a cost-cutting exercise. Let me be explicit. In fact, the Tripartite Taskforce never used this phrase. This is what the Tripartite Taskforce said: "A flexible wage system will enable companies to make quick adjustments to their wage costs, enable companies to stay viable, reward workers for their contribution based on the value of their jobs, and link rewards to company and individual performance. The flexible wage system is part of our efforts to develop a more flexible labour market." Nowhere in these motherhood statements was there any aspect to say explicitly that this is a wage-cutting exercise. In fact, the timing of our exercise for these few years may be opportune. I expect nominal wage increases this year as the labour market is getting tighter.

Take, for example, the company, Philips. They realised that to be able to arrive at the variable component, they suggested raising wages by 2%. I do not

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know the exact figure, I have to check on that. But this is the way that they have been doing, ie, raise the nominal wages by 2% and then move their fixed wages (4%) into the variable component (6%). The take-home pay of the employees is more, but the so-called monthly variable component was also increased. The HR managers use the word "re-labelling", in case in the future there is a difficult situation where they would have to cut costs. This is not a wage-cutting exercise. It is the company's flexibility.

Mdm Ho said that she was alarmed - and this is the word she used - when she logged on to our website. And I thank her for logging on to our website, because it makes us more cautious about what we put in there. It showed that 75% of a particular poll on our website, ie, 75% of those who logged on, said that they would change jobs to another company in the same industry if their company implemented wage restructuring. She is quite correct on the figures, but she need not be alarmed. In this particular poll,

about 1,160 respondents logged on and 75% said what she said. However, on the same website, another poll, and this time 91,000 respondents logged on, 98% indicated they would be willing to undergo wage reform to help their companies stay competitive, which means our message has gotten through. The last five years have helped our workers and companies to understand that without that flexibility, it may mean more job retrenchments.

12.30 pm

Mr Seng Han Thong highlighted the need to have strong and sustained communications and promotion programmes among employers and HR practitioners. I agree with him. In fact, one of the reasons why this effort has been successful is that we decided that we need to give broad guidelines, but not to be too prescriptive. We understood

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that we have to leave it to the companies and the HR community, a point that Mdm Ho alluded to, to sell that message to themselves. That is why we said that CEOs must drive this effort. What we did was to propose a very broad wage ratio. So for rank and file employees, it is 70% basic wages to 30% variable component; middle-management 60:40, senior management 50:50. But we also recognise that companies need to build up their variable components overtime. I think it was Dr Ong Seh Hong who said that his feedback was, if a person earns $4,000, take $2,000 from it and put it as a variable component. I think that is suicidal. You will lose your employees, and we are not suggesting that. Companies will need time to gain this variable component. Philips, as I exemplified, is doing it the smart way, from 2% to 6%. And, yes, we must conduct frequent communications exercises. It is all about communications to explain to the workers what these changes mean.

Dr John Chen asked and fed back that there was disquiet on the ground that the 13th month, what we call the Annual Wage Supplement, would be fixed. Let me again correct this impression. The Taskforce recognised that the AWS is an important component of wages. We recognise that many workers use the 13th month to buy books and uniform for their children. We were mindful of that. We never said that you must remove AWS. This was explicit. What we did recommend was that the companies decide for themselves whether the 13th month was to be fixed or a variable. You call it the 13th month, but is it fixed or variable? If it is fixed, treat it as fixed wage. If it is variable, then treat it as variable component. And, if it is variable, there must be key performance indicators to let employees know whether they are going to get it. On the ground, some

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companies, or a majority of them, do not practise AWS. But we leave it to the companies.

Mr Low Thia Khiang asked how do we ensure workers' protection in this whole exercise. How do we make sure that employers do not abuse their employees? The greatest protection for workers is growth and a tight labour market. From 1970 to 2000, our wages increased six-fold. Was that achieved by legislation or initiatives and programmes? It was achieved because there was growth. In a tight labour market, the job of the NWC was to hold cost and make wages affordable. But, when we are in the sweet spot, as I said yesterday, in planning and outlining our strategy, workers will benefit. This is clearly exemplified in the hotel industry. We could have done everything during SARS to try to protect hotel workers but it would not have worked. We did very little else after SARS. In the second half, industries went up, occupancy and dining in the hotels went up, hiring went up, and wages went up. That is the best protection.

Secondly, it is skilling them. Both Mr Gan Kim Yong and Mdm Ho have asked about the pace of this implementation. We recognise that this is a complex exercise and what we said is that we should be practically oriented. We should go down to the ground. So MOM will give specific assistance measures. Yes, she quite correctly pointed out that WDA does fund the training of HR managers to help companies and engage consultancy services for wage restructuring. We recognise that for certain companies it is difficult and so we will help them. We also provide financial incentives to SMEs to engage experienced wage restructuring consultants to help these companies. The funding is 50% of coaching fees - about $8,500 - whichever is lower. Mdm Ho said that these sessions ended in a " sompah " session. For the sake of

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Hansard, " sompah" means to pledge on someone's life, yours or somebody else's. I want to assure her that we do not go around asking people to " sompah ". I asked my staff: did we do this? They " sompah " they did not. What she probably meant was that at these 2-day workshops for HR managers, these companies that we engaged told them what it was all about. Next, they said, "If your company is serious about this, we will fund you. And, if you are serious about it, please indicate on this line that you are serious about it, then we will fund you." I supposed it was translated wrongly and it was considered " sompah ". If the HR community feels offended by it, we will try to nuance our approach.

But the fundamental point is clear. If you are not serious, we are not going to fund you. Why should we? It is your money. It is taxpayers' money. We will fund companies who want it. We will give advice and assistance to companies that are serious with us. We call it the SWAT team. I will try to change the acronym to " SOMPAH " team, but give me some time. SWAT stands for Tripartite Restructuring Wages Action Team and it consists of experienced industrial relations consultants, not only wage restructuring, but, as she rightly pointed out, this is a people's matter. It is not about statistics and business plan. It is about dealing with people, and we have experienced IR consultants from the Singapore Business Federation, SNEF, NTUC and conciliation officers from MOM who will conduct dialogue sessions and meet up with the companies. We have promotional activities. We work with the unions and employers' organisations. So we do not mean to offend the HR community by saying that they are not up to the task. We are saying there are specifics in this programme. We are building the platform. We will need the HR community to do this and we will fund them, but please be serious about this because it is good money and we do not want to pour good

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money after a bad outcome. And, as I have said, the approach has worked. Because we have had a few hundred companies with "X" thousands of employees who are willing to engage with us.

I fully agree with what Mr Nithiah Nandan and Dr Ong Seh Hong said that, despite these efforts, we need to concentrate and focus on a transparent and fair performance appraisal. That is the crux of the matter because there are concerns that employers would take advantage of the wage reform to cut pay. Some employees are doubtful if employers can devise a fair and objective performance appraisal. Many Members have requested that the Ministry monitor these cases for abuse. We will do so. We need to have realistic and transparent key performance indicators, in consultation with employers and unions. And if there are objectives, they will motivate the workers to perform better.

But I am less concerned that there will be abuse if there is economic growth. I will tell you why. One of the feedback from companies that resisted joining the wage restructuring effort was they are worried that their competitive companies in the same sector would steal a march on them if they implemented it. They said, if they do it, and this was a particular sector, Company B does not do it, their employees might go to the other company. They both know they need the flexibility to respond, but, if one starts first, one might lose out. So we created a common platform, and when two or three companies came together in a cluster, they said, "Okay, we will join in because we know that everyone else is in, and there is security in numbers." In other words, the marketplace dynamics operates. Workers in Singapore are very well educated and they have unions to protect and advise them. If, in an economic upturn, you think that you can cut wages, they will walk with their feet.

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And most employers and HR managers whose business is thriving, really do not go to office every day thinking how they are going to abuse their employees. At least, I think not. Check with the employers in this House! They go into their offices, thinking how they can grow their business, and to grow their business they need good people. Unions can play an active role in ensuring that the rewards system is fair and equitable. If workers feel that employers have used this exercise as an excuse to short-change and take advantage of them, go to the unions or approach MOM.

Let me also say that Singapore is not the first country in the world to start a wage restructuring exercise. The Towers Perrin Report recently released a report that Singapore is actually behind. More developed countries and better performing companies are doing this because it makes a difference to business. That is the main initiative. Yes, KPIs sometimes can be difficult to develop. But it has been done before by good businesses, and it drives businesses. So it can be done, and should be done. We have now reached 30,000 feet and we should stop thinking as if we are in base camp. We need to move on, renew our practices and move up.

Dr John Chen says that the Employment Pass salary level is a heavy burden on companies. It is at $2,500 now. That level can be adjusted based on economic conditions. We raised it from $2,000 to $2,500 back then, but we will look and see what is the appropriate number. I also like to remind him that because we have that salary level, there is no restriction on the numbers, not like S Pass where there is a 5% quota or work permit holders where there is a dependency ceiling. However, for Employment Pass holders, and in marginal cases, MOM will take a flexible approach

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in considering other stable components of salary. If they find that the employees go below that threshold, they can now bring them in on the recently introduced S Pass, which is at $1,800. And if they want to bring in even cheaper workers, they can bring them in on work permits.

Some Members have asked for clarifications. Dr Maliki asked about the Marriage Restriction Policy (MRP) ban . Our first message is - and Dr Maliki is quite right - to tell the workers that there are 500,000 of them and that the Ministry needs to exercise some custodial duties in deciding whether our societal structure can take it. So to reduce the numbers, we tell them upfront that they are here to work. If they fall in love, please remember that they have to ask permission to marry, and we may not grant it. To give more transparency is to sometimes give people more false hopes. I suppose I am saying that they rather fall in love back home and keep up their regular correspondence with their sweethearts or lovers over there, rather than fall in love here and create possible difficulties for themselves. So for certain instances, we do want to be somewhat opaque. Mr Speaker, Sir, I will pause here for further cuts.

Dr Tan Cheng Bock: Sir, I think the Minister missed my three simple questions.

Dr Ng Eng Hen: He is quite correct. I apologise. Dr Tan Cheng Bock asked three questions. Can foreigners and PRs join a union? The answer is absolutely yes. They form part of our workforce and they have rights of representation. Membership of trade unions in Singapore is open to all workers, including permanent residents and foreign workers.

He asked if they can hold office positions in the unions. The answer is yes. Membership of the unions may elect fellow members who are PRs or foreigners

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to represent them on the executive or branch committees, subject to ministerial approval, because Government also takes the view that Singaporeans must be at the helm to steer the ship. Permanent residents and foreigners, who are on their way to citizenship, are committed to this same cause, and want to contribute to the interest and welfare of our workers and to the long-term interest of Singapore are welcomed to participate in unions. My Ministry is prepared to allow them to hold union positions if they are elected by their members and the union's constitution allows it. Presently, about 2% of our union leaders are non-Singaporeans.

12.45 pm

Mr Yeo Guat Kwang: Point of clarification, Sir. I think the Minister did not address the question on how we should extend the protection to non-unionised workers, raised by Mr Low Thia Khiang. Would he agree that actually it is quite simple? What we need to do is to advise them to join the unions.

Dr Ng Eng Hen: Sir, he has said it.

Dr Ong Seh Hong: The Minister has also not clarified my concern about his comment on the cost of training, and retraining Singaporeans vis-a-vis that of the long-term benefits that we render to Singaporeans.

Dr Ng Eng Hen: Sir, I did not use the word "lament". Dr Ong used it. In fact, I celebrate those whom I have to fund in these courses. The more the better, but I have a budget. I was trying to make a point that it costs much more. For example, the Work Skills Programme, which is a general course in teaching you how to write your CV or have an interview, costs us a few hundred dollars. And we can apply that to thousands, literally. I think about tens of thousands have signed on that course. But to just

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train one mid-career switch for anybody who wants to be a nurse, it costs us $40,000. So it was not a lamentation, but a celebration. But it is qualifed by the amount of money I have in my budget for training. And I have said that we would do as much as we can. Yes, it does have benefits, but for that person. But I have to weigh which programmes are effective and, if they are effective, we are not opposed to funding them.

Dr John Chen Seow Phun: Sir, may I have a clarification from the Minister? Can I take his answer to my question to mean that if an employer pays an employment pass holder $2,500 and, in bad times, he has to reduce the amount across the board by, say, 10%, he would be allowed to pay the employment pass holder 10% less than $2,500?

Dr Ng Eng Hen: Sir, it is neither advisable nor wise to use this House for explicit cases. But I will try to answer Dr John Chen pointedly. What I have said is that the salary level is $2,500, but MOM would take into account stable components of the salary. But he is asking me that, if there is a downturn, the employer decides to cut the basic wages and it is less than $2,500, then I would say no.

Mr Low Thia Khiang: Sir, it seems to me that the Minister's answer to the question of flexi-wages is that the Government has nothing to do with the protection of workers under the system of wage restructuring, which it seeks to implement. He seems to be suggesting that, perhaps, the workers' protection should be left to the growth of the economy or even a union. Since this is the Government's key initiative in response to the current economic situation, what is the Government's role?

Dr Ng Eng Hen: Sir, I had spent a good part of an hour yesterday outlining this whole issue of protection. Mr Low Thia Khiang is an intelligent man. He

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understands what I said. The press played up the figures. He also understands the logic of it. He is making a political point. I said that there are seeming forms of protection where you introduce so-called protection, where you do not protect. This is spurious protection. And if you read today's Business Times, even the Dutch model, the Rhineland model, is subject to query, where you think that you will impose rigidities, and you try to assure workers that they will have better pay. The unemployment rates in these European countries are double digits. But the Anglo-Saxon model, where you allow companies to right size to respond to the market, protects not only those who are more employable but all, because the unemployment rates in the US and UK are nowhere near those of Europe . So my point is that you can protect workers by helping your economy to grow, but if your companies grow, then they can find the jobs. If you think that you can protect workers by introducing more rigidities, you are protecting an ever shrinking pie. In the end, more people will fight for that small morsel on the table, rather than decide which dishes they can choose from a widespread of dishes. That is the protection we have got, and we stand by our record which shows that we have generated jobs and we will get Singaporeans trained to do these jobs. That is our challenge, not by offering artificial barriers which others can surmount.

Mr Low Thia Khiang: Sir, I am afraid the Minister misunderstood my point. I was referring specifically to flexi-wages. Can the Government not think of a way to make it clear how an employer can use a sort of lever to activate the cut of the variable component of the wages?

Dr Ng Eng Hen: Sir, we have said that the KPIs need to be crafted together with

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employers, unions and employees. If they are not employers or union members - I second what Mr Yeo Guat Kwang said - then ask them to join the unions. On the ground, it is not so easy just to cut wages when you want to. Workers do respond. So what we have said is, yes, we will work with companies to craft these KPIs very clearly, and it can be done. We sat together with hotel owners and we found out that five hotel owners hold about 80% of all rooms in Singapore . So it is easy to talk because they are the main holders. And it came to a point where the owners of these hotels were asking: Which is the most transparent KPI? How can my employees understand this? And most employers are enlightened. I was very happy to hear Mr Gan Kim Yong say that it needs to be transparent. He is an employer, I think, and he is saying, let us have transparent KPIs. We are not the first to do wage restructuring, as businesses know that if you have transparent KPIs, you can motivate employees. So I am quite confident that we can achieve this. But as I said, if employees feel that they are shortchanged, then they can come to MOM and, if they think there are unfair dismissals, they can go to their unions. But I think what he is asking for are less specific rigid levers. I think this is better left to the marketplace because the companies are very flexible and fluid.

The Chairman: Mdm Ho Geok Choo, you have three cuts. Can you take them together? Be brief, please.

Role of Human Resource Practitioners

Mdm Ho Geok Choo: Sir, beyond the company confines, the HRs have a role in the new workplace, characterised by temporary employees and short employment contracts.

The new workplace calls for employable workforce which necessitates engaging them in a lifelong training

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process. So in the transition of the workforce from job to job, HR practitioners can involve themselves as the bridge for this transient workforce to transit to the next job.

HR practitioners must see themselves as active agents of the new workplace engaged in nurturing the employability of the transient workforce, and see themselves as the bridge builder, surrogate care taker or matchmaker of the job lifeline. The exemplary employer shall be the one that takes on this caring social responsibility of being interested to take part in the employability of the departing employee. This is beyond retrenchment and severance payments and the model HR practitioners and employers are those who can distinguish themselves with such corporate values of care for the corporate citizens.

Central to the recommendations of the ERC is the enhancement of Singapore 's human capital and the pivotal role which human resource management plays in enhancing Singapore 's strategic standing. In this respect, the HR function has been redefined to represent the interface between the labour force and the Singapore economy so as to create value out of people.

Extending beyond this mission, I therefore beseech the Minister to consider a partnership with the HR fraternity to develop this concept of engaging HR practitioners as the bridge builder and surrogate care taker of corporate citizens in the new workplace beyond their traditional HR role. Sir, the HR professionals are well poised to take on this challenge. Will MOM consider a framework that showcases this corporate citizenship role in a more focused and holistic manner?

Sir, given the strong commitment of MOM to uplift Singapore 's HR practices, it is so important for MOM to engage HR

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practitioners in more visible ways. I would like to ask the Minister how MOM intends to strengthen this partnership with the HR fraternity to help achieve MOM's vision, particularly in the context of a new workplace with uncertainties and an increasingly ageing population.

Yesterday, in his reply on how he will tackle job challenges, the Minister has given a very pro-NexGen response. He does not think that it is appropriate to legislate to protect the above 50s in their job fit. My offer to him is to capitalise on the HR fraternity to be the surrogate care taker or bridge builder. In this respect, can I ask the Minister whether he will support such an HR fraternity initiative in a more structured manner with MOM?

Quality Workforce

My second cut is on quality workplace. Sir, I support MOM's vision of "A Great Workforce - A Great Workplace" for Singapore . And I quote from MOM's definition of a great workplace at the organisational level, and that is, it should balance "against a single-minded push for competitiveness that sacrifices worker rights and well-being in the process". This entails the intangible aspect of how employers or immediate supervisors treat their employees.

When dwelling on quality workplace, we should not just be keeping to the obvious with regard to the physical environment. For what the eyes see not and the ears hear not, we must be prepared to sense, so that truly, we are propagating a culture of a great workplace. From the hardware, we must move on to the software.

Sir, I am concerned about the issue of workplace bullying which has been on the rise and reported in the local media. If left unchecked, practices of workplace bullying will have irreparable and serious repercussions on both the victims and

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organisation. For the victim, workplace bullying causes indescribable pain and suffering that can lead to severe stress and, in extreme cases, suicide.

For the organisation, workplace bullying results in negative and destructive organisational effects, often resulting in reduced commitment, poor morale, and productivity to the organisations. Such behaviours of bosses, managers, supervisors and their perpetrators at the workplace bullying have a social cost and may even work against Singapore 's push to attract investments, and to create "A Great Workforce".

Employers know that the labour market is a buyer's one. As such, some of the more ruthless among them will have no qualms about asking their retained employees to take on additional workload under threat of the sack if they refuse to do so.

Sir, I would like to ask the Minister, besides MOM's labour relations conciliation service, whether there are other ways by which the Ministry can look into grievances relating to workplace bullying. Given that the Employment Act does not cover employees in managerial and executive positions, in what ways can the Government lend a helping hand to those in management positions who may be subject to unreasonable behaviour of their bosses?

More specifically, as we pursue a "A Great Workforce - A Great Workplace" for Singapore, I would like to ask the Minister if there are plans to study the problems in depth by a Taskforce on the Prevention of Workplace Bullying and to make specific recommendations, even changes in the employment laws, or even to propose for every workplace or organisation a Work Charter on Employee

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Dignity or some form of anti-bullying policy.

Flexible Workplace

My last cut is on a flexible workforce. Sir, as a result of the demographic shift in our workforce and population, we have to consider the implication of any policy, in terms of manpower in sourcing and utilisation. For example, we increasingly have to focus our attention on re-deploying the displaced older workers into new industries. In this, we can actually utilise their experience and maturity in infant care and children development centres as well as senior care, including the aspects of health and social concerns. I urge the Ministry to look into preparing this mature workforce with the skills and knowledge for this kind of jobs.

Sir, on another aspect, I would like to dwell on flexibility as a way of widening the labour market. Last year, the Enhancing Human Capital Sub-committee highlighted the need to grant companies the discretion to implement work schedules, so that employers can better optimise the use of their manpower resources. In relation to this, may I ask the Minister whether there is a corresponding review of the employment legislation which often limits the implementation of flexible work arrangements. At the same time, the sub-committee had also highlighted that organisations should not use flexible working practices to exploit employees. I would like to ask the Minister to update us on whether there are any guidelines, or legislation, that will be passed to address this issue. Also with the emergence of contingency workforce, how are we reviewing the application of basic benefits, eg, medical, that can be extended?

It is important for companies to note that flexible work arrangement can only succeed

if it is not imposed or exploited.

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According to a report released by MOM last year, about 37,000 people in Singapore were reclassified as temporary or part-time employees. This recorded a 50% jump from the number recorded in 1998. Therefore, I urge the Ministry to come up with a framework to facilitate flexi-work.

1.00 pm

Sir, in addition to short working-term or part-time working, flexible arrangements come in other forms. They include job sharing, employing agency workers as well as teleworking. Would the Minister like to comment on how such forms of flexi-work arrangements are being promoted to Singapore companies and Singaporeans?

Lastly, may I submit to the Minister the following for consideration:

(1) To mount a national workshop-cum-seminar with HR practitioners and the industry on flexible work practices and the flexible workforce for the new economy. This will also lend credence to part-time and short tenure vocations for job seekers, casting an entirely new workforce and a new mindset among employers with regard to flexi-work and a flexi-workforce;

(2) To promote and showcase the various forms of flexi-work practices to Singapore companies and Singaporeans; and

(3) To organise forums and conversations to discuss the challenges posed by flexi-work practices and the solutions to address them.

Employment

Dr Lily Neo (Jalan Besar): Sir, in 2003, the female employees made up 44.7% of the total working population. The female labour force participation rate

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in 2003 was 53.9%, of which about 54% were married women, and about 40% of all married couples were dual-earners.

Presently, there is a dearth of part-time work and flexibility in work arrangement, especially for professionals. Teleworking has not taken off. There is not enough assistance and training for women to re-enter employment after being away for a while, eg, after taking a few years off to look after the family, or taking a long maternity leave. What is the Ministry of Manpower doing to improve this situation? Could the Minister make substantial efforts to rectify this situation soonest possible?

Working women find it demanding to try to balance between a full-time job and motherhood. This uneasy conscience is a phenomenon of modern parenting that makes having children daunting. There is a guilt in oursourcing caring of a child, especially with newborn babies. Post-delivery period is the crucial time for mother-baby bonding. It explains why an extended maternity and paternity leave, prevalent in Scandinavia, seems to improve their total fertility rates. In Singapore, the problem is compounded by the scarcity of infant-care facilities. Working women should be assured of their jobs after their maternity leave.

Sir, labour force incentives are as important as monetary ones to help women to have children, without giving up or losing their jobs. Will the Minister ensure the assurance of jobs for our working women after childbirth?

Flexible Work Arrangements

Ms Irene Ng Phek Hoong (Tampines): Sir, we have been talking about the need for companies to introduce flexible working arrangements for years. There is a greater urgency now, given our thrust to have more babies to check our falling fertility rate. But the pace of change in

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terms of flexible work arrangements has been glacial, and the record has been dismal. Now, we have less than 5% of the companies offering flexible work arrangements, compared to 20% of most developed countries, eg, the US. If we just look at a specific segment like part-time employment rate for women specifically, we have even more alarming figures, eg, 8% of Singapore women work part-time, compared to 60% for women in the Netherlands, and 43% for women in Norway. And it is not a coincidence that the countries that have most part-time work are also more successful in increasing their fertility rates, which is also good for the labour market.

Sir, those who have introduced part-time and flexible work arrangements have found that they have benefited, because it is cost-effective, reduces staff turnover, and improves morale. They do it because it makes business sense. But they are a precious minority in Singapore. Many working mothers who are professionals tell me that they have pleaded with the employers for more flexible hours after they have given birth, but their employers are not open to the idea. The women are made to feel guilty for suggesting this, as though they lack work commitment or professionalism.

If I can relate a case of someone I know. She was a good performer at work, often worked long anti-social hours. But after she had a baby, she asked her employer for more flexible hours so that she could juggle her time better between her baby and her work, but she was told no, because of her scholarship bond. So, she quit and just paid off her bond of $15,000, and is now a full-time mum. She would have stayed on in the company had it been more open to the idea of flexible hours. Companies will lose bright promising employees if they persist along this line. But I fear that they are not adjusting to the new realities fast enough.

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Sir, many parents, men and women, are anxious that asking for more flexible hours would mean job security being at stake, their salary and benefits may be affected, and also they may be passed over for promotion. So, unless the right to apply to work flexibly is enshrined in law, companies will continue to resist the request to provide flexible work arrangements. Some countries, such as the UK, have taken the bull by the horns and introduced a law to give parents the right to apply to work flexibly, and for their employers to have a duty to consider this request seriously. I think it just came into effect this year. It does not provide an automatic right to work flexibly, as there will always be circumstances when the employer is unable to accommodate the employee's desired work pattern. The right is designed to meet the needs of both parents and employers, especially small employers, and aims to facilitate discussion and encourage both the employee and the employer to consider flexible hours and to find a solution that suits them both.

The Chairman: Can you wind up your speech, please, Ms Ng?

Ms Irene Ng Phek Hoong: So, the eligible employees are able to request for a change to the hours they work, a change to the times when they are required to work, and to work from home.

Sir, I think we should, on our side, also consider whether we need such a law to speed up the pace of companies offering flexible work arrangements.

My last point is on the role of MOM because, increasingly, it seems to be MCDS taking the role in driving the effort.

The Chairman: Ms Ng, it is enough. Mdm Halimah Yacob, take both your cuts together, please.

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Mdm Halimah Yacob: Sir, we need to do a lot more to help workers to balance work and family. I would, therefore, like to ask the Minister to seriously look into ways to promote flexible work arrangements as part of our efforts to strengthen families. I would like to assure employers that this need not be at the expense of productivity. On the contrary, it would instead greatly improve efficiency and enhance productivity. It is a strategy that is win-win, ie, good for the family and workers, and good for companies too. In fact, a survey of many Fortune 500 companies shows that many of the good companies, or those that are considered good, or desirable by employees, are those that offer flexible work arrangements.

Sir, there are many forms of flexible work arrangements, such as teleworking, flexi-time, job sharing or part-time work. Some private companies are already offering such benefits to their staff. For example, Hewlett Packard practises flexi-time, where staff are allowed to start a normal 8-hour workday at any time between 6.00 am and 8.30 am. They also have teleworking and remote arrangements that allow employees to do their jobs outside the office. The civil service itself offers part-time work and other flexible work arrangements to their staff.

Sir, although the benefits of flexible work arrangements are obvious, it is regrettable that employers have not paid enough attention to them, and Singapore lags behind many countries in such initiatives. Part-time work in Singapore has been hovering at around 3% for quite some time. I suspect that part of the reason for this lack of interest on the employers' part could be because foreign workers are easily available, so there is less incentive for the employers to go the extra mile in rearranging work to provide for flexible work arrangements. I would, therefore, like to urge MOM to do more to

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push employers to do more in offering flexible work arrangements. In this regard, to promote flexible work arrangements at the workplace, I would like to suggest the following:

(1) The Workforce Development Agency seriously looks into promoting flexible work arrangements among our companies. The WDA could perhaps provide professional advice and training to the companies that want to introduce such schemes. Possibly, even some incentives should be considered to help companies kick-start flexible work arrangements; and

(2) The Minister considers setting up a tripartite committee to work out strategies and think of ways to promote flexible work arrangements at the workplace. It is time we just stopped talking, as we really need some action.

Quality of Work Life

Sir, let me move on to the next cut, which is on the quality of work life.

In a study published by the Journal of the American Medical Association in 2003, it was reported that depression caused US companies losses of US$44 billion a year, compared to US$13 billion for other illnesses. The measures were measured in medical costs, lost productivity at work and at home, and the economic worth of those who committed suicide. There is yet no equivalent study of the economic cost of depression in Singapore. But a national survey carried out in 1998 found depression claimed 272,000 or about 8.6% of Singaporeans between the ages of 13 and 65.

Sir, it is clear that there is an economic cost to depression and, therefore, it is important that MOM ensures that companies put in place programmes to assist their workers to

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cope. On the whole, programmes to help deal with the mental health of our workers are less prevalent, compared to programmes for dealing with workers' physical health. In response to a question which I had raised on this topic, the Ministry had said that it is developing a tool to help assess and monitor the psychological health of the workforce. The tool, which measures job stress and aspects of work-life balance, was being developed jointly with the tripartite partners and with the help from organisational psychology and psychiatry experts. It will be useful in recommending intervention measures that can measure workers' psycho-socio health.

Sir, I would like to ask the Minister for an update on this. I would also like to ask the Minister whether the tool has been developed, and what intervention measures have been put in place to help workers stay mentally healthy and fit.

Pro-family Policies

Mrs Yu-Foo Yee Shoon (Jurong): (In Mandarin) : Sir, before you became Mr Speaker, you were the Minister for Community Development and Sports. I am sure you appreciate this problem of work-life balance.

I have been thinking: If women's participation in the workforce increases, will it result in a fall in our fertility rate? Now it is evident from other countries that even with more participation of women in the workforce, the fertility rate does not necessarily go down. So, my question is answered.

In the last few days, we have been talking about pro-family policies. We could see that most sectors are prepared to look favourably into it, but some sectors are not putting the promotion of pro-family facilities on their priority list.

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Of the 170,000 registered companies in Singapore, only about 500 companies, including KK Hospital, POSB and Hewlett Packard, openly show their support for the pro-family policies launched by MOM. I think as a major employer, the Government should take the lead in responding to this appeal.

My parliamentary colleague, Mdm Halimah, has already spoken on the immense benefits that come with a good and proper work-life balance, as such arrangement would lead to better efficiency and productivity, and would also promote the creativity of our workers. The Minister has also mentioned that the drop in fertility rate would affect the strength of our workforce. We are all very concerned with this matter. Maybe, the Acting Minister for Manpower could ask the Finance Minister for more budget, to offer some sort of incentives to encourage the companies to provide a conducive environment for workers to balance work and family life.

1.15 pm

Dr Jennifer Lee (Nominated Member): Sir, I am happy to hear that Government will take the lead in setting an example as an employer who will create a work environment supportive of families and hope to see many measures implemented in this effort.

In this process, it is important that we differentiate between the support and subsidies that Government will be putting in place to provide a supportive infrastructure to help families with kids and the measures that Government will take as an employer. In the former role, we hope, of course, that it will be as generous as possible.

In the case of the latter role, the approach which I believe is important to take must be one that emphasises a practical approach, with clear benefits for

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the organisation and inclusive of all staff, men and women, single and married, with children and none. The importance of emphasising benefits to the organisation is because we want to see not only the civil service adopting what I would prefer to call good work-life effectiveness practices, but that private employers across the board would also see it in their own interest to do so.

Private companies will not see it as their responsibility to help Singaporeans avoid extinction by having more babies. I think this is perfectly understandable. However, we are fortunate in this instance that the interest of a company and those of its employees seeking good work life effectiveness are entirely congruent and synergistic.

Speaking from our experience in KK Hospital, I can say, with conviction, that flexible working arrangements are eminently implementable without any increase in operational costs. On the contrary, it enables tangible benefits, such as matching employees' needs, for example, extending service hours by the use of flexi-time and handling uneven workflows by the use of part-timers on top of the other often-cited benefits of improved recruitment and retention.

This promotion of increased availability of part-time work will also not only be beneficial to parents wanting to spend more time at home when their children are small, but it will also open up opportunities for older displaced workers. Properly implemented, good work-life practices engage workers in a collaborative process to find better ways in getting work done, and engender a flexible and creative approach to solving operational challenges.

Actually, the Ministry currently responsible for all issues relating to promoting the family is MCDS. While such components of the drive, such as

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family life education and planning for dependent care centres and subsidies, sit well under the MCDS umbrella, other aspects which relate to work environment, such as flexible working arrangements, which are currently promoted by MCDS' Work Life Unit, I believe they would be much more effectively driven by MOM, as it would signal that these measures are down-to-earth business strategies to keep employees productive, effective and committed in the competitive and demanding modern work environment, rather than the burdensome Robin Hood type of accommodations to working mums.

I would therefore propose that as the Working Committee on Population works towards comprehensive measures that it would recommend, MOM should be the Ministry which is designated the champion to promote and push for good work-life practices in companies.

Paternity Leave

Mdm Halimah Yacob: Sir, after observing two weeks of debate in this House, I am quite convinced that there is great passion amongst both the Frontbench and the Backbench to promote work-life balance and other pro-family benefits. Of course, our challenge is how to translate this passion into reality and that is where we have to convince a lot of Ministries to put programmes in place.

In this light, Sir, I am therefore proposing that the Ministry of Manpower consider legislating paternity leave of not more than five days a year for our fathers. We all agree that fathers play a crucial role in a child's development, particularly in the formative years. In legislating five days of paternity leave, we can, in a small measure, send a powerful signal that we acknowledge the role of both parents for a strong and stable family.

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Sir, if we provide paternity leave to our fathers, we will not be alone in doing so. In Norway, new fathers are allowed four weeks of paid leave after their baby is born and they can also request for another 12 months of unpaid leave. Their employers are obliged to re-employ them after that - not just the mothers, but the fathers too. This seems to have reaped some benefits. It was reported that Norway's birth rate has stopped declining since the introduction of this leave five years ago. Since 2001, the fertility rate in Norway has been 1.75 children per woman, higher than the European average of around 1.5. With a population of around 4.5 million, some 1.1 million are under the age of 18, a rise of about 4% in the proportion of young people, compared to seven years ago. In fact, even the British government, known to be very pro-market in their outlook, is now considering allowing fathers the right to take six months off work if their wives want to return to work after their paid maternity leave ends. I am not, of course, suggesting the way of Norway or UK. But I am just advocating five days of paternity leave.

In the light of all these, I would therefore again request the Minister to consider legislating five days of paternity leave. The public sector already has such a leave scheme. If this change is made, it will align the private sector's practice with the public sector.

Working Environment

Dr Lily Neo: Sir, the 1990 Singapore Census showed that 40% of all married couples are dual-income earners. Many dual-income couples have difficulty in balancing work and family due to the lack of conducive working environment and this causes lower fertility. Working women find it stressful to juggle between inflexible work schedules and family,

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given that both roles are equally intensive and time-consuming.

The recent study that polled 1,200 Singaporean women showed that they preferred to take on a full-time housewife's role or engage in part-time work, which suggests that they find the pull of home stronger than workplace. Almost four in 10 mothers polled preferred not to work at all, a third chose part-time work and only a quarter, the highly-educated women, wanted to continue working full-time. All these indicate that family-friendly work arrangements must have the top priority of attention to help the career-minded or working couples balance home and work commitments and stay in the workforce.

The experience of family-friendly firms in the US showed that they reap productivity gains, better customer service, higher staff retention rates, reduction in recruitment and training costs and a drop in absenteeism. May I ask the Minister what steps are taken to promote family-friendly firms? Is the Minister satisfied with the results of his Ministry's efforts so far? What more can be done to improve the present situation? Will the Minister implement measures with impact, such as tangible incentives in terms of grants and tax relief for companies to adopt family-friendly policies for their employees? Complaints have also been heard that employers are not happy when their employees are expecting and taking time-off for antenatal check-ups and maternity leave. How would the Minister address this issue?

Dr Ng Eng Hen: Sir, in line with our procreation initiatives, many Members have asked MOM to see if we can improve the workplace. First, let me thank the women MPs for voicing these concerns. I would also like to thank the men, but none rose to speak.

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Fundamentally, I agree with all of them - Dr Lily Neo, Ms Irene Ng, Dr Jennifer Lee and Mdm Halimah Yacob - that workplaces which meet employees' security, safety, work-life and developmental needs result in more productive and engaged workers, as well as lower staff turnover rates. This is what the management gurus espouse when they teach. They say that it is good for business. If it is so - and it is a big "if" - not in terms of what we believe, but in terms of what employers believe, the challenge is to help develop great companies that have this inherent in their corporate culture, because, as Dr Jennifer Lee said, it must be good for the organisation. It must be "congruent and synergistic" - that was the phrase she used.

Dr Lily Neo asked whether we are satisfied with the results. I think we better see where we are at and then decide whether we are satisfied. I will give a few numbers and then round it up. These are statistics on family care, flexible work arrangements and employee support schemes.

First, on family care leave, the private sector establishments - these are the ones with at least 25 employees - which cater quite adequately for ad-hoc family events. For example, about half (47%) provide for paternity leave benefits in 2003, 75% for marriage leave and 90% for compassionate leave. So they do quite well for ad-hoc events.

Provision for paid family care leave - in other words, leave to take care of their sick relatives - is not a common practice provided for - less than 10%, whether it is for mothers, fathers, children or spouse.

As for longer family care leave - in other words, more than three months to attend to some family matters - only 14% of private establishments, compared

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to 35% of companies that provide for examination leave. I suppose this reflects subconsciously the relative importance our society and companies place on family care compared to examinations.

Flexible work arrangements are quite uncommon in the private sector. Only 4% (or 36,900) of private sector employees are on part-time, flexi-time or flexi-place. What about employee support schemes? 30% of private establishments provide some housing benefits but only 1.5% provide childcare benefits. We have only 36 workplace childcare centres providing about 8% of total childcare places. Of these 36 workplace centres, 22 were set up by Ministries and statutory boards. I suppose there is some conciliation that the Government is doing its part of a small pie.

Therefore, the combined picture of these statistics that I have given is that, from this snapshot, companies are generally sympathetic towards marriages, emergencies, maternity leave, paternity leave and examination leave. We do less well when it comes to take time off to take care of sick relatives, employer-provided childcare benefits and flexible working arrangements.

Some Members have asked how is the Government doing, including MOM. I have noticed that Mrs Yu-Foo, part of her strategy, is to challenge each Ministry and says, "What are you doing?" I have caught on to her strategy. How is the civil service, including statutory boards, doing? Over the last five years, we had approximately 3,000 civil servants out of 60,000 in the civil service, about 5% who took no-pay leave for childcare reasons. There is an increasing trend. As for flexi-work arrangements, all Ministries practise alternate Saturday and week-day off and flexi-time. About 900 officers have gone on part-time employment. Some work from home or share jobs.

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Our strategy thus far has been the Tripartite Committee on Work-Life Strategy (TriCom) formed by NTUC, SNEF, MCDS and MOM, which spearheads the promotion of work-life harmony. As Dr Jennifer Lee pointed out, MCDS has a dedicated work-life unit. The question is: how do we further facilitate efforts without disregarding the concerns of employers and business interests? We have promoted work-life practices through seminars, sharing sessions with companies, and training workshops. We have the Singapore Family-Friendly Employer Award. This was launched in 1998 and since then, the numbers of recipients have gone up - six in 1998 and 23 in 2002. This shows that more companies are coming on board.

MOM also partners MCDS to produce pamphlets, guidebooks to guide employers and HR practitioners. MCDS provides financial subsidies for Work-Life Strategy Consultancy - what Mdm Ho suggested for SMEs and VWOs. The Skills Development Fund administered by MOM or WDA will also fund staff training for work-life strategy. We also give a Capital Grant Scheme to help employers defray the cost of setting up a workplace childcare centre. So there are schemes available.

1.30 pm

Looking at this overall picture, I would say there is a framework in place to better facilitate work-life balance. But even with these efforts - and many Members have asked how do I rate our results - my assessment is that we have not yet made significant inroads into organisations. We have not done well. Let us be honest. I think there are several reasons. We better examine these reasons and move away, as some Members have said, from platitudes and grapple with the real day-to-day problems. What are the reasons

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why we have not made significant inroads? First, I think despite what management gurus say, not all CEOs are convinced that it makes business sense to promote work-life practices. Many are sceptical. I think that is the feeling on the ground. Second, many managers and some HR departments - Mdm Ho Geok Choo pointed this out as well - do not have the capability or the support to identify and implement such practices that meet the employees' needs. Third, I believe there is a culture element in Singapore. In Singapore, we have a prevailing work culture that emphasises "face time" - how much time an employee spends visibly there at his work station, rather than productivity per hour. So, if your boss sees you more hours per day, he gets satisfied even if the productivity is not there, compared to somebody he does not see, and he turns around and says, "Where were you?" But, he does not realise that the person has done twice the amount of work. We have this culture of face time.

Let me address two of these reasons and try to correct mindsets. I know it is something that we have to grapple with, but we have examples of companies in Singapore that are very advanced in work-life balance, not in their home countries, but these MNCs are here. Delta Lloyd is ranked among the top four insurance companies in the Netherlands and it provides work-life balance measures beyond what is required by law, because it sees this as a corporate culture and as a competitive advantage in hiring and retaining staff and talent. What can employees do? The employees in this company can negotiate the number of hours worked per week up to a maximum of 38 hours, so you negotiate. One in four employees have chosen to work a 4-day week or less. Not only can the work hours be annualised, the weekly flexible rostering allows staff to choose their work patterns. According to Delta Lloyd, they have benefited from increased

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productivity and quality of work, and their staff appears to be happier and more engaged. It is engaged in their work. I do not think it means engaged to be married - maybe it does. It has managed to attract talent who otherwise would have withdrawn from the workforce because they could not work full-time. Labour costs did not increase. Managers have to spend more time though and need more creativity to organise work. So, that is the point HR department and managers have to respond to result in higher productivity.

In Singapore, we have our own shining examples of local companies - Hewlett Packard, Dupont Singapore and KK Women's and Children's Hospital. I applaud Dr Jennifer Lee's effort. She has made an eloquent submission of the positive effects on her organisation as CEO, and I have had very good feedback over the years of what KK has done to be able to find the sweet spot in allowing flexible arrangements, and yet fulfilling their business objectives. That is a virtuous cycle which she tried to get into.

However, we realise that each organisation has a different practice and needs to find one suited for its own business objectives and profile of employees. It is hard to impose a standardised model of family care leave, benefits and flexible work arrangements, because it might undermine the particular company.

Many MPs have asked Government, and specifically MOM, to do more. Dr Lily Neo says we should make substantive efforts. Mdm Halimah says, "push, action". Dr Jennifer Lee says, "expect many measures to be implemented and the MOM should specifically take over or spearhead some of the functions." I agree with Members that the Government and MOM must do more. Therefore, my Ministry will consult employers and employees to identify appropriate

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strategies. I want to start by asking companies: do you believe in this? If you do, why? If not, tell me why. What can work for you? What are your fears? What do you think will happen? How can we help to adjust? I think that is the starting point. I am not going there and say, we are going to do this and therefore you better comply. I think it would be disastrous. I will start by asking them about their needs.

We need to understand their needs and challenges. Then, after I have done that, we will create platforms to enable groups of employers, unions and employee representatives to come together and decide on what is the best model to move forward. At the same time, MOM will study the different ways the other countries have done, whether it is job-sharing, compressed work-week, work day, non-standard work-week patterns, and then we will facilitate the various schemes. This is my strategy. And it also includes allowing women to come back after maternity leave or childbirth, as Mdm Halimah has suggested.

Some Members have urged me to legislate paternity leave, longer maternity leave, family care leave and even the right to negotiate flexible work arrangements. I have thought about this and I want to caution against using legislation as the main lever to develop family-friendly workplaces. I am concerned that, as good intentioned as we are for a specific and important goal, our efforts and intentions may backfire because once legislation is enacted, it cannot be so easily undone.

Legislation is a blunt instrument and, when used indiscriminately, may have untoward consequences. The Employment Act is meant to provide the most basic standard that all industries need to abide. In other words, it is a bar, but a very low bar, so that they can have the

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principle of reasonable employer-employee management practices. It is not meant to be seen as a standard bearer, an advocate. Legislating too rigidly on leave and other benefits will distort the market. It may not help companies to arrive at an optimal set of benefits. And other countries have experienced this. As DPM Lee has mentioned, in a particular country that has legislated maternity leave, bosses, at the same time when hiring a worker, give another undated form, and ask the lady to sign, so that when she gets pregnant, they can invoke the letter and she loses her job. It is a resignation letter. They have gotten around the legislation. In certain countries, the feedback is that women of child-bearing age already face discrimination, poorer employment and career prospects, because the employers immediately assume that because of legislation, these employees are likely to use the benefits to their, as opposed to the company's benefits, and therefore do not hire them. So, we need to be careful. We will study this.

As Members know, the Working Committee on Population, under Mr Eddie Teo reporting to Minister Lim Hng Kiang, is in place. I would like to tell you that MOM has three persons, and since some MPs are counting, two of them are women in this Working Committee to review these matters. Dr Jennifer Lee says that this needs to be practical and of benefit to the organisation. We agree. We do not want it to be Robin Hood, but neither do we want to reverse the position. MOM will be guided in this review by four principles:

(1) The changes must help employees balance work-life and family care - that is understood;

(2) Business competitiveness must be maintained or improved;

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(3) Labour market flexibility must be maintained so as to ensure sustainable economic competitiveness and employment growth; and

(4) The benefits must not inadvertently increase employment discrimination for the very group they were meant to help.

In line with this, many Members have mentioned positive examples of the Scandinavian countries including Norway . I would like to inform the House that I will be leading a MOM study group to study these benefits and ask questions from fathers, mothers and employers to get a feel of what actually goes on. I think it will help give me a better sense, a better nuance, in terms of dealing with these problems.

We will still assist mothers who want to return to the workforce. WDA will help identify where the jobs are and facilitate them to be placed in these jobs.

Mdm Ho Geok Choo asked whether we can help older workers to be trained as childcarers to lighten the load of working mothers. I understand that MCDS does have a scheme. It is called Family Day Care scheme launched in April 2002, and about 242 caregivers have so far been trained. About 70% and above were above 41 years old.

Mdm Halimah asked what are our efforts - I am moving away from procreation - to deal with stress at work. Every time Mdm Halimah spouts those statistics, I get a bit stressed myself! I suggest that we work on this in a sensible way. Yes, she has asked for updates on the tools that we are going to measure. I would say that the study has not been completed. I will check with my staff on what is the stage. If she likes, she can file a question and I can give a proper update. I do not have the figures.

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Ultimately, the quality of our work place cannot be achieved solely by Government setting standards to every conceivable angle by legislating. I just think it is too blunt and we do not know enough the business on the ground. When we try to introduce this, to a hammer, everyone looks like a nail, and you hammer away, but it may be a mushroom.

Business processes are changing every day. We cannot be monitoring every workplace. Even if we enact legislation, we will have to scour the ground and try to enforce it. So, I agree with Mdm Ho Geok Choo, the key is to raise the standard of human capital management not only among the HR community, but also the CEOs, managers as well as the HR executives in Singapore. Because, at the end of it, the CEOs and the managers themselves must be convinced that these initiatives that meet the range of needs of their employees will raise productivity, innovation and increase their profitability. If they do not, whatever you do is not going to work very well.

Mdm Ho says that we should institute an anti-bully study. I will think about it. This is quite innovative. I must say that I have not thought about this but she says that it occurs on the ground. Let me study it a little bit longer before deciding whether I should institute an anti-bully study.

WDA will help HR community build up that capability and recognition. But I must also say that the HR community must themselves take ownership of this. She has asked whether MOM and Government can facilitate for the HR community to become a surrogate caretaker of business. I would, if I could, but I do not think that is my position. To appoint someone vicariously as a surrogate caretaker, I think that position is earned by their own competence and expertise. And we will ride and capitalise

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on those companies that HR managers have proven themselves to be able to significantly add and drive the companies. We will facilitate and as we do, we fund initiatives. I would rather fund initiatives than the whole profession. Because when I fund the whole profession, the HR community, engineers and welfare officers can also ask me to fund their whole profession. For example, in wage restructuring, I fund the initiative. And when HR managers are involved, I will fund them, and this is my approach.

She has also asked whether we will form somewhat of a tripartite-plus to include the HR community. I would say that, in principle, we do consult them. For example, when NWC meets, we consult agencies and partners, like the Singapore Human Resource Institute, to get their feedback, and we will continue to do so. But I would say that, currently, there are no plans to include the fourth or fifth limb to the tripartite framework that we have, because sometimes it is difficult to do for various issues.

Dr Lily Neo: Sir, could I have the Minister's comment on my question earlier on the training for women to re-enter employment after being away for a while looking after their families?

Dr Ng Eng Hen: I answered it in brief but let me expand on that for the House and Dr Lily Neo's benefit. If Members remember, we launched a Back-To-Work Programme. Some Members may have forgotten, which means that it is bad news for the programme. It has no impact, and the House forgot about it. We launched this in 1996. It was specifically called Back-To-Work (BTW). In 1996, we had a very tight labour market and we needed workers. The intent was to encourage prospective employers to bring the workers back.

I will tell you that the back-to-work has gone into hibernation and hard to rev

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it up again in these labour market conditions. But as I said, WDA will assist mothers who want to return to the workforce. What we also want to do, in line with other sets and groups of people, is to identify programmes. Our strategy is this. Let me find where the jobs are, and then I will tell you where the jobs are. And if a person wants to do it but does not have the skills, I will upgrade him. We have identified electronics, precision engineering, wafer fabrication, textile, healthcare, domestic cleaning. We think that these sectors are suitable for mothers who want to return to work. And we will fund them, train them and try to place them in these jobs.

1.45 pm

Mdm Halimah Yacob: Sir, I am actually very disappointed with the Minister's reply, particularly with regard to the mental stress and quality of life in the workplace. I basically asked ----

The Chairman: Is that a clarification or a new question?

Mdm Halimah Yacob: It is a clarification, Sir.

The Chairman: All right.

Mdm Halimah Yacob: When I raised this question earlier, I was told that a psychological tool is being developed by MOM and that intervention measures are going to be put in place by MOM. But now the Minister tells me that he is not aware of it. That is the first point that I am seeking clarification.

My second clarification is that the Minister said there are 60,000 civil servants, but only 3,000 make use of the flexible work arrangements in the civil service. I would like to ask the Minister whether he is satisfied with that rate.

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What is the reason for the low take-up rate? Is it because the supervisors and the managers in the civil service are actually less than supportive?

The Chairman: The second point is not a clarification, but I will let it go.

Dr Ng Eng Hen: Sir, I did not say to Mdm Halimah that I was not aware of it. She asked for an update and I said that the update was not available, because the study is not finished. For one moment, I was quite stressed when she said she was disappointed.

Her second point is about why only 3,000 civil servants use flexible work arrangements. I think we had better subsume this under the work of the Committee on Population. We will look at the aspects, and then I will come back with a more reasoned reply.

Employment Act

Mdm Halimah Yacob: Sir, I am not satisfied with the clarifications, but I shall proceed to my next cut.

Sir, presently, the Employment Act does not apply to executives, managerial and confidential staff. With this exclusion, it means that executives, managerial and confidential staff do not have recourse to the labour court, which is under the MOM, in order to claim for unpaid wages or other benefits. It is important that all employees, except for the very senior staff in a company, have access to a simple and quick process of enforcing their rights. In support of this, I would like to point out that the Industrial Relations Act was already amended a few years ago to allow for rank-and-file unions to represent executives.

Sir, allowing executives to have access to the labour court would be an extension of this development, which is primarily a recognition that executives too

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need some protection and assistance from unfair practices in the labour market. Hence, I would like to suggest that the Minister consider amending the Employment Act to allow executives to have access to the labour court. We can limit this to executives earning not more than $4,000, or other suitable salary level, to ensure that senior executives are not covered but only up to middle level executives will have recourse to the labour court.

Sir, in my view, this amendment is necessary and timely as the recent economic downturn has shown that executives too are vulnerable and need support. Denying executives recourse to the labour court means that to enforce their rights, they would have to engage lawyers and file claims in the civil court which is expensive and injects too much legalism into the employment relationship. Sir, the current situation leaves such middle level executives exposed and vulnerable to unfair labour practices at work and is therefore untenable.

Sir, the second issue that I would like to raise is with regard to the provision of maternity benefits for female executives. Currently, because female executives are excluded from the ambit of the Employment Act, they are not entitled to paid maternity benefits. This means that whether or not they are entitled to such benefits would depend on the employment contract. I believe that on such a basic issue as maternity benefits and maternity protection, our legislation should cover all employees regardless of their job status. I would therefore like to ask the Minister whether he would consider amending the law, so that female executives would be entitled to maternity benefits as a matter of right on par with other female employees in Singapore . This is consistent with our policy of procreation as well as to provide greater protection to women performing maternal functions.

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The Chairman: Mr Yeo Guat Kwang, please take your two cuts together.

Work Safety and Occupational Health

Mr Yeo Guat Kwang: Sir, before I move my cut, I also want to clarify, on behalf of the male colleagues in this House, that we all support the call for work-life balance and pro-family policies. Many of us spoke quite passionately during the debate on the Budget Statement and also in the COS on MCDS. Perhaps we were barking up the wrong tree. I think, next year, we will follow our female colleagues to target at the right spot.

Sir, we have a world-class workforce. Our workforce has been constantly ranked as No. 1. They work night and day, rain or shine, to maintain a high level of efficiency and productivity. Do the authorities and management of all the workplaces also maintain a high level of occupational health and safety standard? I would like to urge the management to tighten the implementation of safety measures, as workers' lives are at stake. They have a moral and legal responsibility to provide a hazard-free environment for all our workers. Despite our repeated calls, particularly from the labour movement, for more stringent safety measures, we still see unnecessary deaths at construction sites and some of the factories.

In the past two years, 120 workers lost their lives in work-related accidents, of which half happened in the construction industry. In our view, every single work-related death is not tolerable, whether at the construction sites or any other workplaces. Employers must show concern and have the interests of the workers at heart.

Besides fatal accidents, in the last five years, on the average, we also had about

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100 accidents which led to permanent disability per year, of which one-third happened in the metal working industry. These figures are also not acceptable as all these will actually lead to hardship for the worker's family and loved ones. Does the Ministry have plans to step up efforts in these areas?

More efforts must be put in by the tripartite partners, so as to put in place proper systems and develop a safer working environment for the workers. On behalf of union leaders from the non-industrial sectors, I would also like to, once again, urge the Ministry to amend the law, particularly the Factories Act, to provide protection to more workers in workplaces, including non-industrial workplaces, such as office workplaces, hospitals, hotels, restaurants and laboratories. The current Factories Act only covers 700,000 workers, ie, one-third of the total workforce.

Moving ahead, it is the responsibility of all mangement staff and employees to work together to build a strong safety culture at the workplace. It is wrong to just delegate the responsibility to the safety manager or the safety officer. The Ministry should also review the statutory requirement for companies to include such a head count, and give people the wrong impression that the responsibility lies with the safety manager.

Singapore has done well in maintaining safety standards. We should continue to improve on these standards and make our workplace a safe place for all.

CPF

Sir, I will move on to my next cut on CPF. The primary role of CPF is to ensure sufficient savings for retirement. Sufficiency of funds depends on the level of needs catered for in retirement. There

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was consensus that CPF has been used for too many purposes. There is a need for CPF to return to its fundamental role and cater only to the basic needs in housing, medical care and cash for daily expenses in the retirement years.

Sir, the remaining 4% CPF not yet restored would not be restored, and the employer's CPF contribution was cut by 3% from 1st October 2003 . In addition, the Government has decided to lower the CPF contribution to the long-term target range of 30% to 36%, lower the salary ceiling to $4,500 and further reduce CPF rate for older workers over the next two years. Some union leaders expressed concerns that all these adjustments may cause insufficiency of retirement funds for our workers. What would the Ministry do to ensure retirement adequacy?

Another concern raised by union leaders is on the returns on CPF savings. A number of CPF members have made losses from their CPF investments. Likewise, investments in housing are also not insulated nowadays from losses. It seems that it is better to keep the money in the Special Account to enjoy the 4% fixed interest. Does MOM have any plan to ensure and enhance the rate of return for CPF savings which are the hard-earned money of the workers?

Sir, I support the recommendation made in the Budget Statement to request the self-employed to also have sufficient savings in their Medisave account to meet their hospitalisation expenses. May I know how would the Ministry enforce contributions, in a practical way, for the self-employed?

Mr Steve Chia Kiah Hong: Sir, I want to raise the CPF loans idea again and ask the Acting Manpower Minister to give this matter further consideration before rejecting it, as he did previously. Those facing hardship and retrenchment should be allowed to borrow from their own CPF

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savings at low interest rates of about 4%, or maybe 5%. This is better than forcing them to borrow from the loan sharks, or high interest bank loans.

Sir, the concept of the CPF should be expanded to allow extending temporary loans from one's own CPF and/or Special Account to cover for the rainy days. This is especially so when the member becomes unemployed and needs money urgently to cover current living expenses. It makes no sense that the member cannot borrow from his own CPF funds (in the Ordinary or Special Account) but be forced to borrow from the loan sharks, credit cards or banks at a high interest rate.

Sir, it is not as if the CPF funds will be consumed and will not be paid back to the account. To ensure repayment back to their own CPF accounts when they are gainfully employed, the CPF can ask the applicants to furnish a family member to act as a guarantor for such loan withdrawal. This is quite similar in concept as borrowing against the cash value of one's own insurance policy. If there is no cash value or there is no money in the account, then there is nothing to borrow from. I hope the Minister will accede to this idea and give our citizens another avenue to raise short-term cash, when it is most needed.

Dr Jennifer Lee: Sir, I welcome the tax relief for CPF top-ups for non-working spouses which DPM announced in his Budget speech. This is significant as it is the first time that the Government has done anything tangible to acknowledge the role and contributions of non-working spouses. And I hope that this will be the first of many more measures we will see in the future.

However, in this instance, I must say that applying it only to non-working spouses who are 55 years and older is far too late to build up anything near a

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meaningful amount in the individual's CPF and restricting it to those who have earned not more than $2,000 in the preceding year, which is much too low a cap. Currently, our female labour force participation rate is 53% or 54%. Corollary to that, of course, is that 46% or 47% of our women are not in the workforce, a significant percentage of this being full-time home makers. This is a big group. With women having a longer life expectancy, many will survive their husbands. If they do not have adequate provisions for their old age, not only will they face a tough time themselves, the State will find that, at some point, it may have to assume some portion of the responsibility for their well-being. So, I think it behoves us well to look at what kind of provision we can make to try and protect or to enable their financial well-being into their old age.

While CPF savings is only one of the many provisions and aspects of planning for retirement, it is, for many Singaporeans, an important one, a familiar scheme, one that we already have put in place. We should therefore use it to best effect. May I therefore ask the Minister if he will review the tax relief for the CPF top-up for non-working spouses, the conditions of which are currently set, I believe, too late and too low with a view to recommending the removal of the age and prior earnings qualifications?

Negative Income Tax

Dr John Chen Seow Phun: Sir, before GST was introduced, Singaporeans of low or no income paid little or no tax. With the introduction of GST, their tax burden has substantially increased . Moreover, this group of people is likely to face structural unemployment brought about by globalisation. We must, therefore, find effective ways to help them. I believe we can do so in the form of the concept of negative income tax.

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2.00 pm

Negative income tax is not new. In a way, Economic Restructuring Shares (ERS) is a form of negative income tax. Other forms of subsidies and reliefs can also be thought of as negative taxation. Another example of negative taxation is the People-for-Jobs Traineeship Programme implemented by MOM to help the older retrenched workers. In this scheme, the Government will subsidise the salary of a retrenched worker above 40 years old for six months, if he is employed by a new employer. This is to make older workers more employable.

Sir, I think this scheme should be expanded to help low-income Singaporeans to find work and incentivise employers to hire them. It is better for these Singaporeans to work than to face unemployment and rely on Government hand-outs. I suggest that the Government consider paying for their CPF, or a portion of it, when they work. Paying for their CPF will also help them in their retirement, a point which Dr Jennifer Lee has also mentioned. To prevent abuses, audit checks can be carried out on a regular basis. I hope the Minister would consider my suggestion.

Portable Medical Benefits

Mr Yeo Guat Kwang: Sir, the Portable Medical Benefits Scheme (PMBS) has been in discussion for some time, and the labour movement has, in fact, been calling for making the medical benefits portable since 1997. The system can provide workers with portable and continuous coverage during their working years, extending into their retirement. It helps workers save for future medical needs. More importantly, under the scheme, the worker does not lose out when he changes jobs, even if he develops medical conditions. At the same time, there will

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not be unnecessary cost burdens to his employers as he ages.

With the economic downturn and restructuring, many older workers realise the hard reality of the existing employer-based medical benefit. It is more like a cheque - when there is a need to cash, the supporting account could have been closed or terminated. I would like to remind employers to treat workers as stakeholders. Companies have an obligation to stakeholders and should not reduce their corporate social responsibility to enhance the welfare of employees. Employers should seriously consider the ERC's recommendations to implement PMBS. Many union leaders I met suggested that the PMBS should be part of the national agenda rather than leaving it to the employers. They strongly urged that a timeframe be set for the adoption of the PMBS, and that the Government should view the implementation of portable medical benefits as a top priority. Besides tax incentives, the Government should set up the basic infrastructure for the implementation of the PMBS, ie, a national basic insurance scheme for all Singaporeans that the labour movement has been advocating for years.

I would like to ask the Ministry of Manpower how many companies have adopted PMBS to-date, and what more can be done to push for a nation-wide implementation of portable medical benefits.

Mr Heng Chee How: Sir, the discussion over portable medical benefits has been going on for many years now. Competitive pressure and technology change lead to constant restructuring in the economy and churn in the labour market. A worker must be prepared to move through several jobs with different employers in the course of his working life. While his first employer may provide some medical cover for him, the same may not be the case for subsequent

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employers. The provision and extent of medical cover by employers vary widely.

So, what happens to a worker should he fall ill in between jobs or when he works for an employer who does not provide medical cover? Then there is the related concern over the expected rise in healthcare costs due to an ageing population and workforce. Put another way, expected higher medical costs will be yet another reason why employers may put off employing an older worker. If we cannot sort this problem out, then the re-employment prospects for older workers will get worse over time.

For this reason, the labour movement has been pushing hard on this subject over these years. Unfortunately, progress has not been as quick as we had hoped for. With time ticking away, the challenges will only get bigger. I was, therefore, delighted when the Minister for Health said in this House that his Ministry is now seriously studying how to put in place a national health insurance system that goes beyond coverage for catastrophic illnesses, and I think this system will be portable. I believe that this new development will finally provide the much-needed platform and breakthrough for implementing the portable medical benefits system for the workforce.

I would like to ask the Minister for his assessment of the status of implementation of the PMBS so far. I would also like to ask the Minister what steps his Ministry would be taking to work with the Ministry of Health to dovetail PMBS requirements into the national health insurance system that is now being planned.

Retirement Age

Dr Ong Seh Hong: Sir, I have spoken on the concept of retirement in this House and I am raising it again.

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In this modern economy, the concept of a pre-determined retirement age is probably no longer relevant. This topic and issue I am raising have increased urgency in the light of our falling birth rate. Our limited human resources have just gotten more precious, and we should stretch them and make better use of them.

Sir, we need to understand that the chronological age is no indication of a person's psychological, physiological and mental well-being. A person at 62 could still be very healthy in all aspects, and he can expect to live longer if he is actually working. This is because if a person is working, he is still physically active and mentally challenged. So he continues to use his mind more and, socially, he has the opportunity to interact with his co-workers and colleagues so that he has a more fulfilling life, compared to someone who has to retire when he is still healthy, and he really has less to look forward to. And the possibility of the latter's health deteriorating rapidly is much higher.

Therefore, Sir, it is to our overall benefit to keep our workforce working for as long as possible. Having a prescribed and pre-determined retirement age is unhelpful and artifically neutralises a person's economic productivity.

Sir, our falling birth rate has put another spin on this. By removing the retirement age concept and allowing more Singaporeans to work longer, as long as they are physically and mentally healthy and are willing to continue to work, we can actually compensate for the shrinkage of our workforce due to ageing. Keeping these older people healthy by letting them work longer and gainfully employed, will also make them reduce their dependency on our future younger population. Therefore, I call upon the Minister to review the concept of retirement and consider removing the pre-determined retirement age.

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Pension Plans

Mdm Halimah Yacob: Sir, I would really like to support what Dr Ong said. I think what he said is really relevant and useful, because there is a need to engage and encourage employers to employ people beyond 62 years of age. Right now, the prescribed retirement age is 62, although I must stress here that it does not mean that employers are forced to retire people at 62. In fact, the retirement age of 62 is meant to protect the worker, to allow him to work up to 62, and prohibiting employers from retiring anybody before they reach the age of 62. But many lower-income workers that we represent in the labour movement have made the request that they be allowed to work longer. However, employers are generally unwilling to employ their workers, although at the age of 62 many of them are still productive and can continue to contribute effectively to the workplace. So, I would like to ask the Minister what more can be done by MOM to encourage and promote the employment of older workers beyond the age of 62, particularly those who are in the lower income group and may not have much savings and, therefore, need to keep on to their jobs.

The second point I would like to ask relates to the Government's plans to set up a pension plan within the CPF. The aim is, of course, to enhance returns for CPF members by lowering investment costs. I would like to ask what is the progress that has been achieved because, for this pension plan to be effective, there must be critical size. Otherwise, there may not be much savings in terms of institutional cost savings, and these institutional costs may be passed on to the workers, and therefore there will not be much of a return. I would, therefore, like the Minister to give us an update on this. In particular, I would also like to hear the Minister's reaction on the two

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points about size, and how to also help Singaporeans make discerning choices that will not be harmful to them, bearing in mind that although, currently, we do allow the use of CPF funds for investments, not many are able to make that kind of discerning choices.

The Parliamentary Secretary to the Acting Minister for Manpower (Mr Hawazi Daipi): Sir, I would like to address questions raised by various Members related to the areas of the Employment Act, workers' safety, medical benefits and CPF.

Employment Act

Mdm Ho Geok Choo and Mdm Halimah Yacob commented that the Employment Act does not cover executive and managerial staff. This is true. But managerial and executive staff are in a position to negotiate their own terms and conditions of employment with employers, including paid maternity leave for female workers. In addition, my Ministry recently amended the Industrial Relations Act in 2002 to allow union representation for executives for unfair dismissal, retrenchment and breach of contract.

Enhancing Occupational Safety and Health

Let me move on to safety at work. I agree fully with Mr Yeo Guat Kwang that one death at any workplace is one too many. Mr Yeo should be heartened to know that the number of fatal accidents in factories has fallen over the years, from 103 cases in 1997 to 55 cases in 2003. Similarly, injuries resulting in permanent disability have also fallen from 124 in 1997 to 87 cases in 2003.

These improvements were due to the following measures taken by MOM:

(1) Requiring occupiers of certain hazardous factories to implement safety management systems and safety audit;

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(2) Implementing a scheme to debar contractors with bad safety records from employing foreign workers from non-traditional sources and from tendering public projects; and

(3) Enforcing stringent actions, including issuing stop work orders, against unsafe factories and worksites.

However, in general, I would agree with Mr Yeo that there is still room for improvement, and we will continue to work on this. The responsibility of ensuring safety of workers cannot be the Government's alone. Management and unions too must play their part. I agree with Mr Yeo that management should not delegate this responsibility to safety personnel only. MOM will work with companies and unions to improve the safety situation in workplaces. In fact, in our discussions with CEOs of companies, we stressed this point that the leadership must be provided by the heads of the companies.

Mr Yeo has also called for the Factories Act to be extended to protect the safety and health of workers in other workplaces. We will be doing just that. A new legislation will be enacted for this purpose in due course.

CPF, Negative Income Tax and PPPs

Sir, let me now turn to CPF, negative income tax and the pension plan. Mr Yeo has also asked how we can ensure that workers will have sufficient savings to meet their old age needs, given the reduced CPF contribution rates. Individuals have the primary responsibility to ensure their own retirement adequacy by staying employed for as long as they can. We should, and cannot remove this individual responsibility for retirement security. What the Government should do is to help workers upgrade their skills and stay employable.

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In addition, the Government restructured the CPF system last year to reduce the statutory burden on employers to improve the employability of workers, including older workers, and to rationalise withdrawal rules so that CPF members will have more cash set aside in their retirement age and in their Medisave Accounts when they turn 55. Our projections show that even at a CPF contribution rate of 30%, the majority of new CPF members who contribute regularly to the CPF from the time they start work and are prudent in the use of their CPF for housing, will be able to meet the Minimum Sum of $120,000, in 2003 dollars.

What the Government will not do is to engender a dependence mentality on the State and weaken workers' motivation to re-skill. I understand Dr John Chen's intention in asking for subsidies for

employers' CPF contributions. What we had instead done last year was to raise the salary floor for CPF contributions so that workers with low income would have a higher take-home pay. This incentivises them to work and many of them will still be eligible for other financial schemes if they need assistance.

2.15 pm

I would like to stress that there are already a lot of schemes to help workers to enhance their employability - as a first line of defence to enhance their welfare. It also follows that having reduced CPF contribution rates to improve employability, we should not extend the CPF core objectives beyond retirement, housing and healthcare needs, to include lending for hardship, which is what Mr Steve Chia has proposed. Even with a guarantor, workers would face an additional burden in the future as the loan would have to be repaid. Moreover, for those who do not pay back their loans,

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this will be equivalent to early withdrawal, and defeat our very objective to ensure that people have sufficient savings for retirement.

This year, the CPF Board will undertake two major initiatives to help Singaporeans enhance the returns on their CPF savings. The first major initiative will be for the CPF Board to implement the ERC's recommendation to provide low-cost, privately-managed pension plans (or PPPs) for CPF members as an additional option under the CPFIS. The aim is to help members increase the probability of higher returns on their CPF savings over the long term by reducing investment costs through reaping economies of scale, and allowing them to tap into global investment opportunities through professionally managed funds.

Mdm Halimah Yacob has asked whether there is sufficient critical mass for the PPPs to be viable. The industry feedback is that for a PPP to be viable, it would have to gather about $500 million to $1 billion in assets over a few years. With about $53 billion and $15 billion still available for investments under CPFIS-OA and CPFIS-SA respectively, we have the potential critical mass for PPPs to be viable.

The CPF Board has just completed its industry consultation on PPPs and is currently evaluating the feedback. The CPF Board will release its response to the feedback when ready.

I am also pleased to inform Mdm Halimah that the CPF Board will enhance its public education programme to help Singaporeans prepare adequately for retirement. The CPF Board has launched the Investor Education website on 5th January this year to help members make informed investment decisions. Following this, the Board will introduce information

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modules structured according to members' main life events, such as starting work or reaching 55 years, in a website to be called "My CPF". These modules will guide members on what to consider at different stages in their lives, when they decide to use their CPF savings. This "My CPF" website will be launched tomorrow.

The CPF Board will continue to educate its members through newsletters, participation in road shows, talks and seminars, and in the MoneySENSE national financial literacy programme. This effort will include PPPs when they are introduced.

The Government will continue to find ways to help Singaporeans build up their retirement savings. The two measures announced in the Budget Speech to raise the tax relief for cash contributions to the individual's own CPF Retirement Account or the accounts of his parents and grandparents from $6,000 per annum to $7,000 per annum, and the extension of the tax relief to top-ups to the CPF Retirement Accounts of non-working spouses who earn not more than $2,000 in the preceding year, will help encourage CPF members to build up the retirement savings for their relatives. At the same time, the move to top up the Medisave Accounts of Singaporeans aged 50 years and above will help them build up savings to meet their medical needs.

In response to Dr Jennifer Lee's suggestion about dividing the Special Account into two for single income households, we would prefer not to interfere with how Singaporeans provide for their family members when the majority of Singaporeans are in fact doing fine and are responsible. Our approach is to create the opportunities for voluntary top ups, and this year, we have decided to extend tax relief to members who top up their non-working spouses' Retirement Accounts. We are currently studying the

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issue of top ups for non-working spouses below age 55, but it requires careful consideration as we need to ensure that the topped up funds eventually flow to the spouses to meet their retirement needs and not for other purposes.

On portable medical benefits, both Mr Yeo Guat Kwang and Mr Heng Chee How have asked for an update on the Portable Medical Benefits Scheme, or PMBS, and the Transferable Medical Insurance Scheme, or TMIS, and called for measures to speed up their adoption. The Tripartite Working Group released its guidelines on the PMBS and TMIS on 1st October last year. Implementation of the PMBS and TMIS is voluntary. Since 1st October 2003, 35 companies have implemented PMBS. This is in addition to the 164 companies that were already on the scheme earlier. In the case of TMIS, three more insurance companies have joined in to provide TMIS.

To promote adoption of the schemes, the Government adjusted the tax structures on medical expenses to allow employers who implement either of the two schemes to continue to enjoy a 2% tax deductible limit. However, with effect from 1st April 2004, employers who choose not to implement either of the schemes will have a lower tax deductibility limit for medical expenses at only 1% of their total payroll.

These are early days for the schemes. We expect the number of companies adopting portable medical benefit schemes to increase as the full effect of the differential tax deduction for medical expenses comes into force in April 2004.

MOM will continue to work closely with employers and union representatives to facilitate and promote the implementation of PMBS and TMIS. We will monitor the progress of implementation and will make refinements where necessary.

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As regards Mr Yeo's comment that medical coverage should be provided under a medical health insurance scheme, we know that the Acting Minister for Health had, just two days ago, announced that MOH is studying such a scheme.

As for Dr Ong Seh Hong's suggestion to lift the limit on retirement age, let me explain that the Retirement Age Act stipulates the minimum retirement age, which is currently set at 62. It is not the maximum age for employment. If the employee is fit and healthy, he can continue to be employed beyond 62 on mutual agreement with his employer. Hence, it is not necessary or advisable to remove the minimum retirement age stipulated in the law.

Mr Yeo Guat Kwang: Sir, may I know what does it mean by "in due course", as stated by the Parliamentary Secretary? Can he be more specific in terms of the timeframe set for the extension of the safety registration to protect more workers?

Mr Hawazi Daipi: We will introduce the amendments soon.

Mr Steve Chia Kiah Hong: Sir, the Parliamentary Secretary seems to imply that the borrowers, borrowing from loan sharks or from the banks, need not pay back the loan. Does it mean that the Parliamentary Secretary actually prefers that the CPF members borrow from loan sharks in times of need than from their own CPF accounts?

Mr Hawazi Daipi: We have never suggested that. I do not know whether the Member will suggest to his residents to borrow from loan sharks. What we are saying is that CPF savings are meant for three main purposes - retirement, home as well as medical expenses. All the members' assets must be meant for their

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retirement. That is the basic foundation of CPF savings. His house, his other assets, including shares, stocks and so on, can be encashed to ensure that he has savings for his retirement. We should stick to that.

Foreign Domestic Workers

Ms Braema Mathiaparanam (Nominated Member): Sir, I would first like to applaud the Ministry on its many new initiatives to protect the foreign domestic workers (FDWs), training of new employers and foreign domestic workers, booklets on safety precautions, accreditation schemes, etc.

Most employers do treat their FDWs well and, in some cases, extremely well and the number of obvious cases of abuse is small. What remains unclear though is what constitutes acceptable working conditions.

Currently, the variations from one worker to another on salary issues, rest periods, sick leave, days off, prompt payment of salaries are too wide. We cannot say that these are the conditions that need to be settled between the employer and the employee because here we have, in our midst, a foreign domestic worker. Whether she is savvy or not, we have to see her, more often than not, as being a little bit more vulnerable.

It is my hope that the Ministry of Manpower would look into a standardised contract to spell out certain terms or, at least, a set of guidelines on good practices so that employers and employees do know the terms which are open, transparent and, most important of all, consistent and can be applied.

I know the Ministry would come back to say, as in last year's answer, that there are enforcement issues here. How do we

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enforce this? I think that the current accreditation scheme that will be effective from 1st June can be used to put pressure on agencies to take this under their purview, ie, to govern the behaviour of the employers who have taken the FDWs from their agencies. Another way to govern this would be, if the terms are open and consistent, for all of us in the community to play a role in alerting the Ministry or the agencies to any abuse of contract. But when the contract varies, we are all stuck.

Lastly, I would like to say that this is an important area, in spite of the current instability, because our guest workers are our ambassadors. We need to look into it.

Mr Chandra Mohan K Nair (Nominated Member): Sir, a substantial number of our foreign domestic workers, numbering in total around 150,000, come from neighbouring ASEAN countries like Indonesia, the Philippines and also from the sub-continent countries like Sri Lanka and India. These workers are generally young ladies in their late teens and their 20s.

They are here to work and earn some money in a very humble way. Most of them are quite poor and come from very humble background. Some of them are married with children at home and they need help. We must show, as Singaporeans, more compassion and concern for them. We must be concerned about how Singaporeans, as employers, and our Government as a host country, treat these ladies. We must be respectful of them and give them the dignity and respect as human beings. Their host countries and their citizens will be observing us to see how caring we are of their citizens.

Our Government has, directly or indirectly, done credibly well in terms of caring for these foreign domestic workers.

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In terms of these maids entering into Singapore, there are laws in the Ministry of Manpower to observe, and there is some insurance coverage on a compulsory basis. There are also criminal laws in Singapore to ensure that those abusing their maids are prosecuted once such offences are brought to the attention of the Police and the public prosecutors.

2.30 pm

Sir, we can do more and help to improve their lives and skills. I would like the Ministry to use the maid levy of about $345 per month to give maximum benefit to the maids. The Government gets almost $15 million per month on maid levy. Why can we not use part of it for maids to have their own equivalent of our CPF,

say, a minimum of $50 a month? They could then have some compulsory savings to bring home, upon completion of their contracts of employment.

The Government should also use part of the levy to conduct courses on, say, domestic science, proper use of home appliances, health concerns, improving their language skills, like English, Malay, even Chinese and Indian languages, and upgrade their primary and secondary education during weekends. There should be legislation to allow maids to have at least 2-4 days off per month and let them improve their skills, on a voluntary basis, during their off days. Also, Sir, we should encourage employers to have some standard employment contract with minimum employment conditions like minimum wages, off days, as I said of at least 2-4 days per month, etc. And as Ms Braema has indicated, I suspect that many of the maids in Singapore lead very hectic lives, having to work long hours, some as long as 16 hours, from 6.00 am to 10.00 pm every day. We would not want our daughters or mothers to work that hard.

I would, therefore, urge the Government to seriously look into this

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matter with compassion and serious concern to improve the lives of foreign domestic workers in Singapore. They will then go home to their respective countries with fond memories of their stints in Singapore and to have love and affection for their employers and their families.

The Chairman: Prof. Chin is not here. Mdm Halimah.

Protection for Foreign Domestic Workers

Mdm Halimah Yacob: Sir, many initiatives have been undertaken by the Ministry of Manpower in order to improve the lives of our foreign domestic workers. And I agree with the other speakers that in comparison with foreign domestic workers in many countries, the status and conditions of our foreign domestic workers here are generally quite favourable.

Sir, the current approach, however, in dealing with the relationship of the foreign domestic workers and their employers is to leave it to the parties to work out the terms of the contract. MOM has rendered help by suggesting a standard contract for such workers, but again the approach is voluntary and it depends on the two parties, ie, the employer and the foreign domestic workers, to work out their terms. In this kind of relationship, the balance is, of course, never equal as a foreign domestic worker is not in an equal bargaining relationship.

Sir, at last year's COS debate, I had argued for some form of regulatory protection for foreign domestic workers as, unlike other foreign workers, they are not covered under our Employment Act. MOM's reply was that it was not practical to regulate domestic work in regard to hours of work, rest days and overtime work in a home environment.

Sir, I am raising this issue again this year because I feel that we can and

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should provide some minimum standards of protection in our laws for foreign domestic workers. I agree with MOM that it may not be possible to regulate the working hours and overtime work because the nature of their work is such that it is difficult to measure the exact working hours. But, nevertheless, I still think that it is possible to stipulate other minimum standards covering issues like rest days, sick leave or annual leave. It is also possible, in my view, to allow foreign domestic workers to file their complaints or claims for arrears of wages or other benefits with the labour court, which is administered by MOM. In this way, there is a legal right for them to bring their claims against the employers in an inexpensive, speedy and simple manner. Although I am aware that the MOM currently helps foreign domestic workers to settle their claims, this is done unofficially. If an employer refuses to turn up for conciliation or to pay the foreign domestic worker, MOM has really no power to compel the employer to do so, which to me is an unsatisfactory situation. Sir, I urge the Ministry to look into this suggestion as it represents a progressive way of protecting our foreign domestic workers, and we are prepared to work with MOM on how to work out this regulation.

International Labour Organisation Conventions

Sir, first, let me congratulate the MOM for being very forward-looking in its approach towards the ratification of ILO conventions. Since 1965, Singapore has not ratified any conventions until a few years ago when it ratified Convention 182 on the Elimination of the Worst Forms of Child Labour and, subsequently, Convention 100 on Equal Pay for Work of Equal Value. This is indeed laudable, Sir, as these are core ILO standards that are linked to issues of equality and protection

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of children against exploitation for profit considerations.

Sir, as Singapore has already ratified Convention 182, which is on the Elimination of the Worst Forms of Child Labour and also Convention 5 which stipulates the minimum age before children can be allowed to work in an industry, it is my hope that the Ministry will consider also ratifying Convention 138. All these three Conventions - Conventions 182 and 5 which have already been ratified and Convention 138, which has not been ratified - deal with the issue of elimination of child labour. Convention 138 stipulates 15 years as the minimum age for work. Under our law, Sir, I am aware that 14 years is the minimum age for work. Although there may be some concerns that if we ratified Convention 138, we have to change our minimum age for work, this should not be a major obstacle as in Singapore, it is rare to find young people below the age of 15 working, as most are in school.

Sir, we can be proud of our labour standards as they are high. In this regard, we have much to gain by ratifying core ILO Labour Conventions, wherever possible, and thereby sending a clear signal that our employment practices are up to international standards. I would, therefore, like to urge the Minister to consider ratifying Convention 138 and, if so, to also indicate what would be the timeframe.

The Chairman: Order. I propose to take the break now.

Thereupon Mr Speaker left the Chair of the Committee and took the Chair of the House.

Mr Speaker: Order. I suspend the Sitting and will take the Chair again at 3.00 pm.

_Sitting accordingly suspended
at 2.37 pm until 3.00 pm _

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Sitting resumed at 3.00 pm

[Mr Speaker in the Chair]

Debate in Committee of Supply resumed.

[Mr Speaker in the Chair]

Head S (cont.) –

Dr Ng Eng Hen: Sir, first, let me thank Ms Braema, Mr Chandra Mohan and Mdm Halimah Yacob for their positive comments about the initiatives that MOM has launched. Over the years, we have implemented a range of educational as well as legislative initiatives. I would like to report to the House that the situation has improved for the well-being of foreign domestic workers or maids. For example, in 1997, we launched a particular initiative where we enhanced the penalties in the Penal Code for offences committed against foreign domestic workers. It was done in such a way that the same penalties apply for offences committed against these foreign domestic workers. Compared to the same offence committed by a local, it would have the penalty of one and a half times. And this reflected our appreciation of the unequal relationship that Members are talking about between employer and employee, in this particular instance, foreign maids.

Before 1997, there were about 157 abuse cases. After the enhancement of the Penal Code, the number of abuse cases decreased to an average of 69 in subsequent years. So the number has come down. While there continues to be a handful of errant employers, the majority, as Members have rightly pointed out, of foreign domestic workers who work in Singapore are well treated by their employers. This was confirmed in a survey conducted by the Singapore Press Holdings last year, in which 82% of foreign domestic workers surveyed indicated that they were happy in

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Singapore . As many of the Members here know, many, in fact, apply for an extended duration to work here.

Notwithstanding these improvements, my Ministry closely monitors the situation and will take further steps to safeguard their safety. As announced earlier, first-time employers will be required to attend a compulsory orientation programme before they are allowed to employ a foreign domestic worker from April onwards. During these sessions, we will address this unequal relationship and explain to them what they can or cannot do, and the penalties that come with abusing their maids. The orientation programme will not only educate potential employers about good employment practices, but we also use this occasion to highlight to them, the foreign maids' rights and their recourse for help. We are conscious of the fact that foreign maids who stay in their employer's home are very much part of the employer's household. This is a unique relationship, and the boundary of their workplace is not clearly defined. Mdm Halimah said that we should extend the Employment Act to govern such employment relationships. We do not cover, under the present Employment Act, all domestic workers, whether local or foreign. It recognises the difficulty of legislation in addressing this specific relationship. And the rigidity imposed by further legislation will hinder the ability of employers and their domestic workers to negotiate agreements.

Instead, my preferred approach is to increase the transparency of the employment terms, which we should do - in other words, encourage and indeed facilitate both sides of the employment contracts - which are mutually agreed. And many foreign domestic workers have such contracts. They are drawn up with the help of employment agents and, in

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many instances, their own Embassies, who tell them what their contract should be. These contracts spell out the core employment terms, including rest days.

Moving ahead, the Ministry aims to do what many have recommended, including Mr Yeo Guat Kwang, to have all foreign domestic workers and employers enter into employment contracts. This will be part of the accreditation process. We will advise that they must have clearly defined areas like scope of duties, hours of work and rest days, so that the basic welfare of maids is addressed and outlined upfront. However, I do not believe in mandating what should be stipulated in every set of employment contract and these are best left to the individual parties to decide. What we have done is to stipulate practices that must be observed as work permit conditions and when these conditions are breached, it will attract heavy penalties. I assure Members here that my Ministry will, and has not hesitated to, invoke the Employment of Foreign Workers Act to take stern action against employers who are found to have ill-treated or exploited their maids.

The many measures we have put in place will improve further the safety and well-being of foreign domestic workers. In fact, even Indonesians themselves have affirmed our efforts. Let me quote from a recent article from Kompas - I have circulated it - which was published on 8th March this year - an Indonesian daily with the heading, " Singapore Gets Things Done". I quote from the translated text, " Singapore will do everything to see that problems are overcome well. In other words, when a problem emerges, various measures are immediately taken to see that the problem is solved comprehensively." The article then goes on to detail our efforts, including the fact that we have "firmly meted" out harsh punishments to those who abuse their

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maids. They recognise that we have taken these errant employers to task and that we do not discriminate between Singapore citizens or foreign citizens who commit crimes. The Indonesian press here has acknowledged that we have in place safeguards to protect their workers.

As for the handling of salary arrears, my Ministry already extends free conciliation services to foreign domestic workers and their employers. And it is not as if it is painted by Mdm Halimah that we are powerless to act against employers who we find are errant. Indeed, we can bar them, we can prosecute them. In many instances, my Ministry has helped conciliate and resolve the dispute between employers and their workers. This is no different from foreign domestic workers.

Both Ms Braema and Mr Chandra Mohan have asked for the partial use of the levy to pay for various items - skills development and medical insurance. The levy is a pricing mechanism to moderate the demand of foreign domestic workers, although we give rebates for working mothers. As for worker's training as a suggestion - as Mr Chandra Mohan has passionately called for Singaporeans to be compassionate, which I agree with - we have certain initiatives. There is one Bayanihan Initiative where MOM has worked together with the Filipino Embassy to start training houses for their domestic workers and to skill them. And we will continue to work with VWOs or other agencies which are interested to start this initiative.

But I must remind the House that the physical well-being and training of foreign domestic workers are the responsibility of employers, not MOM. We will ensure that their well-being is safeguarded but their well-being and how you choose your maid must be the responsibility of the individual employer, and employers must factor such associated cost when they

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hire foreign domestic workers. That is why we insist that employers bear the cost of the personal accident insurance and attend the compulsory Safety Awareness Course. I also want to make a pitch for Singaporean employers who do not want the hassle of employing foreign maids to hire local domestic workers. There are indeed many companies which have started this initiative. I am told that many families, especially expatriate households in districts 9, 10, 11, as well as some local households, use their facilities because they prefer it as a less intrusive option.

The final area is Mdm Halimah Yacob's question about ratifying the ILO Convention 138, and she is right. ILO 138 Convention stipulates 15 years old as the minimum working age. Under our Employment Act, the child below the age of 14 is not allowed to take up gainful employment. But as we all know, for all purposes, child labour does not exist in Singapore as the majority complete at least 10 years of education and they are in schools. Therefore, we have no problems complying with ILO Convention 138 in practice. But we will choose the appropriate time to amend our Employment Act to do so.

Mdm Halimah Yacob: A point of clarification, Sir. I did not say that the Ministry is powerless and it cannot prosecute an errant employer. I am fully aware of that. Employers who violate any criminal law, or other work permit rules will face sanctions. I am speaking only in relation to the employment contract. Can the Minister clarify? If an employer refuses to come for a conciliation meeting arising from some employment dispute, has the Ministry the power to compel the employer to do so under the existing law?

Dr Ng Eng Hen: Sir, we have said that when employers enter into a contract with their foreign domestic workers, what we want to move towards is a mutually

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agreed contract. And if the foreign domestic worker says that the contract has been breached, we will try to negotiate and settle the dispute. If we find that indeed the employer has not paid the maid and there are salary arrears, we can take action. We can debar the employer, and we have debarred such employers before from hiring further maids. And we can try to make restitution. I am also looking at ways to see how we can ensure that salaries are paid promptly and are actually paid. These are things that we will continue to look at to see how we can improve the well-being of maids here.

Mr Yeo Guat Kwang: Sir, I am glad that the Minister has assured Singaporeans that he is listening and aware of the concerns related to the employment situation and the progress of the Government in its efforts at strengthening employability of workers is encouraging. I am satisfied with most of the answers given by the Minister and the Parliamentary Secretary but, of course, not all. On that note, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (2), Mr Chiam.

NTUC

Mr Chiam See Tong (Potong Pasir): Sir, I beg to move,

That the sum to be allocated for Head S of the Main Estimates be reduced by $10 in respect of Code SD 1500.

Sir, last year, an office bearer of the Singapore Democratic Alliance (SDA), of which I am an office bearer, was sacked as a member of the UWEEI Union, which is affiliated to the NTUC. The SDA member had been holding the post of Chairman of a branch of that union for

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many years, yet he was never disturbed. When it was announced in the press that he was elected the Secretary-General of the SDA, he was suddenly asked to leave as a member of the UWEEI Union. All of us in the SDA were, of course, surprised because the said member of the SDA was doing good work for the benefit of the union and did not carry out any political activities while he was in that union. The reason given for the sacking was that the NTUC has a symbiotic relationship with the PAP.

By virtue of that relationship, the NTUC not only supports the PAP, but also takes action on behalf of the PAP for its political work. One of those actions taken by the NTUC is to rid from its ranks any of its members who support an Opposition party, although that member has never acted against the interest of the workers in Singapore . I also know of another case a few years back, when an Opposition member, who was a teacher was sacked from one of the NTUC education centres just because he stood for election under the banner of the opposition, although he did nothing wrong as a teacher.

The NTUC is a labour union and should fight for the interest of the workers. But at the moment, it is difficult for it to do so because the NTUC Chief is a member of the Cabinet. He is in a difficult position. When there is a conflict of interest, where would his loyalty lie - on the side of the Government or on the side of the workers? The NTUC is also said to have a symbiotic relationship with the PAP. In this relationship, the NTUC is supporting the Government more than the workers. An example is the wage reforms now being pushed by the Government,

which are at odds with the needs of the workers. Also, last year, there were widespread retrenchments but the NTUC had not shown its dissatisfaction. The

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NTUC should be apolitical. It should open its membership to all workers of whatever political leanings. The NTUC should also fight for its independence, so that it can serve the interests of the workers better.

Dr Ng Eng Hen: Sir, I am quite puzzled why this cut is placed under MOM. It would be presumptuous for me to answer on behalf of the NTUC. Indeed, there is no need. But, as an observer, I would just say that, despite all of Mr Chiam's aspects, the Secretary-General of the NTUC had the highest votes last year, and he was re-elected in a constitutionally acceptable manner by the majority. So, I think the voters disagree with Mr Chiam.

As for this particular union case which he has brought up, an expulsion is an internal union matter. If the union constitution allows them to take disciplinary action, it is up to them. If he feels that they have transgressed the constitution, he can put it up to MOM, and the Registrar of Trade Unions can have a look at it. Otherwise, there is no need for me to engage on this topic.

Mr Chiam See Tong: Sir, of course, we are at the receiving end, so we are unhappy that the NTUC, instead of just concentrating only on union work, is also doing political work on behalf of a party. So, I would ask the Minister whether it is right for trade unions to act on behalf of political parties to do their biddings.

Dr Ng Eng Hen: Sir, the trade unions act on behalf of Singapore, and there is no further need for me to justify what NTUC does. It is presumptuous. If the Member wants to address the NTUC directly, I suggest that he files a cut. I am sure Mr Lim Boon Heng will be more than happy to defend himself.

The Chairman: Mr Chiam, are you withdrawing the amendment?

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Mr Chiam See Tong: Sir, I am not happy with the answers of the Minister. Nevertheless, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The Chairman: Amendment No. (3), Mr Yeo Guat Kwang.

Occupational Health Hazards

Mr Yeo Guat Kwang: Sir, I beg to move,

That the sum to be allocated for Head S of the Main Estimates be reduced by $10 in respect of Code SI 1500.

Sir, company policies and programmes to improve the physical, social and emotional well-being of employees now play an increasingly important role. In office workplaces, however, hazards are hidden. It may arise due to bad sitting posture, how an office workplace is structured, or the quality of the indoor air. However, workers are generally not well-informed about such hazards and how to prevent them. These hazards have also not been treated with the same seriousness by the employers as they would for the other kinds of occupational safety and health hazards. Studies performed in Denmark and Sweden have shown that productivity increases significantly with increased ventilation and high air quality. I would like to urge MOM to take active steps to promote good indoor air quality at the office workplace and ergonomics awareness, particularly awareness of the potential risk factors of office occupational injuries, like back and neck problems. MOM should consider setting OHS regulations for office workplaces, such as the condition of the air, lighting, radiation and ventilation system.

Mr Hawazi Daipi: Sir, office premises would be covered in a later phase of

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implementation of the proposed Safety and Health Factories and Other Workplaces Act. The new law will impose duties on employers to ensure, as far as practicable, the health, safety and welfare of the employees at work. Most of the existing health safety and welfare provisions of the Factories Act, including ventilation, lighting, overcrowding and safe place of employment, will be extended to safeguard the health, safety and welfare of employees in other workplaces, including office settings. Environmental conditions in offices, such as air temperature, humidity and air supply, are regulated by the Building and Construction Authority, while the Ministry of the Environment has a set of guidelines on office indoor air quality. My Ministry has also published guidelines on office ergonomics.

In the area of occupational safety and health in offices, my Ministry prefers a consultative and self-regulatory approach. To promote good practices, employers are encouraged to follow the various guidelines in safeguarding the health, safety and welfare of their employees. It may not be appropriate at this stage to be over-prescriptive.

Mr Yeo Guat Kwang: Sir, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Maid Levy

Mr Chiam See Tong: Sir, I beg to move,

That the sum to be allocated for Head S of the Main Estimates be reduced by $10 in respect of Code SK 1500.

Sir, I have four questions for the Minister:

(1) The maid levy now stands at $345 per month. Many have commented that it is unethical for the Government to

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collect more money than the maids' salary. The maids have to slog, as already mentioned, 16 hours a day. The Government does not have to do anything and yet collects more money than the maids. So, I am just asking whether the Government is willing to reduce the maid levy to less than the salary paid to the maids.

(2) Can there be a tax exemption for the money paid by single men and single women for the maid levy?

(3) Every maid has compulsorily to be medically examined every six months. Since the Government has collected so much in maid levy, I am just wondering whether the Government is willing to pay for these six-monthly medical examinations of the maids.

(4) I still think that the question of psychological screening for maids is important, because we have heard of an employer's child being killed by maids. We do not want to see those two incidents repeated. So, I think it is advisable to have psychological screening for maids. Is the Government willing to carry it out at its own expense?

Mr Hawazi Daipi: Sir, the foreign domestic worker levy, like all levies, goes into the Consolidated Fund to finance Government expenditure in general. The Government does not earmark the levy for any specific expenditure purpose, such as psychiatric or psychological screening, or free medical check-ups. Foreign domestic workers work and stay with their employers. Hence, employers are in the best position to help their foreign domestic workers to cope with and adapt to new working and living environment. Some may need more time to adjust to the new social and cultural environment than others. Employers should, therefore, be more sensitive to foreign domestic

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workers and not subject them to unnecessary work pressures, especially at the beginning of their employment in Singapore. Employers should also show understanding and concern, if they detect that their foreign domestic workers are emotionally upset as a result of work stresses or news of unpleasant events at home. Generally, employers who treat their foreign domestic workers well and are generally concerned about the welfare and interest of their foreign domestic workers, are more likely to enjoy a happy and productive relationship with their foreign domestic workers.

Currently, all FDWs must undergo a full medical examination before they are issued with a work permit. However, it does not provide for psychiatric screening, and any attempt to do so would, at best, sieve out only the most severe cases. In any case, ensuring mental health should not be confined to foreign domestic workers alone. If I were to extend the need for such screening, then we will have to compel employers to do so. And who in the household should be compelled to go through psychiatric screening - the husband, the wife, or the children? And what age limit are we talking about? So, I do not think it is practical to accept Mr Chiam's suggestion.

On Mr Chiam's other question, which was also expressed by some MPs in earlier debates, about waiving or reducing the foreign domestic worker levy for various reasons, whether to relieve the burden on households or to encourage young couples to have children, let me try to offer some replies. The foreign domestic worker levy is set at an appropriate level to moderate demand, such that the numbers do not grow out of control. There are already more than 140,000 foreign domestic workers in Singapore today. Given Singapore's physical constraints and the social costs arising from their employment, we need to maintain the foreign domestic worker levy

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level, so as to control the admission of the FDWs. Even so, despite the high demand for FDWs, the levy rate of $345 a month has been maintained since 1998. Because the foreign domestic worker levy is meant to moderate demand, lowering the levy is not the best way to help needy families alleviate their financial burden during an economic downturn, particularly since only 14% of all households employ FDWs. Instead, the Government seeks to help families through other measures that provide benefits more directly, such as childcare subsidies, tax relief, etc. For example, working married women who employ foreign domestic workers are currently entitled to a tax relief equivalent to twice the annual foreign domestic worker levy. This effectively means that the working couples are already paying lower foreign domestic worker levy.

In 2002, about 40,000 taxpayers claimed this tax relief. The tax forgone due to this relief was about $267 million. This tax relief is also extended to single mums who are separated, divorced or widowed and living with their unmarried children. Also, subsidies on childcare fees are given to approved childcare centres, set at $100 per child for full-day programmes, and $75 per child for half-day programmes. The half-day subsidy is also extended to non-working mothers. Such tax reliefs and subsidies can help to reduce the financial burden on young working parents.

Hiring foreign domestic workers should not be the only solution available to households, particularly for childcare purposes. Various community organisations, like the CDCs, have developed programmes to train locals in the provision of childcare and home services. A heavy dependence on foreign domestic workers will undermine the effort to develop a more vibrant local domestic services industry that will provide additional domestic service options to households as well as jobs for Singaporeans.

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Mr Chiam See Tong: Sir, can I have a clarification on three points? This question of ethics has not been answered, ie, whether or not it is unethical for the Government to collect more money than the wages paid to the maids, who are the persons who really do all the work. I think the Parliamentary Secretary did not give an answer whether the Government is willing to give tax exemption to single men who employ foreign maids. As regards infants being in the care of mentally unsound maids, which is more dangerous - to allow a child to be taken care of by a maid with an unsound mind, or a maid being employed by an employer who is of unsound mind?

Mr Hawazi Daipi: Sir, I have explained to Mr Chiam that the foreign domestic worker levy is not meant to collect money from the public. It is meant to control the number of foreign domestic workers in Singapore. We already have 140,000 foreign domestic workers in Singapore. Members in this House and members of the public are continuously worried about the values transmitted to our children. Are we saying that Mr Chiam is in favour of having more foreign domestic workers by lowering the levy? We do not expect the wages of the foreign domestic workers to be increased because it is subject to supply and demand.

Mr Chiam See Tong: My question has still not been answered. The question is whether or not it is ethical to collect more money than the wages of the maid. Is it a yes or no?

Mr Hawazi Daipi: Sir, it is not a question of ethics. It is a question of controlling the number of people in this occupation that we want to see in Singapore.

Mr Chiam See Tong: Sir, the other point on whether or not Singaporeans are wanting to hire maids, I think it is a

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question of necessity. It is just purely out of necessity. As both parents are working, they need to have somebody to take care of their child or their parents who are sick. There are many other reasons. Does the Parliamentary Secretary agree on that point?

Mr Hawazi Daipi: Yes, just as there are so many reasons for people who want to employ a foreign domestic worker, there are so many alternatives for them to care for their children and for their aged parents. We want to encourage Singaporeans to consider all these other options, instead of just employing foreign domestic workers, especially for those who may not be able to afford it. And we are not doing justice to foreign domestic workers if we were to allow people, who can barely afford to employ them, to bring them into their households. And then we will have problems of abuse, non-payment of salaries, and so on.

The Chairman: Mr Chiam, are you withdrawing your amendment?

Mr Chiam See Tong: Sir, can I have one final clarification before I withdraw the amendment?

The Chairman: I will allow you to do so.

Mr Chiam See Tong: Thank you, Sir. I have people coming to me at the meet-the-people sessions complaining that they were not able to employ foreign maids. Although they themselves said they were able to, but the Government told them that they were not. It shows that it is out of necessity for many Singaporeans who want to employ foreign maids, and not as a luxury for them.

The Chairman: Mr Hawazi, do you want to respond to that?

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Mr Hawazi Daipi: Has Mr Chiam verified whether that particular resident can afford to employ a foreign maid?

Mr Chiam See Tong: He told me that he could.

The Chairman: Mr Chiam, you can write an appeal letter on this matter.

Mr Chiam See Tong: With that, Sir, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn .

The Chairman: Amendment No. (5). Mr Seng, are you moving your amendment?

Mr Seng Han Thong: Since I am in a good mood, I am not moving my amendment.

The sum of $155,272,180 for Head S ordered to stand part of the Main Estimates.

The sum of $56,263,400 for Head S ordered to stand part of the Development Estimates.

The Chairman: I shall now deal with the remaining heads of expenditure in respect of which no amendments stand on the Order Paper Supplement.

In respect of the Main Estimates, they are Heads C, G and Z.

I propose to take these heads of expenditure en bloc .

Question, "That the sums stated for Heads C, G and Z which appear in the last column of the Schedule of estimated expenditure under the Main Estimates on page 24 of Paper Cmd. 3 of 2004 stand part of the Main Estimates," put and agreed to.

The Chairman: In respect of the Development Estimates, it is Head C.

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The sum of $245,400 for Head C ordered to stand part of the Development Estimates.

Question, "That the sum of $23,650,794,740 shall be supplied to the Government under the Heads of Expenditure for the public services shown in the Main Estimates for the financial year 1st April, 2004 to 31st March 2005, contained in Paper Cmd. 3 of 2004," put and agreed to.

Question, "That the sum of $17,101,034,550 shall be supplied to the Government under the Heads of Expenditure for the public services shown in the Development Estimates for the financial year 1st April, 2004 to 31st March 2005, contained in Paper Cmd. 3 of 2004," put and agreed to.

Resolutions to be reported.

Thereupon, Mr Speaker left the Chair of the Committee and took the Chair of the House.

The Deputy Prime Minister and Minister for Finance (Mr Lee Hsien Loong): Sir, I beg to report that the Committee of Supply have come to certain resolutions.

First Resolution reported -

"That the sum of $23,650,794,740 shall be supplied to the Government under the Heads of Expenditure for the public services shown in the Main Estimates for the financial year 1st April, 2004 to 31st March 2005, contained in Paper Cmd. 3 of 2004."

Second Resolution reported -

"That the sum of $17,101,034,550 shall be supplied to the Government under the Heads of Expenditure for the public services shown in the Development Estimates for the financial year 1st April, 2004 to 31st March 2005, contained in Paper Cmd. 3 of 2004."

Mr Lee Hsien Loong: Mr Speaker, Sir, I beg to move, "That Parliament doth agree with the Committee on the said resolutions."

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Question put, and agreed to.

Resolutions accordingly agreed to.