Employment (Amendment) Bill

Deputy Speaker, Sir, the overhaul of our employment legislation has been a long and extensive process. I am glad to see it is finally coming to fruition.

The changes will benefit and enhance protection for all employees. Proposals, such as the removal of the monthly salary cap of $4,500, additional protection for more vulnerable employees and improvements to dispute resolution services, are greatly welcomed. One of the amendments is to increase the salary cap for paying overtime to non-workmen from $2,250 to $2,600. This is expected to benefit an additional 100,000 workers. On the other hand, the cap for workmen has been left unchanged at $4,500, since about 99% of workmen are already covered under this threshold.

However, I feel that, as a matter of principle, we should gradually remove all salary caps for overtime. If companies need to pay equally for each unit of work-time input, regardless of whether work is done within official work hours or during overtime, they would be more motivated to look into productivity upgrading measures to reduce overtime work. This will be in line with our goal of better work-life balance for all employees. Enhanced productivity also means that our workforce and companies would be more competitive.

The result will be a win-win situation for both employers and employees.  All these developments will boost Singapore’s attractiveness to investors so that quality jobs will continue to be created for Singaporeans. On this note, I would like to conclude with my support for the Bill.

Mr Deputy Speaker, I would like to thank all 17 Members who have spoken in support of the Bill. It has been quite a marathon because I took the stand at about 4.00 pm; so, it was about three hours ago. Every one of you have raised important issues which I will address.

But in the interest of time and also in support of Ms Anthea Ong's very timely reminder – the importance of mental well-being – I seek Members' kind understanding that I will focus on points relating to today’s amendments and there are about 40 pages of it.

The other points, for which I have about 20 pages, are, of course, very important. But I think they can also be addressed on other occasions, or if we have some time later.

As we debate the merits of the proposals, it is useful to remember the wise words of Mr S Rajaratnam when he presented the Employment Bill to Parliament in July 1968. It is a very uncanny coincidence, but that was also the month I was born.

He said, "The Employment Bill should, therefore, be seen in the context of the new problems an independent Singapore faces. There must be a climate of industrial peace and stability to attract both local and foreign capital. It is essential to increase the productivity of our workers, the efficiency of entrepreneurs, so that our products can compete in the stiff competitive export markets of the world. That is the intent and purpose behind this Bill. How far this Bill will succeed in its purpose will depend on both workers and employers placing national interests before sectional interests."

Sir, although five decades have since passed, the fundamentals have not changed. The EA exists to regulate employment practices in a balanced way, protecting workers while retaining labour market flexibility for businesses to thrive and create good jobs. A few more points are worth remembering.

First, the EA is our main but not the only employment-related legislation. It works in concert with other important pieces of legislation, such as the Workplace Safety and Health Act, the Work Injury Compensation Act, the Retirement and Re-employment Act, the Employment of Foreign Manpower Act. And all these to advance the interests of our workers.

Second, besides laws, our unique brand of tripartism also relies on the Tripartite Guidelines, Standards and Advisories to promote fair and progressive practices, while ensuring good employment outcomes.

Third, in everything we do, the tripartite partners strive to be pro-worker and pro-business. This has been a cornerstone guiding employment practices in Singapore that has served us well.

Fourth, in recent years, employers have been asked to take on more obligations, such as longer paternity leave and re-employment of older workers, first to 65 then to 67. As we debate EA changes, bear in mind also that the tripartite partners are always in an ongoing conversation about other areas that may see further changes in the coming years.

Fifth, the Government also plays its part for local workers. In the provision of healthcare, for example, employers' major contribution is through the CPF which builds up our MediSave. The Government’s efforts include the development of public healthcare facilities and schemes like MediShield Life, CareShield Life and Community Health Assist Scheme (CHAS), which together, keep healthcare affordable without placing excessive burdens on individuals and employers.

So, I hope Members can keep these points in mind as I address the specific concerns. Let me start with the coverage of the EA, and whether we can up the provisions, make them more generous.

Mr Melvin Yong asked for the distinction between workmen, non-workmen and managers and executives to be removed. The tripartite partners discussed this extensively. At workplaces, the lines between workmen, non-workmen and managers and executives are, indeed, blurring. In the EA, the distinction remains largely in Part IV. Among other things, Part IV regulates working hours, rest days and overtime (OT) payments. Including the more than 700,000 managers and executives whose work is much more varied and tends to be more outcome-based, will make our laws much more rigid and prescriptive.

To Mr Dennis Tan’s point on defining managers and executives, given that employment practices evolve constantly, the current approach of referring to managers and executives as those “employed in a managerial or executive position” while taking reference from case law works well for the tripartite partners. In a High Court ruling earlier this year, it was also made clear that the actual work requirements and individual circumstances matter more than the job title given. So, there are already some parameters we work within and they generally work well.

Within Part IV, the coverage for workmen and non-workmen has been different since the EA was first enacted in 1968. Workmen, who are manual workers, generally need more protection where OT is concerned. This remains so today. The salary threshold of $4,500, therefore, covers nearly all workmen, whereas the salary threshold for non-workmen covers about half of them.

Mr Zainal Sapari, Mr Saktiandi Supaat, Mr Gan Thiam Poh, Mr Arasu Duraisamy and Assoc Prof Daniel Goh asked if the salary threshold for non-workmen could be higher or even removed completely. Our longer-term intent is, indeed, to close the gap between the salary thresholds for workmen and non-workmen. That said, in every EA amendment, the tripartite partners consider carefully the impact on both workers and employers. When benefits are upped, so, too, are the costs borne by employers.

Indeed, former Nominated Member Assoc Prof Randolph Tan wrote an op-ed expressing some concern about the timing of this round of EA enhancements, whether businesses could absorb the impact in the current economic climate. Mr Douglas Foo also pointed this out in his op-ed published in The Straits Times yesterday and when he spoke earlier.

Thankfully, in Singapore, our union leaders recognise the need to consider the package of improvements and not just individual items. They know it is equally important to give employers time to adjust to changes that come from many directions, not just the EA.

In this amendment, the tripartite partners agreed to the major shift to extend EA core provisions to cover all managers and executives. This already benefits 430,000 managers and executives. The expanded coverage under Part IV benefits another 100,000 or so workers. So, in total, we are talking about half a million.

The tripartite partners are mindful that changes should not inadvertently affect workers’ employability. They reached a consensus that these shifts are sufficiently well-calibrated and remain committed to review the thresholds in future amendments.

Let me now turn to the gig economy – self-employed persons (SEPs). Mr Zainal Sapari, Mr Saktiandi Supaat, Assoc Prof Walter Theseira, Ms Joan Pereira and Ms Denise Phua raised concerns about protections for SEPs. By their very nature, SEPs do not have the same kind of relationship with their service buyers as that between employees and employers. This is the main reason we do not attempt to regulate SEPs’ relationship with service providers under the EA.

Earlier this year, a tripartite workgroup formed by MOM had put forward a set of recommendations to address SEPs’ common challenges, some of which were outlined in earlier speeches. And in the earlier circulation of materials, I believe not only a summary of the EA changes were distributed; there was another separate circular that outlined the recommendations of the tripartite workgroup.

At MOM's Committee of Supply (COS) debate in March, I announced the Government’s acceptance of the recommendations and our implementation plan. I am pleased to share that we are making good progress and will update Members at a later date.

To Assoc Prof Walter Theseira’s point, we recognise that workers can, indeed, be wrongly classified as SEPs to avoid EA obligations. Anyone unsure of his employment status should approach MOM so that an appropriate determination can be made. In the last three years, we have successfully intervened in around 100 cases where employees were wrongly classified as SEPs and helped them to recover their due statutory benefits or CPF contributions.

Mischievous employers should take note and realise that they can be prosecuted for non-provision of salaries and benefits.

Let me now deal with the specific provisions of the EA, starting with rest days. Mr Zainal Sapari and Mr Melvin Yong suggested double pay for work on a rest day, regardless of who requested for it. There are good reasons for the differentiation. The double rate discourages employers from asking employees to work excessively. On the other hand, the single rate if workers request to work on rest days, ensures that workers are not inadvertently encouraged to work excessively for the double pay, when actually they should be resting.

Mr Zainal Sapari is, of course, concerned that the employees do not always know that they are due to be paid at the double rate if their employers ask them to work on their rest day. Mr Melvin Yong worries that these workers are forced or deceived into declaring these as self-requested. They are valid concerns.

MOM is keen to partner NTUC to strengthen outreach for the WorkRight initiative to educate employers and employees about their responsibilities and rights. This would also address Ms Joan Pereira's concerns and raise awareness amongst the employees who have not been paid the right amounts to submit a mediation request to TADM. Let me state categorically that if an employer is found to have misrepresented the worker's request to work on a rest day, we will take the employer to task for non-payment of salary or providing false information.

Let me now deal with leave entitlements. Dr Intan Azura Mokhtar asked if the carry-forward specific provision for unused annual leave can be extended to all employees. Ms Jessica Tan also asked if an employer is required to pay the employee for unutilised annual leave. To clarify, annual leave provisions in section 88A used to be in Part IV and now apply to all employees. However, the employers’ obligation to carry forward unutilised annual leave to the next year remains for Part IV employees only.

The tripartite partners decided against extending the carry-forward provision to all employees which now include higher earning managers and executives – no more limit. This is out of concern for the otherwise drastic impact on business liabilities. Members who are familiar with HR practices know that, actually, you have to set aside the liability and factor it as a cost in your books, so there is a real impact.

Annual leave should be planned ahead of time to meet both employee and organisational needs, to avoid situations of unconsumed leave entitlements. If the employer is unable to approve leave due to work exigencies and the employee has shown reasonable efforts to adjust his leave plans to suit organisational needs, the employer should allow for leave encashment. This is so that the employee can benefit from his statutory leave entitlement.

To Mr Saktiandi Supaat’s question, there is no need for the employer to force the employee to take leave if an employee does not want to utilise his leave entitlements. However, we do encourage workers to take their annual leave to rest and recharge from their work to maintain their mental well-being. That is what the provisions are for.

Dr Intan Mokhtar asked about TCM practitioners. A small number of doctors have dual registration under the Traditional Chinese Medicine Practitioners Act (TCMPA) and the Medical Registration Act (MRA). For the purposes of granting paid sick leave, employers are required to recognise the MCs issued by such practitioners in their capacity as doctors under MRA.

Ms Irene Quay asked that we also require employers to recognise the MCs issued by CPPs. Today, as CPPs are not registered under MRA, MOH does not allow them to issue MCs. We understand that MOH will need time to assess the programme as well as other new models of care before deciding whether other healthcare professionals can be certified to issue MCs. MOH will, therefore, continue to monitor these developments.

Ms Irene Quay also asked that we encourage employers to allow for up to three non-consecutive days of sick leave without MC per year and she gave many good reasons why this would be a more productive approach. While we recognise the Member's call for this to be mandated, Ms Irene Quay herself also rightly pointed out that employers would need to create controls, surveillance and audit systems to ensure that their employees do not abuse the system. These will, inevitably, add to business costs. As the EA does not prohibit employers from doing so already, progressive companies are free to go ahead to offer this as part of their talent attraction and retention strategies. A number have done so. We will continue to give them flexibility to decide what works best for them.

Mr Patrick Tay and Mr Melvin Yong asked for clarifications regarding hospitalisation leave. Today, employers are not required under the EA to recognise an MC from private doctors, other than their own panel doctors, for purposes of paid sick leave. The amendments to the EA in this Bill will require employers to recognise MCs from any doctor, whether private or public, for purposes of granting paid sick leave.

To Mr Patrick Tay’s question, employers can recognise MCs for purposes of granting hospitalisation leave from any doctor in the private hospital. In fact, there is no evidence today that employers have refused to recognise MCs from approved hospitals. We expect that employers will continue to recognise MCs from all approved hospitals.

An employee who has chickenpox or other infectious diseases, and who is hospitalised or certified by a hospital doctor to be ill enough to be hospitalised, will be granted paid hospitalisation leave, even if he is not physically warded.

For MCs issued by non-hospital doctors, such as GPs, employers are required by law to recognise the MC for purpose of granting paid sick leave up to 14 days. The 14-day entitlement for outpatient medical treatment is sufficient to cover the vast majority of employees today, given that the average number of days of sick leave taken is 4.8 days. Employers are free, of course, to grant additional paid sick leave beyond the annual 14-day entitlement should an employee need it. And we have come across many cases where the employers, out of goodness of their hearts, extend this when the employees do need it.

Turning to clarifications on authorised deductions, Mr Louis Ng and Mr Patrick Tay asked about the implementation and safeguards for authorised deductions. To clarify, section 27(1)(f) remains largely unchanged. As is the case today, employers must provide proper documentation to prove the legitimacy of deductions, if they are for the recovery of any advance and loan. To Mr Patrick Tay's comment on the deduction for payment to a cooperative society, this still remains as an authorised deduction under section 27(1)(j).

To the question of whether section 27(1)(i) is limited by prohibited deductions in other statutes, the answer is yes. This was Mr Louis Ng's question, I think. Mr Louis Ng and Mr Patrick Tay asked about written consent. Such consent cannot be a general clause in a contract stating that an employer can make any deduction as and when necessary. Instead, the consent must be given specifically for a particular deduction that the employee has agreed to.

Written consent given by an employee under duress will not count as valid consent. The employer must also maintain proper records to substantiate the written consent. An employer who penalises an employee for withdrawing consent may also be liable to be prosecuted under the EA.

Regulations to protect the well-being of the employee. Dr Intan Mokhtar raised the issue of over-inflating salaries declared or clawing back salaries from rank and file workers. Our law today already allows us to take action against errant employers in this regard. If the employer falsely declares the salary of a foreign worker to qualify for a higher work pass, the employer can be prosecuted for false declaration under the Employment of Foreign Manpower Act (EMFA). Such an employer may also be prosecuted under the EA for non-payment of salary if he pays the local or foreign worker a lower salary than what is declared, for example, in the key employment terms or payslips or in the In-Principle Approval that was given to the employee. As for “salary claw back” cases being on the rise among Fortune 100 companies, we have not received such complaints from employees, but we will continue to monitor the situation.

Ms Anthea Ong asked why violations under the new section 139(2)(aa) are civil contraventions and not offences. To clarify, the Minister has the power to provide that violations of regulations are either criminal offences or civil contraventions. Civil contraventions allow us to treat less severe breaches as non-criminal infringements which attract a financial penalty. Compared to non-payment of salary, which is a criminal offence, requiring an employee to sign on a blank salary voucher is a less severe breach, which should attract correspondingly less severe penalties.

Wrongful dismissals and the compensation framework. Mr Louis Ng and Mr Dennis Tan asked for clarification on what constitutes dismissal without just cause or excuse. Assoc Prof Daniel Goh asked how the Tripartite Guidelines on Wrongful Dismissal and factors for determining compensation amounts will interact with the adjudication work of the ECT.

The dismissal is without just or sufficient cause if it was on grounds, such as discrimination, denial of statutory benefits, and with the intent to punish the employees for exercising his rights. Dismissal because of poor performance, misconduct and redundancy are not considered wrongful.

As I mentioned earlier, wrongful dismissal is not a new provision in the EA and there are many cases we can draw reference from. MOM will publish a set of Tripartite Guidelines on Wrongful Dismissal which the ECT must take into account. It would not be possible to define all scenarios of what constitutes wrongful dismissal and what does not. Instead, a more feasible approach is to use illustrations and set out principles and parameters that the ECT must take into account when adjudicating cases.

An example of what constitutes wrongful dismissal is if an employer dismisses an employee to punish him or her for exercising a right, such as submitting a mediation request to MOM or reporting the company to MOM for an EA offence, even though he or she has performed satisfactorily at work.

In the case reported by Dr Intan Mokhtar where the employee felt that she had been forced to resign, a claim can still be lodged with TADM. If unresolved through mediation, the case can be escalated to the ECT and the same applies to persons who believe they had been dismissed due to discrimination.

Assoc Prof Daniel Goh and Mr Dennis Tan also asked if the ECT claim limit would be increased, given that we will be covering highly paid managers and executives. To clarify, for wrongful dismissal claims, there will be a separate claims limit of $20,000 and $30,000 for union-assisted cases, in addition to the claims limit for any salary or benefit owed. So, in other words, it can be up to $40,000 or $60,000, if the two are combined.

The claim limits are established as such because the ECT is meant to be an expeditious and affordable channel for resolving disputes. Cases involving higher claim amounts are likely to be more complicated and, hence, take more time and workers with claims exceeding these limits can continue to pursue their claims in the higher Courts, where it is probably the more appropriate place to do so.

There was a question on frivolous claims. Several Members asked how the adjudication of wrongful dismissals at the ECT will work. Mr Douglas Foo asked if there are any measures to prevent frivolous claims of wrongful dismissal. Mr Dennis Tan spoke about possible abuse of this recourse by disgruntled employees. These are reasonable concerns that employers generally have, now that more managers and executives are covered. Employees who feel that they have been wrongfully dismissed may first submit a request to for mediation. TADM will do its part to prevent frivolous and unmeritorious cases from proceeding. And every year, there will be some.

For cases of contractual termination, where the employer has met all his obligations, TADM will first ensure that there is a case for the employer to answer before contacting the employer to attend mediation. The employee will have to substantiate why he or she thinks that dismissal was wrongful, for example, by citing specific incidents which gave rise to the claim.

For cases like the staff who took advantage of staff travel privileges which Mr Saktiandi Supaat mentioned, if the employer has established such abuse after due inquiry, the employer can dismiss the employee without notice on grounds of misconduct.

Mr Saktiandi Supaat and Mr Patrick Tay asked what support has been put in place to facilitate the transfer of the adjudication of wrongful dismissal claims from MOM to ECT. ECT and TADM, where compulsory pre-ECT mediation takes place, will be expanding their manpower to meet the new demands. These mediators and investigation officers involved undergo training programmes that have been designed to equip them with the relevant skills.

Mr Louis Ng and Assoc Prof Walter Theseira asked if adverse inferences may be drawn against employers if they fail to produce documents, such as Key Employment Terms and salary slips, and also employer's past behaviour.

The answer is yes. ECT will be able to do so. The list of employment laws that ECT can draw adverse inferences from will be specified in a new Fourth Schedule in the Employment Claims Act.

As to whether we will consider reversing the burden of proof for salary claims, we are mindful that reversing the burden of proof for such cases may result in opportunistic employees filing frivolous claims. So, we would not do so for now.

Ms Jessica Tan and Mr Saktiandi Supaat asked how the Ministry will be communicating the changes to the public. Actually, I think Ms Joan Pereira also mentioned this. MOM will be publishing an online guidebook shortly, summarising the key amendments to the EA, along with how employers should review their existing HR policies to ensure compliance with the Act. We are also working with SNEF, NTUC and other industry partners to hold briefings on the EA amendments over the next few months, prior to the implementation on 1 April 2019.

Let me now address questions from Ms Denise Phua and I believe also Mr Arasu Duraisamy regarding the changing nature of employment. They have asked how the EA will cater to the changing workforce, where employees may be more mobile, and have multiple employers – the portfolio workers.

As mentioned, we have other tools that complement the EA. The Member mentioned the need to better protect outsourced workers who, by the way, are still employed by the outsourced service provider which has employer obligations towards the employees. Besides the protection already afforded to them under the EA, the Tripartite Standard on Employment of Term Contract Employees will help bring about better employment conditions for such workers. The Tripartite Standard on Contracting with Self-Employed Persons also helps to shape norms and ensure the sustainability of the economy of self-employed work.

MOM and our tripartite partners will continue to keep a close watch on workplace trends like the ones that were mentioned and also others, for example, automation and flexible work arrangements, which Mr Saktiandi Supaat spoke extensively about. We will continually review the EA to ensure it stays relevant in regulating employment practices in a balanced way, protecting the rights of workers while retaining flexibility in the labour market for businesses to thrive. I would add further that the right approach may need adjustments beyond the EA which is, indeed, the reason we aim to strengthen support for SEPs through the recommendations that I circulated.

Once again, Sir, I thank Members of the House for their support of this Bill. I hope that I have addressed questions and suggestions related to today's amendments. The other points remain important and can be addressed at other platforms.

In conclusion, let me just say that the EA is a living document and a permanent work-in-progress. For this amendment, the tripartite discussions started quite early in the tenure of former Manpower Minister Lim Swee Say – and he is seated right there – and was followed through when I took over from him. Members can be certain that as soon as we start to implement today's changes, we will again be looking forward as to what more is needed for the future, and whether the person standing here to pass those next sets of amendments will be me or someone else – who can tell?

Building a tripartite consensus on what are the right changes to make, and when to make them, which employee groups to focus on in each amendment, all these deliberations take a great amount of time and effort that is often unseen. I might add that it takes a lot of mutual trust among the tripartite partners, too. Yet, this is also our greatest strength that has ensured improvements are sustainable, with no drastic U-turns every now and then, which you see in other countries – what one government promises, and then the next government comes and says they are not valid anymore. We have not seen that throughout the course of the EA.

This strength is also mentioned by many Members of Parliament, notably, Mr Douglas Foo, Mr Melvin Yong, Mr Arasu Duraisamy, too. As a result, we have helped our businesses to continue providing good jobs and the vast majority of our workers to enjoy good employment outcomes.

MOM is deeply grateful to the many stakeholders in the tripartite partnership that have made possible today's changes. They have worked tirelessly to make this a reality. Let us now focus on getting the changes implemented expeditiously and smoothly. With your permission, Mr Deputy Speaker, Sir, I beg to move.

Just two points of clarification with the Minister. I thank the Minister for a very long debate. I know it is taking our time but there are two points. Firstly, on the enforcement of ECT claims. I hope the Ministry and the tripartite partners can look at the enforcement of the ECT judgments so that we have expedient and also speedy resolution and ease of resolution. That is one. The second one is on section 18A. I spoke about it and I hope the tripartite partners will work together to come up with a set of frequently asked questions and guidelines to give greater clarity before the Act is rolled out.

Mr Deputy Speaker, on section 18A, I can confirm with the Member that his request is being looked into and I think it can be done. His question on ECT and expeditious settlement, I agree with him. Our objectives are aligned.

I thank the Minister for the extensive clarifications. But I still do want to ask one more point around retrenchment. While I understand the need to balance, both the cost as well as the impact on employees, but because of the disruption we are seeing in the workplace and the restructuring of businesses, inevitably, there will be impact on employees. So, have the tripartite partners come to some way of balancing both the cost and the protection for employees?

Mr Deputy Speaker, I thank Ms Jessica Tan for the question. It is a very important area and the tripartite partners have had extensive deliberations on this issue. The Member, Mr Arasu Duraisamy, I think, articulated the thinking very well and, in fact, in a recent blog post, Mr Patrick Tay did likewise. But I think it is useful for me to state it for the record.

MOM agrees with the tripartite partners on the need to strike a balance and that it would be counter-productive to try and legislate mandatory minimum payouts in the event of retrenchment. From the employee's standpoint, any mandated minimum may become a norm even when employers are in a position to pay more and this would not benefit the workers. From the employer's perspective, if the mandated minimum is too high, then the companies may not be able to afford and they may end up becoming over-burdened at the point in time when that sum of money could affect the remaining workers. So, countries like the US and Switzerland also do not mandate retrenchment benefits.

So, given these considerations, the tripartite partners have issued instead an advisory stipulating the prevailing norms for retrenchment benefits quantum that employers should take into consideration when determining the retrenchment benefits.

In addition, since 1 January 2017, employers have been required to notify MOM of retrenchments. This enables Workforce Singapore, the unions and other relevant agencies to help the affected workers find alternative employment. According to our survey last year, around 90% of the establishments which retrenched workers actually paid retrenchment benefits even though there was no stipulated mandatory payout, of which 70% paid retrenchment benefits that met or exceeded the prevailing norms articulated in the tripartite advisory. So, I think that is a situation that is not too bad.

*Question put, and agreed to.*

*Bill accordingly read a Second time and committed to a Committee of the whole House.*

*The House immediately resolved itself into a Committee on the Bill. – [Mrs Josephine Teo.]*

*Bill considered in Committee.*