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EMPLOYMENT (AMENDMENT) BILL Order for Second Reading Read. 1.48 Pm the Minister for Labour (Dr Lee Boon Yang): Mr Speaker

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EMPLOYMENT (AMENDMENT) BILL Order for Second Reading Read. 1.48 Pm the Minister for Labour (Dr Lee Boon Yang): Mr Speaker Page 1 of 19 This report was printed from Singapore Parliament website. Parliament No: 8 Session No: 2 Volume No: 65 Sitting No: 1 Sitting Date: 01 -11 -1995 Section Name: BILLS Title: EMPLOYMENT (AMENDMENT) BILL MPs Speaking: Dr Lee Boon Yang (Minister for Labour); Encik Othman Bin Haron Eusofe; Mr Charles Chong; Mr Chin Harn Tong; Mr Low Thia Khiang; Mr Stephen Lee Ching Yen; Mr Tan Soo Khoon (Mr Speaker); Column: 40 EMPLOYMENT (AMENDMENT) BILL Order for Second Reading read. 1.48 pm The Minister for Labour (Dr Lee Boon Yang): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." The Employment (Amendment) Bill before the House today seeks to amend the Employment Act with consequential amendments to the Industrial Relations Act. Sir, last year, a Tripartite Review Committee comprising representatives from the Singapore National Employers Federation (SNEF), the National Trades Union Congress (NTUC) and the Goverment was set up to review the Employment Act. The Committee was chaired by the then Minister of State for Labour, Mr Goh Chee Wee. The Committee adopted the following terms of reference: (a) Review the provisions in the Employment Act which have become irrelevant and not kept pace with the changing needs of employers, workers and the economy; (b) Review the provisions in the Employment Act which cause rigidities in the labour market and hinder company restructuring; and (c) Recommend changes to the Employment Act to address the issues reviewed. After some six months of careful study and thorough discussion, the Tripartite Committee was able to make extensive recommendations to modify and improve the existing Employment Act. Subsequently, Government accepted the recommendations made by the Committee. This Employment (Amendment) Bill has incorporated the Committee's recommendations with some refinements added since the Committee completed its deliberations. The refinements are the result of the extensive feedback received by my Ministry from both employers and unions representing workers regarding the implementation of Column: 41 some of the proposed amendments. Consequential amendments to the Industrial Relations Act will also be needed to bring it in line with the amendments to the Employment Act. http://sprs.parl.gov.sg/search/topic.jsp?currentTopicID=00064901-ZZ&currentPubID... 12/10/2013 Page 2 of 19 The proposed amendments in this Bill will bring the provisions of the employment and industrial relations laws up-to-date. By passing this Bill, you will help to make our employment laws more responsive to the changing economic and business conditions and better suited to future developments. The House will note that this Bill covers many areas. Since the technical and minor details of the Bill have already been covered in the Explanatory Statement to the Bill, I propose to address only the key issues. New definitions and applications of rate of pay First, let me deal with the new definitions and applications of rate of pay. Clause 2 of the Bill introduces two new definitions - "basic rate of pay" and "gross rate of pay" to replace the existing "rate of pay" and "ordinary rate of pay" used in the current Employment Act for the purpose of computing statutory payments. This arose from the Tripartite Committee's recommendation to rationalise the basis for computing statutory payments to employees. The two new definitions of "basic rate of pay" and "gross rate of pay" will provide a clear and unambiguous basis for payment for overtime work, work on rest day or public holiday and payment for approved leave. This amendment will prevent unnecessary disputes between employers and employees on the types of allowances which should be included for the purpose of computing the various statutory payments. Sir, under the proposed amendment, "basic rate of pay" refers to the total remuneration excluding all allowances, overtime payment, bonus, annual wage supplement, reimbursement of special expenses and productivity incentive payments. The "basic rate of pay" shall be used to calculate payment for overtime Column: 42 work under clause 13, work on a rest day under clause 12, and for payment on a public holiday under clause 15. The rationale for paying only the basic rate of pay for these occasions is that, under the current law, employees are already entitled to a higher rate of compensation for overtime work and work on rest day or public holiday. For example, an employer is required to pay an employee a minimum of 1.5 times the hourly rate of pay for overtime work and 2 days' pay for work on a rest day. The second new definition "gross rate of pay" refers to the total remuneration including allowances except for overtime payments, bonus payments, annual wage supplement, travelling, food and housing allowances, reimbursement of special expenses and productivity incentive payments. It shall be used as a basis for computing payment in lieu of notice of termination under clause 3, salary deduction for absence from work under clause 8, payment for public holidays under clause 15, annual leave under clause 16, sick leave with hospitalisation under clause 17, and maternity leave under clause 27. The rationale for including allowances for these payments is that employees should not suffer a cut in their normal expected income as these are benefits earned in the course of their employment and their absence from work had been sanctioned or approved by their employers. Sick leave where hospitalisation is not necessary Sir, in the case of outpatient sick leave, the Tripartite Review Committee originally proposed that allowances should also be paid. However, employers have expressed concern that granting shift allowance to workers who are on outpatient sick leave would defeat the purpose of this allowance which is to motivate them to come to work on unpopular shifts. This is particularly so in the case of http://sprs.parl.gov.sg/search/topic.jsp?currentTopicID=00064901-ZZ&currentPubID... 12/10/2013 Page 3 of 19 process industries which pay a sizeable shift allowance to ensure that their employees do not absent themselves from work when they are scheduled to work on unpopular shifts. While going on sick Column: 43 leave is a valid reason for an employee to stay away from work, there is concern that if this becomes rampant and workers stay away at the slightest feeling of discomfort, it would cause severe disruption to the shift work schedule. It would also be unfair if such workers continue to receive their shift allowance while their more responsible colleagues have to cover their duties in their absence. Replacements may also be necessary and the employer may have difficulty in getting relief workers at the last minute, apart from having to incur additional cost. Sir, to address such concern, clause 17 will allow shift allowance to be excluded as a statutory payment for workers on outpatient sick leave. Notwithstanding this, employers and employees or their unions could work out mutually agreeable rules under which the workers could still be paid their shift allowance when they are on outpatient sick leave. My Ministry, together with NTUC and SNEF, has formulated a set of tripartite guidelines regarding the circumstances under which employees should be paid their shift allowance while on outpatient sick leave. For example, an employee who is diagnosed to have contracted an infectious disease would have to stay away from work and therefore should not be penalised for taking outpatient sick leave. The guidelines will be issued by my Ministry after the Bill has been passed. Recovery of compensation for unfair dismissal Sir, clause 4 introduces a new subsection 7A to section 14 to enable the Court to recover compensation due to an employee whose employer has been found guilty of failing to comply with a Ministerial Order. This means that a worker who had been wrongfully dismissed would still be able to recover his compensation even if the employer defaults on the Ministerial Order. Transfer of employees Sir, I now come to the matter of transfer of employees. Clause 6 of the Bill Column: 44 concerns the transfer of employees. In a fast changing business environment, companies may need to restructure their operations to remain competitive. Restructuring could involve the redeployment or transfer of employees to an associated company, a subsidiary or a new company. Currently, the Employment Act allows employers to redeploy their employees within the same company. However, it is silent on the rights and obligations of the employers and employees in the transfer of employees to another company, including an associated company or a subsidiary. The common law viewpoint is that the consent of the affected employees must be sought to effect the transfer as this involves a change of employer which is a different legal entity. This could lead to protracted negotiations between the employers and employees or their union, causing damaging delays to a company's genuine restructuring exercise which could in fact have enhanced the employees' long-term job prospects. Sir, I would like to cite three examples where due to the absence of a clear legal framework on the rights and obligations of employers and employees in a transfer of employees to a different legal entity, protracted negotiations had taken place and company restructuring had been unnecessarily delayed or hindered. The first involved a fairly sizable local group of companies. As part of its business strategy to be more competitive, it decided to restructure its operations and set up a subsidiary to operate part of its supporting services. The restructuring involved the hiving -off of a major supporting service division http://sprs.parl.gov.sg/search/topic.jsp?currentTopicID=00064901-ZZ&currentPubID... 12/10/2013 Page 4 of 19 and resulted in about 3,000 employees having to be transferred to the new subsidiary.
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