(Delivered in Parliament on 20 November 2018)
Mr Deputy Speaker Sir, this Employment (Amendment) Bill has not failed expectations and should be acknowledged for extending protection to all workers except public servants and domestic workers by removing the salary cap of $4,500 a month. With this change, all professionals, managers and executives (PMEs), who form the bulk of the local workforce, will benefit from the Employment Act provisions. Other amendments such as making annual leave a core protection provision and enhancing the regulation of dismissals are also important features of the Bill.
With progress comes new limits and unaddressed issues become more prominent. I support the Bill but would like to highlight two sets of issues related to additional protection for more vulnerable workers and wrongful dismissals.
Additional Protection for More Vulnerable Workers
The first set of issues I would like to highlight concerns Part IV of the Employment Act, which provides additional protection for more vulnerable workers. The key provisions in Part IV have to do with rest days, hours of work, overtime pay, retirement benefit and so on. With this Amendment Bill, annual leave would be moved out of Part IV and become a core provision of the Employment Act applicable to all workers. This is a good and logical move but it is less progressive than it seems. Providing for annual leave is already a common practice and an irreversible norm, so the law is only catching up with reality.
The tweaks being made to the salary caps for non-workmen and for overtime compensation requirements are more important changes. The salary threshold for non-workmen to be covered by the additional protections of Part IV would be increased from $2,500 to $2,600. Non-workmen refers to white-collar workers who are not PMEs. At first glance, this struck me as a miniscule enhancement. Upon reflection and research, I still cannot put my head around the significance of a $100 increase in the threshold.
I understand the Ministry said this increase would result in half of the workforce being covered, but is this an increase from 40 percent to 50 percent or from 48 percent to 50 percent of the workforce? If it is the latter, it does not appear to be a meaningful increase. Just to illustrate, annual real wage growth in recent years is around 1.9 percent. This means that within two to three years, this $100 increase in salary threshold would be rendered irrelevant.
My question is why not take the progressive step of removing the distinction between workmen and non-workmen altogether? I understand from former Minister for Manpower Mr Lim Swee Say’s reply to a parliamentary question by Ms Thanaletchmi in May 2016, this distinction is a legacy issue and the government’s longer term plan is to remove this distinction given the changing nature of our workforce. In the 2014 amendment, the salary threshold for non-workmen was increased from $2,000 to $2,500. This was a significant increase, and the $100 increase this time round pales in significance compared to the $500 increase in 2014. At this rate, how would the non-workmen threshold be able to catch up with the $4,500 threshold for workmen so that the distinction may be removed?
I understand this approach of gradually increasing the threshold is to balance employers’ concern with the rise in business costs. But the $100 increase appears to be quite imbalanced against the favour of white-collared workers. I believe the increase should be more substantial to better protect white-collared workers, precisely because this segment of the workforce has become a lot more vulnerable in recent years because of technological disruptions and the rise of artificial intelligence. Better still, the government should commit to a timeframe to remove the distinction between workmen and non-workmen altogether so that companies would get the heads-up to adjust their business costs.
Wrongful Dismissals
The second set of issues I would like to highlight has to do with the enhancements to the regulation of wrongful dismissal claims. The definition of dismissal has been expanded to cover forced resignations, which plugs a loophole that employers could use to get around wrongful dismissal allegations. However, this Bill misses the opportunity to define what constitutes dismissal “without just cause or excuse”. The Ministry has said that the tripartite partners would be providing further guidance and clarity on what constitutes wrongful dismissal and the factors for determining the compensation amount. I have a few questions on this.
First, how would the tripartite guidelines on wrongful dismissal and factors for determining compensation amount, when they are issued, interact with the adjudication work of the Employment Claims Tribunal? What would be the legal status of the tripartite guidelines? Would the Tribunal be obliged to stay within the limits of the tripartite guidelines and if so, would not this be undermining the purpose of having the Tribunal adjudicate wrongful dismissal claims? If not, how should the Tribunal take guidance from the tripartite guidelines? Can the Tribunal override the tripartite guidelines in specific cases due to peculiar circumstances?
Secondly, with regards to the content of the tripartite guidelines, would the guidelines cover unjust causes or excuses such as discrimination on ethnic, nationality, age, gender, religion, marital status, disability and mental health grounds? I would like to stress that dismissal of workers because they are suffering from mental health problems should be considered wrongful, if these mental health problems could be treated and managed and would not substantially affect work performance. Mental health issues are prevalent in advanced economies such as ours and are often under-reported and go untreated because of the stigmatisation and lack of understanding of mental health issues. The same stigmatisation and lack of understanding is the basis of wrongful dismissals of workers with mental health issues. Another unjust cause or excuse that the tripartite guidelines should cover is related to sexual harassment, as the threat and actuality of dismissal are often used by those in power to sexually exploit their subordinates.
I am also of the view that in such cases where the Tribunal concludes that dismissal was wrongful due to discrimination, or due to sexual harassment, the compensation and reinstatement of the workers are not good enough remedies. Such wrongful dismissals are not merely unjust, they are also egregious violations of workers’ rights and social norms. I believe that the Tribunal should be empowered to impose punitive sanctions in terms of fines and jail time for those guilty of such violations.
Thirdly, I would like to ask if wrongful dismissals would also cover cases of disguised retrenchment or false retrenchment. Disguised retrenchment refers to the serving of termination notice to employees due to job redundancy without treating it as retrenchment so that retrenchment benefits do not have to be paid. If the employment contract contains retrenchment benefit provisions, then it would be clear that such cases should be heard at the Tribunal. If the employment contract does not contain retrenchment benefit provisions, then I would like to ask do workers in such cases have the basis to claim fair retrenchment benefits based on prevailing industry norms? False retrenchment refers to the retrenchment of workers not due to genuine redundancy but on unjust grounds such as discrimination. I believe in such cases, it is clear that claims should be heard by the Tribunal.
Lastly, with the passing of this Bill, the Employment Act will cover high-salaried PMEs who would then be enabled to bring wrongful dismissal claims to the Employment Claims Tribunal. However, the Tribunal is limited to awarding claims up to only $20,000. Highly-paid PMEs would likely be seeking claims for back wages and compensation that are much more than $20,000. It would seem to be unreasonable and unfair to open up this avenue for redress for these PMEs while maintaining the jurisdictional limit for the claims. Would the cap be adjusted upwards after the passing of this Amendment? If so, what would be the new cap and why?
Conclusion
Mister Deputy Speaker Sir, this Amendment Bill is a progressive piece of legislation that would extend the protection of our workers in the midst of economic disruptions and uncertainty. Progress brings new challenges and highlights old ones that remain in the system. I have highlighted two sets of issues.
The first set has to do with the legacy distinction between workmen and non-workmen in providing for additional protections under Part IV of the Employment Act. It is my wish that the meaningless distinction be removed as soon as practicable, and in my view the $100 increase in salary threshold for non-workmen eligible for the additional protections is too insignificant.
The second has to do with wrongful dismissals. While it is good that the Employment Claims Tribunal will now hear cases of alleged wrongful dismissals, it would be extremely useful if (1) it is clarified how the tripartite guidelines on wrongful dismissal would intersect with Tribunal hearings, (2) the tripartite guidelines contain explicit guidance on dismissals linked to discrimination and sexual harassment, (3) wrongful dismissals also cover disguised retrenchments and false retrenchments, and (4) the jurisdictional limit for claims be raised to make the process more meaningful for high-wage PMEs.
Thank you, I support the Bill.