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Employment Claims Bill 2016, Second Reading Speech at Parliament

Minister for Manpower, Mr Lim Swee Say, Parliament

  1. Madam Speaker, I beg to move, “That the Bill be now read a Second time.”

    Current dispute resolution landscape
  2. There are two main categories of employment disputes:
    1. Salary-related disputes, such as those over non-payment or short payment of salary, allowances, bonuses, commissions and salary in lieu of notice of termination.
    2. And non-salary-related disputes, such as unfair dismissals and grievances from employees.
  3. This Bill focuses on the first category of salary-related disputes.
  4. Today, there are three avenues for resolving them.
  5. First, through the unions. Union members in unionised companies have recourse to conciliation under the Industrial Relations Act and access to the Industrial Arbitration Court. Even though most of them are currently rank-and-file workers, but with the IRA amendments passed in 2015 last year, we now allow more Professionals, Managers and Executives,PMEs in short, to have access to this route.
  6. Second, employees who are covered by the Employment Act (EA) - these are rank-and-file employees and PMEs earning up to $4,500 per month, regardless of whether they are union members - have access to what is commonly called “the Labour Court” at the Ministry of Manpower (MOM).
  7. Third, all employees have access to the Civil Courts. This recourse is important especially for complex claims which may require legal representation and take longer to resolve.
  8. Madam, even with these three avenues in place, there is growing demand for access to an affordable and expeditious way to resolve disputes.
  9. This is especially so amongst PMEs, whose number has increased by about 20% over the last decade and is set to grow further.
  10. To ensure that our employment dispute resolution landscape remains relevant going forward, the proposed Employment Claims Tribunals, ECT in short, will help more employees resolve more types of salary-related disputes with their employers.

    Covering more types of salary-related disputes
  11. Let me first explain how the ECT will cover more types of salary-related disputes.
  12. The ECT will take over the Labour Court’s function of hearing statutory salary-related disputes on employee entitlements under the Employment Act, Retirement & Re-employment Act and the Child Development Co-Savings Act. These include unpaid salary, overtime pay, salary in lieu of notice, employment assistance payment and maternity benefits.
  13. In addition, the ECT will hear contractual salary-related claims from employees. Such claims include payment of allowances, bonuses, commissions, salary in lieu of notice and retrenchment benefits, provided that these are expressed in monetary terms in the contract.
  14. The ECT will also hear claims from the employers. However, as with the Labour Court, employers can only bring claims for notice pay to the ECT.
  15. The types of claims which the ECT can hear are laid out in the First and Second Schedules of the Bill, which may be updated based on tripartite consultations.

    Covering more employees
  16. Besides hearing more types of claims, the ECT will be accessible to more employees compared to the existing Labour Court.
  17. Besides hearing statutory salary-related claims from employees covered under the EA, RRA and CDCA, the ECT will also hear contractual salary-related claims from more employees, including PMEs who earn more than $4,500 per month and are currently beyond the coverage of the EA. With this, all employees can now have access to the ECT for their statutory and/or contractual salary-related disputes.
  18. Public servants, domestic workers and seafarers will continue to be able to bring their statutory salary-related claims regarding employment assistance payment and maternity benefits to the ECT, just as for the Labour Court.
  19. As per current practice at the Labour Court, contractual salary-related claims of these groups of employees will not be heard at the ECT. Public servants continue to have recourse through the Public Service’s internal processes. Domestic workers can approach their employment agencies and MOM to resolve employment disputes. Likewise for seafarers, they can continue to settle disputes, including salary-related disputes, under the Merchant Shipping (Maritime Labour Convention) Act.

    How ECT will work
  20. I will now describe how the ECT will work. The ECT will be set up under the State Courts, with the claims to be heard by legally qualified Tribunal Magistrates and in accordance with Courts processes.
  21. We have built in features to keep the process expeditious and affordable.
  22. All parties will be required to go through mediation conducted by MOM-approved mediators before their claims can be heard at the ECT. This is because our experience, shows that mediation is an effective way of resolving salary-related claims amicably between the parties. More than 90% of Labour Court claims were resolved at the mediation stage without having to go through formal hearings.
  23. The claimant must submit a request for mediation within one year after the claim arises, or within six months if the employment relationship has ended.
  24. There will be no legal representation, as with the Labour Court and Small Claims Tribunals.
  25. If mediation is successful, parties will sign a settlement agreement and apply for the registration of the settlement agreement in the District Courts for it to be enforceable as a binding Court Order.
  26. If mediation is unsuccessful, the mediator will issue a referral certificate for the claimant to lodge a claim at the ECT.

    Tripartism and the key role of unions
  27. Madam Speaker, the ECT will significantly enhance the resolution of employment disputes. Even so, tripartite partners will continue to have important roles to play.

    Set-Up of the Tripartite Alliance for Dispute Management
  28. Tripartite partners will set up a new centre known as the Tripartite Alliance for Dispute Management, or TADM in short.
  29. For a start, it will conduct the pre-ECT mediation and serve as the MOM’s approved mediation centre for all employees, both unionised and non-unionised workers.
  30. Union members today enjoy additional remedies, such as the Tripartite Mediation Framework (TMF), MOM conciliation or recourse to the Industrial Arbitration Court. This will continue.

    Expanding Coverage of Tripartite Mediation Framework
  31. We are also amending the IRA to expand the coverage of the Tripartite Mediation Framework so that more union members can use this avenue to resolve more types of disputes.
    1. Today, only managers and executives earning up to $4,500 per month who are union members in non-unionised companies have access to the TMF. We will remove the salary cap and also allow the rank-and-file employees to access the TMF. Only executive employees with substantial managerial responsibilities will continue to be excluded due to a potential conflict of interest.
    2. The types of disputes covered under the TMF will be expanded to include re-employment and other statutory employment benefits – for example, over-time pay, public holiday pay and maternity benefits under the EA and CDCA.
  32. In addition, in recognition of the role of the unions, we have included three features in the ECT process:
    1. First, the claims limit will be $30,000 per case, for cases which go through mediation with union involvement, compared to $20,000 for all other claims.
    2. Second, union members in unionised companies can be represented by their unions at mediation and at the ECT and this will be prescribed in the subsidiary legislation.
    3. Third, union members in non-unionised companies who undergo TMF can seek consent from the ECT to have their tripartite mediation advisors observe their ECT hearings.
    Implementation
  33. Madam Speaker, I have highlighted the key features of the Bill. With the passing of the Bill today, the ECT and TADM will be established by April 2017.

    Conclusion
  34. In conclusion, together, these changes – the proposed ECT, the setting up of TADM, the strengthening of TMF – will provide for a more comprehensive and inclusive suite of dispute resolution services for all employees, while ensuring that unions and the tripartite partners continue to have a strong role to play in our employment landscape.
  35. Madam Speaker, I beg to move.