Lee Boon Yang
Singapore
“6 The other guidelines are that there must be a post office sited within 5 km of every private residential estate and within 1 km of any commercial or industrial estate. MAID LEVY CONCESSION (Applications by the disabled) 32.”
“Madam, can I quickly respond to the point on assistive technology? Certainly this is an area of interest. We cannot say that we have the capability at this juncture but we will certainly look into what is possible and work with our ICT sector.”
“Nevertheless, if the spouse of the homemaker is working, he will be eligible for WIS if he satisfies the criteria. Husbands of homemakers are further eligible for tax relief.”
“Sir, I do not think it is quite correct to say that we always expect our own artists to perform for free or do public service. There are, of course, occasions where we do seek Singapore artists and arts companies to contribute to the national causes. For instance, when we went international for Singapore Season in China.”
“Ms Sylvia Lim asked the Minister for National Development (a) what checks does the Ministry or the National Environment Agency have in place to prevent mistaken payments to hawkers who cease operations due to upgrading works at hawker centers; (b) how did the mistaken payment of $18,000 to Mdm Lee Ah Muey come about; and (c) what will the…”
“While it was also true that initially the reaction or the response of the licensing authority was that foreigners should not participate in such an event at the Speakers' Corner - because there is already an existing prohibition against any foreigners taking part in any activities at the Speakers' Corner - subsequent assessment resulted i…”
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“With a workforce of less than 2 million people, compared to the teeming millions in the other cities in the world or in the region, and we are not talking about countries, we are just comparing cities with cities, it is very difficult for us, with less than 2 million workers, to outdo our competitors, based solely on the efforts of Singaporeans alone. We will not have the critical mass nor the resources to succeed on our own. We have to build up a critical mass by supplementing our local talent with a flow of international talent to enable Singapore to compete successfully in the global market. We must position ourselves as a talent capital where Singaporeans and foreign talent work side by side to create wealth for all to share. Sir, foreign talent is thus a critical element in our strategy for future success. And, indeed, it becomes even more critical and more crucial during this economic downturn. Recently, two of our largest banks (DBS and OCBC) recruited foreigners for their CEOs. This was a strategic move by both banks to bring in the best men in preparation for new competition when our banking and financial sector will be thrown open to international competition. Such foreign talents, and many more like them, are helping Singapore companies to weather the recession, reorganise their operations and reposition themselves for new competition and opportunities. In doing so, they will create more jobs for Singaporeans. Attracting foreign talent can enhance our workforce's competitiveness and capabilities in many new areas. It is about bringing in people who can make the difference and hence we need them all the more in a period of economic decline or downturn. For those who have been here helping us to compete all these years, we should not chase them away.”
“And the fact that soon after the hand-over, Hong Kong was very stable and developing very well, there was very little justification for Hongkongers to want to uproot themselves, which makes it even more difficult for us to attract them. But the point he made was quite similar to the point made by Dr Tan Cheng Bock last week, that we should not be talking about attracting foreign talent at this stage while the economy is down and unemployment is high. Basically he supported the point made last Monday by Dr Tan that the Government should think Singaporeans first. Sir, let me explain. The Government is fully aware of the difficulties faced by the people during this economic recession. We understand that individuals may have difficulty understanding the need for foreign talent when they are jobless or they are without job for some months after graduation. It is only very tempting under such circumstances to press the Government to turn off, or at least reduce, efforts to attract foreign talent, in order to protect our citizens and to give them a better chance. Let me explain why I believe this would hurt us in the long term and will not solve our immediate problems. The economic crisis is the manifestation of the inescapable fact that the world is changing, and changing rapidly. We are now seeing the removal of geographical and regulatory barriers to the movement of people and capital. This changing world will not stop for us to catch our breath. We cannot bury our heads in the sand and wish away reality. And the reality is that in the 21st century, nations which succeed are those which are able to capitalise on their intellectual and human capital. The basis of competition will be a country's collective knowledge, expertise, creativity and entrepreneurialship.”
“So what matters is, during the period of stay they contribute to Singapore's economic well being. Those who want to stay in Singapore and to sink roots here, and those whom we feel that we need and welcome, we should consider them for PR because they will add to the richness and strength and capabilities of our workforce. Sir, the eligibility for PR of foreigners, whether they are here working first on employment pass or they are applying directly for PR, is thus determined to a large extent by their ability to contribute to Singapore's economic capability, their assimilability and their commitment to our national effort. Over time, such migrants will also become true Singaporeans, like many of our forefathers. They can help us to compete in the economic arena and contribute to social cohesion. So we should not deny ourselves of this source of talents, this source of new migrants, by slowing down the issue of PR unnecessarily. 1.30 pm Sir, I now come to Mr Chiam who said that he supports that in the period of high growth, Government should not limit the entry of foreign talents to Singapore. He asked about the Hongkongers who have been granted approval in principle to come to Singapore. I do not have the specific figures with me because PR is actually a Ministry of Home Affairs' matter. And if he wants the specific numbers, he should raise the question with the Minister for Home Affairs. But I understand that we have offered 25,000 approvals in principle for PR for Hongkongers. Quite a large number of applications had been received since it was offered in 1989. But as to the number of families who have relocated here, it has only been a few thousand families. It is not such a large number.”
“They are not rigid criteria which we use to exclude people who do not meet our salary guidelines. In fact, what is more important is the foreigner's education, work experience and the nature of jobs that he or she will be doing in Singapore. We do not just grant employment pass purely on the basis of the current earnings of an applicant. We will look into the real work experience and the qualification. So let me assure him that the new PQR system does not intentionally or inadvertently discriminate against this group. In fact, for those who are well qualified, they will be granted either a P employment pass or a Q1 employment pass, which allows them the benefit of bringing in their dependants. Those who are presently granted Q2 are not because they are earning a lower income but because their skill criteria and qualifications lie in the borderline region, and we want to let them work here for a period of time for a proper assessment. So they can subsequently re-apply for a higher category of employment pass if their employer supports their application. Dr Wang said he supports our foreign talents policy, but he cautioned against granting PR too readily. Let me say that foreign talents come to Singapore for a variety of purposes. Some come here to experience our culture and to work in an Asian environment for a period of time. Others come clearly with the hope of sinking roots in Singapore. Whether they are here for a short stay or a long stay, I think, is not that important. What is important is that while they are here, they are making a real contribution to our economy. They are really helping us to be more competitive and to grow the economic pie. I think that is more important.”
“So with effect from 1st April this year, we are going to introduce a measure whereby employers who have more than two missing non-traditional source workers within the same calendar year will not be allowed to employ new non-traditional source workers for a certain period of time. This is to compel employers to better manage and better look after their non-traditional source workers so that they do not run away or abscond and therefore put the employer in a corner whereby he can no longer recruit any new non-traditional source workers. There has also been a sharp increase in the number of foreign workers making claims against the employers over the last few years. In fact, in 1998, close to 7,000 foreign workers made claims against their employers, mostly on salary arrears. Almost all the claims that we investigated turned out to be valid. In other words, the contractors have, in most cases, attempted to cheat or deprive these foreign workers of some salaries. These are the ones who regularly flout the Employment Act. We take a very serious view of employers who try to cheat their foreign workers or to take advantage of them. So employers who blatantly disregard or violate the Employment Act will not be allowed to apply for new work permits or renew existing work permits for their foreign workers. Next, I come to Dr Wang Kai Yuen, Member for Bukit Timah GRC. He asked whether in our streamlining of the employment pass system into a PQR system, we have inadvertently disadvantaged a group of skilled or talented workers from overseas who are now granted Q2 employment pass. My answer to him is no. Although we do have salary criteria or guidelines, I believe I had, in a previous sitting in this House, informed Members that the salary yardsticks are just guidelines.”
“The manpower industry has the potential to become a new growth industry serving both domestic and regional needs. The third idea that has cropped up from the discussion by the Manpower 21 Committee is to prepare for the workplace of the future and the need to strengthen tripartite relationship. Sir, as the concept of work is changing on a global scale, we need to build new infrastructure that will enable more people to work from home or within their communities. Welfare structures such as safety at work, industrial health, workmen's compensation and employment coverage would have to be reviewed to respond to these changes. At the same time, this would be an excellent opportunity for us to strengthen tripartite relationship at both the national and enterprise level. Sir, besides these key ideas here, there are still many others being discussed and refined by the Manpower 21 Committee. The Committee expects to complete its work by June this year. Mrs Yu-Foo Yee Shoon has also raised the point about missing foreign workers and the disputes between foreign workers and their employers. Yes, there has been an increasing trend of missing foreign workers, particularly from the Indian sub-Continent. Most of these workers, in fact, are here in Singapore working in the construction industry. Apart from more enforcement actions to round up such missing workers and overstayers, we will also try to introduce new deterrents. Part of the problem of missing workers is, in fact, as pointed out by Mr Rai, because some employers exploit and take advantage of the foreign workers. So they run away. What we want to do is to try and minimise this possibility of employers exploiting the foreign workers.”
“Life-long learning must lead to recognition for the skills gained. There must be incentives and this should be employer and also individual-based incentives to encourage employers and workers to pool their effort to send their workers for skills upgrading and retraining. We have to develop a network of learning or training providers, both public institutions and also private learning institutions, so that any worker who wants to go for skills upgrading will be able to have the opportunity. We must make use of technology. We must tap technology to make sure that training or skills upgrading opportunities can be made more accessible to workers. For instance, we should tap electronic learning (e-learning) through the Internet so that workers can perhaps study either at home or even at community centres where such equipment can be provided. We should facilitate workers' access to career development, to job opportunities and to training available, and also the kind of funding that Government can give to support such workers training. Last, but not least, we must have a sustained strategic marketing plan to continually encourage and motivate workers to go for such skills upgrading. The next idea that has been developed is this concept of developing a manpower industry in Singapore. The manpower industry is defined as a cluster of companies involved in the total development of Singapore's manpower and talent capability. This includes both public institutions and private companies such as management schools and human resource consultancies. We intend to work closely with this cluster and to develop organisations and institutions and companies so that they would be able to contribute more to Singapore's manpower development.”
“However, Sir, I must point out that manpower planning in itself cannot ensure that there will be sufficient jobs for all Singaporeans. These will have to depend on the performance of the economy and the resulting job creation. Manpower planning can help us to be more responsive to changes and to deploy workers to growth areas where jobs are still being created. This includes a clear identification and projection of areas of employment creation, analysis of areas of supply shortages and surpluses, and also a wide ranging skills upgrading and workers' retraining programmes to bridge the skills gap. Sir, Mrs Yu-Foo Yee Shoon has also asked for an update on the Manpower 21 Committee's effort. This was the initiative launched by my Ministry in June last year. The objective is to formulate a strategy for the development of Singapore's manpower capability to forge a globally competitive workforce. The study team includes some 100 top businessmen, captains of industries and civil servants who have held many in-depth discussions on manpower issues confronting us today. Some Members have even made study tours overseas to learn about how other countries are going about in their human resource development and skills upgrading for their own workers. Sir, their findings and recommendations are being rigorously debated within the Committee itself and refined. At this juncture, I would just like to provide Members with some indication of some of the key ideas which have come out from these discussions. The first is the concept of a school of life-long learning. This is part of a national framework to enable every Singaporean to pick up new skills in order to enjoy lifelong employability. There are altogether six key features of the school of lifelong learning. First, recognition.”
“MOM has also appointed academics from NUS and NTU to help us to develop relevant models to guide policy decisions. I note what Mr Chay mentioned earlier on about the fact that many other countries' experience in manpower planning has always turned up short of expectation, and they have in many cases gone wrong. Even our own university, according to Mr Chay, has not come up with good long term projections for manpower demand. The task of manpower planning is not easy. It is going to be a very difficult task. To hit the target right every time is not going to be easy. But that does not mean we should not do anything. That does not mean we should just leave it on its own to muddle through. We, of course, are also studying how other countries are tackling their manpower planning issues. For instance, in the US, the US Bureau of Labour and Statistics has a long experience and long history of carrying out manpower planning. They have well-established methodologies as well as manpower research and training programmes. We will seek to learn from these more established manpower planning agencies in overseas countries and to tap on their experience. As this effort by my Ministry to develop a manpower planning model for Singapore is still at an early stage, I am afraid I will not be able to provide Members with details. But I would like to assure Members that our objective is to gather as much information as possible to provide timely and relevant information on manpower and skills demand and supply for better management of our workforce. We will release this information to the public in our regular employment outlook reports which will touch on the industry's specific trends.”
“Sir, may I respond to Mrs Yu-Foo Yee Shoon, Chairman of the GPC for Manpower, and the other Members who have spoken on the subject of manpower planning, foreign talent and foreign workers. On manpower planning, the first point that I want to make is that we have a small workforce of about 2 million. The local workforce grows at around 45,000, maybe 50,000, a year, as the new entrants join the labour force. Between 1987 and 1997, total employment creation in Singapore grew rapidly from about 70,000 in 1987 to a high of 120,000 in 1997. This resulted in persistent shortage of workers and explained the chronic tight labour market situation in Singapore. Of course, the current situation is a complete reversal. Owing to the regional economic crisis and its impact on Singapore, we have seen rising unemployment and a record high number of retrenchments. Last year, 1998, we suffered a net job loss of 23,400 jobs, and unemployment rose to 4.3% in December last year. For this year, the employment situation is likely to continue to remain weak, with employment growth either flat or possibly negative. Sir, manpower planning is about managing and balancing the supply and demand of manpower for the economy. We aim to balance at the national level manpower demand from industries and manpower supply from both local and foreign sources, so as to sustain economic growth and to optimise the use of our available manpower resource. 1.15 pm Sir, the Manpower Planning Division is new to my Ministry. MOM is now the central coordinating manpower agency for Singapore. We have adopted a holistic approach to manpower planning needs. This is done in close partnership with many other Government Ministries and agencies.”
“Employment Pass holders are eligible for medical subsidies because they contribute economically to the Singapore economy. This is in line with ongoing efforts to ensure that talents feel welcome in Singapore and their stay here is not made unduly difficult. All foreign dependants of both Singapore citizens and non-citizens do not qualify for medical subsidies. An exception was made some years ago for dependants of 3-year Work Permit holders. However, with effect from 1st September 1998, foreign employees are issued with P, Q and R work passes. P and Q work pass holders are classified as Employment Pass holders, hence their dependants are not eligible for subsidised health care. When existing 3-year Work Permit holders change employers, they will have to re-apply for Q work passes. Dependants of Q work pass holders, like dependants of all other Employment Pass holders, are also not eligible for medical subsidies. If there is no break of employment, their dependants will continue to enjoy the medical subsidies granted previously. COST OF NEW CUSTOMS, IMMIGRATION AND QUARANTINE FACILITIES 40. Mr Chng Hee Kok asked the Minister for Home Affairs if he will reveal the cost of the new Customs, Immigration and Quarantine facilities at the Woodlands Train Checkpoint. Mr Wong Kan Seng: The new Customs, Immigration and Quarantine facilities at the Woodlands Train Checkpoint cost $25.7 million to build. IMPROVEMENTS MADE TO ALEXANDRA HOSPITAL AND PLANS TO OFFER SPECIAL MEDICAL SERVICES 42. Dr S Vasoo asked the Minister for Health what improvements have been made to Alexandra Hospital (AH) and whether there are plans to offer special medical services.”
“The Ministry has been monitoring the recruitment situation for some time. We hold discussions with employers to encourage them to employ older persons and to identify suitable jobs for them. We visit selected companies together with representatives from the Singapore Productivity and Standards Board, the Singapore National Employers Federation and the National Trades Union Congress to better understand the issues faced by employers in the management of older persons. We have also impressed upon employers that certain jobs could be restructured or redesigned to make them suitable for older workers to handle. We will continue with our efforts to help change the mindset of employers and to assist the older workers find alternative jobs. INITIATIVES TO ASSIST BUSINESSMEN IN EXPLORATION INTO NEW MARKETS 28. Mr Tay Beng Chuan asked the Minister for Trade and Industry if his Ministry intends to supplement its current schemes with any initiatives to assist businessmen in their exploration into new markets beyond this region.”
“(i) Owing to the economic downturn, the demand for labour in Singapore has dropped to an unprecedented low in 1998. In September 1998, some 15,500 vacancies were reported. This was only about a third of the level reported in September 1997. As jobs become scarce and more candidates are available for employers to choose from, it is a natural tendency for employers to be more selective. However, I urge employers to be reasonable and not to use unfair criteria. Jobs, which require generic skills and capabilities, should be opened to all applicants regardless of their age or social background. Employers should not confine their recruitment to younger workers only, if the job can also be performed by older workers. Older workers, who have much experience from their previous jobs can also contribute to a company's growth. (ii) With an aging population, to discriminate against older job seekers is a practice that employers could ill afford. Even before the regional crisis affected us, the Ministry has undertaken various activities and programmes such as the "Back to Work" Programme, to help facilitate the employment of older persons. The thrust of our effort is to change employers' mindset on the employment of older persons and to encourage employers to provide job opportunities for them. On the legislative front, the retirement age has also been raised from 60 to 62 from January 1999, to help older workers stay on their jobs. In view of the current economic situation, job seekers, regardless of age or educational level, are finding it difficult to secure a job. The situation may continue to be so for the rest of 1999. The Ministry is aware that the older and less educated job seekers face tougher challenges. We have therefore placed greater emphasis on helping them.”
“Mr Cyrille Tan asked the Minister for Manpower whether his Ministry is (i) monitoring the situation in which employers are being "choosy" in their recruiting methods and (ii) considering measures to encourage employers to hire mature workers with relevant skills and experience.”
“Earlier, in March 1996, the Employment of Foreign Workers Act (EFWA) was amended to hold main contractors in the construction industry liable for illegal foreign workers found at their site. The amended Act also prescribed security measures contractors should take to prevent illegal workers from entering their sites. This will ensure that contractors make serious effort to keep out illegal foreign workers. We also stepped up enforcement and persecution actions. The number of raids conducted by the Employment Inspectorate and jointly with MHA has increased by over 80% between 1997 and 1998 (Number of inspections conducted by EI or EI and MHA in 1997 and 1998 is 572 and 1,014 respectively, i.e. increase of 89%.). In 1998, my Ministry prosecuted 320 employers for employing illegal foreign workers. While the Employment of Foreign Workers Act provides for mandatory imprisonment for a second offence, my Ministry has sought deterrent sentences on some first time offenders. This had resulted in 5 first time offenders being sent to jail since 1997. The maximum jail sentence meted out was 100 weeks to a proprietor of a construction company which employed more than 100 illegal foreign workers. We are of the view that the current penalties are adequate to deter employers from employing illegal workers. However, my Ministry will monitor the situation closely and if necessary, seek enhancement of penalties to check illegal employment. Employers are reminded not to employ illegal foreign workers as the risks and penalties involved outweigh any short-term benefits. RECRUITING METHODS OF EMPLOYERS 27.”
“In 1998, my Ministry's enforcement officers arrested 4,259 illegal foreign workers, including 1,307 foreigners who had entered Singapore illegally or had overstayed beyond the validity of their social visit passes. In comparison, a total of 1,884 illegal foreign workers were arrested in 1997. The presence of illegal workers creates social problems, affects our law and order and undermines economic upgrading. I would like to inform Members that in view of the current threat of illegal immigration, we have intensified our enforcement actions and are working closely with the Police to ferret out the illegal workers. Illegal foreign workers and those caught employing them already face stiff penalties under the law. They can be fined or jailed. Employers of more than 5 immigration offenders will be caned. The penalties for the employment of illegal immigrants and overstayers are spelt out under the Immigration Act administered by the Ministry of Home Affairs. In view of the rising number of illegal foreign workers caught, the Ministry of Home Affairs had raised the penalties for such employers in October 1998 as a further deterrence. For employers of more than 5 immigration offenders who could not be caned (ie, women and males who are more than 50 years of age), the maximum fine was increased from $6,000 to $10,000. This will ensure that such employers would be subjected to a heavier fine than those who employ 5 or less immigration offenders ($6,000). For corporate bodies convicted of employing immigration offenders, the fine was increased from between $50,000 and $100,000 to between $100,000 and $200,000.”
“CPF members' savings with the Central Provident Fund are invested in Government Bonds, Advance Deposits with MAS and bank deposits. The CPF Board does not invest members' savings in equities or foreign currencies. I have earlier asked the CPF Board to review the six-month time lag between interest rates of commercial banks and those paid on CPF savings to make the CPF interest rate more reflective of the prevailing market rates. As this has implications on the HDB concessionary mortgage rate which is currently pegged at 0.1 per cent above the CPF interest rate, we are still reviewing the matter with related agencies. An announcement will be made once the review is completed. MEASURES TO PREVENT HIRING OF ILLEGAL IMMIGRANTS 26. Mr Cyrille Tan asked the Minister for Manpower whether his Ministry will consider tougher measures to prevent employers from hiring illegal immigrants at the expense of Singaporean workers as current penalties have not deterred such abuse.”
“We are also providing skill-upgrading for older workers who face the risk of retrenchment or who have been retrenched. For instance, the newly established Bukit Merah Skill Development Centre is currently training about 400 older workers including many who had been retrenched. Skill upgrading can help workers to remain employable. Retraining can facilitate their redeployment to new jobs in a different sector. We will provide more opportunities for upgrading and retraining so as to minimise the extent of structural unemployment in the years ahead. NEEDS OF THE ELDERLY 23. Mdm Claire Chiang See Ngoh asked the Minister for Community Development, in line with the Government's policy of looking into the needs of the elderly, (a) whether there is a register or list of elderly persons who live alone and who are not supported by any relative; (b) what kind of financial assistance schemes and what total amount were made available for this vulnerable group from 1994 to 1998; and (c) what kind of mechanism is being set up to make it easier for the illiterate elderly who are bedridden to apply for Public Assistance.”
“The latest preliminary estimates based on a survey of private sector establishments with at least 25 employees revealed that around 7,200 workers were retrenched in the fourth quarter of 1998, higher than the 6,000 estimated previously. This brings the retrenchment figure for the whole of 1998 to 28,300 workers, the highest ever recorded since the last economic recession in 1985, which saw 19,529 workers laid off. The Ministry of Manpower provides employment assistance to all job seekers who are Singapore Citizens and Permanent Residents. Owing to the economic downturn, the number of job seekers registered with the Ministry had quadrupled from 4,777 in 1997 to 19,784 in 1998. Nevertheless, the Ministry was able to provide job referrals to about 78% of all registrants. A total of 4,182 job offers resulted from these referrals. However, not all job seekers took up the offers. Eventually, a total of 1,038, or 5.2% of all registrants, were successfully placed. Whether older workers will face unemployment of up to a year or more is dependent on the performance of the economy. If the economy turns around within a year or two, such a scenario is unlikely. Of the locals retrenched in the first half of 1998, 65% were re-employed as at September 1998. Among those re-employed, the average time taken to obtain re-employment was 1.6 months. Older workers may face more difficulty e.g. only 52% of those in the age group 50 and above were re-employed, taking also on average 1.6 months to secure re-employment. To better the older workers' re-employment prospects, my Ministry held many discussions with employers to urge them to look beyond the age factor when recruiting workers. We have emphasized to them that the older workers can be just as productive.”
“In the light of the above, my Ministry therefore prefers to adopt an educational and moral suasion approach by working together with employers' organisations to advise employers to promote non-discriminatory recruitment practices based on the workers' skills and capabilities and not on factors which are of no relevance to the job. In labour scarce Singapore, it is in the interests of employers to reach out to all Singaporeans who can do the work and help the company to compete. This is the basis of our meritocratic approach which has served Singapore well. By adopting discriminatory practice, an employer is only shortchanging himself. This will become more apparent when the economy recovers in a year or two. UNEMPLOYMENT AND SUCCESS RATE OF JOB PLACEMENTS 22. Mr Low Thia Khiang asked the Minister for Manpower (a) how many people were laid off as at the end of 1998; (b) what is the success rate of job placements; and (c) whether older workers will face long-term unemployment of up to a year or more.”
“We are of the view that an educational and promotional approach is preferable to legislation in dealing with this issue. The problem with legislation is that it would create rigidities in the job market which would be detrimental to economic growth and job creation. For example, there would be instances where business and job requirements would compel an employer to look for persons of a particular background compatible to the requirements. Similarly, where a job requires physical strength such as handling heavy machinery in a shipyard, it would be more appropriate for the employer to recruit a younger male worker who is able to cope with the job requirement. On the other hand, in the cosmetic business, the employers would want to employ younger females instead of older males to promote their products. These are market requirements and should not be misconstrued as discrimination. I would also like to point out that experience in other countries has shown that legislation may not solve the problem. Instead, it often leads to high incidences of litigation and controversies. This issue of discrimination had not been raised for the past 10 years when we enjoyed sustained economic growth and negligible unemployment. I have no doubt that in 1996 and 1997, there were similarly inappropriately phrased recruitment advertisements. Yet we only received 9 complaints in 1996 and 16 complaints in 1997. Last year, we had 32 complaints. We believe this trend reflects the rising unemployment rather than real discrimination.”
“My Ministry does not propose to introduce legislation to regulate recruitment advertisements and practices. While my Ministry shares the concern of Mr Tay and members of the public over job advertisements which stipulate a particular race, religion, gender or age as a criterion for the selection of candidates, we do not believe that legislation is the best solution. Currently my Ministry is able to investigate complaints received from anyone who considers himself to be discriminated against in employment on grounds such as race, religion, age and gender. If our investigations reveal that any form of discriminatory practice does exist, the employer will be cautioned and warned of the implications of such practices. The employers concerned will also be asked not to adopt any discriminatory employment practices in future. They usually would accept the Ministry's advice. In the course of our investigations, we have discovered that job advertisements citing a preference for a particular ethnic background were often misrepresented. Employers explained that they wanted candidates who were able to speak a particular language and that since candidates of other racial groups were unlikely to meet the language requirement, they felt that it would be more expedient to stipulate a particular race in their job advertisements. This would also spare the efforts of applicants who did not have the necessary requirements, in applying for the job and attending to interviews. Notwithstanding this explanation, the Ministry had pointed out to such employers that citing racial preference or other discriminatory factors should be avoided. I would also like to emphasise that this problem resides in a minority of employers and often in small companies.”
“About 21,000 Singaporeans who are aged 55 years and above do not have CPF savings. This is the group of Singaporeans who had never worked as an employee before or who were self-employed during their working career. It is a small group compared to the 420,500 Singaporeans aged 55 years and above who have CPF savings. DISCRIMINATION IN HIRING AND OTHER EMPLOYMENT MATTERS 21. Mr Simon S C Tay asked the Minister for Manpower whether the Government will consider introducing legislation or other means to ensure that private sector employers do not discriminate in hiring and other employment matters on factors such as race, religion, language, gender or age, unless such factors are strictly relevant to that job.”
“] Bill considered in Committee; reported without amendment; read a Third time. PREVENTION OF POLLUTION OF THE SEA (AMENDMENT) BILL Order for Second Reading read. 5.10 pm”
“Clause 3 reorganises the definitions in section 2 by replacing the existing definitions of "Convention" and "amended Convention" with the new definitions of "Warsaw Convention" and "Warsaw (Hague) Convention" respectively and further inserts 2 new definitions of "Montreal Protocol No. 4" and "Warsaw (Hague) (Montreal) Convention". Clause 4 amends section 3 to provide that the provisions of the Warsaw (Hague) (Montreal) Convention shall have the force of law in Singapore; and if there is any inconsistency between the text of the Warsaw (Hague) (Montreal) Convention as set out in the Third Schedule and the Montreal Protocol No. 4, the authentic French text shall prevail. Clause 5 amends section 4 to empower the Minister to certify who are the Parties to the Warsaw (Hague) (Montreal) Convention. Clauses 6 to 14 deal with consequential and drafting amendments. Clause 15 inserts a new Third Schedule containing the text in English of the Warsaw (Hague) (Montreal) Convention. In conclusion, Sir, the amendments of the Carriage By Air Act to give effect to the amendments made by the Montreal Protocol No. 4 to the Warsaw (Hague) Convention would benefit our air cargo industry by facilitating the transition to a fully electronic trading environment for air cargo in Singapore. The result is significant gains in efficiency and greater convenience to shippers, freight forwarders, consignees and airlines. The efficient use of EDI would enhance our Changi Airport's status as a major air hub in the region and further increases its international competitiveness. Sir, I beg to move. 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. - [Dr John Chen Seow Phun.”
“It also reduces cost and increases efficiency of the shipment of air cargoes. The Protocol also amends the Warsaw (Hague) Convention to introduce strict liability for the carriage of cargo and expresses the limit of the carrier's liability in terms of the IMF's Special Drawing Rights (SDR) instead of US dollars, without changing the limits of the carrier's liability. In today's trade environment, manufacturers increasingly seek just-in-time delivery and related strategies as ways of enhancing efficiency and reducing business costs. To exploit these innovations, it is more efficient to use electronic air waybills via Electronic Data Interchange (EDI) in place of the traditional paper air waybills. The electronic approach is not only less expensive, but also faster and less of a hassle to customers. By making better use of EDI as allowed under the Protocol, carriers and shippers can maximise the productivity of their resources. These issues are addressed by the ratification of the amendments to the Warsaw Convention by the Montreal Protocol No. 4. Singapore acceded to the Protocol on 31st October 1997 and the Protocol came into force for Singapore on 12th September 1998. Sir, let me now address the key provisions of the Carriage By Air (Amendment) Bill. The Warsaw (Hague) Convention, as amended by Montreal Protocol No. 4, is referred to in the Bill as the Warsaw (Hague) (Montreal) Convention. Clause 1 relates to the short title and commencement. The clause deems the Bill to have come into operation on 12th September 1998 and provides that the Bill should not affect rights and liabilities arising out of an occurrence which took place before that date. Clause 2 amends the long title to incorporate the reference to the Montreal Protocol No. 4.”
“Sir, in conclusion, the amendments proposed in the Bill will ensure that the bridging loan money extended by the Government to CPF members is protected. The amendment will allow members who are using their CPF Ordinary Account savings for the upgrading cost of their HDB flats under the Main Upgrading Programme to use their Special Account savings to meet the shortfall in their monthly instalment payment. Lastly, the amendment will also enable the Board to be more efficient in its administration. Sir, I beg to move. 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. - [Dr Lee Boon Yang.] Bill considered in Committee; reported without amendment; read a Third time. CARRIAGE BY AIR (AMENDMENT) BILL Order for Second Reading read. 5.02 pm The Minister of State for Communications (Dr John Chen Seow Phun): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Sir, the Bill seeks to amend the Carriage By Air Act (Chapter 32A of the 1989 Revised Edition) to give effect to the provisions of the Montreal Protocol No. 4 which amend the Warsaw Convention (relating to international carriage by air) as amended by the Hague Protocol (which is referred to in the Bill as the "Warsaw (Hague) Convention"). The Montreal Protocol No. 4, which deals with the international carriage by air of cargo and baggage, amends the Warsaw (Hague) Convention to allow electronic air waybills to replace the traditional paper air waybills, thus removing the need for air waybills to physically accompany shipments. This provides greater convenience to shippers, freight forwarders, consignees and airlines.”
“In line with this decision, I think it is only rational to allow those who are using their Ordinary Account savings to service the upgrading cost to also tap savings in their Special Account. This is provided for by clause 7 which amends the CPF Act to allow CPF members to use their CPF Special Account savings for monthly payment of their share of upgrading cost under the HDB Main Upgrading Programme. However, this amount of the Special Account savings which can be used will be capped at the amount of the shortfall arising from the CPF cut to the Ordinary Account contribution. I would like to stress at this juncture that this is not a permanent feature, in other words, allowing the Special Account savings to be used either for servicing housing loans or for paying their share of the upgrading cost. This is a temporary arrangement because once the economy recovers and we start to restore the CPF contribution rate, the existing rule where only CPF Ordinary Account savings can be used for upgrading works or servicing housing loan will apply. Sir, currently, the CPF Act provides for the General Manager of the Board and Board members to sign legal documents which require the CPF Board's seal. Such legal documents could be deeds of arrangement and deeds of postponement which set out the distribution of sales proceeds of the property between the CPF Board and the mortgagee financier under the CPF Property Scheme. This arrangement had resulted at times in inconvenience when the General Manager and Board members were not present in Singapore. Clause 2 of the Bill therefore amends the CPF Act to enable any Deputy General Manager of the CPF Board to sign legal documents which require the Board's seal in addition to the General Manager and Board members.”
“Clause 6 introduces a new section 15(a) to require a CPF member who has not fully repaid his bridging loan to do so before he will be allowed to withdraw his CPF savings on the ground that he has become physically or mentally incapacitated or is found to be of unsound mind. However, a member who reaches the age of 55 will continue to be allowed to withdraw his CPF savings after setting aside the Minimum Sum even if he has not fully repaid his bridging loan. This is because the CPF Minimum Sum currently set at $55,000 is more than enough to cover the maximum bridging loan anticipated, which is about $13,000, based on a loan of $360 per month for a duration of three years. Currently, a CPF member who has been declared a bankrupt cannot withdraw his CPF savings unless the CPF Board authorises his withdrawal with the approval of the Minister. Although a bankrupt CPF member cannot qualify for a bridging loan, there is a possibility that a CPF member may become a bankrupt after he has taken on a bridging loan. To deal with such situations, clause 6 of the Bill amends section 27 to require a bankrupt member to repay his bridging loan plus interest before he can withdraw his CPF savings. Currently, about 1,500 CPF members are servicing their HDB flat upgrading cost with their CPF Ordinary Account savings. As announced by DPM Lee, in order to help CPF members who are affected by the CPF cut, we would allow those who have used up their CPF Ordinary Account savings to draw on their Special Account savings to meet the shortfall in their monthly housing loan repayment, subject to the amount of the cut in the CPF contribution.”
“Clause 4 of the Bill introduces section 14(a) to provide for the Government to extend loans to CPF members under approved loan schemes. The new section allows the CPF Board to direct monies for the bridging loan from the Government into the Ordinary Account of a CPF member requiring such loans. These monies are deemed to be CPF contributions and may be used for the purpose prescribed by regulations which include financing the purchase of residential and commercial property. This new section 14(a) also provides for the member's CPF contribution to be used to repay the bridging loan and interest. By deeming the money lent as CPF contributions, properties which have been purchased through the use of the bridging loan will, through the existing provision of the CPF Act, be subject to a statutory charge to secure the refund of those monies to the CPF accounts of the borrowers. This would allow the CPF Board, acting on behalf of the Government, to recover the bridging loan and interest directly from the borrowers' CPF accounts if they fail to repay or breach the terms and conditions of the loan. Currently, under the CPF Act, a member may withdraw his or her CPF savings in a lump sum upon attaining the age of 55, and after setting aside the prevailing CPF Minimum Sum or if a member becomes physically or mentally incapacitated, or is found to be of unsound mind before reaching the age of 55. Sir, arising from the introduction of a bridging loan scheme, it is necessary to ensure that any loan taken should first be paid before the CPF member can withdraw his or her savings.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." In November last year, the Government announced a $10.5 billion package to reduce business costs. One of the measures was a 10% point reduction in the employer's CPF contribution rate. In order to assist owners of private properties who are servicing housing loans or HDB lessees paying market interest for their mortgage loans, a bridging loan was also announced. This bridging loan is a Government loan to affected homeowners to make up for the shortfall in CPF contribution due to the 10% point reduction. The maximum amount of bridging loan released monthly will be the shortfall in the monthly loan instalment or the amount of reduction in the CPF Ordinary Account contribution, whichever is lesser. The interest charged on the bridging loan is the same as the HDB concessionary mortgage rate which in turn is computed at the prevailing CPF interest rate plus 0.1%. The CPF (Amendment) Bill before the House today seeks to amend the Central Provident Fund Act to expand the Government's bridging loan to the borrowers' CPF Ordinary Account. In effect, the bridging loan money is subjected to the same charge as CPF savings released for property purchases under the CPF rules. It also gives the Government, through the CPF Board, the right to recover the bridging loan amount from the borrower's CPF accounts. This is the least cost approach to providing such a loan to the homeowners who would otherwise have to draw up another mortgage agreement. The Bill also seeks to allow CPF members affected by the CPF cut to use their CPF Special Account savings to service the monthly payment of the upgrading cost incurred under the HDB Main Upgrading Programme Sir, I will now go through the key clauses.”
“Employers should train all their workers, both local and foreign, to perform their jobs adequately. Where practicable, employers should recruit skilled foreign workers at source instead of bringing unskilled workers here for training. The Government encourages the recruitment of skilled foreign workers by charging a low levy of only $30 per skilled work permit holder. On financial support for training, the policy of the Skills Development Fund (SDF) is to focus on training support for citizens and permanent residents who form the permanent workforce. However, SDF support for training has also included the training of skilled foreign workers, i.e. those on 3-year `Q' passes. Nevertheless, the Government will continue to give priority to the use of public funds for the training of the permanent workforce. SENNETT STATION 8. Mr Shriniwas Rai asked the Minister for Communications whether the Sennett Station will come into operation at the same time as the North East Line.”
“For the first 3 quarters of 1998, a total of 21,073 workers were retrenched. Of the locals retrenched in the first half of 1998, 65% were re-employed as at September 1998. 44% of these locals retrenched managed to secure alternative employment within 1 month and 61% managed to do so within 3 months. The average time taken to secure alternative employment was about 1.6 months. TRAINING OF UNSKILLED FOREIGN WORKERS 7. Mr Shriniwas Rai asked the Minister for Manpower whether his Ministry has a long term policy to train unskilled foreign workers in Singapore.”
“The work pass system is designed to provide flexibility in considering all deserving applications for work passes. Foreigners with appropriate qualifications and skills may be given "P" or "Q" passes even though they do not meet the income criterion. The Committee on Singapore's Competitiveness has recommended to reduce total wage cost by 15%. Hence, foreigners working in Singapore may also suffer a cut in income. But they will not be denied a work pass on account of their lower income. Work passes will be issued or renewed based on the factors I have just pointed out. Since the bulk of the 15% reduction in total wages will come from the 10 percentage point cut in employers' CPF contributions and a reduction in the variable wage component, reduction in basic wages, if any, will not be significant. My Ministry will continue to exercise flexibility in assessing work pass applications. As such, there is no need to review the income criterion used in assessing work pass applications.”
“With regard to Mr Ong's question on the impact of cost reduction resulting from some companies wanting to return the CPF savings to their employees, I would like to point out that only companies which continue to perform very well would be in the position to do so. The CPF Board has so far received 49 enquiries by companies on the possibility of continuing their contribution at 20%. Another seven companies have indicated that they were considering passing the savings from the CPF cut to their employees in the form of additional bonuses or other benefits. Such efforts by employers to reward workers for good performance under difficult market conditions are consistent with NWC's recommendation and will not have any adverse impact on our overall effort to regain competitiveness. WAGE GUIDELINES FOR EMPLOYMENT PASSES 12. Dr Toh See Kiat asked the Minister for Manpower whether he will lower the wage guidelines for the different categories of employment passes to reflect the 15% reduction in wage costs that has taken place. The Minister of State for Manpower (Encik Othman bin Haron Eusofe) (for the Minister for Manpower): Mr Speaker, Sir, a foreigner seeking to work in Singapore will be considered for a work pass commensurate with his skills and economic contributions to Singapore. Better qualified foreigners are issued with "P" or "Q" work passes. In assessing the type of work pass to be issued, my Ministry takes into consideration a number of factors including the foreigner's educational qualification, job experience and income as well as the nature of the job. I would like to stress that although the income criterion is used as a proxy to the economic contribution of the foreigner, it is, however, not the sole criterion.”
“As the revised NWC guidelines were announced only in November last year, it is too early at this juncture to determine how many companies have implemented the guidelines. My Ministry will conduct a survey to gauge the employers' response to the revised NWC guidelines. The findings are expected to be available by April 1999. In the meantime, feedback from employers and settlements of cases referred to my Ministry for conciliation indicates that most employers in both the unionised and non-unionised sectors have implemented the wage reduction guidelines issued by the NWC. The extent of wage cut varies from company to company depending on their performance. If this trend continues, the companies should be able to reduce their wage cost by 5-8% as recommended by the NWC. Together with the 10 percentage point cut in the employers' CPF contribution implemented in January this year, we should be able to achieve the target of 15% reduction in overall wage cost to regain business competitiveness. MOM's survey will also determine whether senior management personnel had taken a bigger cut in their salary as compared to their junior counterparts. While the detailed findings will only be available in April, information available so far indicates that many companies have implemented a bigger cut in the salary of their executives and senior management personnel. In the case of the civil service, senior civil servants are subjected to higher cuts in their salaries compared to junior officers as announced by DPM Lee in November last year.”
“Mr Speaker, Sir, Mr Ong has raised two questions relating to the recent National Wages Council's wage guidelines and another on the CPF reduction. May I have your permission to take all the three questions together.”
“Mr Speaker, Sir, I have just said that if any employee feels that his services have been unfairly terminated, he can appeal to my Ministry. 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. - [Dr Lee Boon Yang]. Bill considered in Committee; reported without amendment; read a Third time and passed. CIVIL LAW (AMENDMENT) BILL Order for Second Reading read. 4.18 pm”
“If in fact an employee whose service has been terminated but he feels that it is actually a dismissal in the guise of contractual termination, he can always appeal to my Ministry. Each year we do get a certain number of such appeals and we have always been able to resolve the differences between the employer and employee. So it is not a completely one-sided situation where the employer has absolute right and to exercise it indiscriminately. We have a mechanism within the Ministry in implementing the Employment Act to ensure that employees' interests are also looked after. I am pleased to inform Members that in terms of conciliation of resolving such difficulties, the Ministry's Labour Relations Department has been very effective and efficient. I think the Member also has to look from the point of view of the employer. After all, employees also can leave a job by giving a certain period of notice. So it cuts both ways. An employer has invested money in training an employee and the employee can turn around and say, "Look, I want to quit. I give you a month's notice." So I think in a free labour market, we should allow this flexibility, instead of creating more rigidities, as he seems to be suggesting.”
“All Skills Development Fund training subsidies are eligible for young and old workers. We make no distinction on age. I think I have addressed Mr Lim Swee Say's point about pensionable civil servants. Their pensions will be protected. They can carry on to work beyond 60 to 62. Of course, they would also have to come to an agreement on the amount of wage reduction, just like employees in the private sector. I would pass on his suggestion that the civil service takes the lead in implementing the base-up wage system. I think this will be considered by the PSD. I agree with Mr Lim that while we can amend the law, there is still no guarantee of employment because this is very much dependent on the job opportunities available. In a situation where there is an overall decline in employment, as we have experienced in the last two quarters as a result of the economic downturn, there is of course a greater difficulty to ensure that older Singaporeans stay in the job. But I would urge all employers, even when they have to downsize, not to inflict a penalty on the older workers. I think Mr Lim has adequately pointed out that older workers, and, in fact, several other Members have mentioned this, can continue to make a valuable contribution to the company's operation. Finally, I come to Mr Jeyaretnam. He says that the talk of raising the retirement age is academic as long as employers are allowed to terminate the employee's service with one month's notice. This is not a new thing. This right to give notice to terminate an employment contract is already in our Employment Act. We have to look at it in totality. While the employer can give termination notice, there must be a sufficient reason for such termination.”
“It may cause unhappiness and resentment among the younger workers who also may want to do such jobs. We cannot generalise to say that younger workers cannot do such jobs. On balance, it is not advisable for us to move towards trying to take a protectionist approach and say that certain jobs must be reserved for older workers or to interfere with our free labour market practice. Instead of adopting this protectionistic approach, trying to reserve jobs for older workers, which is really not efficient, economically speaking, it will be more viable for us to continue to encourage and promote the employment of older Singaporeans for a wide variety of jobs. I am sure Members are aware of how companies like McDonalds, for instance, have branched out in their search for manpower to the older Singaporeans and they have been very successful in that. They can meet most of their labour requirements by employing older Singaporeans, including retirees. More and more companies should adopt this approach and change their mindset to try to create opportunities for older Singaporeans. Mr Zulkifli also suggests extending the Skills Development Fund or setting up a special fund to look after the training needs of older people. I have already mentioned that in our concept of developing a lifelong learning system, we will reach out to both young and old workers. At this juncture, I do not think there is a need to specifically identify a fund for older workers. In fact, the SRP, if you want to look at it, indirectly benefits older workers more than younger workers because the SRP is targeted at the lower skilled and less educated workers who, by virtue of the definition, become the older workers. They are the ones who are now benefiting most from the SRP.”
“We have to take time to ensure that the employment market can adjust to this change. In due course, when we move it to 67, we would already be very much closer to the target in the US. Mr Zulkifli also suggested that we should prepare workers for retirement. I also agree with him on that score that even as we talk about extending the retirement age and working longer, we do need to make preparation for eventual retirement, and to make both financial planning and also in terms of an alternative or even a second career after retirement. Even at age 62 or, in the future, 65, there will be many Singaporeans who are still very physically and mentally very alert and active. They can do a lot of other kinds of work as a form of a second career. It is part of our continuing education and training programme that we are in the process of establishing under the new charter of the Ministry of Manpower, ie, this concept of a lifelong learning. We will incorporate these ideas to train young and old workers so that they can continually upgrade their skills and capabilities and they can continue to serve their employers or in other areas such as social organisations, as mentioned by the Nominated Member. But there is one point that he raised that I cannot quite agree with him, and that is, the point about trying to reserve certain jobs for older workers. For instance, he mentioned jobs in kindergartens and childcare services. While I agree with him that grandparents are great for looking after young children, we should not be interfering with the job market to the extent that certain jobs such as those in the childcare centres be reserved for older people. That would not help us in the sense that they will introduce rigidities and distortions into our labour market.”
“I touched on it earlier on. I agree with him that we should continue to provide training to older workers, in particular, to help them to adjust to the changed labour market where newer jobs are being created, but requiring higher skills. I think it is of interest for Members to know that the shift towards higher skilled jobs is taking place quite rapidly. In the early 90s, EDB promoted investments and created a lot of jobs. Out of the jobs that were created through EDB's investment promotion effort, about one-third of them required skilled workers. But today the investments brought in by EDB and the jobs that they create require two-thirds of skilled workers. So we have doubled the requirement for skilled workers over a short period of less than a decade. So older workers, in particular, therefore need to make a special effort. Let me assure Members that Government will provide all the opportunities and fundings that are necessary to ensure that older workers who are in need of skills upgrading will receive this training. Next, I turn to Mr Zulkifli Baharudin. He raised several valid points and concerns which I will try to address. He mentioned the possibility of introducing legislation like that in the US to outlaw discrimination of workers up to the age of 70. In fact, the Retirement Age Act is such a legislation because under the Retirement Age Act the employers are not allowed to retire workers on account of age until they reach a minimum statutory retirement age. So, in effect, it provides the same degree of non-discrimination for older workers. Yes, the provision now is to raise to only 62, but we have already served notice that we intend to raise it to 67. But we cannot do this in a rush. We cannot hurry the process.”
“So we should allow companies to do so to ensure continued cost competitiveness despite the fact that there are going to be more and more older workers. However, I also would like to point out that it would be unwise for an employer to indiscriminately cut the wages of their productive older employees as this will certainly cause a serious effect on the morale of such employees. In any case, employers who intend to introduce a wage cut are required, under the proposed Bill, to give notice to the employees and come to an agreement between the employer and employee. In fact, in companies where the workers are represented by unions, the unions also would want to be consulted on the degree of reduction that the employers want to carry out. Next, I come to Mr Cyrille Tan. I thank him also for the support. He has reinforced my argument on why we should move at this juncture, despite the economic downturn, to raise the retirement age. The fact that most older employees are prepared to accept the wage cut of 10%, according to Mr Cyrille Tan, is an indication that our process of tripartite discussion of a sensitive issue is working well. It is through this Tripartite Committee on Extension of Retirement Age that we have arrived at this consensus that would take into consideration the employers' and also the employees' concern. We have arrived at this level of wage adjustment which I think, as Mr Cyrille Tan has mentioned, is acceptable to the workers. That would help to encourage more older Singaporeans to carry on working. If you make too big a cut, then you will demotivate them and they might just decide not to carry on, in which case our Retirement Age Act would not have achieved its objective. Mr Cyrille Tan also mentioned the need for training of older workers.”
“If they were to look at the Bill, they will see that in fact these safeguards are already provided under the new section 4A(5) which stipulates that the wage reduction shall be based on factors such as employee's productivity, performance, duties and responsibilities and the wage system that a company practises or exercises. This provision means that while employers are given the flexibility to reduce the wages of older employees by up to 10%, such cuts cannot be introduced indiscriminately. For employees who are not on the seniority-based wage system, such as those who are paid by hourly rate or fixed rate, regardless of their age - in other words, they are being paid according to their job worth - then the employers would have to take this into consideration in deciding on whether to make a wage cut. If in fact they proceed to make a wage cut and the employees feel unhappy, they can always appeal to my Ministry. We will investigate their complaints and help them to reach a solution with the employers. Mr Chong also suggested that we should prohibit companies which are not affected by the seniority-based wage system to introduce a wage cut for the older employees. While I understand his concern that he wants to provide for this explicit protection for older workers, we are of the view that the companies in fact should be given some flexibility to adjust the cost of retaining their older workers. Apart from the seniority-based wage system, companies may need to adjust the salaries of older workers based on other considerations which are already spelt out in the section provided earlier on. These other factors are productivity, performance and contribution to the company.”
“We cannot legislate or force the employers, on their own, to retain the older workers, because there are economic considerations. We must make sure that older workers are equipped with all the skills that are necessary for them to make a value added to their employer and that is the only way to remain employable. Mr Chong mentioned that the cut in CPF arising from the recommendation of the Committee on Singapore's Competitiveness could erode the differential between the younger and older workers. I want to correct an impression. The reduction in the employer's CPF contribution for older workers is a separate matter. So, we are going to proceed with that. We will, on 1st January 1999, reduce the CPF contribution rate for older workers from 7.5% to 4% for those aged 60 to 65, and for those aged 65 and above, from 5% to 4%. This is a separate matter. The CSC's recommendation, which has been accepted by the Government, to reduce employer's contribution by 10% point will also kick in. In fact, for older workers, from 1st January 1999, the employer's CPF contribution rate will come down to 2%, not 4%. So the differential would still be maintained. In fact, it will actually be improved, because in the past, we used to have 12.5% differential between the two groups. Now, we have narrowed the differential some more. Mr Chong and Dr Vasoo also requested that safeguards should be put in place to ensure that older workers who are currently drawing salaries which are at or in fact below the market rate should not be affected by the 10% wage cut.”
“And any time between 60 and 62, if they choose to retire, they will be entitled to their pension. I think this is reasonable because if you are already working and drawing a salary, albeit about 10% less, there is really no need for you to have your pension upfront. So, you carry on working, you have a regular income and you do not need the pension. The pension will be released when you retire. But it will be frozen at the age of 60. Mr Charles Chong made several comments in supporting the amendment. I agree with him that older workers right now may have more difficulties fitting into new jobs that are available and I think Mr Lim Swee Say also made a point on the possibility of retrenchment for older workers. Our approach is to try to help the older workers who are retrenched or who are more vulnerable to retrenchment to uplift their skills, so that they would be able to continue to serve or contribute to the company where they are currently working, or if offered an alternative job in another company where they can make a valuable contribution. This is the main thrust of the Skills Redevelopment Programme and I reported to this House yesterday that, in fact, the Skills Redevelopment Programme is progressing very smoothly and the take-up rate is very encouraging. As of now, we already have more than 10,000 workers, mostly older workers, who have signed up for the programme for retraining. This is the way that we can help to look after the older workers who are in need of skills upgrading to ensure that they remain employable. I have to say that this is in fact the only way that we can help these older workers to equip them with the means to hold on to a job. There is no other way that we can ensure that they remain employable.”
“The Tripartite Committee on the Extension of Retirement Age has in fact discussed this particular issue quite extensively and both employer and employee representatives agreed that in amending the law, we should not try to fix a rigid period, whether it should be two weeks or a month. This is because there are many situations in actual human resource management practice where you have to give allowance for the size of the company, the set-up within the company and the company's own management practices. They have recommended that we take a more flexible approach instead of specifying the exact period. Reasonable notices to us, would mean, say, at least a month or something like that. If, in fact, an employee feels aggrieved that the period of notice has been too short, he can always appeal to my Ministry and we will try to resolve these differences. As long as it is in tune with what is current practice in Singapore, it would be considered reasonable. Mr Ang and Mr Lim Swee Say brought up this point that with the raising of the retirement age, pensionable employees in the civil service should not be disadvantaged. Although civil servants are exempted from the coverage of the extension of retirement age, when we moved from age 55 to 60, we gave this exemption to the civil service. I understand that the PSD will in fact apply the new retirement age. In other words, civil servants will be able to work up to the age of 62. For pensionable civil servants, if they want to withdraw their pension at age 60, they would have to retire from the service because they cannot withdraw the pension and carry on working continuously. But if they want to carry on working, then their pension right will be preserved up to the age of 62.”
“Mr Ang Mong Seng also supported the Bill and he asked that employers should consider the contribution of older employees when they adjust the wages of such employees. I agree with him. I think I said so in my main speech that the Tripartite Committee in fact made specific recommendation that employers should always consider the contribution, the wage level and the performance of the older employees before they proceed to make adjustment to the wages. Mr Ang also suggested that the wage reduction should not be done haphazardly on a month-to-month basis or as and when the employers feel like doing so. We have a certain understanding between the tripartite partners that such wage reduction should in fact be done for a reasonable period, either a year or two years. The extension of the retirement age is for two years. Ideally, it should be for the full period of two years. It is not good management practice to go and change the wages of the employee on a haphazard basis. So I agree with him that the employer should in fact give the employees reasonable notice and also make such wage adjustment over a reasonable period of time. He, in fact, also said that there is this provision in the Bill for employees to give reasonable notice to their older employees. It is not specified what is a reasonable period of notice and the question is: should it be seven days or two months? Let me assure the Member that through the tripartite practice, and through our practice of managing the employer-employee relationship, there have evolved certain norms on what is a reasonable notice.”
“Mr Speaker, Sir, I thank the Members who have spoken out in support of this amendment Bill to raise the retirement age from 60 to 62. They have raised many valid points for consideration and I will try to address all the concerns that they have raised. First, Dr Vasoo, in supporting the amendment, raised the concern of potential areas of dispute between employers and employees when they come to the age of 60 and they have to give reasonable notice on reducing the wage of older workers. And his question is: if there is a dispute, who will mediate, who will help the employee to listen to his appeal, to listen to his own concern? I would like to assure the Member that my Ministry has since 1994, when we first enacted the Retirement Age Act, established a unit in the Labour Relations Department which is geared towards looking after the needs of older workers who have any dispute with their employers on account of age. So, if an older worker feels that his employer is making an unreasonable offer or that he is being retired prematurely, or his service is terminated on account of age, he can always come to my Ministry to seek conciliation or to seek support in resolving those problems with their employers. I am pleased to say that, although I do not have the exact numbers with me, since 1994, we have been able to resolve the cases we handled expeditiously and satisfactorily for both parties. Likewise, Dr Vasoo also raised this possibility of employers taking advantage of the wage reduction to force out older workers. The recourse here is of course for the older workers to appeal to my Ministry to investigate their complaints against their employers for taking such unfair action. Let me assure Members once again that any such complaints will be carefully investigated.”