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In order to have a better understanding of employment laws, including industrial relations legislation, HR Law Academy will share regular updates with HR practitioners on how to tackle some of the pertinent HR employment law and industrial relations issues.

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A sample of the legal clinic newsletter is as follows:

Scenario :

Question:

Icon International Hotel (Icon) has its presence in Singapore since the year 2013. Shortly after, Hotel Trade Union (HTU) claim trade union recognition for the rank and file positions in Icon. The management of Icon dislikes HTU as they are of the view that HTU is extremely unreasonable in all their dealings in particular to collective bargaining and the negotiation for annual increment and performance bonus.

With the amendments to the Industrial Relations Act on 1 April 2015, a trade union, the majority of whose membership consists of employees in a non-executive position, is allowed to represent executive employees collectively.

Employers and trade unions may discuss the representation of executives on a collective basis making reference to the Tripartite Guidelines on Extending the Scope of Union Representation for Executives. Upon agreement, employers can accord formal recognition to the trade union.

What would be the significance of the above amendment and what would be your recommendation to the General Manager of Icon by virtue that Icon and HTU are not in a harmonious relationship? The General Manager also mentioned that 2 years ago, the management did not give outright recognition of trade union to HTU. However, HTU managed to unionise Icon as they managed to garner the majority in a secret ballot.

Solution:

Based on the facts as stated, it could be seen that both Icon and HTU do not have a harmonious labour-management relationship. This is confirmed as Icon did not want to accord outright recognition of trade union to Icon 2 years ago. This is notwithstanding that Icon was not happy over the collective bargaining and neither were they happy with negotiation for annual increment and variable bonus.

Before I explain the significance of the amendments to the Industrial Relations Act which took effect 1 April 2015, I wish to highlight that there were several other amendments made to the Act.

I would first explain that the amendment to the Industrial Relations Act under section 30A(1) in 2002 states that rank-and-file employees’ union, whilst not entitled to collectively bargain for executive or managerial positions, may individually represent them:

(a)     to make representations to the Minister under section 35(3);

(b)     upon the retrenchment of the executive employee, to negotiate with the employer with a view to resolving any dispute relating to the retrenchment benefits payable to the executive employee;

(c)     to negotiate with the employer with a view to resolving any dispute to a breach of contract of employment by the executive employee or the employer; and

(d)     to represent the executive employee in proceedings before the Court in respect of the dismissal or reinstatement of the executive employee in circumstances arising out of a contravention of section 82 or any matter referred to in paragraphs (b) and (c).

On the other hand, under section 30A(2) of Industrial Relations Act, the employer may object to such representation on the grounds that the executive or managerial employee:

(a)     is employed in a senior management position or performs or exercises any function, duty or power of a person employed in a senior management position, including the control and supervision of major business operations, accountability for operational performance, formulation of business policies, plans and strategies and provision of leadership to other employees;

(b)     performs or exercises any function, duty or power which includes decision-making, or the power to substantially influence decision-making, or any industrial matters including the employment, termination of employment, promotion, transfer, reward or discipline of other employees;

(c)     performs any function or duty which includes representing the employer in any negotiation relating to any industrial matters;

(d)     has access to confidential information relating to the budget and finances of the employer, any industrial relations matter or the salaries and personal records of other employees; or

(e)     performs or exercises any other function, duty or power which may give rise to a real or potential conflict of interest if he is represented by the trade union.

Also, another amendment made to the Industrial Relations Act was on 1 February 2011. The amendment was such that a new Part IVA which relates to the tripartite mediation of disputes involving executive employees. Under this new section 30F of the Industrial Relations Act an ‘executive employee’ who is in receipt of a monthly basic salary not exceeding $4,500 and who is a member of a trade union which has not been given recognition by his employer under section 17 of the Act may pursuant to section 30(G)(1) request for tripartite meditation on the following:

(a)        any dispute relating to a breach of contract of employment by the employer of an executive employee;

(b)        any dispute relating to salary due to an executive employee; or

(c)     any dispute relating to the retrenchment benefit payable or to be paid to an executive employee by his employer.

If the employment is in relation to dispute in salary claims, then the executive employee would not need to rely on Industrial Relations Act. Instead, the executive employee who is earning basic salary not exceeding $4,500 may pursuant to the Employment Act proceed to resolve the dispute at Ministry of Manpower. If the dispute involves salary claims, the claim may be adjudicated by Ministry of Manpower through the Labour Court.

On the other hand, section 30G(2) of Industrial Relations Act states that the following disputes may not be the subject of tripartite mediation:

(a)        any dispute where the material facts giving rise to the dispute occur earlier than one year before the date on which the Commissioner receives a notification under section 30H(2) relating to that dispute;

(b)        any dispute which arises out of or as a result of a termination of the contract of employment of an executive employee, unless the Commissioner receives a notification under section 30H(2) relating to that dispute within 6 months after the contract of service.

From the above, I would also need to explain the different types of trade union membership. For an unionised company, it could mean the company has an executive union and/or rank-and-file union as explained earlier. If a company has both the executive and rank-and-file trade unions, then both executive and rank-and-file employees could join as an ordinary member in their executive union or rank-and-file unions respectively and they would be covered within their own collective agreements. In other words, as an ordinary member of their trade union, they would have full representation and there is no necessity to join as a general branch member with NTUC as after all an ordinary member will enjoy the same benefits as general branch membership and is covered under the collective agreement. If a company has only a rank-and-file union, then the executive level is not allowed to join the rank-and-file union. However, with the amendments to the Industrial Relations Act in 2002, section 30A of the Act permits executive and managerial staff to join the rank-and-file as an ordinary member but with limited representation. The rank-and-file union will not be allowed to collectively bargain for executive or managerial positions but may individually represent the eligible executives or managerial employees under section 30A(1) of Industrial Relations Act.

Section 30H of the Industrial Relations Act states the procedure for seeking mediation. Specifically, section 30H(3) states that upon receiving a notification of dispute under section 30(H)(2), the Commissioner may:

(a)        direct a conciliation officer to conduct tripartite mediation of the dispute;

(b)        assign or re-assign tripartite mediation advisors, at any state prior to the commencement of the tripartite mediation proceedings, to assist the executive employee or his employer (who are parties to the relevant dispute) in the tripartite mediation;

(c)        direct the executive employee and the employer to participate in the tripartite mediation; and

(d)     of his own volition or upon request by either the executive employee or the employer, request any other party whom he deems appropriate, including but not limited to:

(i)          an officer from the trade union of which the executive employee is a member; and

(ii)       a representative of any business organisation which the employer is a member, to participate in the tripartite mediation by assisting the tripartite mediation advisors assigned under paragraph (b).

From the above, PMEs which fall within section 30F of the Industrial Relations Act and who are general branch members of NTUC or who are members of SNEF may request assistance from NTUC and SNEF respectively to represent them in the mediation or conciliation meeting at MOM. However, under section 30H(5) of the Act, both the employee or the employer shall not be represented by an advocate or solicitor or a paid agent at any mediation session. Also, this means that if an employee who is not an ordinary member of his trade union with full or limited representation under section 30A of the Industrial Relations Act or general branch member of NTUC and if the employee wants NTUC to represent him, then he must first join as a general branch member of NTUC in order to qualify for NTUC to represent him.

In view of the above, executive level staff earning a basic salary up to $4,500 may now join as a general branch member with NTUC and have their labour relations officer to mediate with the company should they have any disputes with the Management.

With the amendments to the Employment Act on 1 April 2014, the coverage of employees now extends to PMEs whose basic salary is up to $4500. Specifically, this category of PMEs would be covered under the general provisions of the Employment Act except Part IV. With the amendments, basically, the tripartite mediation would be redundant to a certain aspect. The coverage would exceed section 30G(1) of the Industrial Relations Act. However, for PMEs who are not general branch members of NTUC, they may not seek assistance from NTUC. Surely, if the Industrial Relations Officer were to represent the PMEs, it is likely that there would be more pressure on the employer. This is notwithstanding that MOM conciliation officers would also need to follow up more closely to the complaint. On a whole, section 30G(1) may lose its significance in view of the amendments to the Employment Act. It must be added that for section 30G(1) of Industrial Relations Act, the biggest advantage is that the employee could request the trade union to negotiate for the retrenchment benefits ie to bring the matter up for mediation at MOM. If a PME were to invoke the Employment Act on retrenchment benefits, it is of no use in that the Employment Act does not cover for retrenchment benefits. Therefore, with the backing of the trade union, it may more likely be easier for the PME to get some form of retrenchment benefits from the employer. On the other hand, if the employer refuses to give any form of retrenchment benefits, there is really nothing much the trade union or employee can do as after all the Employment Act does not confer any retrenchment benefits to the employee.

As for section 30A of the Industrial Relations Act, it would still remain relevant as there is no salary cap for PMEs. Also, this is in particular to retrenchment benefits in which the Employment Act does not confer such statutory benefit. In other words, for PMEs earning the basic salary in excess of $4,500, it would still be most relevant in that at least they are protected for the four areas as mentioned. This is notwithstanding that unlike the coverage of the Employment Act which does not confer any rights on retrenchment benefits, section 30A of Industrial Relations Act does allow the trade union to negotiate for the PME. Also, with the amendments to the Employment Act that states the qualifying one year service in order to qualify for protection for wrongful and unfair dismissal, there is no such requirement for section 30A of the Industrial Relations Act.

In terms of amendments to the Industrial Relations Act, this effectively means that a rank-and-file union can collectively bargain for managerial and executive employees except for those who fall under the exception of section 30A(2) of the Industrial Relations Act. This means that there will also be a collective agreement for managerial and executive employees and the rank-and-file union could negotiate with the management for annual increment and bonuses for managerial and executive employees. On the other hand, for trade unions that have not been accorded recognition by employers and are seeking to collectively represent executives, may first seek to represent the rank-and-file employees before seeking to represent executives. As for trade unions that have been accorded recognition for rank-and-file employees may approach employers for direct recognition to collectively represent executives for the class(es) of executives mutually agreed upon. If the employer grants direct recognition, the trade union may then proceed to collectively represent executives. However, if the employer does not want to grant direct recognition, then the trade union would have to follow the procedure for trade union recognition.

 It is no doubt that with the amendments to the Employment Act which took effect 1 April 2014, PMEs are protected as they are now covered under the Employment Act except for Part 4. For Unionised companies, for the fact that rank-and-file union can collectively represent the PMEs, this would mean that their terms and conditions of employment would even be better than what is already provided in the Employment Act. However, the trade union has to seek recognition from the management.

In conclusion, my recommendation to the General Manager is that they need to know what would be the chances for them to win the secret ballot if they do not want to accord outright recognition to NTU. If the changes are highly likely that HTU will again garner the majority, then perhaps it would be better for Icon to give HTU outright trade union recognition. On the other hand, if Icon does not want and if HTU were to win the secret ballot, the scope of representation to be accorded to HTU would be PMEs earning a basic salary of $4500 and below. The rationale is that the as PMEs is after all covered under the Employment Act.

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