Coverage
First, the coverage under the Act will be extended. Currently, all
manual workers, and non-manual workers earning $1,600 or less per
month, are eligible for compensation under the Act. We will now
include non-manual workers earning more than $1,600 a month so that
they too, can be compensated under the Act rather than have to go
through the legal process under common law. We are not the only
country to have done this. In other jurisdictions such as Australia,
Canada, Hong Kong and the United Kingdom, the compensation framework
does not make a distinction between manual and non-manual work. We
will therefore amend sections 1 and 2 of the Act to include all
employees, except those specified in the Fourth Schedule. This will
increase the coverage of the Act by more than 850,000 employees, or
70%, to 2.1 million employees. Consequently, we will remove the term
workmen and amend the short title to the Work Injury Compensation
Act.
The Fourth Schedule lists two groups of employees who will be
excluded from the Act.
a. Police officers are
currently excluded. Under the amended Act, members of the
Singapore Police Force as well as members of the Singapore Civil
Defence Force, Central Narcotics Bureau, the Singapore Prisons
Service and Singapore Armed Forces, will be excluded due to the
unique nature of their work environment. These personnel can face
inherent risks in the normal course of their duties at work. They
would already have specific work injury compensation provisions in
the relevant legislation, comparable to what the Act provides.
b. The second group are domestic workers who were and remain
excluded as they are employed by households and typically work and
live in the same premises. As a result, it will be difficult to
determine whether any injury sustained in the premises was due to
work-related activities or otherwise. While excluded, foreign
domestic workers are still protected under the personal accident
insurance which their employers must purchase. The personal
accident insurance in effect has a wider scope than the WCA and
provides compensation to the foreign domestic workers in the event
of permanent disablement or death, regardless of whether or not
the accident was work-related. In tandem with the updating of the
compensation limits under the Act, MOM will increase the insurance
coverage requirement, from $10,000 to $40,000. This will apply to
all new applications for foreign domestic workers submitted from 1
July 2008 onwards. For existing foreign domestic workers, the new
requirement will apply to work permits that expire on or after 1
July 2008.
The current
Act requires employers to purchase insurance for all workers covered
by the Act, unless otherwise exempted. However, for the non-manual
employees earning above $1,600 a month who are previously not
covered under the Act, we will not require compulsory insurance
coverage. Our data shows that generally, non-manual employees face
lower workplace risks and incur fewer injuries. Hence, we can leave
it to employers to decide whether to buy insurance for them. This
will help businesses manage their costs. Nevertheless, the employer
is still liable to pay compensation to the employee in the event of
a work injury. MOM would also review our data periodically and may
require specific sectors to purchase insurance if the risks warrant
added protection.
Compensation Norms
Second, this Bill updates compensation norms. This is laid out in
the Third Schedule of the Act. As before, the compensation takes
into account the employee's loss of future earnings due to his
injury which are determined by the worker's monthly wage and his
age. As the younger worker would have had more potential years to
earn, the compensation is a higher multiple of his wages.
And as before, the computed amount of compensation is subject to
maximum and minimum limits specified in the Third Schedule. This is
to ensure that eligible workers will receive a minimum amount of
compensation while the maximum limit caps the liability of
employers. At present, the minimum limits are $37,000 and $49,000
respectively for death and total permanent incapacity, while the
maximum limits are $111,000 and $147,000 respectively.
These limits will be adjusted to take into account the increase in
wages since the limits were set in 1995. With this change, the
minimum compensation for death and total permanent incapacity will
be increased to $47,000 and $60,000 respectively. The maximum
compensation will also be raised to $140,000 and $180,000
respectively.
With the amendments to compensation norms, the family of a deceased
25-year old who earned $1,500 a month would receive $140,000, an
increase of $29,000 or 26% more than current. If the worker were 55
years old, his family would be compensated $129,000, an increase of
$18,000, or 16% more than today.
Next, existing compensation rules allow for an additional 25%
compensation to employees who suffer total and permanent incapacity,
in order to reflect the higher cost of care. However, it requires
the employee to prove that he would need the constant care of
another person for the essential actions of life. About half the
employees who were totally and permanently incapacitated in the last
few years did not qualify for the additional award as the injured
employee may find it difficult to prove that he fulfils the
condition. Under the new Act, this additional condition will be
removed, while the additional 25% compensation is retained for all
employees who suffer total and permanent incapacity.
We have also amended section 18 to allow the employers to seek
indemnity in the civil courts against a third party who was
responsible for causing the injury, even if the employer was
partially at fault. Currently, the employers can only do so if they
were completely not at fault for the injury. The distinction between
no and partial fault may be too fine to determine and the removal of
this pre-condition will not affect the payment of compensation to
the injured employees who choose to claim under the WCA.
Next, medical expenses. Under the current Act, only medical expenses
that are incurred in Singapore are compensable. As more employees
are required to travel outside Singapore for work, the amended
section 14 allows medical expenses incurred outside Singapore to be
compensated if the accident happened when the employee was working
overseas and immediate medical treatment was needed.
In addition, an employer's liability for hospital expenses is
subject to numerous sub-limits for different expense items such as
ward charges, operation fees, and physiotherapy fees, etc.
We will simplify how medical expenses are compensated. The Bill
removes the existing sub-limits for hospital charges and instead
introduces an overall cap on an employer's total liability for
medical expenses. The proposed cap of $25,000 per accident per
employee will fully cover the medical expenses incurred in more than
95% of claims where hospitalisation was required. This cap will be
revised regularly, to keep pace with changes in healthcare costs.
We recognise that there may be that remaining 5% where
hospitalisation expenses are very high. As the WCA is predicated on
no-fault, limited liability as an acceptable alternative to both
employers and employees, we will have to set a limit to compensation
for medical expenses. Affected employees who wish to recover the
full medical expenses can exercise their option to do so under
common law.
Finally, section 8(2) of the Act, which deals with situations where
the injured employee holds more than one job, will be amended. At
present, an employee with multiple jobs can claim compensation for
his multiple earnings only for jobs in the same occupation. In
comparison, if a claim was brought in the civil courts, his total
loss of earnings would be claimable. The number of workers with such
a scenario is small. In the last five years, there are only a
handful of cases in which the injured employee is employed by
multiple employers. Nevertheless, it would be more equitable to
amend the Act such that an employee will be compensated for his
total earnings with different employers, except for earnings that
are from contracts of service that the employer does not know about.
This exclusion is necessary and fair so that employers are made
aware of their potential financial liability under the Act and can
insure themselves accordingly.
Overall, these changes ensure that the workmen's compensation system
continues to be relevant and serve as a sensible alternative to the
common law process.
Efficiency and Effectiveness
Thirdly, we will improve the efficiency and effectiveness of the
compensation process.
Preferred route of compensation
Under the present Act, workers can only claim for injuries from the
common law or the workmen's compensation system. They cannot do so
from both. This makes sense because the WCA was indeed created to
serve as an alternate and more expeditious route to avoid protracted
legal proceedings. However, some claimants abuse the system by
filing claims for both but withdrawing the WCA claims at the last
minute to switch to a civil suit. This imposes significant
commitment of resources, as time and effort would have been invested
to investigate and prepare the case. Involved parties such as
witnesses would also have committed their time to the adjudication
process. Employers will have to repeat part of the process in the
courts. Processing time for each case becomes unnecessarily
prolonged and as a result, compensation is delayed. We will
streamline the process, so that claimants through the WCA can have
speedy compensation. Nevertheless, even after our amendments, we
still allow adequate time for claimants to decide on either route to
claim damages or compensation for their injuries.
At present, an injured employee has up to one year from the date of
the accident to decide whether he wishes to file a claim under the
Act. The one-year period to claim under the WCA remains unchanged
and if he decides to seek compensation under the Act, his claim will
be processed, and the Commissioner will notify him of the assessment
of his compensation amount.
Upon receiving the notification, the amended section 33 allows him
up to 28 days to decide if he wishes to pursue his claim under the
Act, or withdraw his claim. If he decides to pursue his claim under
the Act, he will generally no longer be able to withdraw his claim
and institute fresh proceedings in the civil courts.
Flexibility in paying and distributing compensation
Next, the existing Act also contains restrictive rules that require
compensation in death and total permanent incapacity to be paid to
the Commissioner, rather than directly to the employee, or his
dependants. This can delay the payment of compensation to the
employee.
Hence, section 9(1A) of the Act will be amended, to allow for all
work injury compensation to be paid in three different ways: to any
employee who is 18 years or older, to the employee's estate or his
dependants, or to a committee and estate of the employee appointed
under the Mental Disorders and Treatment Act.
These amendments will enable us to keep the workmen's compensation
process efficient.
Enhancing penalties and offences
We are also enhancing the penalties and offences under the Act so
that the system will continue to work effectively. The penalties in
the Act were last revised in 1990. A new section 35 will be
introduced to increase the penalties for selected offences. For
example, an employer who illegally deducts his employee's salary to
defray the cost of work injury compensation insurance may be fined
up to $5,000 instead of $2,000, while the maximum jail term has been
kept at 6 months. The new section 35 also makes it an offence if any
person fails to comply with an order to pay compensation. A new
section 40 allows the Commissioner to apply to the court to order
the convicted person to pay up the amount owed to the employee, over
and above the penalty for the offence. This amendment will provide
the employee an additional option for recourse. Currently, if an
employer does not pay compensation after being ordered to do so by
the Commissioner, the employee's only recourse is to enforce the
order on his own in the civil courts. This may not be practical as
the injured worker may not have the means to do so. With this
amendment, MOM would be able to enforce the payment of compensation
on the worker's behalf.
As we tighten the rules against errant employers, we also need to
ensure that workers do not abuse the workmen's compensation system.
There have been instances of abuse and fraudulent claims. The
existing Act contains limited remedies against such behaviour as it
is currently not an offence under the Act to make a fraudulent claim
for compensation. MOM can only proceed against them on a lesser
offence of providing false answers. In 2007, nine workers were
convicted for fraud on this basis.
With the increase in compensation quantum as proposed in this
Amendment Bill, we must also ensure that the Act can effectively
deter fraudulent claims by a small number of workers.
Hence, the new section 35 makes it an offence for any person to
knowingly make a fraudulent claim under the Act for compensation.
The maximum penalty is a fine of $15,000 and a jail term of 12
months.
Streamlining accident reporting requirements
Finally, we have streamlined the accident reporting requirements
under the Act with those under the Workplace Safety and Health Act.
This will simplify the reporting requirement for employers, thus
reducing overall compliance costs. Instead of having to report all
accidents, including minor ones, section 12 and related regulations
will be amended such that an employer is required to report an
accident only if it results in a death, or it results in the injured
employee being unfit for work for more than 3 consecutive days or
being hospitalised for at least 24 hours, or if the employee
contracts an occupational disease. For minor injuries, the current
statutory reporting requirement will be removed, but the obligation
to compensate the employee remains. This will benefit the employees,
as the employers can directly compensate their employees. However,
in cases where employees face difficulty in obtaining compensation,
they can still report to MOM, which will enforce the employer's
obligation.
Reaching out to employees
MOM will continue to reach out to employees on their rights under
the Act through its publications and mandatory safety training
courses. Nevertheless, to further increase worker awareness of the
available avenues for compensation, all stakeholders – the
community, union leaders, employers - have a pro-active role to
play. MOM will work with them to create greater awareness among our
employers and workers.
Closing
Sir, in conclusion, the extension of coverage of the Act will make
available basic work injury compensation to over 2 million employees
and bring our compensation framework in line with international
practices. Updating the compensation norms and enhancing the
efficiency and effectiveness of the system will encourage employees
to use the system. This also benefits employers as their liabilities
will be capped. With these changes, MOM, together with the
industry-led Workplace Safety and Health Council, and the
cooperation of employers and workers, will be well-placed to achieve
the goals spelt out in its safety and health vision for 2015.
Sir, I beg to move.