Round-up Speech at Second Reading of WICA Bill 2019

Minister of State for Manpower Mr Zaqy Mohamad, Parliament House of Singapore

1. Mr Speaker, Sir, on behalf of the Minister for Manpower, let me first thank all 13 Members who have spoken in support of the Bill. 

Singapore’s WSH performance

2. Professor Fatimah Lateef asked about the trend in the number of WICA claims and how our safety performance stands among our peers.

3. In line with the Singapore’s improving WSH performance, the number of awarded claims has fallen by 7% in the past 3 years, from around 15,700 in 2015 to around 14,600 in 2018.

4. As the WICA is but one option for employees to seek compensation for work injuries, a better reflection of our workplace safety is the workplace fatality rate.

5. As mentioned in my earlier speech, our three-year average fatality rate has improved significantly from 18th place relative to OECD countries in 2010 to 7th in 2018. We are working hard towards the goal of having a rate of less than 1.0 per 100,000 workers by 2028, which will make our workplaces one of the safest in the world. 

Align commercial incentive of employers and insurers to injury prevention – Greater information transparency to reward safer companies

6. Mr Douglas Foo and Ms Jessica Tan and asked how MOM will share policy and claims information with insurers.

7. Only authorised representatives of designated WIC insurers will be allowed to check on employers’ information. As mentioned in my earlier speech, the Ministry will not be revealing actual workforce size and annual payroll data to insurers. Rather, our system will just tell insurers that their clients’ declaration is either consistent or not consistent with MOM records. 

8. Ms Jessica Tan also asked about transparency in premiums quoted by insurers. The WIC insurance market today is highly competitive, with 31 insurers operating. As in other insurance products such as motor insurance, employers can approach different insurers to obtain a quote, based on their company activities, accident record and workforce size.

9. MOM will also explore how best to publish general information on the range of premiums quoted, to help employers see where they stand, and to encourage them to strive for a clean safety record to obtain the lowest premiums. 

Faster and simpler claims benefit everyone – Overall

10. I would like to thank Professor Fatimah Lateef for highlighting the need for expeditious claims process. 

11. This is core to the WICA. The average time for claims for permanent incapacity or death to be resolved is 4.5 months after the claim has been filed. Amendments such as streamlining of the claims process and compensating based on current incapacity will further shorten the claims process.

Improving processes to ensure expeditious WIC claims processing – Insurer processing

12. With regards to insurer processing claims, Mr Patrick Tay, Ms Anthea Ong, A/P Walter Theseira, Mr Zainal Sapari and Mr Melvin Yong have asked about the measures that are put in place to safeguard employees’ interests.

13. As I have detailed out in my earlier speech, the interests of the employees will continue to be protected as insurers do not have discretion in setting the compensation amount. Compensation for incapacity is based on the assessment of a heath professional and computed using a fixed formula based on age and earnings. The Ministry will put in place a system of checks and balances in the licensing scheme to ensure that claims are processed fairly and in a timely manner.

14. Employees who feel that their compensation was not processed fairly can raise objections, which will continue to be adjudicated by the Ministry. Employees who face other problems or suspect errant behaviour by insurers or employers should report this to the Ministry.

15. Nevertheless, given that this is a new regime, I fully agree with Mr Sapari that we should conduct reviews at appropriate junctures to fine-tune if necessary. 

Improving processes to ensure expeditious WIC claims processing – Current incapacity

16. Mr Zainal Sapari sought clarifications on whether employees who are compensated based on their CI assessment are able to seek re-assessment if their injuries deteriorate thereafter.

17. Firstly, I want to say that a doctor will not make a CI assessment unless he is of the view that there is unlikely to be a significant change in the employee’s condition. 

18. Secondly, in coming up with the CI framework, we consulted with the WIC Medical Board, which comprises medical professionals that help MOM to review appeals against the treating doctor’s assessment of incapacity. The Medical Board confirmed that state of incapacity six months after the accidents would be very close to the eventual extent of permanent incapacity in the vast majority of cases. 

19. Thirdly, in the unlikely event that an employee’s condition deteriorates significantly after the CI assessment, the new WICA provides for the initial assessment to be revised if the doctor can provide the reasons for the revision within 90 days after the deadline to raise objections. 

20. Mr Louis Ng sought clarifications on whether the introduction of current incapacity will affect employee’s WICA entitlement to medical treatment for their work injuries. 

21. Under the new WICA, employers are responsible for their employees’ medical expenses up to $45,000, or one year from accident, whichever is reached first. This entitlement is independent of the medical assessment of either PI or CI. 

22. As mentioned in my earlier speech, CI assessment would take place at least six months after the date of accident, where the WIC Medical Board assesses that the extent of incapacity is a close approximation of the steady-state incapacity for most cases. As such, the bulk of the medical treatment and hence expenses would have taken place before the CI assessment.

23. The introduction of CI assessment therefore allows foreign workers to recuperate and be with their loved ones earlier in their home countries. I note that this view is echoed by Mr Zainal Sapari who is familiar with workers’ situations through the unions and MWC. 

Improving processes to ensure expeditious WIC claims processing – AME multiple

24. I would like to thank Mr Louis Ng and Professor Fatimah Lateef for highlighting the importance of employers providing itemised pay slips and difficulties that we face when such reliable documentary evidence is unavailable. 

25. It is mandatory under the Employment Act for employers to issue itemised pay slips to their employees. 

26. To address the handful of cases we see each year that lacks reliable documentary evidence to determine AME, the Commissioner can either set the “derived AME” based on the co-worker’s earnings or a multiple of the employee’s basic rate of pay. For the latter, the multiple will be set at a level such that the “derived AME” is higher than industry norms, further incentivising employers to provide proper documentary evidence. 

Enhancing protection for employees – Compulsory insurance

27. Mr Patrick Tay, Mr Arasu Duraisamy and Professor Fatimah Lateef proposed higher coverage for compulsory insurance and a faster pace of implementation. 

28. The Ministry had originally proposed during the public consultation, to raise the salary cap in one step. However, employers were concerned about the cost pressures they were already facing, and an uncertain economic outlook. 

29. The eventual outcome of a two-step increase was a tripartite consensus. I would like to place on record my appreciation for our union leaders, and I am sure employers also feel likewise. 

30. MOM will continue to consult tripartite partners on the timeframe for compulsory insurance to be adjusted further.

31. I note Mr Patrick Tay and Ms Jessica Tan were concerned employers may under-insure for WIC. 

32. As part of the licensing conditions, designated insurers will have to report to the Ministry their data on the number of workers insured by each of their clients. This will be checked against our own records of companies’ workforce size to identify which companies are not insured or under-insured.

Enhancing protection for employees – Compensation limits

33. Professor Fatimah Lateef asked about dental claims. I am happy to confirm that under the new WICA, employees can claim for medical fees incurred for dental procedures from any registered dentist in Singapore, if the need for dental procedure arose out of a workplace accident.

Enhancing protection for employees – compensating for light duties

34. Mr Douglas Foo sought clarifications about compensation for light duties. Employees who are on light duty but are absent without reasonable excuse or leave will be ineligible for such compensation. 

35. Mr Patrick Tay suggested to compensate injured employees with light duties with the full AME for the full period of light duties. 

36. With the new WICA, we have made the treatment of light duties to be on par as medical leave. So just as full AME is payable for the 14 days of medical leave under the existing WICA, full AME is also payable for the first 14 days of light duty or medical leave. 

37. The WICA adopts the sensible approach of compensating the full AME for the first 14 days of medical leave and 60 days of hospitalisation leave. For injuries that require beyond the combined 74 days of medical leave and hospitalisation leave, AME is not fully compensated because such injuries would likely be serious enough to warrant an award for PI. 

38. Mr Louis Ng, Dr Chia Shi-Lu and Professor Fatimah Lateef asked for greater clarity on medical leave and light duties. 

39. With the move to expand compensation to work-related light duties, and to report any instance of light duties or MC, light duties will be treated like MC under the new WICA. So the distinction between medical leave and light duties will become less important under the new WICA.

40. Nonetheless, I agree with the three MPs that we can do more to reduce confusion on the ground. We will work with the medical community and seek their professional opinion on the grounds for doctors to prescribe either medical leave or light duties.

Enhancing protection for employees – Incident reporting

41. Mr Douglas Foo raised concerns about the administrative work and compliance cost of reporting accidents resulting in any instance of medical leave or light duties. To ease the administrative burden on employers, the report form for those with medical leave or light duties that are 3 days or less will be simplified and shortened. Nevertheless, employers will still need to provide the additional details should their employee get subsequent medical leave or light duty that exceed the 3-day threshold. 

42. Mr Louis Ng, Mr Patrick Tay and Ms Anthea Ong sought clarifications on whether employees will be kept informed in the claims process, such as being notified when their employers report the accidents, and if they will be given the opportunity to challenge the details stated in the accident reports. 

43. Once an employer submits an accident report to the Ministry, the employee would receive a letter informing that an accident report has been made, his/her rights and the steps to be taken to receive compensation. The Ministry or insurer will verify important information such as injury sites and salary information with them, and conduct fact-finding if there are any disputes. 

44. To Mr Tay’s point that claimants should be kept in the loop of the WIC process, this is already the case today. Claimants or anyone assisting them can obtain information about the claims status through our website or text messages. For the latter, they come in 4 languages and claimants can subscribe to our text messaging service to receive notifications when the claims status changes.

45. Mr Louis Ng and Ms Anthea Ong also asked how the Ministry intends to ensure that foreign employees receive notification of the accident reports and whether employees can obtain a copy of the accident reports for free. 

46. We will explore how we can provide such notifications. In the meantime, employees who did not receive such a letter within 3 weeks of informing their employers of their work injuries can approach the Ministry for assistance. 

47. The content of accident reports will not affect employees’ amount of compensation under the WICA, so workers would not need their actual reports. Reports could be useful if the employee makes a common law claim, as it may suggest whether any party was at fault in the accident. In such a situation, it is reasonable for employees to pay the nominal fee of $5 for the report. 

48. Various suggestions were raised by Mr Patrick Tay, Mr Louis Ng and Dr Chia Shi-Lu to address under-reporting of work injuries by employers.

49. On auditing employers reporting of accidents by referencing third-party data, this will be possible under the new WICA as insurers will share with MOM the claims made by employers.

50. On subjecting both employers and doctors to a duty to report work accidents, the primary responsibility rests with employers, as they are required to ensure the safety and health of their employees. Instead of burdening doctors with additional legal liability, WICA simplifies the reporting regime for employers. As long as an MC (of any sort) is issued, the employer has to file a report. It also makes cases of medical malpractice more clear cut, as it would be very unusual that any significant injury would not warrant at least an MC or light duties. This approach allows employers and doctors to focus on what they do best, rather than making a doctor also responsible for what an employer can easily do. 

51. On the suggestion to allow employees to report to MOM, I would like to clarify that employees can already report accidents to MOM. They can do so when accidents occur, or when they did not receive notice of their employers’ accident reports. 

52. Mr Pritam Singh raised various issues. Let me first say I welcome his sudden interest in work injury compensation, as the Workers’ Party has so far not raised any questions concerning the compensation of employees for work injury, during this term of Parliament. 

53. Mr Pritam shared the case of R, and asked if there were gaps that led to the late reporting of this case.  We have managed to trace the case he referred to, and fuller facts will be useful for Members of the House to understand the context.

54. In R’s case, he was injured in 2015 while he was on his way to training at a third-party venue. Both he and his employer did not report the injury then, as they thought it occurred when he was not at work.  

55. His employer nevertheless paid more than $54,000 for his medical expenses, which exceeded even the upcoming WICA limit on medical expenses, even though they thought it was not a work injury. R only filed a report 2 years after the accident. This was after he had left his employer, having served till age 67. His employer was also progressive in re-employing him up to 67, even though the re-employment obligations under the Retirement and Re-Employment Act were up to 65 in his case. He later explained to MOM that it was only after he left employment, and he told a friend, that his friend asked him why he did not file a WIC claim.

56. I would like to point out that this is not a case of “power imbalance” that the employer exploited, as Mr Pritam has characterised it. In fact, the employer’s actions in covering the cost of medical treatment shows that the employer was doing right by the worker. 

57. MOM did not admit the claim initially, as it was not made within one year from date of accident. Upon appeal, MOM investigated further the circumstances leading to non-reporting in 2015. It was clear from the worker’s and employer’s account, that both parties believed it was not a work accident. MOM therefore exercised discretion under the law, to admit the claim. 

58. I should highlight that the concept of a time-bar for claims exists in both WICA and under common law. When a time-barred report is filed, without further information of the background, the right thing to do is to reject it. However, there is an avenue for the claimant to appeal, and provide facts to support his appeal, as he did in this case. 

59. In the end, as MOM admitted the claim, R was ultimately assessed to have suffered 25% permanent incapacity and awarded another $54,500 in compensation. 

60. I should also note that the employer could have taken the position that since the worker wanted to pursue a WICA claim, benefits and cover that were provided for him in 2015, and which exceeded WICA limits for medical costs, should be recouped. But the employer did not do so. 

61. Far from illustrating deficiencies in the WICA system, R’s case shows how the WICA regime is robust in compensating deserving cases. Time-barred cases are reviewed if the appellant is able to provide facts to show why a claim could not be filed earlier. It also shows that there are employers who are willing to go well and above what the law mandates, because they care for their workers.

62. Mr Pritam also extrapolates from R’s case, to claim that private settlements are not fair to workers, and that MOM should oversee such settlements. R’s case in fact shows the opposite. The employer has actually ended up paying more than he would have been required to if the claim had bee`n filed under WICA at the outset.

Other - Educating employees and employers

63. Mr Patrick Tay, Mr Pritam Singh, Ms Anthea Ong, Mr Douglas Foo and Mr Zainal Sapari spoke on educating employees and employers on the WICA. 

64. We agree this is important, for workers to know their rights, and for employers to understand what counts as a work injury. Over the years, the Ministry has expanded its outreach to educate employees, such as through the foreign workers’ Settling-in Programme. Mr Tay has also shared the assistance and support that unions and the Migrant Workers’ Centre (MWC) can provide to those with work injury compensation claims.

65. For employers, MOM has and will conduct briefings to clarify any doubts. 

66. MOM will continue to raise public awareness of WICA, and seek new channels and partners to work with us.

Other – More frequent reviews of compensation limits

67. On the frequency of reviewing the compensation limit, I would like to clarify with Mr Pritam Singh that we have initiated reviews every three years. 

68. At the conclusion of the review, we announce the revised limit to take effect the following year. The next review is then initiated 3 years later. In the review, we consider wage growth and inflation since the last revision of the compensation limit, and discuss with tripartite partners on what the new limit should be, taking into account the interests of workers as well as businesses. 

Others – Payment of medical expenses

69. A few Members — Mr Patrick Tay, Mr Louis Ng, Ms Anthea Ong, Dr Chia Shi-Lu and Professor Fatimah Lateef — have raised concerns about workers’ treatment being delayed or workers not following-up on treatment because employers did not provide the hospitals with the letter of guarantee (or LOG). 

70. It is reasonable for hospitals to ask for LOGs to be assured that employers will pay for medical expenses, since some treatments may not be for work injuries or may be discretionary. Otherwise, the burden of bad debts could be passed on as higher cost to all other patients. 

71. Nonetheless, no worker would be deprived of treatment for work injury regardless of the ability to pay, or if an LOG was provided. 

72. Employers are already required under the WICA to pay for their employees’ medical treatment for any work injuries. This includes for diagnostic work like MRI scans to assess the extent of injury. Workers should report to MOM if their employers are not willing to furnish a LOG for work injuries. We will take action against employers who fail to meet their obligation to pay for medical expenses under the Act. In addition, the new WICA will allow the Ministry to order insurers to pay medical expenses directly to the healthcare institution if necessary. 

73. On the suggestion of insurance cards to employees to facilitate prompt treatment, I thank members for the suggestion, but would point out that WIC insurance is just one of several medical insurance products for both local and foreign workers. Local workers also have their own Medishield Life policies, as well as company provided insurance. For foreign workers, it is a condition of the work pass that the employer has to purchase insurance to cover medical treatment generally. Issuing cards to workers will not solve the problem of whether the medical treatment is being claimed under the correct policy and will lead to even greater confusion. 

Other - Adequate Food and Acceptable Housing for Injured FWs

74. Mr Louis Ng and Mr Zainal Sapari enquired about the food and housing for injured foreign workers.

75. Employers are still responsible to look after their workers while they are in Singapore even after they cancelled their work permits. They have to provide acceptable housing and adequate food (i.e. three meals a day) for workers whose work injury claims are still pending.

76. Before 1 Aug 2019, if the worker does not want to stay at the accommodation provided by the employer and requests to stay at other accommodations, we have permitted it. However, this has caused other problems, such as no control over the housing conditions where the workers stayed.

77. From 1 Aug 2019, we have established higher standards for injured workers’ housing. Employers have to continue housing the workers at their dorms, or pay for housing and upkeep in other MOM-approved dormitories.

Other – WICA and salary claims

78. Ms Anthea Ong suggested for WICA and salary claims to be conducted in parallel. 

79. This is already the case as both claims will be processed concurrently. In the event that the AME is disputed, the salary claim will need to be settled first, in order to establish the correct AME.

Others – Work-related mental disorders 

80. Mr Arasu Duraisamy, Professor Fatimah Lateef and Mr Melvin Yong have asked about the coverage of mental illness under WICA.

81. The WICA stipulates compensation for injury by accident arising out of and in the course of work. Employees can thus be compensated for mental disorders and any resulting incapacity, even if there is no physical injury, if the following three criteria are met:

i. First, the injury is a clinically diagnosed mental disorder.

ii. Second, the mental disorder is caused by an accident. 

iii. Third, the accident arose out of and in the course of work.

82. In the past 5 years, 3 cases of psychological injury arising from work-related accidents were compensated under WICA. They involved conditions such as post-traumatic stress disorder (PTSD) diagnosed and assessed by psychiatrists.

Others – Telecommuting

83. Mr Arasu Duraisamy asked whether the WICA will cover work injuries sustained while telecommuting. The answer is “Yes”. 

84. In cases where it is clear that the injury was clearly due to work, such as an employer requiring the worker to respond urgently to work calls while at home, and the worker fell while rushing to answer the call at home, the injured employee will be entitled to WICA compensation.  

Others – Compensation for long latency ODs 

85. Mr Zainal Sapari asked about compensation for occupational diseases (or ODs) with latency periods that exceed the prescribed limitation periods for WICA compensation.

86. To clarify, the limitation periods for compensation for ODs are set at between one and three years after the end of employment. 

87. There are indeed some ODs such as asbestosis with very long latency that can be more than 10, 20 years, and employees may not be eligible for WICA compensation if they have already left their companies. However, it is not practical to impose unlimited liability on employers. They may not even be in business after so long. 

88. Therefore, the Ministry has opted for a pragmatic approach, by providing payouts from the Workers’ Fund to employees with long latency ODs who are time-barred from WICA. They can also seek recourse under the Common Law.

Other – SEPs with work injuries

89. Mr Arasu Duraisamy, Mr Chen Show Mao and A/P Walter Theseira asked about the recourse available to self-employed persons (or SEPs) in the event of a work injury.

90. As Members may be aware, the WICA does not cover SEPs as they are not considered as “employees”. The service buyers of SEPs often do not have control over the SEP’s work conditions and hours, relative to employers’ arrangements with their employees. Unlike employees where there is a clear one-to-one relationship with the employer, many SEPs also contract with multiple service buyers. It would not be fair for multiple service buyers to compensate or purchase insurance for each SEP they contract with. 

91. To protect themselves, the Ministry has encouraged SEPs to buy prolonged medical leave (PML) insurance and personal accident insurance to mitigate their income loss and cost of medical treatment in the event of a work injury. SEPs can also consider seeking damages from third-parties under the Common Law.

Others – Workers’ Fund

92. Mr Patrick Tay suggested to channel a portion of the WIC insurance premiums to the Workers’ Fund to ensure its sustainability. 

93. The Workers’ Fund provides a safety net for employees who did not receive their full entitlement of WICA benefits. Reasons include employers who were uninsured and were in financial difficulties. 

94. At the moment, the Workers’ Fund has sufficient resources to compensate cases that meet its criteria. 

Others – Concerns over business costs

95. Finally, I note Mr Douglas Foo’s and Ms Jessica Tan’s concerns about the increase in business costs due to the slew of changes to the WICA. 

96. There are 3 changes that will impact business costs.

97. One, higher compensation limits for medical expenses, death and permanent or current total incapacity. The nominal value of compensation is reviewed every 3 years to keep pace with wage growth and inflation. 

98. Two, wider coverage of compulsory insurance. Companies that have not already purchased WIC insurance for such workers will have to do so. But the vast majority of companies insure all their employees already. We estimate that only around 25,000 to 30,000 employees will need to be additionally covered. Therefore, companies would not face significantly higher premium costs as a result of this change.

99. Thirdly, the WIC insurance market is competitive, so it will be difficult for any insurer to unilaterally raise premiums sustainably. In fact, average premiums paid per employee insured declined 12% from 2015 to 2018, despite compensation limits being raised by 20% in Jan 2016.

100. My advice for employers who are concerned about higher premiums is for them to strengthen their WSH management processes and prevent accidents. This will help them achieve savings in premiums.

Conclusion

101. Once again, I thank Members for their support of this Bill. Your speeches reflect the views and concerns of employees’ and employers’, and underscored the importance of maintaining a fine balance between additional protection and higher business costs. Your suggestions will also help refine our implementation of the new WICA. I also thank the many groups we have consulted, unions, employers, insurers, NGOs, and to help shape the new WICA. 

102. To conclude, the age old adage, “prevention is better than cure”, is particularly apt for today’s amendments. I hope all stakeholders will continue to give us your full support as strive towards being amongst the best in the world in WSH performance by 2028.

103. With your permission, Sir, I beg to move.