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Singapore’s Industrial Relations Scene

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Singapore’s industrial relations scene is characterized by the 3-way relationship between Management, Government and Union. Collaborative manner between all three parties is the key to the tripartite relationship. In result, this has paved the way for Singapore’s economic success and social progress.

Singapore suffered greatly during the Global Financial Crisis in 2008. Despite that, the country was able to achieve overall growth in terms of GDP. Moreover, Singapore was ranked as the most competitive Asian country, given its very cooperative labor management related, according to the World Economic Forum.

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Industrial relations in Singapore were adversarial between 1950-1960s, due to soaring unemployment rate, undesirable working environment and unrest within the community. With Singapore’s independence from Britain in 1965, a pivotal turning point arouse. Industrialization was seen as an immediate response to the desperate economic situation and scarce resources (Singapore Tripartism Forum, 2011). With the solution came a challenge to the new nation, to attract and maintain foreign investment for local jobs was imperative for Singapore in order to achieve long term economic growth and development.

Because of this, union joined the National Trades Union Congress (NTUC), and supported the government’s signal to deviate from the common unionism and adversarial labor-management relations in order to aim for industrial peace. With this combined forces, tripartism was thus born. The goal was to create a project wherein the country and industries can leave the adversarial unionism in the past and walk towards a harmonious and peaceful industrial sector where truth and justice are upheld and discrimination and prejudice are prohibited.

Tripartism talks about the collaboration between unions, management and the government. Of this, partners of the this tripartite are the Singapore National Employers Federation (SNEF), Ministry of Manpower (MOM), and the National Trades Union Congress (NTUC). Tripartism is a key competitive advantage for Singapore in a sense that it has helped promote harmonious labor-management relations and boost the country’s economic competitiveness.

One of the key players of tripartism is government. Government influence both the management and unions through the passing and signing of laws and public policies to manage labor relations. Example of which is the passing of laws that pertains to the regulation of strikes and other activities that unions have (Katz, Kochan & Colvin, 2015).

The Ministry of Manpower (MOM) is responsible for creating, enforcing, and implementing labor policies for Singapore’s workforce. It aims to create and foster a universally competitive workforce as well as a safe and secure work environment. In order to cater the demands of the workforce, MOM has implemented a number of labor policies, such as the Employment Act and Trade Disputes Act. The Employment Act (EA), signed on 15 August 1968 (Government Gazette, 1968), standardized and managed the conditions of hiring and the conditions of the workplace (Parliament, 1968). Moreover, the act also aimed to eradicate unfair workplace practices, to justify the wage policy by removing exploitation of overtime work, and to safeguard companies against extreme retrenchment benefits (Goh, 1995). With its proclamation, the EA was able to abolish previous laws associated to employment and working environment (Parliament, 1968).

Through the EA, foreign investors began to flock over to Singapore’s manufacturing sector. Foreign investors’ interests were reinforced and strengthened by the reduced labor costs and enhanced labor conditions. With this increase, Singapore’s economy saw a rapid expansion, an annual growth rate of 13.4% was seen between 1968 and 1972 (National Library Board, 2018). With this growth, the country’s unemployment began to go down. By 1971, unemployment rate went down to 4.8% from 7.3% in 1968 (Lim, 1998).

The Industrial Relations Act (IRA) of 1968 sought to evidently define the rights of employers, in terms of management, over its employees via the amendments in the Industrial Relations Ordinance (IRO) of 1960 (Singapore, 1960). The IRA was passed alongside the EA in 1968 (Government Gazette, 1968).

After the enactments of both the EA and IRA in 1968, government control over labor force became secured. Both labor laws sought to create a productive, cheap and complain-free labor force, along with the creation of opportunities for both local and foreign investments and more job openings in Singapore.

The amount of work done by one person, because of industrial stoppages, remarkably went down after the enactment of both IRA and EA in 1968. On the same year, approximately 11,000 man-days were wasted due to four work cessation. From 1978, industrial unrest became a thing of the past in Singapore (Huff, 1994). By 1971, a great number of jobs were opened by foreign investors, causing a tense labor market of which 12% of the labor force were immigrants (Turnbull, 2009).

A trade union is any association of employees or employers, whose main objective is to facilitate relations between management and workers. Its intent is to promote peaceful and harmonious industrial relationship between employer and workers, to enhance the working environment of employees, and to increase productivity for the interest of both the worker and the employer (Ministry of Manpower, 2017).

Another key player in tripartism is the unions or trade unions. Trade unions help gravitate and promote enhancements in union members’ workplace and work environment, advocate rights of unions and employment conditions (Katz, Kochan & Colvin, 2015). Moreover, they are the employee’s representation when there are grievances, they participate in collective bargaining and annulations, and join in agreements and resolutions of disputes in trade (Pitan, 2013).

The National Trade Union Congress (NTUC) is the association of unions in different sectors in Singapore, namely industrial, service and the public sector (Ministry of Manpower, 2016). NTUC aims to help the country stay competitive among other countries, to develop better social status and overall welfare of workers, and to establish a secure, responsible and nurturing labor movement. Its vision is to be an inclusive labor movement for all workers, regardless of cultural background, age, gender and religion.

When Singapore gained independence in 1965 from United Kingdom, strikes were as common island-wide. In 1969, NTUC started the NTUC Modernization Seminar, which then became a pivotal event when unions made a pivotal decision to stray from an aggressive and adversarial to a harmonious approach with employers (National Trade Union Congress, 2018). In 1972, the National Wages Council (NWC) was created due to Singapore’s rapid industrialization, which resulted to a pile of wage increase expectations. NWC’s purpose was to create wage policies that are in tune with long-term economic growth. Wage reforms and restructures were seen, which resulted to unions and businesses working together. Annual Wage Supplement and Monthly Variable Component were one of the few that consists of the flexible wage system. These measures have ensured adequate wage increase to suffice workers a reasonable standard of living.

Along with an increase in wage, the union directs its efforts to enhance worker capacity and skills for both the interest of the employee and employer. With government fund, NTUC works alongside with industries to advertise the $100 million Inclusive Growth Programme (IGP) that helps over 100,000 below minimum employees with better skills and wages (National Trade Union Congress, 2018). Also, there is WorkPro, which backs up companies who embrace progressive and new workplace practices. Another area of cooperation between union and management is when both aim in achieving continued employability of workers in order to keep workers’ skills relevant to the changing demands. With that, schemes such as Skills Re-development of 1996, National Skills Recognition System of 2000, Employability Skills System of 2004, Workforce Skills Qualification of 2005, and Job Recreation Program of 2005 were created (National Trade Union Congress, 2018).

With the outbreak of the Global Financial Crisis in 2008/2009, the unions urged companies to reduce costs in order to save workers’ jobs. Jobs were kept and mutual trust bloomed. Because of this effort, unemployment was kept at a low rate of 3.3% (Ministry of Manpower, 2009) in June 2009, quite below the height of 4.8% in September 2003, due to severe acute respiratory syndrome (SARS) outbreak in the country.

The third part of tripartism is the management. In negotiations that takes place in industrial relations, management speak for the company and uphold its interests. Management should also work hand-in-hand with their workers to establish compensation and benefit packages and policies that benefit both parties (Coleman, 2017).

Singapore National Employers Federation (SNEF), established in 1980, is a association of employers who are committed in ensuring industrial peace and harmony and aiding companies attain excellence in employment practice, thus improving productivity, competitiveness and the quality of work life of employees (SNEF, 2017). With a total membership of more than a thousand corporate members, SNEF is a dynamic part in promoting the tripartism between the MOM, SNEF and NTUC. SNEF provides a wide scope of services to its members. It represents the key interests and goals of employers in tripartite committees, forums and reviews, provides expert and world-class consultancy and advice to its corporate members via seasoned consultants on proper and ethical observation of labor laws and tripartite guidelines. Moreover, SNEF updates its corporate members on the latest amendments in terms of labor, manpower and employment issues. Furthermore, SNEF also facilitates the employers’ efforts in building an inclusive and diverse workforce through its programs such as Workplace Health, WorkPro, Fair Employment and Work-Life Balance. Lastly, SNEF provides timely and relevant research and information on local human resource and employment trends (SNEF, 2017). One of the reasons why tripartism works in Singapore is because of the country’s unique political structure (Wong, 2015). Singapore is arguably a “socialist democracy” with free-elections, but the government has a stake in every pie in the country. This political situation makes tripartism a suitable choice for Singapore, which is why many countries aspire to apply tripartism in their land but can’t do so without much difficulties (Wong, 2015).

Tripartism requires trust in its foundation in order for it to work efficiently, and since the government has a say in majority of the issues in the nation, it makes it harder for the “trust” to be broken (Wong, 2015). Rather than using the court trials, Singapore and tripartism utilizes its Ministry of Manpower (MOM), NTUC and SNEF to create and implement policies and enforce a cooperative approach.

Definitely, this is Singapore’s competitive advantage over other countries. It sets the tone for many things, specifically in the innovation of its industrial relations. As jobs and works evolve and create newer ones, there is a dire need for a platform wherein relevant issues and hard-hitting questions are to be asked and be heard in order for the country to maintain its economic edge (Wong, 2015). Tripartism and labour management has become a stage wherein grievances can be heard and be uplifted by unions, assessed and workplace concerns are taken into account by management decisions, and justice and rights are promoted by the government.

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