Tripartism For A Competitive Economy and

Inclusive Society

Singapore

26 October 2015, Monday

Ms Diana Chia

President of National Trades Union Congress

Industrial Peace & Labour Law Reform

(1965 to 1979)

Separation from Malaysia (1965)

Withdrawal of the British Troops (1967)

Social Unrest

Industrial Unrest in 1960s

Strikes

Priority: Attract Foreign Direct

Investment, Create Jobs

Export oriented

industrialisation

Attract foreign direct

investment

Job Creation as Top Priority

Revamp of Labour Law

GOVERNMENT Abandon confrontational

approach

Constructive labour relations

climate

Wage restraint

LABOUR UNION

Investment

Create Jobs

Employment standards

EMPLOYER

Success of Industrialisation

Influx of Investment

Tight Labour Market

Pressures to Increase Wages

1st Tripartite Committee -

National Wages Council (1972)

NWC plays an active role in setting guidelines for wage

adjustments and policies

Industrial Peace

NUMBER OF INDUSTRIAL STRIKE PER

YEAR & MAN-DAYS LOST

0

100

200

300

400

500

600

700

800

900

1000

1950

1952

1954

1956

1958

1960

1962

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

Strike Per

Year Man-Day

Lost

Securing industrial peace

important for sustained

growth and rise in living

standards

Productivity and Wage Reform

(1980-1997)

First Tripartite Productivity Drive

• Productivity not rising as fast as wages

• Competition from other countries

• Launch of Tripartite Productivity Drive

(1981)

• Skills Upgrading, Automation, Worker

involvement, Teamwork

1985 Recession

• First recession

• More than 90,000

workers were laid off

8.6 8.8

-0.7

1.3

10.8

-2

0

2

4

6

8

10

12

1983 1984 1985 1986 1987

Real GDP (%)

Department of Statistics, Singapore

Tripartite Response to 1985 Recession

• Cost-cutting measures

–Labour Movement agreed to cut

Employer Provident Fund

contribution from 25% to 10%

–Wage freeze for many workers

25% 25%

25%

10%

1985 April-1986

Total Provident Fund Contribution Rate

Employer

Contribution Rate

Employee

Contribution Rate

Causes of Recession

• Two internal causes of

recession :

− Loss of Business Competitiveness

− Wage Rigidities

−Seniority Based Wage System

Wage Reform was part of the

measures to tackle recession

• Tripartite committee set up to

undertake wage reform

• Key Principles

Wages to reflect value of job & be

linked to productivity

Narrow Salary Range Ratio to

1.5

Introduce variable

component to pay

Post-85 Recession (1986-1997) • 70% of companies implemented flexible

wage system

• GDP grew by 9% per annum

• Unemployment declined from 6% in 1986 to

below 2%

8.8

-0.7

1.3

10.8 11.1 10.2 10

6.7 7.1

11.5 10.9

7 7.5 8.3

-2

0

2

4

6

8

10

12

14

1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997

Real GDP (%)

Department of Statistics, Singapore

Role of Tripartism in Singapore’s

Resilience

(1998-2009)

Dr Robert Yap

President of Singapore National Employers Federation

Department of Statistics, Singapore

1997 Asian Financial Crisis

4.3

-2.2

6.1

4.5

-3

-2

-1

0

1

2

3

4

5

6

7

1997 1998 1999 2000

Real GDP (%) • Massive retrenchment

in 1998

• Cuts in wages and

provident fund

contribution

• Measures by tripartite

partners enabled

Singapore to rebound

from a decline of

2.2% in GDP in 1998

to a 6.1% growth in

GDP in 1999.

Challenges in the 2000s

• Period of economic

volatility in the early

2000s

• Global financial crisis

2008/9

• SARS in 2003, H1N1

in 2009, haze in 2013

and 2015

9.1

-1.2

4.2 4.6

9.2

7.4

-2

0

2

4

6

8

10

2000 2001 2002 2003 2004 2005

Real GDP (%)

Department of Statistics, Singapore

• Fine-tuning provident

fund contributions

• Enhancing wage

flexibility to maintain

competitiveness

• Developing Human

Capital

Economic Review

(2001 to 2003)

3.7

4.8 5.2

4.4

0

1

2

3

4

5

6

2001 2002 2003 2004

Unemployment Rate (%)

Strong Economic Growth

(2004 to 2007)

4.6

9.2

7.4

8.7 8.8

1.5

-0.8

-2

0

2

4

6

8

10

2003 2004 2005 2006 2007 2008 2009

Real GDP (%)

Department of Statistics, Singapore

Sep 08

Lehman

Bros

Collapse

“Upturn the Downturn”

(2008 to 2009)

15 Sep 08

• Lehman Brothers Collapsed

19 Nov 08

• Released Excess Manpower Guidelines

1 Dec 08

• Launched SPUR

12 Jan 09

• Revised NWC Guidelines

5 Feb 09

• Resilience Package Including $4.5B Jobs Credit Scheme

29 Apr 09

• TRUST Teams Provide Advice and Assistance

Resilience of Tripartism

Management taking the lead in cutting costs,

saving jobs

Avoid record retrenchments

Avoid record unemployment

Build capabilities

Prime Minister of Singapore

Lee Hsien Loong at the

May Day Rally 2010

It (2009

recession) has

deepened the

reservoir of trust

and strengthened

us for the next

time whenever it

comes.

Health and Environmental Issues

SARS 2003

Flu (H1N1) 2009

Haze 2013 and

2015

Positive Outcomes

• Economic Resilience

–Strong Economy

• Social Resilience

–Harmonious Industrial

Relations

• Psychological Resilience

–Resilient Workforce

–Responsive Employers

Resilience

Economic

Social Psychological

Inclusive and Sustainable Growth

(2010 onwards)

Mr Teo Ser Luck

Minister of State for Manpower, Singapore

Our Operating Environment is Evolving

Slowing local workforce growth

Better educated workforce, more professionals, managers, and executives (PMEs)

Uncertain global economic climate

Impact of technology and globalisation on jobs

26

Government

Union Employers

• Skills for the future

• Fair employment practices

• Work-life harmony

• Support for older workers and

low-wage workers

• Transform businesses

Quality Jobs and

Inclusive Growth

Tripartite Partnership in Priority Areas

SkillsFuture: A national effort to develop skills for the future

Across the workforce covering all educational backgrounds and sectors

Help individuals make

well-informed choices in

education, training and

careers

Develop an integrated,

high quality system of

education and training

that responds to

constantly evolving

industry needs

Promote employer

recognition and career

development based on

skills and mastery

Foster a culture that

supports and celebrates

lifelong learning

1 2

4 3

SkillsFuture – selected initiatives

In School Starting Work Growing your Career

7

SkillsFuture Earn &

Learn Programme

• For fresh polytechnic and

ITE graduates

• Opportunities to learn

through structured on-the-

job training and institution-

based training

• Those who successfully

complete this programme

will receive industry-

recognised qualifications

and a sign-on incentive

Sectoral Manpower

Plans

• Tighter collaboration

amongst tripartite

partners

• Anticipate future skills

needed and set out a

strategy to upskill the

workforce

• To be rolled out in all key

sectors by 2020

Enhanced

Internships

• Will be rolled out to

polytechnic and ITE

courses over the next

two years

• Help students make

better career choices

through real-world

exposure to the

industries

• Fair opportunities in the

workplaces and career

advancement

• Tripartite Alliance for Fair and

Progressive Employment

Practices (TAFEP) set up in

2006 to promote the adoption

of fair employment practices

• `

Promoting Fair Employment Practices

Encouraging Work-Life Harmony

• WorkPro Work-Life Grant

— Improve talent attraction and retention

— Increase employability and job opportunities for workers

• Tripartite Committee on Work-Life Strategy

— Tripartite advisory on flexible work arrangements

25% 28% 28% 35%

38% 41% 44%

47%

0%

10%

20%

30%

40%

50%

2007 2008 2009 2010 2011 2012 2013 2014

Proportion Of Establishments Offering At least One FWA, 2007 To 2014

Source: Conditions of Employment Survey, MOM.

*Survey before 2011 measured establishments offering informal and formal FWAs.

Increasing the Employability of Older Workers

• With an ageing workforce, it is crucial to ensure that older workers

remain employable, so that they can fulfil their potential, and we can

continue to benefit from their experience

• Introduced re-employment legislation for

workers above age 62

• Promotional campaigns to change mindsets

towards older workers

• Incentivise the adoption of good age

management practices and job redesign

• Job search support (Career Support

Programme, WDA/e2i Career Centres)

Tripartite Efforts

Source: Comprehensive Labour Force Survey, Ministry of Manpower

66.3% employment rate for older workers in 2014

Residents aged 55-64 as at June 2014

Supporting Low Wage Workers (LWWs)

• Help LWWs deal with challenges of slow wage growth, impact

of technology and globalisation on rank and file jobs

• Tripartite Efforts

o Improve the employment

standards and working

conditions of low-wage workers

o Identify opportunities for income

growth and job mobility for low-

wage workers

o Drive outreach and promotional

activities for low-wage workers,

and raise awareness of avenues

of help available

Supporting Low Wage Workers (LWWs)

• Progressive Wage Model – a wage-skill

ladder that ties wages to training and

improvements in productivity.

o Developed by tripartite committees

comprising government agencies,

unions, service providers/industry

associations and buyers

o Tripartite-negotiated PWMs for the

cleaning, security and landscaping

sectors are enforced through

Government regulatory levers

Transforming Businesses • Promote stronger business growth and better careers for

Singaporeans by supporting companies in their

transformation efforts.

Lean Enterprise Development (LED) Scheme

Manpower lean

Strong Singaporean

core

Better quality

workers

f Future-Ready

Union Employers

Government

TRIPARTISM

Communication, Consultation, Consensus Building,

Co-Creation and Co-Ownership