Tripartism For A Competitive Economy and Inclusive Society Singapore 26 October 2015, Monday
Industrial Peace & Labour Law Reform (1965 to 1979) Ms Diana Chia President of National Trades Union Congress
Industrial Unrest in 1960s Strikes Social Unrest Separation from Malaysia (1965) Withdrawal of the British Troops (1967)
Priority: Attract Foreign Direct Investment, Create Jobs LABOUR UNION GOVERNMENT Abandon confrontational Export oriented approach industrialisation Constructive labour relations Attract foreign direct climate investment Wage restraint Job Creation as Top Priority Revamp of Labour Law EMPLOYER Investment Create Jobs Employment standards
Success of Industrialisation Pressures to Increase Wages Tight Labour Market Influx of Investment
1 st 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 Strike Per Man-Day 1000 Year Lost 900 Securing industrial peace 800 important for sustained 700 600 growth and rise in living 500 standards 400 300 200 100 0 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
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 Real GDP (%) 10.8 12 8.8 10 8.6 8 6 4 1.3 2 -0.7 0 1983 1984 1985 1986 1987 -2 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 Total Provident Fund Contribution Rate 25% Employer 10% Contribution Rate Employee 25% 25% Contribution Rate 1985 April-1986
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 Narrow Salary value of job & be Range Ratio to linked to 1.5 productivity 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% Real GDP (%) 14 11.5 10.9 10.8 11.1 10.2 10 12 8.8 10 7.5 8.3 6.7 7.1 7 8 6 4 1.3 2 -0.7 0 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 -2 Department of Statistics, Singapore
Role of Tripartism in Singapore’s Resilience (1998-2009) Dr Robert Yap President of Singapore National Employers Federation
1997 Asian Financial Crisis Real GDP (%) • Massive retrenchment 7 in 1998 6.1 6 • Cuts in wages and 4.5 5 4.3 provident fund 4 contribution 3 2 • Measures by tripartite 1 partners enabled 0 Singapore to rebound 1997 1998 1999 2000 -1 from a decline of -2 -2.2 2.2% in GDP in 1998 -3 to a 6.1% growth in Department of Statistics, Singapore GDP in 1999.
Challenges in the 2000s Real GDP (%) • Period of economic volatility in the early 10 9.2 9.1 2000s 7.4 8 • Global financial crisis 6 2008/9 4.6 4.2 • SARS in 2003, H1N1 4 in 2009, haze in 2013 2 and 2015 0 2000 2001 2002 2003 2004 2005 -1.2 -2 Department of Statistics, Singapore
Economic Review (2001 to 2003) • Fine-tuning provident Unemployment Rate (%) fund contributions 6 5.2 • Enhancing wage 4.8 5 4.4 flexibility to maintain 3.7 4 competitiveness • Developing Human 3 Capital 2 1 0 2001 2002 2003 2004
Strong Economic Growth (2004 to 2007) Real GDP (%) 9.2 10 8.8 8.7 7.4 8 Sep 08 Lehman 6 4.6 Bros Collapse 4 1.5 2 -0.8 0 2003 2004 2005 2006 2007 2008 2009 -2 Department of Statistics, Singapore
“Upturn the Downturn” (2008 to 2009) 5 Feb 09 15 Sep • Resilience Package 08 Including 1 Dec 08 • Lehman $4.5B Jobs • Launched Brothers Credit Collapsed SPUR Scheme 19 Nov 08 12 Jan 09 29 Apr 09 • Released • Revised • TRUST Excess NWC Teams Manpower Guidelines Provide Guidelines Advice and Assistance
Resilience of Tripartism It (2009 recession) has deepened the Management taking the lead Avoid record reservoir of trust in cutting costs, retrenchments saving jobs and strengthened us for the next time whenever it Avoid record Build capabilities unemployment comes. Prime Minister of Singapore Lee Hsien Loong at the May Day Rally 2010
Health and Environmental Issues Flu SARS (H1N1) 2003 2009 Haze 2013 and 2015
Positive Outcomes • Economic Resilience – Strong Economy Economic • Social Resilience – Harmonious Industrial Relations Resilience • Psychological Resilience – Resilient Workforce Social Psychological – Responsive Employers
Inclusive and Sustainable Growth (2010 onwards) Mr Teo Ser Luck Minister of State for Manpower, Singapore
Our Operating Environment is Evolving Uncertain global Slowing local economic climate workforce growth Better educated Impact of technology workforce, more and globalisation on professionals, jobs managers, and executives (PMEs)
Tripartite Partnership in Priority Areas Government Quality Jobs and Inclusive Growth • Skills for the future • Fair employment practices • Work-life harmony • Support for older workers and low-wage workers • Transform businesses Union Employers 26
SkillsFuture: A national effort to develop skills for the future 2 1 Develop an integrated, Help individuals make high quality system of well-informed choices in education and training education, training and that responds to careers constantly evolving industry needs 3 4 Promote employer Foster a culture that recognition and career supports and celebrates development based on lifelong learning skills and mastery Across the workforce covering all educational backgrounds and sectors
SkillsFuture – selected initiatives Enhanced SkillsFuture Earn & Sectoral Manpower Internships Learn Programme Plans • • • Tighter collaboration Will be rolled out to For fresh polytechnic and polytechnic and ITE ITE graduates amongst tripartite • courses over the next Opportunities to learn partners • two years through structured on-the- Anticipate future skills • needed and set out a Help students make job training and institution- strategy to upskill the better career choices based training • through real-world Those who successfully workforce • exposure to the complete this programme To be rolled out in all key industries will receive industry- sectors by 2020 recognised qualifications and a sign-on incentive Starting Work Growing your Career In School 7
Promoting Fair Employment Practices • 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 • `
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 Proportion Of Establishments Offering At least One FWA, 2007 To 2014 44% 47% 50% 41% 38% 40% 35% 25% 28% 28% 30% 20% 10% 0% 2007 2008 2009 2010 2011 2012 2013 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 Tripartite Efforts • 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) 66.3% employment rate for older workers in 2014 Residents aged 55-64 as at June 2014 Source: Comprehensive Labour Force Survey, Ministry of Manpower
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
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