Speech at STF Industrial Relations Seminar 2011 "Working Together for Fair and Progressive Employment Practices"

Mr. Lim Swee Say, Secretary-General, NTUC,
Mr. John De Payva, President, NTUC,
Mr. Stephen Lee, President, SNEF,
Many distinguished participants from the tripartite partners,
Ladies and Gentlemen
Brothers and sisters,

Good morning to all of you.

Introduction

1. I am pleased to join you at this year's tripartite industrial relations (IR) seminar. It is very important that our union leaders, employers and government officials are able to come together to discuss issues of common concern regarding workers and employers, businesses and Singapore as a whole. Our objective is to make things better for all of us here in Singapore. This is a very unique partnership, and is the strength and the envy of many; we should continue to value and build on this.
2. Although the recession in 2008 was one of the worst in decades, and many countries are still recovering from it, but overall our economy rebounded strongly. Our robust growth enabled our companies to do well and provide good employment for our people. All of us here, our tripartite partners, can claim credit for putting in place a series of downturn and upturn measures which have helped our businesses to thrive, to continue, and in the process, our workers as well to weather the recession and bounce back together.
3. Today again, we see the dark clouds on the horizon. In Europe, the situation is quite dire. The spill-over risks of a Greek default remains something we need to look out for. In the US, the sluggish economic recovery has heightened fears of a double-dip recession. This is a useful backdrop to remind ourselves of where we are today.
4. These are not trivial concerns. We are tracking these developments closely and we are beginning to be affected. While the overall Singapore economy remains healthy, and the latest data shows improving employment numbers, these are the spill-over effects from our previous quarters. The picture going forward will be less benign. Going forward, we should be prepared for the worst. Certain sectors have begun to feel the early effect of the global slowdown. In the electronics sector, for example, there have already been a number of retrenchments and instances of companies implementing shorter work-weeks. Earlier this month, the Ministry of Trade and Industry cut Singapore's economic growth forecast this year to around 5% - still not bad- but it predicts a further slowdown in expansion next year as the global outlook weakens. Later we will be giving an update on the labour market situation after this.
   
   Tripartism – Our Key Competitive Advantage
5. Whatever the outlook, we can remain positive. Tripartism has been and continues to be our "special weapon", especially during economic downturns. People often do not register these efforts as we go about quietly working out solutions together in order to improve things for all. Going forward now, we will be a bit 'noisier' working on solutions, but that is the expectations from the ground. This is something we’ll take in our stride. The main thing is that the spirit of cooperation has helped to address numerous key issues in industrial relations in a win-win manner - whereby workers enjoy wage increases and employment with companies growing well in good times, while challenges are overcome together in bad times. The close collaboration between the tripartite partners has been possible only because of the trust that has been built up over the years as a result of constructive unionism, enlightened management and a supportive Government. As I have shared with many of you in my dialogues with unions and employers, going forward, this sense of trust becomes even more important, as expectations are out there for us to speak out and bring forward a lot of things that we discussed behind closed doors previously. That would sometimes bring about strains, but that is something we need to take in our stride.
6. Our brand of tripartism is something that we must never take for granted. We must always be alert to changing trends and needs, and ensure that we remain relevant. Therefore, I was heartened that the NTUC convened an Extraordinary Delegates Conference to deliberate on a number of critical challenges facing workers and the labour movement. I would like to touch on two of them here: first, the importance of productivity improvements and for productivity gains to be shared with workers; and second, the need of the growing proportion of professionals, managers, and executives (or PMEs) to be better represented by the labour movement.
   
   Sharing gains of productivity with workers
7. Let me stress this quite emphatically. Again. Productivity improvement is the key to raising the competitiveness of our companies. We cannot continue to depend on easy access to labour. This is the only way we can achieve sustainable real wage increases for our workers. It is for this reason that the National Productivity and Continuing Education Council was formed. We need to help businesses automate, re-engineer their work processes and re-design their jobs. There is a wide range of resources that companies can tap on, including the 2 billion-dollar Productivity and Innovation Credit and the National Productivity Fund. We are quite happy to spend in order to support the transition efforts. Business federations and associations must help their members understand what is available and how best to utilise the assistance that is available. Companies should also push associations to do more. In the same way, companies must take the lead. This change must happen now. Unions and the employees must also do their part, suggest ideas,in supporting management. They do so knowing that raising productivity is essential to sustaining their own wage increases. When companies do well, jobs are retained, when companies thrive, wages can go up. To keep the faith of their employees, management has to ensure that productivity gains are shared with the employees. There must be appropriate schemes to effect such sharing, so that employees are duly rewarded and engaged meaningfully.
   
   Representation of PMEs
8. The other issue highlighted by NTUC is the changing profile of our workforce, with the rising proportion of professionals, managers, and executives (PMEs). While PMEs can today form their own unions for full representation and collective bargaining, they cannot join the rank-and-file unions in their respective companies, except for limited representation in specific areas. This limits their access to union assistance through existing union channels when they need, and denies them representation on other employment issues.
9. Having said this, there is growing recognition that many PMEs, especially the junior executives who have risen through the ranks, or who have little or no management responsibilities, may require extra help to deal with employment issues that they may face from time to time at the workplace. I agree that we need to look into this issue as this group will continue to grow, and if we do not factor them in, we will become irrelevant. Given that this is something of concern to both unions and employers, this issue should be addressed through tripartite discussion. It should not be left to fester and grow on its own. This would continue the tripartite consultation approach that the tripartite partners have adopted in dealing with matters relating to employment and industrial relations. It is in all our interests to work together on this front, on how to bring onboard the PMEs. In addressing the issue, it is essential that management effectiveness is not undermined, and that unions will continue to work with management to preserve harmonious workplace relations.
   
   Keeping Singaporeans at the Core of the Workforce
10. There is one other important issue that I would like to talk about today. In his National Day Rally speech this year, PM Lee spoke at length about what it means to put the interests of Singaporeans first in areas ranging from housing to healthcare. On employment, while we must continue to be open to foreigners who can complement, and they do complement, our workforce, we must also ensure that Singaporeans remain at the core of our workforce. These are divergent needs that pull us in different directions. How do we do this?
    
    Approach on two levels
11. At two levels. First, at the macro level, MOM's work pass framework needs to ensure that companies have the manpower they need, so that their businesses can remain viable. Let me be clear, these companies' need the ability to thrive in order to stay afloat, and to create good jobs for Singaporeans. However, we all also fully recognise the constraints that we are facing and the need to moderate demand for foreign manpower. We have already begun to tighten. Foreign worker levies for Work Permit and S Pass holders are being increased in phases. Qualifying salaries and qualifications for those on Employment Passes are also being raised so that Singaporeans are not disadvantaged by foreigners who are coming in at lower wages. We will strengthen measures and enforcement to deter circumvention and contravention of the work pass framework. We know that some employers are already finding this painful. I thinkk it is a necessary and inevitable structural adjustment, given the circumstances we are in. In my dialogues with various associations, I have explained why we cannot continue to grow the numbers of foreign workers in our workforce at the rate we did previously. We need to trim that down. It is also a valuable opportunity for us to transform ourselves, to transform our companies, increase productivity and importantly, to position ourselves to weather the storm and ride the recovery thereafter. This is an opportunity to transform, rather than remain the way we are. We all know the world is becoming more productive and competitive on the global front. Our productivity is not where it ought to be. This represents an opportunity to transform ourselves. We will be better placed after the next recession.
12. We are also aware that many Singaporeans have expressed their anxieties of discriminatory practices in their work place, including allegations of foreign managers hiring their own kind. Let me emphasise that discriminatory practices have no place in Singapore. Hence, at the micro level, we also need companies to understand their responsibilities to attract, recruit and develop Singaporeans so that Singaporeans remain at the core of our workforce.
13. In response, the Tripartite Alliance on Fair Employment Practices (TAFEP), which is a tripartite initiative co-led by NTUC and SNEF and supported by MOM, consulted extensively with the public, as well as businesses led by SNEF and the unions led by NTUC. There have been many different views on this, and we have taken them onboard. In addition to engaging its members, SNEF consulted business chambers, industry associations, stakeholders and the employer communities at large to seek their views and feedback to address the issue. At the same time, NTUC consulted its various unions and stakeholders to reflect the views and concerns of Singaporean workers. Apart from businesses and the unions, members of the public and the HR community have also contributed many thoughtful views.
14. As you would be aware from the various media reports, there were robust discussions among the tripartite partners, each with their point of view. And their views are valid. Despite the differences, the partners are aligned on the common objective of keeping Singaporeans at the core of the workforce and stamping out discriminatory employment practices. This is something we all agree on. They agree that more can be done to meet the aspirations of Singaporeans to have good jobs and career prospects, while continuing to provide businesses the environment they need to compete and to grow vis-à-vis other countries.
15. The outcome is a balanced set of guidelines, which all employers are expected to adhere to. Under the guidelines, which are being released today, employers should make reasonable efforts to attract and consider Singaporeans for job positions on merit, and to train and develop their potential and careers. This means taking steps in spirit and action to show that jobs are open to Singaporeans. Examples of such efforts could include: ensuring that jobs advertised are open to Singaporeans; working with educational institutions, career centres and recruitment agencies to attract and recruit Singaporeans; and also developing the skills and expertise of their existing Singaporean employees for higher level jobs. These guidelines will form part of the Tripartite Guidelines on Fair Employment Practices. TAFEP and MOM will make reference to these guidelines in addressing complaints alleging unfair employment practices.
16. Some may ask, "Why are these only found in guidelines? Why not in legislation?" As I mentioned earlier, there are already many hurdles to employment of foreigners being introduced by MOM at the macro level. And these measures are important. On the ground, however, there are still situations where some employers have stereotypes and prefer to hire foreigners over qualified Singaporeans. Sometimes, these foreigners may be the employer's own countrymen. But these issues are not straightforward, and addressing such individual practices involves addressing stereotypes and changing the employer's mindset, which is more effective, we believe, through TAFEP's moral suasion approach. Over the years and even recently, we have found that when TAFEP receives complaints of alleged unfair employment practices and finds them to be valid, most employers wisely heed TAFEP's advice. We expect that this will continue to be the case. However, if we are unable to resolve issues through this consultative route, MOM still has other avenues through which it can encourage an employer to do the right thing.
    
    Conclusion
17. Singapore is an open economy. This is something that is a reality and something that we accept. In many ways that has been to our advantage. Our competitive advantage lies in our ability to be responsive and flexible to global changes. We do not want to go down the way of some other countries and impose onerous additional control measures which may be popular, but at the same time reduce the flexibility of our labour market and Singapore's ability to be nimble and remain ahead of changes. We believe that what we are putting in place represents a good balance.
18. We are therefore tightening access to foreign workers, so as to move away from labour-input driven growth to productivity-driven growth. To complement this, the formulation of these guidelines will address discriminatory employment practices at the workplace. Doing this through tripartite consultation and consensus is a demonstration of how we need to continue to work together. Our economy will continue to evolve and we will continue to face new challenges. This will require a concerted effort among businesses, unions and the Government to work together to achieve our common goal in spite of the differences that we have. This tripartite partnership approach has been our key advantage against other countries and must be preserved and strengthened.
19. Why are we doing all this? We are doing this to keep Singapore stable and strong so that we can continue to be a hub where businesses, both local and foreign, can thrive. Ultimately, we are doing this because when businesses thrive, and our economy grows, we can provide good jobs and opportunities for our people, and we would be better placed to provide for Singaporeans and to make things better for all of us.
20. On this note, I wish you a fruitful seminar.
21. Thank you.