HRM231 - S4 Canvas

Study Unit 4
Tripartism in Action
© 2021 SUSS. All rights reserved. S4 - 1

Introduction
By the end of this unit, you should be able to:

• Understand and discuss the general role of the
Government in employment relations.
• Understand and discuss the role of employer’s
organisations in tripartism.
• Illustrate the benefits of the tripartite process on wage
settlements.
• Illustrate the benefits of the tripartite process on managing
excess manpower.

“State” defined….
• A collective term, consisting of many different agencies,

each with its own area of responsibilities and yet interacting
to ensure that policies are supportive of each other
• Elected government of the day represents the State and
together with the many institutions and agencies, will see to
the implementation of all its policies

The Roles of the State
• In Singapore, the State agency that administers, enforces,

manages and guides all matters pertaining to manpower,
employment and employment relations is the Ministry of
Manpower (MOM)
• The main objective of MOM is to promote a stable

industrial relations climate (industrial peace for investors)
and to safeguard workers’ welfare, safety & health
(justice to employees)

Methods of State Intervention
• taking the lead as a major employer;

• regulating incomes and prices;
• managing the economy by influencing the labour market;
• protecting labour standards;
• rule-making and as a legislator;
• promoting social citizenship.
Note: Refer to study guide for details on these methods.

Examples
• IAC set up in October 1960

• Enacted the Employment Act in 1968
• Amended IR Act in 1968
• Modernisation of Labour Movement Seminar in 1969
• Formation of NWC in 1972
• Amended Trade Union Act in 1982 to establish a new set of
objectives for trade unions
• 1985-86 recession – employer’s CPF contribution rate
reduced from 25% to 10% points. Variable wage system was
initiated
Examples
• Enacted Retirement Age Act in 1993 to set legal retirement

age at 60 (no legal age before that)
• Retirement age extended to 62 in 1999
• Wage reform initiated in 2003. MVC and AVC were advocated
• Resilience package and job credit scheme to help employers
in 2009 (global financial and economic crisis)
• Retirement and Re-employment Act enacted in Jan 2012
• Government introduced various leaves to boost birth rates
• Employment Act amended in April 2014

Examples
• Fair Consideration Framework (Aug 2014)

• Progressive wage model
• Tighten inflow of foreign workers and professionals
• Representation of PMEs by rank-and-file unions
• Further extension of re-employment age to age 67 in July
2017 ( 68 in 2022 & 7065 by 2030)
• Employment Act revised and take effect on 1 April 2019

Activities undertaken by the State
• Major employer - taking the lead in contemporary employment

relations, such as being the first to extend the retirement age.
• Regulating the employment relationship through a process of
legislation as in subjecting labour disputes to arbitration or in
introducing flexible work schemes.
• Institutions and machineries in resolving disputes through the
process of conciliation, mediation and arbitration.
• Policy-setting in economic and political programmes which have
important implications for employment relations.

Government Interventions in Employment Matters
• By making laws, rules and regulations to guide and control

employment / industrial relations actors
• By educating workers and employers on employment / industrial
relations matters
• Setting up fact finding advisory bodies to resolve trade disputes
• Intervenes in employment / industrial relations matters through
judicial methods
• Controls the excesses of unions and employers
© 2021 SUSS. All rights reserved.

Legislative Framework
• MOM is responsible for administering all the laws relating to

employment through its Labour Relations Division. The major
(relevant) laws are:
– Employment Act (EA)
– Industrial Relations Act (IR Act)
– Trade Disputes Act
– Trade Unions Act
– Retirement & Reemployment Act
– Work Injury Compensation Act (WICA)
– Workplace Safety and Health Act (WSHA)

Labour Relations Division
• Functions of LRD:
– Promotes & maintains industrial peace
– Balances interest of employers & employees
– Provides legal framework & formulates policies on employment
relations
– Reviews employment laws & ensures their relevance
• Services of LRD (cover both unionized & non-unionized sectors)
– Advises on terms & conditions of employment
– Investigates claims & complaints regarding employment terms
– Conciliates & adjudicates employment disputes
– Investigates and makes recommendations to Minister on complaints
of victimization & wrongful dismissal
– Registers union and maintains a registry
Code of Industrial Relations Practice
• Government’s objective for employment relations is not only
directed at the economic and social ends it seeks to achieve; it is
also an expression of its political ideology about the desirable
nature of society.
• In employment and industrial relations – this is reflected in the
“Industrial Relations Code of Practice”
• This Code was to foster a partnership between management and
unions/employees, harnessing the efforts of both to develop a
motivated and productive workforce to achieve business excellence;
to realize employees’ full potential to enable them to earn higher
incomes and live a better life; and to contribute towards a
harmonious workplace environment, strengthen tripartite
collaboration and enhance Singapore’s overall competitiveness for
economic growth.
Code of Industrial Relations Practice
• Collaboration, Not Confrontation

• Leadership and Mandate
• Mutual Trust and Respect, Understanding and Integrity
• Sharing of Information
• Professionalism
• Mutuality of Purpose

What are employers’ organizations?
• Employers’ organizations are entities that promote the

collective interests of business, across sectors, irrespective
of enterprise size.
• The core business of representative employers’ and
business organizations is to advocate, on behalf of the
business community, for policy and regulatory change that
will ensure an economic environment conducive to
enterprise creation and development.

Main roles of Employer Organisations
• Protect and promote the interests of employers on issues

such as trade, investment, tax, etc.... (economic interests),
e.g. Chambers of commerce
• Protect and promote the interests of employers on labour-
related issues (Social interests) e.g. employer trade unions
• Provision of direct services to members.

Advantages of joining an employer organisation
• They negotiate with trade unions on behalf of their members.

• They give advice on employment laws, health and safety,
taxation laws etc…
• Strength in numbers, they want to influence government
decisions.
• They can share ideas and research facilities.
• They can organise trade missions to help members look for
business opportunities

Employer Organisations in Singapore
▪ Chambers of Commerce & Industries
– Singapore Business Federation
• Apex business chamber representing interests of 25,000
companies in Singapore
– Ethnic & Foreign Chambers of Commerce
• E.g. Chinese, Indian, Malay, America, British, Japan, Dutch,
etc….
– Industry Associations
• Singapore Hotel Association, Singapore Food Manufacturers’
Association, Singapore Retailers Association, etc….
▪ Trade union of employers - SNEF
Keys to Effectiveness
Some of the keys to the effectiveness of an employers'

organization are the following:
• the ability to assess and influence the external environment,
which requires a collaborative effort among members, the policy
board and staff
• the identification and provision of services members need
• investment in staff (i.e. proper recruitment, training and
development) to ensure skilled/professional staff
• the provision of up to date, well researched and well analyzed
information, the possession of knowledge and its application.

Employer organisations and the government
Employers’ organisations represent similar wants of businesses, and will

try to influence the government to give better conditions for businesses
to prosper:
• They want the government to control things such as inflation, law
and order, health and safety, and education for the workforce.
• Lower taxes.
• More freedom for businesses.
• Fair competition.
• Good transport infrastructure.
• Access to overseas markets.
• Reliable source of power.

SNEF
• The SNEF was formed in 1980 as a result of merging the Singapore

Employers Federation & the National Employers Council.
• The main objectives of SNEF are:
– To help employers to achieve excellence in employment
practices & to increase their competitiveness in the
global market
– To strengthen tripartite partnership with the government
& the unions to generate economic growth
– To create more & better jobs to improve the quality of
work–life of their employees.

Do You Know?
▪ SNEF is registered as a trade union under the Trade

Unions Act
▪ It is the national trade union of employers, representing the
interests of all sectors of the economy
▪ It is thus the counterpart of the NTUC
▪ It is an independent, autonomous non-profit organization
funded by membership fees and revenue from consultancy,
training, research and other activities.

Industrial Relations Panel (IRP)
▪ Assists the Council to formulate SNEF's policies on IR and

L-M issues
▪ Chairman of each of SNEF's 15 industry groups constitute
the members of the IRP
▪ IRP is made up of senior personnel or human resource
practitioners of member companies
▪ The IRP is chaired by a Council member.

Why SNEF can represent employers?
• Under the Industrial Relations Act:

• Sect 64(1)(b): A company can be represented by his
employee or an officer of a trade union of which the
company is a member
• Sect 27: Right of SNEF to participate and represent
employers in collective bargaining.

SNEF in Industrial Relations
• The roles of SNEF in the Singapore IR system are:

– To forge consensus among affected and leading
employers
– To lead employer delegations in tripartite discussions
– To seek tripartite consensus
– To assist employers to implement tripartite guidelines

The Practice of Tripartism → NWC
Prior to the establishment of the NWC in 1972:

▪ Wage negotiations were often conducted in an atmosphere of
relative freedom and in a rather haphazard manner
▪ Work stoppages and strikes over wage claims reflects early history
of turbulence in its industrial relations set-up
▪ Despite surplus levels of unemployment, trade unions continue
pressing for better wages and fringe benefits for their members
▪ Wage increases were either ad-hoc or largely determined by the
bargaining strength of unions and management

1965 → Export-oriented labour-intensive industrialization
• A relatively low-skilled low-waged workforce came to be deployed in

labour-intensive industries
• Competing globally in terms of costs because of its situation of surplus
labour
• Growth strategy was able to achieve annual growth rates averaging 9
per cent p.a. which reduced unemployment to 8 per cent in 1967 and
to 4.8 per cent by 1971
▪ Established the Tripartite National Wages Council in 1972 to ensure
the establishment of ‘orderly’ wage regulation.

Original terms of reference for the NWC
• Formulation of general guidelines on wage policy

• Adjustments to wage structure with a view to developing a
coherent wage system consistent with long-term economic
development
• Advice on incentive system that promotes productivity and
efficiency
http://www.ilo.org/public/libdoc/jobcrisis/download/socialdialogue_singapore.pdf
Wide Acceptance of Annual Guidelines
▪ Perception of guidelines as neutral, unbiased and fair,

though not mandatory → not industry or sector-specific
▪ Government’s endorsement and full backing – more so in
their capacity as a major employer
▪ MOM & IAC base their disputes settlements on these
guidelines
▪ Thus guidelines treated as de-facto mandatory settlements
in unionized sectors – if disputed
▪ Collective bargaining became a mere formality
▪ Guidelines well within employers’ capacity to pay
Benefits
• Proven its contributions in regulating wage increases, leading to

stability in the employer-employee relationship.
• The guidelines, even though not mandatory for employers to
adopt, have helped to frame negotiations, leading to a quicker
settlement, and incentives to raise workers’ productivity.
• Wages are pegged to how well the economy is doing and also
company and individual performances.
• The guiding principle of wages lagging behind productivity will
ensure the competitiveness of the workforce and in the process,
enhances economic development.

The Practice of Tripartism → Excess Manpower
• Introduced as a result of the 2008/2009 global economic crisis to

help preserve jobs and skills inventory within the enterprise
• Guidelines place retrenchment as a last resort
• Draw on the many incentives to train and up skill the employees;
• Consider and redeploy employees to other work areas within the
company;
• Implement flexible working such as flexible work schedules,
temporary lay off, shorter work week or other flexible work
arrangements;
• Adjust wage costs using the flexible wage system that is in place

Guidelines on Managing Excess Manpower
The guidelines adopt the principles of:

• Spirit of equal sacrifice;
• Leadership by example;
• Close consultations and transparency.

Tripartite Advisory on Mandatory
Retrenchment Notifications
• With effect from Jan 2017 employers who employ at least 10

employees are required to notify MOM if five or more employees are
retrenched within any 6-month period.
• The notification must be submitted within 5 working days after the
employee is notified.
• Being advisory in nature, the guidelines lack legal status.
• However, if the retrenchment case escalates to the Ministry for
conciliation or IAC arbitration, the Advisory will be taken into
consideration.

What constitutes a retrenchment?
• Retrenchments are defined as dismissal on the ground of

redundancy or by reason of an reorganization of the
employer’s profession, business, trade or work
• This applies to permanent employees, as well as contract
workers with full contract terms of at least 6 months

Considerations
• Selection of employees to be conducted fairly, based on

objective criteria:
– Ability to contribute to company’s future needs
• Should not discriminate against any particular group on grounds
of age, race, gender, religion, martial status and family
responsibility, or disability
• For instance, older re-employed as well as pregnant employees
should not be unfairly targeted.

Communication to Employees
Communicate the intention to the employees before public notice of

retrenchment is given. This may include:
• Explaining the business situation faced by the company resulting in
the need for a retrenchment exercise;
• Outlining how the retrenchment exercise will be carried out;
• Elaborating on the factors that will be considered; and
• Specifying the assistance being offered to those affected.

Retrenchment Notice Period
• Minimum → as per the Employment Act

– Less than 26 weeks 1 day
– 26 weeks to less than 2 years 1 week
– 2 years to less than 5 years 2 weeks
– 5 years and above 4 weeks
• Pay all salaries due and retrenchment benefits to the affected
employees by the last day of work

Retrenchment Benefits
• Employees with 2 years’ service or more are eligible for
retrenchment benefits.
• Those with less than 2 years’ service could be granted an ex-
gratia payment
• Quantum → as per the collective agreement or contract of
service.
• No provision → to be negotiated
• Norm → 2 weeks to 1 month salary per year of service
– Depending on financial position and industry norm
– If retrenchment follows a wage cut, the salary prior to the
wage cut should be used to compute

Benefits
• In using retrenchment as a last resort to manage excess

manpower, the benefits are:
– in preserving capacity (the skills inventory) and in upgrading
capabilities to take advantage of economic upturns.
– minimise the impact on workers and the economy.
• Cutting jobs to save costs could result in higher unemployment
and also impair the psychological attachments of employees to
the organisation.
• The better way is to save jobs and cut costs as an interim
measure
• Ride on the wave of an upturn when the economy rebounds.

Temporary Layoffs
Before deciding on going ahead with the temporary lay-offs, the

following should have been discussed with the employees/union:
• Adjustments to Work Arrangements without Wage Cuts
• Adjustments to Work Arrangements with Wage Cuts
• Direct Adjustments to Wages
• No-pay Leave

Alternatives to Retrenchment
Employers may:
• Request employees to take up to 50% of their earned annual leave
• Implement the layoff period such that it does not exceed one month
at any one instance subject to review
• Pay the affected employees not less than 50% of their wage during
the layoff period

Summary
• Employers organizations are key assets in any

society as they provide advocacy and assistance to
its members – the employers. The success of
enterprises should bring about greater employment
opportunities to workers and a better quality of work
life.

Reflection Question
• Take a look at the SNEF’s website and review its

many activities and come to a conclusion as to
whether the SNEF is more involved with the
economic or social interests of employers in
Singapore.

Reference
Singapore National Employers’ Federation

http://www.snef.org.sg/scripts/cgiip.exe/WService=SNEF/ccms.r#.V6NNh
RKaJP0
Singapore Business Federation

http://www.sbf.org.sg/
Sriyan de Silva, 1997. Tripartism, Employers, and their Organisations.

Bureau for Employers Activities, ILO

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Study Unit 4

© 2021 SUSS. All rights reserved. S4 - 1

By the end of this unit, you should be able to:

© 2021 SUSS. All rights reserved. S4 - 2

• A collective term, consisting of many different agencies,

© 2021 SUSS. All rights reserved. S4 - 3

• In Singapore, the State agency that administers, enforces,

• The main objective of MOM is to promote a stable

© 2021 SUSS. All rights reserved. S4 - 4

• taking the lead as a major employer;

© 2021 SUSS. All rights reserved. S4 - 5

• IAC set up in October 1960

• Enacted Retirement Age Act in 1993 to set legal retirement

© 2021 SUSS. All rights reserved. S4 - 7

• Fair Consideration Framework (Aug 2014)

© 2021 SUSS. All rights reserved. S4 - 8

• Major employer - taking the lead in contemporary employment

© 2021 SUSS. All rights reserved. S4 - 9

• By making laws, rules and regulations to guide and control

© 2021 SUSS. All rights reserved.

• MOM is responsible for administering all the laws relating to

© 2021 SUSS. All rights reserved. S4 - 11

• Collaboration, Not Confrontation

© 2021 SUSS. All rights reserved. S4 - 14

• Employers’ organizations are entities that promote the

© 2021 SUSS. All rights reserved. S4 - 15

• Protect and promote the interests of employers on issues

© 2021 SUSS. All rights reserved. S4 - 16

• They negotiate with trade unions on behalf of their members.

© 2021 SUSS. All rights reserved. S4 - 17

Some of the keys to the effectiveness of an employers'

© 2021 SUSS. All rights reserved. S4 - 19

Employers’ organisations represent similar wants of businesses, and will

© 2021 SUSS. All rights reserved. S4 - 20

• The SNEF was formed in 1980 as a result of merging the Singapore

© 2021 SUSS. All rights reserved. S4 - 21

▪ SNEF is registered as a trade union under the Trade

© 2021 SUSS. All rights reserved. S4 - 22

▪ Assists the Council to formulate SNEF's policies on IR and

© 2021 SUSS. All rights reserved. S4 - 23

• Under the Industrial Relations Act:

© 2021 SUSS. All rights reserved. S4 - 24

• The roles of SNEF in the Singapore IR system are:

© 2021 SUSS. All rights reserved. S4 - 25

Prior to the establishment of the NWC in 1972:

© 2021 SUSS. All rights reserved. S4 - 26

• A relatively low-skilled low-waged workforce came to be deployed in

© 2021 SUSS. All rights reserved. S4 - 27

• Formulation of general guidelines on wage policy

▪ Perception of guidelines as neutral, unbiased and fair,

• Proven its contributions in regulating wage increases, leading to

© 2021 SUSS. All rights reserved. S4 - 30

• Introduced as a result of the 2008/2009 global economic crisis to

© 2021 SUSS. All rights reserved. S4 - 31

The guidelines adopt the principles of:

© 2021 SUSS. All rights reserved. S4 - 32

• With effect from Jan 2017 employers who employ at least 10

© 2021 SUSS. All rights reserved. S4 - 33

• Retrenchments are defined as dismissal on the ground of

© 2021 SUSS. All rights reserved. S4 - 34

• Selection of employees to be conducted fairly, based on

© 2021 SUSS. All rights reserved. S4 - 35