Industrial Relations System of Singapore and Its Economic ImpactThis paper would discuss and evaluate the Industrial Relations System of Singapore and how it has impacted economically towards producing positive results in strengthening Singaporean economy. It would also cover how Singapore tackled the critical situation rose during Asian Financial Crisis and overcame it successfully and triumphantly due to good governance and workable industrial relation system in which both employer and employee feel relaxed and work enthusiastically for the betterment of their country. IntroductionSingapore's industrial relations system is now well known for its remarkable degree of stability and co-operative labor-management relations.
The government has played an active part in promoting economic development through changes in the industrial policy. There are prominent transformations of Singapore's industrial relations since its appearance as a Colonial Administration in 1960. Fundamental changes in the relationship and the external environment between the union and government have brought about some key issues to the industrial relations system. Being a highly industrialized country, Singapore needs to deal with problems associated with globalization such as wages, working hours and retrenchment issues.
Dependency on the foreign workers and ageing workforce can be better managed to tackle the significant labor shortage Singapore is experiencing. However, it is argued whether these employee rights will be appropriately attended to. Due to the cooperation of the government and the union, it is debatable whether industrial relations policies are created to benefit the employees, or rather for economic growth. It is contended that although labor-management relations are peaceful, the cohesiveness of Singaporean organizations is rather low. Colonial Administration to Regulated Pluralism (1960-1968)Lee Kuan Yew wished to industrialize Singapore, passing the Industrial Relations Ordinance 1960 to regulate dispute settlement and collective bargaining through conciliation and judicial arbitration.
In 1961 the Singapore Trade Union Congress was split into the left-wing Singapore Association of Trade Unions (SATU) and the non-communist National Trades Union Congress (NTUC). The NTUC quickly became the leading trade union organization, largely because of government support. In attempts to build harmonious labor-management relations, the Trades Disputes Act 1941 and the Criminal Law Act 1955 limited the capacity of unions to take industrial action in essential services and made politically motivated strikes illegal.
In 1967, the unofficial strike initiated by the Public Daily Rated Cleansing Workers' Union (PDRCWU) was a 'turning point in Singapore's industrial history' and prepared the workers for the changes the Government was planning to make to the labor laws. After the incident, the Government banned all strikes in certain indispensable services and required separate unions for each statutory board. Regulated Pluralism to Corporatism (1968-1979)The number of industrial disputes and strikes declined, but so did the trade union membership. In a perspective of full employment and significant upward pressure on wages, the National Wage Council (NWC) was formed in early 1972 to advise on the creation of a wage system that would guarantee orderly wage increases.
This tripartite forum was made up of representations from trade unions, the government and the employers' federations. This structure reduced negotiations between employers and unions and provided employers with stability in labor costs (Mahuzhnan, 17-34). The second transformation also included a significant strike - at Metal Box in 1977 - which was the last strike carried out in Singapore that was carried out without the consent of the Government.
This was also seen as another changing point in the history of Singapore's industrial relations.