The Future of Tripartism in Singapore: Concertation or Dissonance?

ETHOS Issue 11, Aug 2012

Tripartism in Singapore: A Social Partnership

While labour unrest is accepted as a common phenomenon and an unavoidable business cost for investors in many developed countries, it is almost unheard of in Singapore, where a track record of peaceful industrial relations has been a surety against the loss of business and production opportunities and a key attraction for investors. Singapore’s peaceful industrial relations — a centrepeice of this economic competitiveness — have often been attributed to its model of tripartism: a “social partnership"¹ of the Government, employers and workers.² In a process of “policy concertation”,³ the tripartite partners negotiate, aggregate and align their interests towards national objectives of economic and social development even as they represent and advocate for the broad interests of their respective constituents

The role of a centralised tripartite social partnership in fostering social and economic progress is not unique to Singapore, as it is also being practised in Germany and Austria. It is well recognised among labour economists that countries with some form of tripartite partnership and engagement have better economic and social outcomes — economic efficiency, top line growth and social equity — compared to those with enterprise-based bargaining.⁴ In this regard, Singapore’s economic growth stands as a testimony to the success of its tripartism model. In 2011, the World Economic Forum ranked Singapore as the most competitive Asian country that possessed the most cooperative labour-employer relations.⁵

Cultural and Structural Foundations of Tripartism in Singapore

In spite of its widely recognised benefits, the centralised tripartite model is fast becoming a rarity. Countries such as Australia, Ireland and the UK have turned from a centralised tripartite model to enterprise-based collective bargaining, characterised by growing numbers of disparate trade unions each competing for members, and contending with employers for employment benefits according to the particularistic interests of their members.

Given this global context, the longevity of Singapore’s tripartite model continues to intrigue observers. Proponents exhort Singapore’s tripartite partnership as a “really dynamic, effective tripartism that is very functional, very pragmatic, very operational”⁶ — one that deals with pertinent interests of the Government, employers and workers. Critics deride tripartism in Singapore as a tool for “bureaucraticauthoritarian corporatism” where trade unions have become “primarily, arms of government”⁷ that facilitate state control of labour for the interest of businesses and “are not, therefore, really trade unions”.⁸

What is evident is that tripartism has developed into a key institution that is central to Singapore’s social and economic development. Its institutional strength rests upon its resilience and adaptive capability, which rest on its structural and cultural foundations.

Structural Foundation

Singapore's tripartite model institutionalises structures and processes that aggregate and align interests between the Government, employers and workers. It provides a platform for balancing the trade-offs and benefits among its stakeholders:

• Businesses enjoy profitability from access to high quality human capital and factors of production at competitive rates. In return, they contribute to economic growth and the transfer of knowledge and skills to Singapore’s labour force.
• Workers accept wage moderation in return for economic growth, which sustains employment and wage growth through redistribution of economic gains. Since the unions take the broader view of supporting employment for all workers, rather than protecting only unionised employed workers, Singapore is able to avoid insider-outsider conflicts that typically characterise industrial relations elsewhere.
• The Government leverages culture, structures and leadership within the tripartite partnership to signal national directions. It also provides resources — convening capital and labour to move in an aligned and cohesive manner towards national goals.

Cultural Foundation

Balancing the conflicting interests between the tripartite partners — in particular potentially contentious employer-employee relations — requires profound trust. While institutionalised structures and processes for negotiation form the hardware of tripartism, the software that keeps it going is a culture of mutual understanding and consensus. This cultural foundation was laid in the early days of Singapore’s Independence, between the National Trades Union Congress (NTUC) and the Government.

Workers organised under the NTUC have distinguished themselves from more confrontational union approaches by positioning themselves as “positive agents for modernisation and progress”.⁹ Rather than contending with employers for wages and employment benefits through collective bargaining, the NTUC has supported the national objective of economic growth and seeks benefits for all workers, not only unionised workers. It has done so from the premise that it is “bourgeoning areas of employment”¹⁰ — from economic growth and progress —that fuel organised labour.

NTUC’s fundamental position of voluntarily supporting economic growth to preserve employment and income security for workers help disprove criticisms that trade unions in Singapore are co-opted “de facto arms of the government”.¹¹ The symbiotic relationship between NTUC and the Government was born out of a convergence of respective interests during the early days of independence, when the ruling party’s policy of economic growth through rapid industrialisation also advanced worker interests. This early relationship established a foundation of mutual trust and consensus that continues to this day.

The Challenges of Tripartism

Around the world, tripartism is waning: union membership is declining across Europe, Ireland, Netherlands and South Korea.¹³ Globalisation has skewed bargaining power in favour of businesses by expanding labour supply and increasing factor mobility, heightening conflicts between business and worker interests. With an open economy, Singapore is hardly immune to the destabilising forces of globalisation. Furthermore, changes in the social, economic and political environment are raising questions about the sustainability of tripartism in Singapore.

Widening Socioeconomic Disparity

Growing economic volatility, wage stagnation and widening income disparity are undermining the foundation of a centralised tripartite partnership premised upon the distribution of the fruits of economic growth. In the last decade, real wages in Singapore have fallen two-fold from 5.3% in 2000 to 2.7% in 2010.¹⁴ Correspondingly, Singapore’s Gini Coefficient has seen an upward trend, increasing from 0.43 in 2000 to 0.45 in 2010 where the average income of households in the top 20% is 12.9 times more than those in the bottom 20%, an increase from 10.1 times in 2000.¹⁵

Left unmitigated, such trends are likely to increase workers’ demands for jobs and income security through collective bargaining and representation which contradict employers’ interests to minimise business costs. Such opposing interests between businesses and workers can strain tripartite relations and are likely to make it more difficult to achieve consensus in the future.

Growing Workforce Diversity

With the restructuring of Singapore’s economy to focused on knowledge-based activities, the proportion of Professionals, Managers, Executives and Technicians (PMETs) in Singapore’s resident labour¹⁶ force has increased from 42% in 1999 to 52% in 2010.¹⁷ This implies that the NTUC, which has traditionally focused on Singaporean rank and file workers, will need to recalibrate its advocacy and representation.

In order to strengthen its relevance to its constituents, NTUC is already attempting to regain ground with its constituents. NTUC’s recent push to be more “pro-worker” and seek better employment for Singaporeans¹⁸ is manifested in its open thoughts about “pushing for a cap on the number of foreigners in white-collar jobs”¹⁹ and a review of CPF cuts for older workers.²⁰ Such assertions signal a shift from the traditional approach of consensus building within the tripartite partnership.

Alternative Platforms for Representation and Advocacy

Contending with NTUC’s role of advocating and representing worker rights are the growing numbers of alternative worker advocacy platforms. Social media organisations are harnessing the reach of the Internet to challenge traditional union representation and provide advocacy for specific segments such as displaced and unemployed PMEs. Many of these new advocacy movements are now able to garner sufficient support online to enact real world action for change. For example, Transitioning.org’s online petition “Employ Singaporeans First” led to a public forum for unemployed PMEs at the Speakers’ Corner on 25 June 2011. The forum called for the implementation of minimum wasge, “Singaporeans first” employment practices, and a re-examination of the pro-business tripartite model.²¹

While such “alternative unions” remain isolated and relatively small, they portend a proliferation of advocacy platforms and interests that could well detract from the efficacy of Singapore’s tripartite model based on the aggregation of interests. As concertation becomes difficult, if not impossible, worker interests that have fallen through the gaps are more likely to seek a voice with alternative advocacy groups, accelerating the disaggregation of advocacy. Given this backdrop, the NTUC may even have to seriously consider the possible emergence of a rival union in future.

Risk of Complacency

In addition to external social and political pressures, the cultural foundation of tripartism in Singapore, building on its historical legacy, faces the risks of erosion by its own success. Three decades of peaceful industrial relations may have come to be taken for granted by a new generation of Singaporeans who have not experienced fractious industrial relations, and who may not feel the need to maintain the health of tripartite institutions. Were tripartism perceived to become less relevant to stakeholders, the partnership could splinter into disparate, even contending, interest groups, each attemptingto amplify their value to their respective constituents.

Whither Tripartism?

Tripartism has helped maintain Singapore’s social cohesion, competitive advantage, and economic resilience for the past 30 years. Its viability and value are premised on the delicate balancing of diverse interests among tripartite partners, and aligning energies towards common objectives that maximise all interests. The inherent fragility of such a balancing act has been mitigated by the shared dedication and mutual trust of generations of active tripartite partners.

Will tripartism in Singapore persist as a partnership of concertation or will it break down into a dissonance of interests? The reality that tripartism has to contend with is one where interests are likely to be disparate and diverse. In such an environment, would it crumble and be superseded by disparate independent interest groups? Or would it evolve new forms of consensus building — perhaps more untidy and complex ways of working through divergent interests and views — but nevertheless coming to a constructive consensus between workers, employers and the Government?

While its institutional strength, strong cultural and structural foundations seem likely to sustain this centralised form of collective representation in the near-to medium-term, tripartism’s longterm survival amidst an increasingly complex environment remains debatable. Nevertheless, the demonstrated adaptability of Singapore’s tripartite partnership could well see it through the many uncertainties ahead. 

NOTES

1. Katz, Harry, Lee, Wonduck and Lee, Joohee, eds, The New Structure of Labor Relations: Tripartism and Decentralization (New York: Cornell University Press, 2004).
2. In Singapore’s tripartite process, employers are represented by the Singapore National Employers Federation (SNEF), and workers by the National Trades Union Congress (NTUC).
3. Fraile, Lydia, ed., Blunting Neo-Liberalism: Tripartism and Economic Reforms in the Developing World (Basingstoke, UK; New York: Palgrave Macmillan, 2010).
4. See Endnote 3.
5. Schwab, Klaus, The Global Competitiveness Report 2011–2012 (Geneva: World Economic Forum, 2011), 470.
6. Quote from Mdm Cleopatra Doumbia-Henry, Director for International Labour Standards, International Labour Organisation, in Speech by Mr Gan Kim Yong, Minister For Manpower at the 2nd International Trade Union Confederation For Asia and The Pacific (Ituc-Ap) Regional Conference, 11 May 2011, Wednesday, 10.20am, NTUC Club Downtown East.
7. Barr, Michael D., “Trade Unions in an Elitist Society: The Singapore Story”, Australian Journal of Politics and History, 46 (2000): 480-496.
8. See Endnote 7.
9. Nair, Devan C., Not by Wages Alone: Selected Speeches and Writings of C.V. Devan Nair, 1959–1981 (Singapore: The National Trades Union Congress, 1982).
10. See Endnote 9.
11. See Endnote 7.
12. See Endnote 9.
13. See Endnote 1.
14. “Earnings and Wages”, Ministry of Manpower, accessed 26 July 2011
15. Singapore Department of Statistics, Key Houshold Income Trends, 2010 (Singapore: Department of Statistics, 2011).
16. Residents include both Singaporean citizens and permanent residents — foreigners who are granted long-term residency in Singapore.
17. Ministry of Manpower, Report on Labour Force in Singapore, 2010 (Singapore: Ministry of Manpower, 2011).
18. Lin, Marcus, “Labour Movement Goes Full Throttle for Workers”, NTUC This Week 142 (2010), p.2.
19. “NTUC Reshaping To Be More Pro-Worker, Pro-Citizen”, The Straits Times, June 1, 2011.
20. Kor, Kian Beng, “NTUC Looking at Reviewing CPF for Older Workers”, The Straits Times, July 15, 2011.
21. Transitioning.org, (accessed July 24, 2011).