The origins of tripartism in Singapore: Stories that all employers and employees must know

A discussion that brought together past tripartite leaders gave rise to a number of lessons that one needs to know in order to thrive and flourish in Singapore's labour landscape. Reporting by Aditi Sharma Kalra.

When luminaries of Singapore's labour landscape and tripartism approach get together, it gives rise to a number of untold war stories peppered with anecdotes and experiences that one can only know first-hand. This is exactly what happened at the official launch of the Tripartite Collective, organised by Tripartite Alliance Limited (TAL) and attended by Human Resources Online.

A panel discussion that brought together past tripartite leaders, delved into the history and origins of tripartism in Singapore, and how the approach has been the nation's competitive advantage in tackling challenges and global crises. On the panel (photo above, L-R) were: 

• Moderator: Professor Annie Koh, Professor Emeritus, Singapore Management University
• Lim Swee Say, Minister for Manpower (2015-2018) and Secretary-General, NTUC (2007-2015)
• Lim Boon Heng, Cabinet Minister (1993-2011) and Secretary-General, National Trades Union Congress (NTUC, 1993-2006)
• Peter Seah, Chairman, National Wages Council (NWC), and Chairman, DBS Bank
• Stephen Lee, Chairman, Tripartite Alliance Limited, and President, Singapore National Employers Federation (SNEF, 1988-2014)
• Rajeev Peshawaria, CEO, Stewardship Asia Centre

Note: For those new to the concept, tripartism in Singapore refers to the collaboration among unions, employers and the Government. The tripartite partners are the Ministry of Manpower (MOM), the National Trades Union Congress (NTUC) and Singapore National Employers Federation (SNEF).

Excerpts from the conversation follow:

Q Tripartism is not just about the voices of government and unions, but also the voices of business leaders. How did Singapore come about with this concept, and how did it help to overcome the challenges of those times?

Lim Boon Heng (LBH): The fundamentals of tripartism were stated by our founding leaders. We ought to record what our founding leaders said – S Rajaratnam, Lee Kuan Yew, and Devan Nair. Lee Kuan Yew’s speech at NTUC’s modernisation seminar in 1969 stated principles on which we should progress as a society & country. Fair play and fair share makes it worth the while for every individual to strive for success, he said.

To give you a tone of industrial relations at the time – when I joined NTUC in 1981, we didn’t have that camarademrie among employers, unions and government. We were quite conscious and careful about where and when we met employer representatives.

The crisis we went through then helped shape us – the 1985 recession, caused in major part by the high-wage policy, collective wage policy of the national wages council, where workers got 20% wage increase per year for three years. This caused wage levels to go up to an uncompetitive level and plunged us into a recession. Proposals to cut neither wages nor employee contribution to CPF were accepted by all parties – discussions continued and we were convinced something had to be done.

What NTUC did was to ask for fair play – in a way, equal misery or equal sacrifice – if workers are to get wage cuts, so too must management. It was an easy thing for management to accept.

(Asking for fair play) also meant that when the economy recovered, there would a restoration of the cut. In the end we didn’t restore to the 25% employer’s contribution rate as it was too high, so we accepted it at a lower level and over a period of time.

When our members’ unions saw that the agreement was fulfilled, that solidified the trust among the tripartite partners. Trust is the key factor, and how you build trust is what makes tripartism work.

There were a lot of other things said by our founding leaders – one of which was, we are all in the same boat. What is bad for the company is bad for the workers is bad for the country. So we are all in the same boat, and we should all row in the same direction. Forging alignment is a critical part of tripartism.

Q What were the challenges during that time from an employer perspective?

Stephen Lee (SL): I can think of no better example from the past than PSA where tripartism has helped. In 2001-2002, PSA lost Maersk, its largest customer which accounted for about 12% of PSA’s volume at the time. A year later, Evergreen which accounted for 9% of volume, also announced it is leaving PSA. With 20% likely to be gone, the third and fourth (highest-volume) customers were also packing their bags for across the straits. It was a crisis. Drastic action had to be taken, and we did not have time to ponder.

Had it not been for a pre-existing strong tripartism relationship we could leverage on, PSA could have been a lost cause. At the national level, PSA leveraged on the relationship with NTUC and MOM, at the company level we leveraged strongly on the working relationship with SPWU (Singapore Port Workers Union) and Port Officers' Union (POU). We were able to work very quickly, but it was an uphill task. What PSA finally did was a huge retrenchment exercise – cut down from 7,000 workers to 6,000 workers, and for these remaining 6,000, we went through wage reduction.

At the time, I was told – decide what you want to do, you either cut costs to save jobs, or you cut jobs to save costs – we said we needed to do both.

And we didn’t have time to spread it over two-three years, we had to do it all within 12 months. There was no time to dilly dally.

In the end, we negotiated really hard and we were able to do it. It would definitely not have been doable had it not been for the support. There was already a very good foundation, and it would not have happened if not for the pre-existing trust and confidence. We all had a common belief to make this work, help PSA survive, and in the end, we managed to stop the exodus of the third and the fourth customer.

Q What are the key takeaways from managing the two crises we faced in the past?

Rajeev Peshawaria (RP): It’s the belief that a win-win is possible. The problem with conflict all over the world is that people think one must win, one must lose, or that the idea of fairness is to meet halfway, which is a huge mistake. What these examples have shown is that we don't need to meet  halfway when we can meet the needs of both parties fully, and that's a true win-win. Collaboration is when both parties get exactly what they need, and that's what tripartism is based on.

Q After these and the Asian Financial Crisis, another crisis followed in 2008-09. In your hats with DBS and NWC, faced with the possibility of stagflation, could you share what was done at the time?

Peter Seah (PS): I joined the workforce in 1968, four years before the NWC was established, which in fact, celebrates its 50 years this year. Practically all my life I have been an employer or in management. I feel that enlightened employers need to understand that value creation in an organisation requires shared mission, vision, and values.

In order for shared values to work, there must be an enlightened approach that employees’ welfare (whether it is pay, working conditions, their emotional state, or mindset) is very important.

Everywhere I go, I spend time talking to union leadership – and this is something I learnt the hard way. In the 1970-80s, the Singapore Bank Employees' Union (SBEU) was one of the toughest to deal with. Winning over their support was very important.

Looking at how Singapore has emerged in the past 50 years, at the time, we didn’t have major port to talk about, didn’t have the air hub we have today, and certainly not the financial centre we have today. In the late 60s, you could not believe Singapore will become the major global financial centre we are today – but we prevailed because there has been this belief that we need tripartism and people accept the shared values to achieve national progress. When I was working in New York, Singapore stood out to investors because of our political and social harmony, and peaceful industrial relations (landscape).

Meanwhile, the role of NWC has also really changed. It is not talking about a lot of soft issues – reskilling and upskilling, as ensuring our low-wage workers are never forgotten. We have to make sure we remember the lower-wage workers require more support than others because the baseline for them to have a good livelihood is different.

In fact, the role of NWC has evolved dramatically. When you look at the crises we have faced, as well as the pandemic, it was very important for the NWC to bring the tripartite partners together to address the national crises. To talk about our shared values and to work together to ensure that we have productivity growth as well as employment, so that the country continues to move ahead and hopefully, emerge stronger after the crisis.

The point I’m making is that we are a very unique country where tripartism really works because of shared values. In my experience chairing NWC, all three parties sat together and said, let’s try to resolve our differences. My experience has never been confrontational, it is about getting together on how we resolve thing and move ahead. We should treasure the fact that Singapore’s tripartism is probably one of the most key factors to our 50 years of economic success. 

Q Having heard and gone through various crises yourself, can you give us the three top lessons that you have learned from all these past events? And as advisor to Tripartite Collective, what is the vision you hope for it to achieve?

Lim Swee Say (LSS): Having spent 20 years in tripartism, one of the big things I've learnt is, when you are dealing with the labour movement, you are dealing with real people, real issues, real concerns; therefore, don’t talk using big language, talk issues down to the ground, as its really impacts the workers’ life.

In addition, there are three lessons I have learned:

1. Always have a clear mind on the why, how and what: Whenever we encounter a crisis, let’s be clear, why we have to do what we have to do, how to do it in such a way that is ‘same same but different’ from other countries, and lastly, what are the key outcomes we want.
a. The why in most crises is all about surviving the downturn. But in Singapore, we believe the 'why' must be about minimising the pain in the short term and maximising the gain in the longer term. The tripartite partners spend a lot of time working on how we can come out stronger from the downturn
b. The how – We have to find ways to build our capacity and capability during the downturn, as well as invest spare capacity into new capabilities. 
c. The what – In 1997 during the Asian financial crisis (AFC), we wanted to help retrenched workers to find new jobs and go for training. However, you must remember that there was no skills certification at the time for rank-and-file workers. All the training they received over 20 years was not valued in the market as they were compared to a secondary-two education worker. At this point, just before the crisis, we had started a skills redeployment programme (SRP) which was meant to certify our workers’ skills. Because of the AFC, the tripartite partners came to realise that this programme is important for the long run. So PM Goh Chok Tong went on to allocate S$100mn to the labour movement to transform this into a national programme. We then emerged stronger with that skills certification programme.

To counter the downturn, we prepared our best people for the upturn.

2. Harmonise, not compromise: Every year, some of us go to Geneva for the International Labour Conference. We always talk to union leaders around the world and then came to the conclusion the problems we face around the world are same same – low wage workers, re-employment, retirement age, and more. But year after year, here in Singapore, we are able to make progress on these issues. The reason we’re able to do things differently is tripartism – we believe in a win-win-win mindset. We understand each other's problems, and together we find a way not to compromise, but to harmonise.

3. All three of us cannot live without each other. We cannot solve the problems of the world without each other. What brought us to the way we are today are the 3Ps that I learnt from Lee Kuan Yew – we must be pro business, pro workers, and pro future.  

Manpower Minister Dr Tan See Leng, who was on the second panel discussion at the event, shared his thoughts: "Hearing the experiences and 'war stories' of Mr Lim Boon Heng, Mr Lim Swee Say and others who came before me really underscored how precious and hard fought our tripartite model is.

"Looking ahead, we must continue to nurture and leverage our strong tripartite relations to meet new challenges brought on by technological disruptions and changing nature of work."

Photos / TAL (caption in-line)

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