1. INTRODUCTION
This chapter provides a brief introduction to employment relations in Singapore in general and a case study on the various industrial relations issues between Singapore International Airlines (SIA) and its five unions. The case study traces the intense unionmanagement relationship occurring during the period from the September 11 tragedy to crisis management immediately after the Severe Acute Respiratory Syndrome (SARS) outbreak. The SIA group was chosen as the point of focus because it is in this particular industry (the global airline industry) and this enormous organization that the climate of industrial relations attracts the most attention from the government, the labor movement, employers in general and the mass media. Given the significance of Singapore as an undisputable international air hub and SIA as a showcase of the country’s (business) success story, good employment relations, mutual acceptance, teamwork and the avoidance of industrial conflict are not only indispensable but also must be maintained at all cost. The case provides a vivid example of the so-called “non-adversarial problemsolving approach” applied to an industry which has been adversely affected by economic slowdown, high oil prices, constant threat of terrorism, emergence of regional budget airlines and the occasional health disaster like SARS.
2. DEVELOPMENT OF INDUSTRIAL RELATIONS IN SINGAPORE
Industrial relations in Singapore can be understood and studied using Dunlop (1958)’s well accepted framework. It is comprised of three actors (namely, the government, union and management), an environmental context, the mechanisms through which actors interact, the outcomes of the interaction (rules of the workplace) and the feedback mechanism (implications for the actors and for society). According to Wong (1987), the Singapore model is also characterized by cooperative tripartism with features that encompass (i) strong informal and formal networks of communication; (ii) the dominance of the government as policymaker; (iii) primary concern with economic growth, political stability and industrial peace; (iv) a strong centralized union movement (there is only one union federation, the National Trades Union Congress); (v) a symbiotic relationship between government and the unions; as well as (vi) a non-adversarial problem-solving approach.
Tripartism in Singapore carries the philosophy of earnestly forging and promoting cooperation and mutual understanding amongst the government, employers and unions as social partners. It implies the involvement of workers and employers (directly or indirectly) through their organizations, and the government in the formation and application of policies in the economic, social and labor fields (Chew and Chew, 1995). Examples of tripartism at work include, to name a few, the Industrial Arbitration Court (IAC), National Wages Council (NWC), and tripartite representation in statutory boards and other organizations such as the Central Provident Fund Board, Economic Development Board, Vocational and Industrial Training Board, Community Chest, and People’s Association. What tripartism in Singapore means to the labor movement is that it allows unionists to participate as an equal partner in nation building. It gives unionists and employers equal stature and provides them opportunities to understand the bigger picture and the practical difficulties of running a government. The successful outcome of Singapore’s tripartite processes and practices can be seen in terms of investment growth, economic competitiveness, mutual trust, industrial peace and social justice.
One of the key actors in the tripartite framework is the National Trades Union Congress (NTUC) which was set up in 1961. It is the only national centre of trade unions in Singapore. As of 2005, there were 63 unions and 6 associations affiliated to the Congress. The role of the labor movement in Singapore is “to help the country to stay competitive, to build a strong, responsible and caring movement, foster good employment relations and actively participate in tripartism.” (www.ntuc.org.sg). The unions are tasked to increase productivity, support industrial health and safety, and to enhance members’ economic and social status. Hence, in addition to traditional collective bargaining and safeguarding jobs, unions also have a crucial role to play to increase the employability of workers. To carry out its broader role effectively, the NTUC maintains strong symbiotic ties with the government. Several cabinet ministers and Members of Parliament serve/have served as union leaders at the apex of the labor movement. The NTUC has over the years set up a wide variety of cooperative enterprises (supermarkets, insurance, taxi, dental clinics, childcare, healthcare, food, home services, elderly care) and other related organizations (e.g., Singapore Labor Foundation, Ong Teng Cheong Institute of Labor Studies, Consumers Association of Singapore) to further the wellbeing of Singapore workers.
Employer organizations are generally less homogeneous than union federations. This is because employers are much more diverse in their nature of business and in their forms of representation. In some countries, employer organizations negotiate with unions at the national, local and industry levels. In Singapore, they tend to play an advisory role on employment relations (Tan, 2004). Collective bargaining is still largely determined at the firm level (Chew and Chew, 1995). Within the context of employment relations, the major employer organizations are the Singapore National Employers Federation (SNEF), the Singapore Business Federation (SBF), the Singapore Manufacturers’ Federation (SMF), and the Singapore International Chamber of Commerce (SICC). They play important roles in influencing national policy-making (for example, wage reform, employment of women, extension of retirement age, productivity improvement) and ensuring the overall success of tripartism in Singapore.
Recent examples of employer and union involvement at the national level that have significant impact on the industrial relations scene include the Tripartite Panel on Retrenched Workers (1998); Manpower 21 Report (1999); Tripartite Guidelines on Non-discriminatory Job Advertisements (1999); Code of Responsible Employment Practices (2002); Code on Industrial Relations Practice (2004); National Wages Council Wage Guidelines (yearly); Guidelines on Best Work-Life Practices (2004); Guidelines on Flexible Work Schedule (2004); Guidelines on Family Friendly Workplace Practices (2004); and Tripartite Committee on Employability of Older Workers (2005).
The role of the Singapore government as a key player in the management of employment relations are clearly reflected in the administration of employment laws by the Ministry of Manpower; its assistance in the settlement of disputes; and participation in various tripartite organizations (Tan, 2004). In general, the government’s expectations of the Singapore labor movement are manifold: protect the interests of the workers at the workplace; earn the trust and respect of workers and managers; support the nation’s development strategies as well as to play an active role in shaping a responsible work ethics. Its expectations on employers, on the other hand, are that management should as far as possible adopt a union acceptance strategy, build trust, provide timely information for collective bargaining purposes as well as encourage union roles in activities such as worker training / retraining, employee consultation, empowerment.
In sum, while the government has to constantly balance the needs and expectations of employees and employers, labor and management representatives must refrain from pressing for short-term gains. Concessions by labor or management should not be viewed as a loss to the other opponent, given the supreme priority of ‘national interests’. This principle is especially evident in the case of resolving the disputes between Singapore International Airlines (SIA) and its unions and indeed in sectors (e.g., shipping, transportation, banking & finance, services, telecommunication) that are of critical importance to the growth and survival of Singapore. Since employment relations policies in Singapore are guided by the requirements of national development plans, the government and its agencies must play a central role in the country’s social and economic development processes.
The major employment laws governing employment relations in Singapore are similar to many other countries. Examples include the Employment Act, Industrial Relations Act, Trade Unions Act, Trade Disputes Act, Workmen’s Compensation Act, Retirement Age Act, Factories Act, and the Employment of Foreign Workers Act. Collective agreements are enforceable for a specified number of years before the next negotiation. Every collective agreement has to be certified by the IAC and the IAC may refuse to certify on the ground of public interest. The IAC thus registers, certifies and interprets collective agreements. Disputes between labor and management can be resolved by referring the case for conciliation and mediation by the Ministry of Manpower, whereas arbitration is conducted by the IAC. In its decision, the IAC considers not only the interests of the unions, workers, or employers, but also that of the country/economy as a whole. The decision of the IAC is final and cannot be appealed.
The presence or absence of good industrial relations climate in any country depends on (a) its legal structure (employment laws), (b) the roles played by the government, the labor movement and employer organizations, and (c) national shared values or ideology (e.g., consensus, harmony). At the workplace level, employee relations depends heavily on management attitude and commitment, objectives of the unions, inter-relationship between supervisors and union leaders, and the employees’ attitude. To foster good employer-employee relations in Singapore, numerous schemes have been tried out and put into practice over the years. These include, for example, labor management committees for joint consultation, quality control circles, grievance handling mechanisms, newsletters, suggestion schemes, safety committees, recreation committees and profit sharing (Dessler and Tan, 2006). Whether the presence of these schemes alone are sufficient to counter adverse economic impact on organizations remain to be seen. Indeed, a relatively long period of industrial peace does not imply that one can take things for granted.
3. EMPLOYMENT RELATIONS IN TRANSITION
The economic and social development of Singapore has long been and still is heavily shaped by the role of the ruling People’s Action Party (PAP) government. It is indeed an indispensable driving force in the strategic utilization of human resources in the country, accomplished through a well-established tripartite framework of government, employers and unions. To propel Singapore’s human capital into a world-class workforce, a two-pronged approach has been called for (Committee on Singapore’s Competitiveness, 1998). First, Singapore has to fully utilize and develop its domestic workforce. Secondly, the country must continue to attract overseas talent.
The Singapore economy grew from 2004 to 2007 at an average of 7.8% a year. Moreover, annual employment growth averaged 2.8% from 1996 to 2006 (Business Times, 25 July 2007). The country’s ability to ride on the rise of China and India and to attract foreign investments and expand its service sector should ensure continued growth, barring unforeseen circumstances. Economists generally agree that given Singapore’s small open economy, it is crucial to continue to strengthen the country’s human capital, which in turn contributes to GDP growth.
While the prospects for the long-term job market in Singapore remains optimistic, labor costs (and business and residential rentals) here are comparatively much higher than elsewhere in Southeast Asia. Globalization, rapid technological innovation, company consolidation as well as outsourcing will continue to have significant impact on industrial relations climate at the workplace. What are some of the implications of these issues and challenges on workplace relations? Firstly, the employment system is fast moving into one that can no longer promise lifelong jobs with frequent career advancement or predictable pay increases. Examples can be seen not only in private enterprises, but also the civil service, the statutory boards and other government agencies. In the face of global competition, organizations will continue to restructure so as to compete and survive. They will have to segregate the revenue earners from the non-performers.
Secondly, balancing the interests of employers and their counterparts will require management and workers alike to adopt a fresh look at employee relations and employment practices. A win-win situation will not be easy to achieve given the constant need for companies to address cost containment and cost effectiveness. As highlighted by Cappelli (1999), the biggest challenge for organizations in this new employer-employee relationship will be how to motivate employees and generate commitment when employers are no longer willing to promise long-term security. Companies that maintain a harmonious relationship with their unions and adopt responsible restructuring strategies/employment practices will have a better chance to secure the morale and commitment of those who remain.
Thirdly, temporary employment will become more important over the years. Organizations are careful not to increase their permanent headcount; and contract/part-time employment provides considerable labor flexibility. Temporary employment offers a viable alternative for desperate job-seekers now that the ‘iron rice bowl’ has become more or less extinct. It provides them with the opportunity to constantly upgrade their skills and experiences by working in different environments. This employment trend is not restricted to those traditional secretarial and clerical staff but increasingly embrace people trained in higher level of professional field of studies, such as marketing, HR, IT, management, accountancy and engineering.
Given the above changes, the labor movement, employers, ministries and government agencies alike have crucial roles to play in facilitating the adjustment process and to better manage employer-employee relationship. For example, the tripartite partners in Singapore came up with a code of industrial relations practice in April 2004. Among the recommendations are that management and union leaders should: (a) regard each other as partners and collaborate; (b) lead by example, provide direction and take responsibility; (c) build trust, respect and bargain in good faith; (d) share information and engage in constant dialogue; (e) work together to resolve issues fairly and professionally, establish effective procedure to resolve grievances; and (f) identify common objectives, share visions and formulate win-win solutions.
Another example is the tripartite guidelines on managing excess manpower. In essence, it is recommended that (a) companies should look for alternative work within the organization (to redeploy surplus workers); (b) they should take the opportunity and upgrade the skills of their employees under the government’s Skills Redevelopment Programme; (c) workers and unions should be consulted when companies decide to implement shorter work-weeks and temporary lay-offs; (d) companies should adjust the various components of their flexible wage systems with the consent of the union or workers; (e) retrenchments should be carried out responsibly and in consultation with the union; (f) early notification to the affected workers and the Ministry of Manpower would reduce anxieties and minimize the job search period; and (g) employers should help the retrenched workers to look for jobs in other companies.
Finally, given that the population growth in Singapore has slowed down and the life expectancy of the average person has increased steadily over the years, the tripartite committee on employability of older workers (set up in March 2005) recommended four key thrusts to enhance the employability of older workers. They are: expand employment opportunities of older workers; enhance cost competitiveness of older workers; raise skills and value of older workers; and shape positive perceptions towards older workers.
4. CONCLUSION
The economic and social development of Singapore has long been and still is heavily shaped by the role of the ruling People’s Action Party (PAP) government. It is indeed an indispensable driving force in the strategic utilization of human resources in the country, accomplished through a well-established tripartite framework of government, employers and unions. To propel Singapore’s human capital into a world-class workforce, a two-pronged approach has been called for (Committee on Singapore’s Competitiveness, 1998). First, Singapore has to fully utilize and develop its domestic workforce. Secondly, the country must continue to attract overseas talent. Globalization, rapid technological innovation, company consolidation as well as outsourcing will continue to have significant impact on industrial relations climate at the workplace. What are some of the implications of these issues and challenges on workplace relations? Firstly, the employment system is fast moving into one that can no longer promise lifelong jobs with frequent career advancement or predictable pay increases. Secondly, balancing the interests of employers and their counterparts will require management and workers alike to adopt a fresh look at employee relations and employment practices. A win-win situation will not be easy to achieve given the constant need for companies to address cost containment and cost effectiveness. Thirdly, temporary employment will become more important over the years. Organizations are careful not to increase their permanent headcount; and contract/part-time employment provides considerable labor flexibility. Temporary employment offers a viable alternative for desperate job-seekers now that the ‘iron rice bowl’ has become more or less extinct. Given the above changes, the labor movement, employers, ministries and government agencies alike have crucial roles to play in facilitating the adjustment process and to better manage employer-employee relationship.
5. CASE STUDY: SINGAPORE AIRLINES
5.1. Background Information on Singapore Airlines
SIA is now an international carrier that serves over 40 countries and 90 destinations. Over the years, it has evolved into one of the leading airlines in the world and indeed one of the most respected travel brands. In 2000, SIA became a full member of the global Star Alliance and with it came the benefit of “seamless” worldwide air travel. The year 2004 witnessed the inauguration of the world’s longest non-stop commercial flight to the U.S., which shortened travel time by up to four hours. In late 2007, Singapore Airlines made aviation history again when the world’s largest aircraft, the Airbus A380, came into service.
SIA’s success can be attributed to its management’s vision and strategic choices, core competencies and internal organization, resource deployment, service excellence, innovative offerings and effective people management (Heracleous, Wirtz and Pangarkar, 2006). The company’s corporate website also sheds some hint on the reasons for its continued success:
“Singapore Airlines has grown from a regional airline into one of the world’s leading carriers. We have a young, efficient fleet, an educated staff attuned to quality, and a top-ranked travel gateway, Singapore’s Changi Airport, at the centre of our extensive route network. Our history, our country, and our customers all contribute to our success and our future.”
Since the focus of this chapter is on employer-employee relations, it is in the area of human resource policies and practices that the following case study shall emphasize.
For a company that proudly claims to be a ‘great way to fly’, SIA relies heavily on state-of-the-art aircrafts, inflight facilities and dedicated employees (pilots, cabin crews, engineers, and front-line staff) to deliver sustained customer care and service excellence. It has invested strategically in the youngest, most advanced, and fuel efficient planes -- the average age of its passenger fleet is 5 years 8 month. Heracleous et al (2006: p.148) reported that five interrelated elements seem to underline the company’s pro-human resource strategy: (a) rigorous selection and recruitment processes; (b) holistic approach to human resource development; (c) high-performance service delivery teams; (d) empowerment of front-line staff to control quality as well as (e) motivation through rewards and staff recognition.
SIA’s subsidiaries include the short-haul carrier SilkAir, the package-travel company Tradewinds, SIA Engineering Company, SIA Cargo and the ground-handling provider Singapore Airport Terminal Services (SATS). Given such a huge organization, it is no wonder that more than one employee organizations represent its very diverse groups of workers. In the SIA group, there are five unions, namely the Air Line Pilots Association-Singapore (Alpa-S); Air Transport Executives Staff Union; SIA Staff Union; Singapore Airport Terminal Services Workers’ Union; and SIA Engineering Company Engineers and Executives Union. As expected, the five employee organizations differ in terms of membership profile, union goals and union strategies.
Industrial conflicts in Singapore are relatively rare, compared to many other countries. SIA’s relationship with its unions, especially Alpa-S, provides an interesting case study on the occasional uneasiness and tensions created by economic downturn, high oil prices, regional terrorism, and heightened competition brought about by the entry of budget airlines across Asia and the strengthening position of key competitors like British Airways, Emirates, Qantas and Cathay Pacific. When severe cost-cutting becomes a reality, how do the SIA unions respond to the management’s demand for pay cut, forced no-pay leave and retrenchment? Given the drastic actions that have to be carried out, how would employees (pilots, cabin crews and ground staff) react to a sudden change in organizational climate? Can the five pillars of SIA’s human resource strategy ensure the speedy recovery of staff morale and rebuilding of the company’s service-oriented culture that other airlines talked about? The following section offers a glimpse of the intricacies of labor-management tension that calls for immediate and even unprecedented solutions.
5.2. Labor-Management Relations in Singapore Airlines
Amid a possible global economic slowdown in 2001, SIA went through a very difficult period immediately after the September 11th tragedy in the United States. Its half-year profit dropped a significant 88%. The most immediate action required to survive this unprecedented hard time was to cut costs, especially across-the-board pay cuts. Its CEO decided to take a pay cut of 15% and appealed for pay sacrifice. Management staff would take pay cuts of between 7 and 15 percent. In addition, CEO Cheong met with the heads of the five unions in the SIA group to convince them of the need for wage cuts of 5% for all non-managerial staff and 7% for aircraft captains. This was not an easy task, especially when it came to convincing the powerful Alpa-S which represented some 90% of SIA’s 1,800 pilots. Getting the support from the pilots’ association (which was not affiliated with the NTUC) was crucial. Moreover, though comprising just 12 per cent of the airline’s workforce, the pilots’ earnings made up 25 to 30 percent of the total wage bill. After much discussion among themselves, the five unions finally gave their in-principle support to the pay-cut proposal but they also wanted management to state at which “trigger points” the wages would be reinstated.
SIA offered staff at all levels with more than 15 years of service the opportunity to take up its golden handshake scheme. Participation in this one-time offer however would be based on “mutual consent”. Furthermore, a voluntary no-pay leave scheme was extended to all its employees. They could take leave of between one month and two years. Other cost-cutting measures involved the deferral of aircraft delivery and the cutting of flight schedules. Efforts to reduce costs and an improvement in air travel meant that SIA could restore wage cuts faster. For the year ending March 2002, it made a full-year net profit of $632 million. While the amount represented a drop of 61 per cent over the previous year, the airline kept its 30-year loss-free record intact.
A long tussle between SIA and its pilots erupted in July 2002. The introduction of new and bigger SpaceBed seats created pressure on cabin space. Pilots on these long-haul flights were advised to take their meals and rest breaks in the economy-class when no business-class seats were available. The pilots thought this instruction was a breach of their 1988 collective agreement and threatened to take work-to-rule action. The Ministry of Manpower provided mediation services to both parties while the Transport Minister announced that the government would intervene if necessary to help resolve the dispute. Given that SIA had not experienced any industrial action for 22 years, the conciliation talks undertaken by the Manpower Ministry was crucial. In any case, even if that failed, the ministry could order both sides to go to the Industrial Arbitration Court for its final decision.
After six rounds of talks at the Manpower Ministry, SIA and its pilots finally ended their deadlock and a compromised agreement was reached. Simply put, one business-class seat would be set aside for pilots. If they had to sit in economy-class, the pilots would each time receive S$200 compensation. They would also be given priority to upgrade to business-class ahead of passengers and staff. If business class was full, they could even occupy an empty first-class seat. Moving ahead, it was clear that more open communication, trust building and closer working relationship between SIA senior management staff and the pilots’ union officials were very much needed.
The war in Iraq, the Bali bombing and the outbreak of severe acute respiratory syndrome (SARS) in early 2003 again hit the airline industry badly. SIA had to face its worst crisis in its 56-year history. SIA had to reduce flight service by 20 per cent. Capital expenditure was frozen. Plans to buy new planes and new recruitment were cancelled. Some 206 cabin crew trainees were axed. The airline also asked its 6,600 cabin crews to take compulsory unpaid leave (seven days every two months till end-March 2004) and capacity was cut further to 29 per cent. Talks with the Air Line Pilots Association possible no-pay leave of 10 to 12 days went ahead. But the union wanted the company to first release its overseas-based pilots who were seconded to SIA. In the eyes of Alpa-S, they were not SIA employees and they were hired as “extras”. These 120 pilots did not live in Singapore but were based in gateway cities like London, Los Angeles, Sydney, Perth and Brisbane. They were employed by a wholly-owned subsidiary called SIA Mauritius. They were not members of Alpa-S and were not covered by the union agreement.
Meanwhile, wage cuts of between 15% and 27.5% were planned across the whole company -- rank-and-file employees, managers, senior management and pilots. Directors would take 50% fee cut. Relations with the pilots remained tense since they were strongly opposed to pay sacrifice of 22.5% for captains and 15% for first officers. A loss of flying hours already meant a drop in flight and meal allowances. However, as pilots’ wages formed the largest cost component among staff expenses and there was a surplus of pilots, SIA was ready to go for arbitration if negotiations with the pilots’ union on compulsory no pay leave and wage cuts failed. The first round of talks between SIA and Alpa-S ended in a deadlock. While management indicated that they would consider a reduced requirement for the pilots to take compulsory no-pay leave, two sticky issues remained. First, how to deal with the airline’s overseas-based pilots and second, whether the wage cuts would be restored.
Indeed, for both immediate and long-term survival, SIA had no choice but to remain lean and competitive. The global aviation industry had been undergoing dramatic structural changes ever since the September 11 terrorist attacks that called for cost reduction and labor flexibility. In addition to SARS, economic slowdown and the constant threat of terrorism, SIA had to face rising competition from the low-cost carriers. The Deputy Prime Minister and the Secretary-General of NTUC both reminded the airline employees that wage reform, productivity improvement and better management of costs in SIA were critical. Prime Minister Goh further added that the company could go into the “intensive care unit” if pilots did not promptly settle their differences with management and accept cost-cutting measures.
In May 2003, SIA indicated that while employee pay cuts would not be restored, it would make a one-off ex gratia payment (based on the company’s profitability) once the business prospect improved. Furthermore, while the pay cuts were aimed for cushioning its losses due to the SARS outbreak, SIA was determined to revamp its seniority-based wage system and move towards one that is more flexible and performance linked. In line with NWC recommendations, the wages paid should reflect the value of the job. Increases in pay must tie in closely with performance of the workers and the company. Productivity would also be factored into the equation.
Alpa-S however regarded cost-cutting (for immediate relief) and overall wage reform (for long-term competitiveness of the company) were two separate issues. The pilots opposed permanent wage cuts since they felt that the proposed pay reduction of 22.5 percent for captains and 15 percent for first officers were too severe when coupled with the imposition of no-pay leave. They were also unhappy with the need for retrenchment of some pilots even after wage cuts and compulsory unpaid leave were carried out. SIA, in addition, rejected the Alpa-S’s counter-proposal that captains take 12% and first officers 7% pay cuts and that the profit threshold for wage restoration be lowered from S$700 million to S$350 million. The second round of talks failed and SIA called in the Ministry of Manpower to mediate. Even then, the gap between the pilots and management remained far too wide for successful conciliation.
After two attempts of mediation failed, SIA decided on 12 June 2003 to send its wage dispute to the Industrial Arbitration Court (IAC) for settlement. The arbitrator’s ruling would be final and legally binding. Meanwhile, the SIA group was considering a major retrenchment exercise involving both ground staff and operating crew. This would be the first retrenchment in 20 years. Facing its first-ever quarterly loss and losing S$6 million a day, it had no choice but to retrench 414 ground staff (office and engineering staff, airport workers) or about 1.5 percent of the 30,000 employees in the SIA group, which included regional carrier SilkAir. While this represented the biggest number of job cuts in the flagship carrier’s 31-year history, the figure was significantly lower than many had expected. In addition to retrenchment, 145 staff had taken up a voluntary early retirement package (for selected employees with at least 25 years of service). Pilots and cabin crews were not affected at this stage but it was understood that cutbacks in pilots and cabin crews would follow and be considered separately.
To avoid open court confrontation and realizing the urgent need to move on, in-principle agreement on the wage cuts dispute between the Airline Pilots Association and SIA was reached in late June. The pilots agreed to take pay cuts of 16.5 per cent for captains and 11 per cent for first officers. The cuts would be effective till 31 March 2004 by which time a new collective agreement would be hammered out. SIA would also implement no-paid leave of up to two days every month for all pilots for the same period, down from up to six days that the airline initially demanded.
To make up for the wage reductions, SIA agreed to a lump-sum financial compensation plan. If the after tax group profit reached S$200 million, 25% of the wage cuts would be restored. 50%, 75% and 100% of the wage cuts would be restored when the figures hit S$300, S$400 and S$500 millions respectively. These lump sum payments should give the airline a more flexible pay structure. For example, more of the employees’ pay could be converted from fixed wages to a variable component of the overall reward package.
Furthermore, a “sweetener” in the form of an additional 15% on top of the full restoration would be given out should SIA made S$600 million after tax group profit. It was noted that SIA’s newly appointed chief executive officer was personally involved in the final days of the negotiations and approved the “sweetener”. This settlement was timely since it cleared the way for the company and the pilots to move on and at the same time provided a middle ground example for other SIA unions to follow.
6. QUESTIONS FOR DISCUSSION
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1.
Compare and contrast the Singapore system of industrial relations with that of your country’s. What are the differences and similarities? In your view, what are the strengths and weaknesses of each system? Can the Singapore model be applied to your country?
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2.
With respect to the SIA case, what have you learnt from the case study? Comment on the appropriateness of actions taken by the management and the unions immediately after the SARS epidemic. With the benefits of hindsight, what other actions could have been taken by management, the unions and the government?
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3.
(for class debate)
“Tripartism in many developing countries is just a public relations gimmick where leaders of the three actors (parties) put on a show for foreign investors. Relations at the workplace are still sullen and industrial peace is maintained only by the strong arm of the government because managers and workers expectations on how the economic pie should be shared are still miles apart.” Do you agree or disagree with the statement? Why?
ENDNOTES
The SIA case as presented in this chapter serves only as a basis for classroom discussion rather than to illustrate effective or ineffective handling of an administration or business situation. The information collected for the writing up of this chapter are based on secondary sources, for example, newspapers, magazines, reports, books and the Internet.
SOME USEFUL WEB ADDRESSES
Industrial Arbitration Court (www.iac.gov.sg)
Ministry of Manpower (www.mom.gov.sg)
National Trades Union Congress (www.ntuc.org.sg)
Singapore Airlines (www.singaporeair.com)
Singapore Business Federation (www.sbf.org.sg)
Singapore Human Resources Institute (www.shri.org.sg)
Singapore National Employers Federation