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Cablegate: Labor Monitoring and Engagement with Singapore

VZCZCXRO0068
RR RUEHCHI RUEHDT RUEHHM RUEHNH
DE RUEHGP #0117/01 0280750
ZNR UUUUU ZZH
R 280750Z JAN 10
FM AMEMBASSY SINGAPORE
TO RUEHC/SECSTATE WASHDC 7751
INFO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHC/DEPT OF LABOR WASHDC
RUCNASE/ASEAN MEMBER COLLECTIVE

UNCLAS SECTION 01 OF 03 SINGAPORE 000117

STATE PASS USTR FOR CROMERO
LABOR FOR TWEDDING

SIPDIS

E.O. 12958: N/A
TAGS: ELAB ECON ETRD SN

SUBJECT: LABOR MONITORING AND ENGAGEMENT WITH SINGAPORE

REF: 09 STATE 129631

1. (SBU) Summary: Singapore has relatively few labor problems and
violations of internationally-recognized labor rights are virtually
non-existent. Workers have the right to organize, and approximately
18 percent of the workforce is unionized. A tripartite arrangement
between the government, employers, and labor unions has created a
harmonious labor-management relationship. There have been no
strikes since 1986. The arrangement gives unions a voice in
government, but also helps ensure the government will receive union
support of its policies. Despite the relative lack of labor
difficulties, Singapore is interested in working with the United
States to enhance labor market conditions in the republic, including
improving mediation and conciliation services and promoting
work/life balance for Singaporeans. End Summary.

2. (SBU) Singapore has a highly developed and successful free-market
economy with a GDP per capita that puts it squarely in the developed
world. In part due to steadily rising wages and standards of living
over recent decades there are relatively few labor problems.
Singapore's workforce is 2.94 million strong, one million of which
are foreign workers. The manufacturing sector employs about 17
percent of the resident labor force with another 76 percent employed
in the services industry. Within the services industry, the
financial and commerce sector is a major employer, employing 25.6
percent of the total services industry workforce. The government
believes that a relatively laissez-faire approach to formal labor
protections maximizes employment. Local labor laws are flexible,
allowing for relatively free hiring and firing practices. There is
no minimum wage.

Core Labor Standards
--------------------

3. (SBU) Singapore is a member of the International Labor
Organization (ILO). To date, Singapore has ratified 20 ILO
Conventions, including the five core conventions that cover the four
key areas of employment standards: collective bargaining, forced
labor, discrimination, and child labor. Violations of these core
labor standards are virtually non-existent.

Collective Bargaining
---------------------

4. (SBU) The Singapore Constitution provides all citizens with the
right to form associations, including trade unions. However, the
Parliament may impose restrictions based on grounds of security,
public order, or morality, as well as friendly relations with other
countries. The right of association is delimited by the Societies
Act and by labor and education laws and regulations. Under these
laws, any group consisting of ten or more persons forming an
association is required to register with the government.

5. (SBU) Approximately 18 percent of Singapore's workforce is
unionized as of 2008. Most of Singapore's unions are affiliated
with the umbrella National Trades Union Congress (NTUC) which has
adopted a cooperative rather than confrontational approach with
employers. The NTUC sees itself as a partner with management in
improving quality and productivity, and works in a tripartite
relationship with the government and the Singapore National
Employers Federation. The NTUC is closely connected to the
government and to the ruling People's Action Party (PAP), whose
founding members had been trade unionists. The current NTUC
Secretary General is a full minister in the government, and several
ruling party members of parliament are also senior NTUC officials.
This arrangement provides labor officials with direct access to
government leaders; however, it also provides the ruling party
assurance that the unions will support and explain its policies,
even if unpopular.

6. (SBU) Workers, other than those in the essential services, have
the legal right to strike but rarely do so. There have been no
strikes since 1986. Most disagreements are resolved through
informal consultations with the Ministry of Manpower which
investigates complaints made by workers and attempts to arbitrate
disputes. If conciliation fails, the disputing parties typically
submit their case to the Industrial Arbitration Court, which
includes representatives from labor, management, and the government.
In some cases, senior government officials have stepped in to
mediate disputes, especially in industries that have significant
impact on the Singapore economy, such as transportation.

7. (SBU) Collective bargaining agreements between management and
labor are renewed every two to three years, although wage increases
are negotiated annually. The government follows a policy of
allowing market forces to determine wage levels. The National Wages
Council (NWC), a tripartite body including representatives from the

SINGAPORE 00000117 002 OF 003


government, labor and employers, serves as an advisory body to the
GOS on wage and wage-related issues. Its stated objective is to
provide for orderly wage adjustments in line with Singapore's long
term economic and social development. NWC's recommendations apply
to both domestic and foreign firms as well as the public sector, but
are not mandatory. Companies with unionized employees tend to adopt
NWC recommendations more readily than do companies without.
Government-linked corporations tend to adopt the recommendations
more readily than small and medium sized enterprises.

8. (SBU) Besides these labor dispute mechanisms and the close
working relationship and shared views among labor, management, and
the government, the maintenance of labor peace has been a product of
high economic growth rates, regular wage increases, and a high
degree of job mobility in what has typically been a full-employment
economy. In addition, the widely held view that labor conflict
would undermine the country's economic competitiveness and
attractiveness to investors, and a reluctance to risk possible
confrontation with the government, help to maintain a harmonious
labor situation.

Forced and Child Labor
----------------------

9. (SBU) Singapore prohibits forced or compulsory labor, including
forced and bonded labor by children, and generally enforces this
provision effectively. Under the law, any indigent person may be
required to reside in a welfare home and engage in suitable work.
The ILO has criticized the coercive terms of this Act, which
includes penal sanctions, as not in compliance with ILO Convention
29 on Forced Labor (to which Singapore is a party). The government
maintains that the Act is social legislation that provides for the
shelter, care, and protection of destitute persons, and that work
programs are designed to reintegrate individuals into society.

10. (SBU) Singapore maintains a variety of child labor laws. The
government strictly prohibits the employment of children under the
age of 13. Restrictions on the employment of children between the
ages of 13 and 16 are rigorous and enforced fully. Children under
the age of 13 are prohibited from employment in any industrial
undertakings except family enterprises. The incidence of children
taking up permanent employment is low, and abuses are almost
nonexistent. Ministry of Manpower regulations prohibit night
employment of children and restrict industrial work for children
between the ages of 14 and 16 to no more than 7 hours per day,
including the hours spent in school. The Minister of Manpower
effectively enforces these laws and regulations. In 2003, the
government made six years of primary education compulsory for
children from seven years of age. Virtually all Singapore children
are enrolled through grade 6, and the dropout rate for secondary
school is very low.

Discrimination
--------------

11. (SBU) Women constitute 44.2 percent of the resident labor force
and are well represented in many professions. For those employed in
the managerial, professional, and technical jobs, 63 percent are
male as compared to 37 percent female as of June 2008. The average
salary for women is 75 percent of men's wages. Officials note that
the wage differential is smaller in professional jobs. They
primarily attribute the wage disparity to women's lower educational
qualifications on average and to fewer years of work experience due
to family commitments, rather than to discrimination.

12. (SBU) The Ministry of Manpower, NTUC and Singapore National
Employers Federation (SNEF) issued "Guidelines on Non-discriminatory
Job Advertisements" in January 2007 and "Guidelines on Fair
Employment Practices" in May 2007 to remove barriers such as race,
age and gender, and ensure that jobs are allocated based on
qualifications and skills.

Foreign Labor An Increasing Share of Workforce
--------------------------------------------- -

13. (SBU) Singapore's economy is highly dependent on foreign labor,
which the government began encouraging in earnest in the 1990s. Of
Singapore's total labor force of 2.94 million, 1.01 million are
foreign. Of these, about eighty percent are unskilled and
semi-skilled workers, the bulk being employed in construction,
domestic or services industries. Singapore's non-resident
population jumped 58% between 2003 and 2008. The arrival of these
foreign workers has kept local blue-collar wages lower than they
would be otherwise, exacerbating Singapore's gap between rich and
poor. Singapore's Gini coefficient index for households surged 3.7
points between 2000 (44.4) to 2008 (48.1). Economists point to the
influx of low-wage foreign labor as a cause of diminished labor

SINGAPORE 00000117 003 OF 003


productivity, off 7.8 percent in 2008 after a 0.8 percent decline in
2007. The GOS and NTUC have made raising the nation's productivity
rate a top priority for the economy, and have signaled an upcoming
slowing in Singapore's rate of immigration.

14. (SBU) The Government amended the Employment of Foreign Manpower
Act (1990) in 2007 to improve the employment conditions of foreign
low wage workers. Previously, most foreign construction workers
lived on the work site. However, the Ministry of Manpower issued
regulations in 2004 requiring construction firms to provide approved
housing for foreign laborers before it issues the work permits.
Under the Employment of Foreign Manpower Act, an employer or a
foreign employee who breaks the law, such as employers hiring
foreign workers without a proper work permit, or otherwise than in
accordance with the conditions of a work pass, are subject to a fine
or imprisonment, or both, on conviction. The seriousness of the
offense determines the type of punishment, which can involve an
individual being fined an amount not exceeding S$15,000 (US$11,000)
or imprisonment for a term not exceeding 12 months, or both. For
corporations who violate the law, a fine not exceeding S$30,000
(US$21,400) will be imposed. The government enforces the regulation
strictly, and there have been many cases where a company or its
directors have been punished in the form of a fine or awarded jail
sentences.

Labor Cooperation
-----------------

15. (SBU) Singapore is a developed country with relatively few
labor problems. However, the Ministry of Manpower has expressed
interest in U.S. labor practices. The Ministry is interested in
discussing bilateral initiatives regarding re-employment of older
workers in view of Singapore's aging population, promoting work life
balance through flexible work arrangements, using labor statistics
for human capital development, and enhancing re-employment of
retrenched middle-age professionals. The Ministry would also like
to share best practices in mediation and conciliation services.
SHIELDS

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