LABOR MONITORING AND ENGAGEMENT WITH SINGAPORE

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