2014 Outlook for the Unionised Sector

22 January 2014, Wed

The Labour Movement expects the labour market in Singapore to remain tight in 2014. Local workers are expected to be in higher demand due to the tightening of the foreign manpower quota. Industries in the services sector such as hotel, early childhood care and education, security, and healthcare also face manpower challenges due to manpower crunch.

And in the manufacturing sector, companies especially in the metal, precision engineering and marine engineering industries plan to increase manpower and employ more locals but face the difficulty attracting new hires. We urge companies in these sectors to hire back-to-work women, mature workers and re-employ older workers beyond 65 years old.

The Labour Movement will continue to work closely with our affiliated unions and management partners to pursue broad-based real wage increases by making the Progressive Wage Model more prevalent; improving the jobs, wages, skills and progression paths of all workers; and widening outreach to more Professionals, Managers and Executives (PMEs).

Higher Wage Increases

Workers in the unionised companies enjoyed higher wage increases in 2013 due to collective bargaining and the strong adoption of the National Wages Council (NWC) guidelines.

Adoption of NWC Guidelines

About 90 per cent of our unionised branches paid at least $60 built-in wage increases to our workers earning $1,000 and below, in line with NWC Guidelines 2013/2014. This dollar quantum helped to boost, especially, the incomes of the low-wage earners. A tighter labour market also helped as employers need to attract and retain workers.

Annual Increments and Bonus Payouts

The average basic wage increase for unionised companies in 2013 was 4.25 per cent, comparable to 2012. Slower growth and slackening global demand affected business turnover and profitability, leading to lower wage increases in the manufacturing sector, especially in the electronics, chemical and light manufacturing industries. The services sector fared better with an average wage increase of 4.43 per cent as compared to manufacturing’s 4.15 per cent.

In terms of bonus payment, unionised companies saw better bonus payouts of an average of 3.63 months in 2013 as compared to 3.27 months a year ago. This is inclusive of the 13th month bonus. The higher bonus payouts was attributed to the better business turnover in the services sector, as well as companies wanting to reward their workers and retain them in view of the tight labour market.

For 2014, workers can expect to see wage increases due to the continued tight labour market. However, sectors that are affected by uncertain global outlook and demand may experience slower wage growth than last year.

Better Workplace Benefits

Among the 891 active collective agreements surveyed, almost all provide compassionate leave for death of immediate family member (98.3 per cent), marriage leave (90.8 per cent) and compassionate leave for critical illness of immediate family member (71.4 per cent). 11.4 per cent unionised companies also provide child sick leave, in addition to the childcare leave stated in the Child Development Co-savings Act. Other family-friendly leave benefits provided by unionised companies include eldercare leave and family sick leave to care for immediate family members who are unwell.

In terms of medical benefits, most companies (69 per cent) provide hospitalisation plans of B1 and above. Last year, 61 per cent of unionised companies are on group medical insurance scheme with a median coverage of $4,500, and some going to as high as $20,000. This is a vast improvement compared to 10 years ago when only 49 per cent unionised companies are on it. There is also a higher percentage of 7 per cent on portable medical benefit scheme, as compared to only 5 per cent 10 years ago. In view of the upcoming MediShield Life plan, the Labour Movement and its affiliates will be working closely with management to review medical benefits.

.In the unionised sector, 2,898 workers were displaced from their jobs last year. This is 76 per cent higher than in 2012 which saw 1,647 workers being laid off. The manufacturing sector accounted for 91 percent of the total retrenchment in the unionised sector, primarily from the electronics, chemical and precision industries. Reasons for the lay-offs include relocation of operations out of Singapore, or shut down of production facilities. Four in 10 workers lost their jobs due to on-going company restructuring and shifting of production to countries such as Malaysia, China and Vietnam.

Production and manual workers as well as technicians formed two-thirds of all displaced workers in the unionised sector. The share of PMEs accounted for one-quarter of the retrenched workforce in the past three years.

The first quarter of 2014 may see retrenchment affecting about 200 workers. For companies that are severely affected by business downturn and have insufficient work for workers, they should take a long-term view of their manpower needs. Instead of retrenchment, companies should, in consultation with unions, consider other cost cutting alternatives to better manage excess manpower.

In the event that retrenchments are unavoidable, besides negotiations on retrenchment benefits, some unions also negotiate for additional training grants from companies to help affected workers re-train to take on other jobs. When retrenchments occur, NTUC works with the unions to help displaced workers find jobs in companies that are hiring, as well as work with NTUC’s e2i (Employment and Employability Institute) to help affected workers receive training for other types of jobs. Unions and e2i will also co-organise job fairs for these worker.

A recent example was when HGST, a Western Digital company, retrenched some 531 workers on 27 December 2013 as the company is shifting operations out of Singapore. The United Workers of Electronics & Electrical Industries (UWEEI) ensured that the displaced employees were fairly compensated and treated. On the day of retrenchment, union leaders and Industrial Relations Officers were on site to provide assistance and counselling, as well as sign up the workers for a targetted job fair co-organised by UWEEI and e2i. On 16 January 2014, some 500 job vacancies were offered at the job fair. To better prepare these workers for the job fair, UWEEI and e2i arranged for 114 workers to attend Employability Camps and Executive Workshops.

Shorter Work Week

For the whole of 2013, 10 companies implemented shorter work week due to lack of orders and a slowdown in business. 5,740 workers were affected by shorter work week, which is about 30 per cent less than the number of workers affected in 2012. Majority of the workers were from companies producing semiconductor and electronics products and components.

Industrial Relations Cases

Protecting the rights of our workers is core to the Labour Movement. In 2013, there were 2,439 cases and queries, an increase of 16.6 per cent over 2012 which was 2,092.

In the unionised sector, we are able to help union members with their workplace issues or unfair treatment. The increase was mainly due to a higher number of individual grievance cases which made up more than half of these cases. These covered disciplinary issues and cases relating to benefits, salary and termination. per cent were handled at the union level, with only per cent referred to the Ministry of Manpower and the Industrial Arbitration Court.

For members in non-unionised companies, we are also able to provide advisory services. The main bulk of cases in 2013 were queries on labour laws, termination and salary issues.

There are also more PME members from non-unionised companies approaching NTUC and affiliated unions for help. In 2013, about 40.8 per cent of the queries were from PMEs, as compared to 39.3 per cent in 2012. Their queries covered labour laws, termination and salary issues. The remaining queries were from rank-and-file workers (59.2 per cent in 2013 and 60.7 per cent in 2012).

Protecting more PMEs

Currently, PMEs in unionised companies can be represented by executive unions on a collective basis on any industrial matters, or rank-and-file unions on an individual basis for limited representation on breach of individual contract of employment, retrenchment benefits, unfair dismissal and victimisation. The current Industrial Relations (IR) Act restricts rank-and-file unions from representing Managers and Executives on a collective basis.

An extension of full collective bargaining by rank-and-file unions for eligible PMEs will be a breakthrough. The Labour Movement’s main focus moving forward is to work with the tripartite partners to seek ways to provide full collective bargaining for eligible PMEs. With changes expected to the IR Act, we can potentially reach out to another 100,000 PMEs within our unionised companies, and more than 600,000 PMEs currently in the workforce. The Labour Movement is committed to providing 4Ps (Protection, Progression, Placement and Privileges) to all our workers, including PMEs.

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