From Third World to First The Singapore Story pdfdrive com

6. Winning Over the Unions
I started my political life fighting for the unions as their legal adviser and
negotiator. By the mid-1950s the communists had gained control of most of
them, and both communist and non-communist unions had turned combative. To
attract investments, we had to free unions from communist control and educate
union leaders and workers on the need to create new jobs by getting investments.
This was easier said than done.
Given the communist hold on our unions, it was inevitable that we suffered
endless strikes, go-slows and riots from the late 1940s to the 1960s. Between
July 1961 and September 1962 we had 153 strikes, a record for Singapore. In
1969, for the first time since before the war, we had no strikes or work
stoppages. How did we do this?
Singapore’s British-style trade union practices had been the bane of our
labour movement. To counter communist influence, the colonial government
brought in advisers like Jack Brazier from the British Trade Union Congress. To
draw non-communist union leaders away from communist influence, these
advisers taught them all the bad habits and practices of how to squeeze
employers for more pay and benefits regardless of the consequences to the
company. At a meeting in July 1966 of the Army Civil Service Union of workers
employed by the British forces, I urged them to abandon these British union
practices which had ruined Britain’s economy. I admitted that I had been
responsible for many of them when I was negotiating for the unions. At that time
there was too much exploitation of our workers. But the consequences were so
bad, adding to our unemployment, that I regretted having done this. For
example, triple pay on public holidays had led to cleansing workers deliberately
allowing garbage to accumulate before public holidays to ensure that they would
have to work on these holidays. The purpose of public holidays was to give the
workers leisure, but our workers wanted more pay, not more leisure. So I asked
union leaders to update our trade union practices.
To stress how strongly I held these views, I repeated them in the presence of

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International Labour Organisation officials and union leaders from the rest of
Asia at a meeting of its Asian advisory committee in November 1966. I told our
union leaders that they must not kill the goose whose golden eggs we needed.
Our unions, I said, had been part of a political movement against the British.
Political leaders – and I was one of them – had offered workers the carrot of
independence, saying, “Come with me to freedom and I will give you what the
British employer gives to his British workmen.” That promise we must now
fulfil, but to do so, we had to reestablish “supervision, discipline and working
norms” to get efficiency.
Each year 30,000 school leavers sought work. Our union practices, I
explained, were forcing employers to become capital-intensive, investing in
expensive machines to get the work done with the minimum of workers, as in
Britain. This had created a small group of privileged unionised workers getting
high pay and a growing band of underpaid and underemployed workers. If we
maintained our cohesiveness and stability, and did not repeat past stupidities that
had shaken confidence, we should overcome these problems. We needed new
attitudes, the most important of which was that pay must accord with
performance, not time spent on the job.
The unions and workers were so shaken by separation and fearful at the
prospect of British withdrawal that they accepted my hard-headed approach.
They knew we faced an emergency that could threaten our existence as an
independent nation.
The National Trades Union Congress (NTUC) secretary-general, Ho See
Beng, a PAP MP and an old colleague from my trade union days, protested
against my policies, such as the abolition of triple pay for work on public
holidays. He and his union colleagues had to respond to ground pressure to keep
the rank and file on their side and not be outflanked by the communist union
leaders. I had to override his protests but took care to meet the union leaders
privately to explain my worries. These off-the-record meetings made them
understand why I had to get a new framework in place, one that would make for
a trim and lean workforce.
There was one landmark confrontation with an irrational and ignorant trade
union leader who did not understand the changed circumstances. K. Suppiah was
president of the Public Daily Rated Employees’ Unions Federation. In an
ultimatum to the government on 18 October 1966, he demanded settlement of all
outstanding grievances arising out of an alleged non-implementation of a
collective agreement made in 1961, wanting S$1 per day increase for his 15,000

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daily rated workers.
Suppiah and I had worked together for many years from the 1950s in the old
City Council days. He was an uneducated man born in India, a rabble-rouser in
Tamil (the language of Madras) and a determined and stubborn leader.
Negotiating with him was disconcerting because he was squint-eyed and did not
seem to be looking at you. He led a union, the majority of whose members were
immigrant Indian unskilled labourers brought over from Madras by the British to
do cleansing work. He did not understand that we were no longer in the happy,
riotous 1950s when union power was waxing; that in newly independent
Singapore, on its own and highly vulnerable, the government could not allow
any union to jeopardise Singapore’s survival. I met him and his union leaders. In
a 40-minute exchange, I said I could consider a wage increase for the 1968
budget, but not for 1967. I warned that 7,000 of his members were Indian
nationals who now needed work permits to continue working. If they went on
strike they could well lose their jobs and would have to return to India. Suppiah
was not impressed. Only 2,000 or 3,000, he said, were on work permits and he
would go on with the strike. If the union was broken then let it be broken by Mr
Lee. He accused me of having forgotten that I owed my position as prime
minister largely to the trade union movement.
Suppiah called for a strike by the Public Daily Rated Employees’ Unions
Federation on 29 December, just before the New Year festivities. I asked them to
reconsider their decision, and referred the dispute to the Industrial Arbitration
Court. This made any strike by the workers unlawful and I issued a statement to
draw their attention to this.
The ministry of health implemented their new work system for cleansing
workers in January 1967. On 1 February 1967, about 2,400 workers of the Public
Daily Rated Cleansing Workers’ Union, a member of Suppiah’s federation, went
on a wildcat strike. A defiant Suppiah warned the government that if the
cleansing workers’ grievances were not settled within a week, all 14,000
workers in his federation’s other daily rated unions would go on sympathy
strike.
The police arrested and charged Suppiah and 14 other leaders of the
cleansing workers’ union with calling an illegal strike. The registrar of trade
unions issued notices to the union and the federation to show cause why they
should not be deregistered. At the same time, the ministry of health declared that
the strikers had sacked themselves; those who wished to be re-employed could
apply the next day. This coordinated firmness panicked the strikers. Ninety per

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cent of them applied for re-employment. Two months later, both the Public
Daily Rated Cleansing Workers’ Union and Suppiah’s federation of unions were
deregistered.
This strike was a turning point in Singapore’s industrial history. The way the
government met it head-on won the support of the public. It triggered off a
change in union culture, from a defiant flouting of the law to reasonable give-
and-take. I was able to swing public opinion round further. In a series of
speeches to the unions I prepared the workers for the changes we planned to
make to the labour laws. We banned all strikes in certain essential services and
made each statutory board have its own union.
At an NTUC Delegates’ Conference in early 1968, I convinced them that
industrial relations between employers and workers were more important for our
survival than wage increases, and that together we had to get the labour
movement into better shape by cutting out restrictive practices and the abuse of
fringe benefits. I depended on them as leaders to create a new labour movement
with a reputation for realistic policies which benefited workers. Recounting
Britain’s prodigal years of crippling dock strikes which led to the devaluation of
the pound sterling in 1967, I warned, “If that happens here at our harbour I will
declare this high treason. I will move against the strike leaders. Charges will be
brought in court later. I will get the port going straight away. The Singapore
dollar will never be devalued and I think the people of Singapore expect this of
their government.” I spotlighted the “selfishness of established labour”. Cargo
handled by the Port of Singapore Authority in 1967 increased by over 10 per
cent, but the number of workers employed did not go up because the extra work
was all taken up by overtime. This was immoral at a time of high
unemployment. I told the union delegates that we must rid ourselves of
pernicious British-style trade union practices.
For balance, I told a meeting of employers that they had to be fair to their
workers if they wanted maximum effort from them, that where unions and
employers were not in agreement on basic objectives, the result had been ruinous
for the economy. I urged our employers to do their part so that our workers
would put in their maximum effort to get maximum rewards: direct rewards in
their wages and benefits, and indirect returns through government revenue by
way of homes, health, education and social benefits.
Britain’s announcement in January 1968 of the withdrawal of its military
forces heightened people’s anxieties. I seized that moment to make radical
reforms to rid us of those union practices that had usurped employers’

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prerogatives and eroded management’s ability to conduct its own business. After
we won re-election in April 1968 with an overwhelming mandate, Parliament
passed the Employment Act and the Industrial Relations (Amendment) Act that
same year. Later, the Trade Unions Act was amended. These laws spelt out
minimum employment conditions and placed limits on retrenchment benefits,
overtime bonuses and fringe benefits. They set out uniform provisions for rest
days, public holidays, working days, annual leave, maternity leave and sick
leave. They restored to management the right to hire and fire, to promote and
transfer, functions the unions had encroached upon during the years of industrial
strife. They laid the foundation for industrial peace.
We made it illegal for a trade union to take strike or industrial action without
a secret ballot. If it did so, the union and its officers would be liable to
prosecution. This stopped the practice of voting by an open show of hands where
dissenters were intimidated into acquiescence.
Seah Mui Kok, a union leader and PAP MP, another old friend from my time
with the unions, objected to the wide latitude given to employers to hire and fire,
but accepted the need for unions to be less confrontational to create a better
climate for foreign investments. I included safeguards against misuse of these
powers. These changes in employment and industrial relations laws and
practices brought tangible benefits. Within a year, in 1969, 52 new factories
were built, creating 17,000 new jobs. In 1970 new investments added 20,000
jobs. Incomes increased.
In 1972 we set up the National Wages Council (NWC), with representatives
from unions, management and government. Every year, using facts and figures
available to the government, the NWC reached a wide consensus
recommendation on wage increases and other terms and conditions of service for
the coming year which would be affordable and would promote further
economic growth. Its joint recommendations were accepted as general
guidelines, with variations for the different sectors, for all union-management
negotiations. From its early years, all parties agreed on the principle that wage
increases must not exceed productivity increases.
The deep sense of crisis that prevailed made it possible for me to turn around
union attitudes in a few years. The danger of an economic collapse because
British forces were about to leave altered people’s mood and attitudes. They
realised that unless we made a U-turn from strikes and violence towards stability
and economic growth, we would perish.
I got management to undertake their new role of winning worker

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cooperation, without which productivity could not increase. Strict laws and
tough talk alone could not have achieved this. It was our overall policy that
convinced our workers and union leaders to support our key objective: to
establish international confidence in Singapore and attract investments and
create jobs. But ultimately it was the trust and confidence they had in me, gained
over long years of association, that helped transform industrial relations from
militancy and confrontation into cooperation and partnership.
In 1969 Devan Nair returned to Singapore from Kuala Lumpur at my urging,
to lead the NTUC again. He had stayed on there after being elected to the
Malaysian Parliament in 1964. I needed him in Singapore to play a key role in
maintaining industrial peace and persuading our workers to increase productivity
and efficiency. It was an enormous advantage for me to have Devan as secretary-
general of the NTUC. He coordinated and fine-tuned my policies and inculcated
positive work attitudes in the unions. As NTUC leader, from 1970 to 1981, when
Parliament elected him president of Singapore, he got union leaders to face the
challenge of competition in world markets. Each time Winsemius visited
Singapore, he with his liaison officer, Ngiam Tong Dow, would brief Devan on
the economic and employment situation. Devan taught the union leaders the
basic principles of economics and helped make the tripartite NWC a success.
One problem he faced was the decline in union membership because of
reduced union militancy. To counter this trend, Devan held a modernisation
seminar in November 1969 and convinced union delegates of the need to
modernise their functions to meet the changed environment. They set up several
union cooperative enterprises. In 1970, the NTUC set up a taxi cooperative,
NTUC Comfort, which helped break the pirate (unlicensed) taxi racket rampant
in the ’60s. It started with 200 Morris Oxford taxis and 200 British Austin
minibuses paid for out of the British aid package. By 1994, with 10,000 taxis
and 200 school buses, it was corporatised and listed on the stock exchange as
Comfort Group Limited. To lower its members’ cost of living, the NTUC started
NTUC Welcome, a consumer cooperative, in 1973 to run shops, stores and
supermarkets. Later, as NTUC Fairprice, it became a successful supermarket
chain that kept prices of basic consumer goods near wholesalers’ costs. NTUC
Income, an insurance cooperative, began in 1970 with life insurance, then went
on to motor insurance and other fields. It employed professional actuaries and
experienced managers. Union leaders sat on boards of directors to oversee the

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professional managers of these enterprises and soon understood that good
management was critical for success.
Renewing its leadership has enabled the NTUC to keep itself relevant to a
younger generation of workers. When Devan resigned in 1981 to become
president, Lim Chee Onn, a 37-year-old political secretary, took over as
secretary-general. He had worked under Devan after becoming an MP in 1977.
A first-class graduate in naval architecture from the University of Glasgow, he
brought sound management methods to his union work. However, his
interpersonal skills were not as good as Devan’s, and misunderstanding arose
between him and older union leaders who claimed they found him somewhat
unapproachable.
This was a problem I faced each time there was a change of generation
between leaders. Chee Onn was more than 20 years younger than Devan. Union
leaders of Devan’s generation were used to Devan and did not take to Chee
Onn’s different work style. The basic problem was that the old leaders did not
welcome a sudden infusion of young blood. At my suggestion, Chee Onn had
brought in several young graduates to help him. This added to the discomfort of
the older union leaders. I concluded that it would be difficult for him to get on
with them. Chee Onn took this as a personal failure and resigned from politics in
1982. He went into the private sector, joining Keppel Corporation, one of our
largest government-linked companies. He was a success as a corporate leader,
and a tower of strength to Sim Kee Boon, who had retired as head of the civil
service to be chairman of the corporation.
Devan and I agreed that Ong Teng Cheong, then minister for
communications and concurrently minister for labour, would get on with the
older union leaders. He was in his 40s, nine years older than Chee Onn, and I
believed there would be less of a generational difference. I persuaded Teng
Cheong to work with the unions. He agreed and by 1983 was elected NTUC
secretary-general. He remained in the cabinet; it worked well since the unions
had their interests represented and the government was able to take their views
into consideration when discussing policies. Teng Cheong, an architect trained in
Adelaide University, has a good command of English. Being Chinese-educated,
he is also fluent in Mandarin and Hokkien, his mother tongue. He got on well
with both union leaders and the rank-and-file workers. He took the NTUC into
new fields, providing members with better leisure and recreational facilities. I

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had encouraged him in this, but he needed little encouragement. What he
required were financial resources and political support, which I gave him.
The NTUC expanded into health services, child care, a broadcasting station,
a seaside resort hotel for workers called Pasir Ris Resort and a country club, the
Orchid Country Club with a golf course by Seletar reservoir. It also developed
quality condominiums its members could buy. These new cooperative
enterprises gave more union leaders hands-on experience in running enterprises.
Successive generations of new leaders learnt about good management. These
clubs, resorts and other facilities provided workers with lifestyles previously
available only to the better-off. I believed these facilities would reduce the
feeling that workers belonged to a lower order, excluded from lifestyles which
only the successful enjoyed. To make them affordable, the government provided
state land at nominal prices.
For many years I had been urging the NTUC to set up a labour college. In
1990, with help from the principal of Ruskin College, Teng Cheong established
an Institute of Labour Studies to teach industrial relations and leadership
development.
When Teng Cheong was elected president of Singapore in 1993, Lim Boon
Heng, 12 years younger, then second minister for trade and industry, took over
as secretary-general of the NTUC. He graduated in naval architecture from the
University of Newcastle-upon-Tyne and had worked with the unions since 1981,
where his good interpersonal skills had been a great asset. He brought in well-
educated and talented young men in their 20s and 30s who had done well in
universities abroad and had fresh ideas. This input of new blood rejuvenated the
thinking and attitudes of union leaders and produced results for the unions. Like
Teng Cheong, Boon Heng remained a cabinet minister, formalising a pattern of
cooperation between the unions and the government that has served Singapore
well.
I launched a productivity movement in the early 1980s because I was
impressed by Japanese practitioners. I encouraged NTUC leaders to work with
management to introduce quality control circles (QCCs), groups of workers who
together put up suggestions on how to improve work, save time and costs and
achieve zero defects. Progress was slow. Following Japanese company practice,
QCCs whose suggestions resulted in savings or improvements had their photos
displayed and were awarded small prizes or bonuses. The Japan Productivity

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Centre helped with experts, training fellowships, training materials, equipment
and software. Every now and again I would speak at award ceremonies and
present the annual productivity prizes.
On one occasion, in 1987, after presenting a prize to the managing director
of a Japanese company, I asked why his local workers were less productive than
his Japanese workers although they used the same machines. His honest reply
was that Japanese workers were more skilled, more multi-skilled, more flexible
and more adaptable, with less absenteeism and job-hopping. Singapore
technicians, group leaders and supervisors were unwilling to undertake work that
would soil their hands. In contrast, their Japanese counterparts considered
themselves not as white or blue-collar workers, but as grey-collar workers; they
would readily help operate and maintain machines and so better understood the
problems of workers.
Devan had been struck by the achievements of Japanese unions. He got two
octopus-like general unions to reorganise themselves into nine industrial unions.
In 1982 Chee Onn, who was then NTUC secretary-general, initiated the change
from industrial to house unions. It made for better communication between
union leaders and workers, and leaders could focus on the specific issues and
problems of their own company with management. In 1984 the NTUC,
convinced of the benefits, adopted a resolution to support house unions.
In most cases, house unions increased union membership. They encouraged
openness and trust, and were good for labour-management relations. However,
in the 1990s Boon Heng found that house unions did not function as well as they
did in Japan. Singapore companies are too small, most with less than a thousand
workers, compared with tens of thousands in Japanese companies. Furthermore,
unlike Singapore, in Japan executives, university graduates and other
professionals can join unions. Singapore house unions do not have enough well-
educated members for leadership positions. They have to depend on the NTUC
for help when negotiating with employers. We have to find a solution to this
problem without recreating the disadvantages of omnibus unions.
These changes to unionism in Singapore were achieved with few strikes or
industrial disputes. The maturing of the trade union movement and its leaders
was helped by several dedicated and able officers I had seconded from the
government administrative service to the NTUC Labour Research Unit in 1962,
after the communist unions broke away in 1961 from the Singapore Trade Union
Congress to form their own union federation, leaving the non-communist unions
without sufficient skilled negotiators. One of the officers I sent was S.R. Nathan,

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who had been a social worker. He had good judgement and worked well with the
union leaders. Nathan later became permanent secretary of the foreign affairs
ministry and our ambassador in Washington. In 1999, he became president of
Singapore. Another was Hsu Tse Kwang, an energetic “doer” who later became
our income tax commissioner. They helped the non-communist union leaders in
their collective bargaining and in presenting their cases in the Industrial
Arbitration Court. They educated union leaders on the realities of economic
survival for Singapore and in the process forged an NTUC leadership that was
realistic and practical. Later, in the 1990s, I encouraged promising returned
scholars to take up full-time careers in the NTUC to beef up its research and
negotiating capabilities. With universal education and numerous scholarships, by
then all the bright children of poor parents had made it to university. Able union
leaders who rose from the ranks became few and far between.
To maintain the symbiotic relationship between the PAP government and the
NTUC, I encouraged the NTUC to get some MPs to work full-time with the
unions, and to appoint others as advisers to various unions. These MPs raised
union issues in Parliament. Such additions to the unions’ manpower capabilities
made a qualitative difference. Without their disciplined intellectual input and
their easy access to ministers, the case for the unions would not be put across in
a way that would command attention and from time to time bring about a
revision of policies.
We have put in place a fair framework to govern industrial relations.
Restrictions on unions’ excesses are balanced by consultative and arbitration
procedures through which the unions can protect the interests of the workers.
The key to peace and harmony in society is a sense of fair play, that everyone
has a share in the fruits of our progress.
The NTUC’s positive approach to problems helped reduce unemployment
from 14 per cent in 1965 to 1.8 per cent in 1997. For 25 years, from 1973 to
1997, average real wages increased yearly by just under 5 per cent. We suffered
a reverse in the Asian financial crisis of 1997: unemployment increased to 3.2
per cent in 1998. To regain our competitiveness, the unions and government
agreed and implemented a package of measures that reduced wages and other
costs by 15 per cent from 1 January 1999.

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