The Singapore National Employers Federation (SNEF) and Singapore’s Industrial Relations K.C. Bernard Gan MEc, BEc (Hons), DipER A thesis submitted in fulfilment of the requirements for the award of the degree of Doctor of Philosophy in the School of Organisation and Management, at the University of New South Wales, Australia. February 2010 ORIGINALITY STATEMENT ‘I hereby declare that this submission is my own work and to the best of my knowledge it contains no materials previously published or written by another person, or substantial proportions of material which have been accepted for the award of any other degree or diploma at UNSW or any other educational institution, except where due acknowledgement is made. Any contribution made to the research by others, with whom I have worked at UNSW or elsewhere, is explicitly acknowledged. I also declare that the intellectual content of this thesis is the product of my own work, except to the extent that assistance from others in the project's design and conception or in style, presentation and linguistic expression is acknowledged.’ Signed: ……………………………………….............. Date: …………… 10th February 2010 ………………… ii ABSTRACT This thesis examines the formation, development, role and behaviour of the Singapore National Employers' Federation (SNEF). Its focus is primarily the field of labour management. It addresses key issues in the role of the SNEF from its formation in 1980 to 2004, in the institutional context of Singapore’s politics, economic development and industrial relations. This longitudinal study makes a substantial original contribution to understanding Singapore’s leading national employers’ association, and is a pioneering study of a national employers' association in East Asia. The thesis is a qualitative case-study, using fieldwork interviews, primary documents and the secondary literature as data sources. Through the critical event method, the work focuses analysis on key junctures for the SNEF’s development and change during the period examined. In addition, the author employs the Sheldon and Thornthwaite (1999) model of employers’ association strategy in framing the analysis of the thesis’ central questions, and in examining SNEF’s strategic decisions in response to changes in its external environment. By analysing how the SNEF’s external roles and internal relations changed during each period, the research draws attention to the dynamic nature of this employers' association in the rapidly changing conditions marking Singapore's development. Given the central role of the People's Action Party (PAP) in Singaporean society, a central theme of this thesis is how the SNEF balances political pressures from Singapore’s government-dominated corporatist system, with the needs of its diversified membership. The narrative core of the thesis identifies five distinct periods of Singaporean industrial relations – through the lens of the SNEF – reflecting larger economic developments through which the government guided the economy and society. The thesis finds that, while the SNEF is an independent and apolitical organisation, it is nevertheless deeply embedded in the Singaporean variant of corporatism. Accordingly, the SNEF’s role and behaviour are inherently guided by the PAP’s ideology of pragmatism and, in Singapore, sectoral interests deferred to and institutionally served national interests. iii ACKNOWLEDGEMENTS This thesis represents a four-year unprecedented personal journey of intellectual and emotional adventure. My transition to become a full-time student – after 10 years in the corporate world – was particularly challenging but fulfilling. The two most important people who have accompanied me are my supervisors: Associate Professor Dr Peter Sheldon and Dr David Morgan. I thank them for their continued support and for going beyond their official roles as supervisors. They are also my esteemed mentors, friends and colleagues. I shall always remain humbly grateful to them. My special thanks to Nina Jaffe for proof reading this thesis. I also wish to thank Post Graduate Coordinator, Professor Dr Chris Jackson; Head of the School of Organisation & Management and Professor Dr Steve Frenkel for securing me the UNSW PhD Completion Scholarship and the Sasakawa Young Leaders Fellowship, which provided invaluable financial support during the final stages of my study. Support from my peers, colleagues and friends have been invaluable, especially through the difficult times. Special thanks must go to my closest friends, Ng Lilian and Edmund Lee; Christina Chia; my peers at the University of New South Wales: NanFeng, XiaoLi, Pom, Kate, Chen Shu, Daniel, Stephanie, YiQiong, Jane, John, FeiYi, XiaoBei, ChongXin, YaQing, SiXin, QinDi, Mahesh, In Jun, Janis, Corina, Maria, Senia, Andrea, Patrick, Zahid; faculty staff: Dr Nancy Kohn, Associate Professor Dr Chungsok Suh, Professor Dr Prem Ramburth, Associate Professor Dr Julie Cogin, Professor Dr Lucy Taksa, Dr Ian Hampson, Dr Wang Yue, Associate Professor Dr Christopher Wright, Associate Professor Dr John O’Brien and, last but not least, the iv School of Organisation & Management’s administrative staff: Terry O’Callaghan, Robyn Tompkins, Yazmin Seremley, Agus and, Fran Prior. I am deeply indebted to a number of important people who are instrumental in my case study of the SNEF. A special heartfelt thanks goes to: SNEF staff, Shaun Hou, Chua Ker Sin; SNEF Executive Director, Koh Juan Kiat; SNEF President, Stephen Lee; SNEF Council members, Boon Yoon Chiang, Steven Goh and Alexander Melchers; SNEF IRP chairmen, Chia Boon Cher and Victor Kow; MOM Divisional Director, Industrial Relations and Workplaces, Ong Yen Her; NTUC ex-Secretary General and Minister, Prime Minister’s Office, Lim Boon Heng; NTUC Director of Industrial Relations, Chiam Hui Fong; SIEU President, Terry Lee; Executive Director of Singapore Compact for CSR, Thomas Thomas; ex-IAC President, Tan Boon Chiang; ex-CEO SNCF, Leow Peng Kui; Head, Admin & People's Development, Keppel Offshore & Marine Technology Centre, KS Thomas; and last but not least, POU President Tan Hoon Kiang and ex-POU General Secretary, Tan Teck Kheng. I would like to thank, my girlfriend, Dou Yun, who is always there for me even though she is doing her own PhD. As well I would like to thank my sister, Irene. Finally, I would like to dedicate this thesis to my parents who strongly supported my difficult decision to leave corporate life to pursue my lifelong dream of obtaining a PhD. Without their love and support, I would never be able achieve this lifelong dream. v TABLE OF CONTENTS Statement of Originality ii Abstract iii Acknowledgements iv Table of Contents vi List of Tables and Figures xi List of Abbreviations xv Chronology of Singapore Modern History and Industrial Relations xviii Development Chapter 1: Introduction 1.1 Aims of the Thesis and Reasons for This Research 1 1.2 Singapore’s Political Economy and Industrial Relations 6 1.3 An introduction to the SNEF 12 1.4 Conclusion 14 Chapter 2: Literature Review, Research Design and Methodology, and Thesis Organisation 2.1 Introduction 16 2.2 Employers’ Associations 16 (a) The Formation and Purpose of Employers’ Associations 17 (b) The Nature and Structure of Employers’ Associations 22 2.3 Corporatism 27 2.4 The Research Questions and the Conceptual Framework 32 2.5 Research Design and Methodology 34 (a) The Case Study 34 (b) Critical Events Analysis 35 (c) Data Sources 38 (d) Procedures 39 (e) Sheldon and Thornthwaite’s Employers’ Association Model 41 2.6 Organisation of this Thesis 43 vi Chapter 3: The SEF: The Early Years, 1945-1971 3.1 Introduction 46 3.2 The PAP, Politics, Economic Development and Industrial Relations in Post- 48 War Singapore 3.3 The PAP and the NTUC: Development of a Symbiotic Relationship 56 3.4 The Industrial Arbitration Court 59 3.5 Amendment to the Industrial Relations Act and the enactment of the 63 Employment Act in 1968 3.6 The NTUC Modernisation Seminar in 1969 65 3.7 Formation of the SEF and the NEC 66 3.8 The SEF Internal Dynamics, 1962-1967 67 3.9 The SEF Strategic Response to the NTUC Modernisation Seminar 77 3.10 Summary and Conclusion 82 Chapter 4: The SEF: The NWC, The Development of Incomes Policy and Singapore’s Second Industrial Revolution, 1972-1979 4.1 Introduction 84 4.2 The National Wages Council and Incomes Policy 86 4.3 National Incomes Policy, 1972-1979 92 4.4 Singapore’s Second Industrial Revolution 99 4.5 The SEF Internal Dynamics, 1972-1979 101 (a) Organisational Structure 101 (b) Membership 102 (c) Leadership and Decision-Making 105 4.6 The SEF External Roles, 1972-1979 106 4.7 The Dynamics and Interactions of the SEF Internal and External Roles 109 4.8 The SEF Strategic Response 110 (a) The SEF Strategic Response to the NWC and Incomes Policies 110 (b) The SEF Response to Singapore’s Second Industrial Revolution 112 4.9 Summary and Conclusion 118 vii Chapter 5: The Formation of the SNEF and its Early Years, 1980-1986 5.1 Introduction 120 5.2 The Formation of the SNEF, 1980 122 5.3 The SNEF Internal Dynamics, 1980-1986 130 (a) Organisational Structure 130 (b) Membership 133 (c) Leadership and Decision Making 137 5.4 The SNEF External Roles, 1980-1986 143 5.4.1 The SNEF and its Ongoing Corporatist Responsibilities 143 5.4.2 Responding to Critical Events 146 (a) The PAP’s Policy of Emulation of Japanese Industrial Relations Model 146 (b) High Wage Policies and the Threat to Competition 151 5.4.3 The SNEF: Its Environment and its Members: Collective, Selective 156 and Elective Goods 5.5 Summary and