Singapore’s unique brand of tripartism, expressed in the collaborative relationship among the unions, employer representatives, and the Government, has been a key competitive advantage for Singapore. It has ensured that workers’ and employers’ views are adequately represented in the policy-making process, sustained harmonious labour management relations, and supported Singapore’s economic growth and distribution of the fruits of growth. The National Wages Council (NWC) as the tripartite body that issues wage guidelines is a key example of tripartism in action.

The NWC was formed in 1972, at a time of significant industrial unrest. The government was concerned that unchecked collective bargaining would cause wage growth to become unsustainable and hamper economic development. The government thus established the NWC to regulate wages and support productivity growth to match these wages.

Since its formation, the NWC has continued to issue wage guidelines annually for more than 50 years. These guidelines have helped companies navigate economic challenges and reward their workers fairly. The NWC also introduced the Flexible Wage System in 1986, which enables companies to provide variable wage increases that fairly reflect employees’ performance, while retaining flexibility to exercise wage restraint to save jobs and livelihoods during recessions. This encourages employers to increase wages in good times, without the fear that these increases will be unsustainable in bad times. In addition, the NWC recommends a range of wage growth for lower-wage workers annually, to ensure that all segments of the workforce share the fruits of Singapore’s economic success.

The NWC has also been a strong advocate for employers to maximise the productivity of their workers through upskilling, job redesign, and business transformation, in recognition that wage increases must be accompanied by commensurate increases in productivity to be sustainable in the long term.

The Legacy of Prof Lim Chong Yah

The late Emeritus Professor Lim Chong Yah was appointed as the first Chairman of the NWC, and would go on to serve for almost three decades until 2001. He set the tone for the NWC and put in place the structures and processes that underpinned its success.

Prof Lim shaped the design of the NWC. The equal representation of the labour movement, the employers, and the Government on the NWC, and the closed-door meetings to allow for frank and open discussions, are some of the key decisions that reflect and continue to sustain the spirit of tripartism to this day.

In addition, Prof Lim’s independence and neutrality were crucial in the early years of the NWC, given the history of confrontational industrial relations. In Prof Lim’s own words, the role of the NWC Chairman was “to act as a referee and a helper”.

In his condolence letter on Prof Lim’s passing, then-Prime Minister Lee Hsien Loong recounted Prof Lim’s role in the NWC negotiations in 1986, just after a severe economic downturn. The Economic Committee had made drastic recommendations to cut the CPF contribution rate, and maintain severe wage restraint to cut business costs and restore Singapore’s competitiveness. It was crucial that both employers and unions understood the Government’s considerations. Prof Lim helped ensure that these considerations were accurately translated into clear, workable and fair recommendations, and the economy revived quickly.

Today, the NWC is recognised internationally; Dr Ng Gek Boo, former ILO Assistant Director-General, said “the ILO (was) impressed by the NWC mechanism which ensures tripartite participation and tripartite dialogue”. This stands as a testament to the NWC’s achievement and—as Dr Ng himself put it—“Professor Lim’s remarkable contributions to decades of industrial peace and economic growth in Singapore”.

The Future of Tripartism

The NWC’s signature approach of consensus-building opened the way for more tripartite initiatives to jointly deal with a wide range of socio-economic issues. Today, we have the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP), which promotes the adoption of responsible employment practices and supports individuals who encounter unfair workplace practices such as workplace discrimination or harassment, the Tripartite Alliance for Dispute Management (TADM), which provides advisory and mediation services for employees and employers to resolve employment disputes amicably, and the Workplace Safety and Health Council (WSHC), which works closely with tripartite partners to promote safety and health at work. These initiatives have helped Singapore build and maintain the unique tripartite harmony that we enjoy today.

But this harmony is by no means naturally-occurring or inevitable. It is the result of the mutual trust and confidence built up by the efforts of previous generations of tripartite partners—including those of Prof Lim as the founding NWC Chairman —and should not be taken for granted.

It will be left to our future generations to continue the good work of our forefathers. Looking forward, the NWC will need to stay responsive to the needs of businesses, workers and the economy, amid technological disruption, demographic changes, and geopolitical instability, while continuing to abide by the key principles of consensus-building, frank discussion and constructive problem-solving for the long-term benefit of Singapore’s economy and its workers.