What happens when employers and unions are in dispute?

What is uniquely Singapore about how unions in Singapore function is that they do not use brute force to fight for the right of workers. They do battle without the need to exert any force. Instead, unions take to negotiations to get the job done.


Negotiating for the salaries, welfare and benefits of workers can be long and arduous. But the result is a Collective Agreement which sets out the terms and conditions of employment for all bargainable employees in a company.

Beyond just salaries and benefits, the collective agreement includes something very important – especially in today’s economic landscape – Retrenchment benefits.


In 2012, Sealing Technologies retrenched 98 workers as its local manufacturing plant was suffering a loss for two consecutive years.  It had initially paid an ex-gratia payment of two weeks’ basic pay per year of service to workers who have served three years or more.

However, the workers who were members of the United Workers of Electronics & Electrical Industries (UWEEI) wanted more – a month’s pay per year of service and benefits to be pro-rated for incomplete years of service.

When efforts to to settle the dispute between the union and the company failed by the Ministry of Manpower, the case was brought up to the Industrial Arbitration Court in July 2012.

To cut the long story short, the court ruled in favour of the union and ordered the company to pay the extra sums, which amounted to $548,000.

You might ask: what is the Industrial Arbitration Court?

The court is set up to deal with matters concerning employer-employee relations and the settlement of trade disputes.

Its functions include registering and certifying collective agreements and the resolution of industrial disputes, etc.

According to the Ministry of Manpower (MOM) and the Industrial Arbitration Court, where an employer  and the union have failed to resolve a dispute after discussion and negotiation, they should seek conciliation assistance from the MOM. If it is not successful, they may then refer the dispute to the IAC for arbitration.


The IAC is but one of the legal levers that the unions have in fighting for the rights of workers effectively.

Without the need for violence and unproductive strikes, unions can get things done through the collective agreements. But when companies do not play along the rules and adhere to the collective agreements, then unions have the choice of escalating the dispute all the way up to the IAC for arbitration.

So, who said the unions do not have power?


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