ISSUE OF BACK-PAY OF THE PUBLIC DAILY RATED EMPLOYEES UNION FEDERATION

Mr Bernard Rodrigues (Telok Blangah): Mr Speaker, Sir, I wish to draw your attention to the dispute in the public sector between the Public Daily-Rated Employees' Unions Federation and the Government which has received sufficient publicity in the press. I can therefore safely assume that Members of this Parliament are conversant with the wrongs alleged and this makes my task so much easier in taking up the cudgels for the workers.

The principal issue involved is the question of back-dating of wage revisions provided in clauses 5 and 9 of the Agreement signed in November 1961 after the strike by these workers was called off. The strike was called off because the workers were confident that the pro-labour Government would abide by the promises solemnly given and written into the Agreement. Clause 5 runs as follows:

"The wages, working conditions and all other terms and conditions of service of the daily-rated employees of the Government shall he revised to be the same as those of similarly employed daily-rated employees of the City Council who are employed in Government Ministries. The cash emoluments so revised shall be payable from the 1st day of January, 1961."

Clause 9 enveloping clause 5 states:

"The wage structure of the daily-rated employees of the Government shall be revised generally at the same time as the wage structure of the daily-rated employees of the City Council employed in Government Ministries. The cash emoluments so revised shall be payable from the 1st day of January 1961. A Committee of Representatives of the Government, the City Council, the Housing and Development Board and the Federation shall undertake the said revisions and shall attempt to conclude it within two months from the making of this Agreement. Mr C. V. Devan Nair may be present at Committee meetings at the request of the Federation."

There are several counts on which the Government is to be blamed for the delay in the implementation of these clauses. The most important we could consider is that the proposed Committee of Representatives to undertake the formulation of a new wage structure was not formed. Instead one year after the Agreement, the Treasury put to the Union a unilaterally formulated scheme, in direct contravention of the clause which provided for a Committee to set about the establishment of a new wage structure. This was signally wrong and in our opinion generated most heat. It must be apparent to all and even more to the Treasury officials that the unilateral approach is the quickest route to a deadlock. It is therefore difficult to understand why the Treasury officials ignored the Agreement stipulated procedure of revising the wage structure. Joint consultation, joint discussion and joint formulation has become part and parcel of healthy industrial relations. And those who signed the Agreement in 1961 knew perfectly well that a joint approach would be the only means of producing quick results. The only thing to be deduced from the manner in which the Treasury officials have gone about in this matter is perhaps bureaucracy has not altogether disappeared and the proper orientation is yet to take place. How else can one explain this glaring disregard of a provision in a collective agreement between the Government and its workers?

Yet the nearest the Commission of Inquiry came to castigating the Treasury officials for their failure here was in these words: "that the procedure stipulated in clause 9 be implemented as soon as possible", when on this score there was ample justification for lambasting the Treasury officials for their contempt of the Agreement.

The Commission of Inquiry which looked into the grievances of the workers seems to have taken the view that a revision of the wage structure was an extraordinarily complex task. This is hardly credible in Singapore when we have shown an extraordinary ingenuity in solving even more difficult problems. What is extraordinary is that four years have gone by and that we are no nearer a solution. The whole issue reeks of the lethargy of the Treasury officials and probably on the mistaken belief that here is a sector of the public service whose just demands can be comfortably ignored by the higher echelons in the civil service. I hope it is a belief they will hasten to correct.

Having said all this, I would now like to come to the central argument of the N.T.U.C. in this case. The Prime Minister invited the N.T.U.C. to discuss this issue in the Parliament, where he assured us, Members would be free to speak their minds on this issue.

The Prime Minister's grounds for Parliamentary discussion of this dispute were that certain fundamental principles are involved when questions of back pay are raised. The Prime Minister has not said something new. Public funds are perennially involved in the payment of public workers, and back-pay is no exception.

The normal arena for a resolution of this dispute between both parties when collective bargaining is exhausted is in the Industrial Arbitration Court. The suggestion by the Prime Minister is unprecedented. Nevertheless, we have no quarrel with the suggestion because we believe in this Parliament, rational argument will be given its proper weight.

The primary stake to us in the dispute is the sanctity of the collective agreement. In fact in Singapore today, the collective agreement is the touchstone of industrial stability. Both trade unions and employers have adopted a responsible attitude towards collective agreement that a measure of the Queensbury rules has been possible for some time now between both management and labour, where fury and scorn were the order before. Dr Goh Keng Swee, our Minister of Defence, in his address in the International Labour Seminar gave pre-eminence to social values in the development of a country which to our minds must include moral obligations and in this dispute the moral obligation of the Government is to respect the undertaking given to the workers in the Agreement that the back-dating of wage claims has to be effective from 1st January, 1961. In short, we expect the Government to honour the undertaking it has given to the workers.

Members of this Parliament will realise that since the democratic trade union movement has assumed command of the labour situation after defeating the anti-national forces, strikes by trade unions have been few and far between, not for pure love of virtue, but because we want to establish a climate for economic growth and advancement and we are proud to say that we have made a direct contribution in this regard. We have gone out of our way to emphasise the need for orderly industrial relations, not only in our own interests simply because we want to stay alive as a movement but for our collective interests. This may not be palatable, but the settlement of this dispute on the terms of the 1961 Agreement will prove to be the acid test of principled response. The Government's integrity in industrial relations has to he immaculate. So we would say the fulfilment of governmental moral obligations is of supreme importance because it goes to the very roots of the political philosophy and the ideals of high civilisation we are striving to evolve.

No less than the Prime Minister himself was an eloquent spokesman on moral obligations. In more or less these words he said: "Workers should not be made to suffer for delays in negotiations for which they are not responsible" - referring to the interim bonuses paid to the Harbour Board workers. because of prolongation of negotiations for which the Harbour workers were not to blame. The Prime Minister when he said this was in the distinguished company of the Arbitration Courts of Australia, India and elsewhere who have upheld that the principle of retrospective payments is justified in those circumstances in which the satisfaction of union claims has been delayed through no fault of the Union. Such delay, the Courts have declared, may occur because of administrative reasons, or the unwillingness of employers to take matters seriously at the negotiating table or even because of delays in the hearing of trade disputes by Arbitration Courts. In all such cases, retrospective payments have been justified in the past and will continue to be so justified.

The principle of retrospective payments must be regarded as a penalty provision on employers who are inclined towards procrastination and delays in the face of legitimate union claims. Such penalty clauses are obviously necessary if industrial relations in a civilised community are to proceed on an even keel. Employers are no more above penalty provisions than trade unions.

Having established the validity of the Public Daily-Rated Workers' claims for back-pay, and we have no doubt that an Industrial Arbitration Court has incorporated this principle in its body of law, we would like to say that it has taken us a long time and effort to formulate rules for the preservation of industrial peace with justice and the N.T.U.C. views this principle as a pre-eminently major contributing factor to securing industrial peace not only in the public sector hut in the private sector as well, because in particular, employers in the private sector tend to watch which way the cat jumps in the public sector and when it jumps in the direction to their advantage, they would have no hesitation in adopting that course. We would also like to say this, that the N.T.U.C. has no intention of degenerating into an effete movement. That will not be in the interests of Singapore as a whole, nor do we believe that the Government is anxious that we should deteriorate to that level, as only quite recently the Minister for Labour, when he opened the Second Convention of the N.T.U.C., stated that a docile trade union movement is not a constructive alternative to a pro-Communist movement.

Now the situation in the Public Daily-Rated Services is one of open frustration, aggravated by stern warnings on behaviour and discipline and should the continued delay engender a trial of strength, we must make it clear that our sympathy will be thrown effectively on the workers' side.

We do not relish the idea of challenges or showdowns. We would much rather put them behind us and regard ourselves as part of the constructive composite which Singapore has become but we can do so only on the confidence and the respect of the workers of Singapore which we have so far earned. We shall not put this in jeopardy because it is not good for Singapore.

Gentlemen, I have elaborated the case of the Public Daily-Rated Employees sufficiently and have three things for you to consider:

(1) The claims of the workers are just - they have been deprived by the tardy conduct of the Treasury officials of a wage increase for the past four years;

(2) The back-pay demand is not something extra being demanded but the accumulation of an increase in wages that is due to them, and finally that once principles are established we cannot afford to shift our ground. We do so imperilling the progress and stability achieved.

4.32 p.m.

Mr Lim Kim San: Mr Speaker, just now I had of necessity made a lengthy statement outlining the fiscal and financial policy of Singapore as an independent and sovereign country and also the Budget for the coming year. I do not propose to make a similar lengthy statement, but if I might, I would like to summarise what the Member for Telok Blangah has said.

I think it can be put down under three headings, that is -

(1) Government acted unilaterally in formulating a scheme to implement the wage claims in the Collective Agreement, 1961, entered into between the Government and the Public Daily Rated Employees Unions Federation;

(2) Due to its procrastination, Government deprived the workers of their just awards;

(3) The demand for back-pay is nothing unusual in matters of wage increase.

Let me take the first two points together, as they seem to me curiously linked. My first reaction is that these two points are contradictory. How can you accuse the Government of having taken unilateral action and in the same breath also allege that it procrastinated? True, on the point of the unilaterally formulated scheme, the facts of the matter are that after the agreement was signed between the Union and the Government, instructions were given to Government departments to implement forthwith those clauses which were clear-cut and straightforward. On the clauses relating to wages, it was not at all that straightforward, and a number of discussions took place between the Union representatives and Treasury officials. Arising out of these discussions, the Treasury presented to the Union a draft scheme setting out full details for the implementation of the wage clauses as a basis for further discussion. This action is nothing new and in fact is common practice in all meetings. It is useful and it is an occasion on which draft proposals are put forward as a basis for further deliberation. This was exactly what the draft scheme sought to achieve. After a number of meetings, agreement was reached between the Union and Treasury representatives. Indeed a signed statement is on record in a Treasury file signifying the consent of the Union to the issue of that scheme. It is therefore highly misleading for the Union, four years after the event has taken place, to make a general allegation of unilateral action on the part of the Government.

On the question of procrastination or delay, thereby depriving the workers of just increases in their wages, this is unfair. The scheme referred to earlier provides for implementation with retrospective effect from the 1st January, 1961. Every employee received some increase in wages. In the vast majority of cases, each employee received an increase of 40 cents per day and in some cases benefited up to a dollar and fifty cents per day. The annual cost of this wage revision was in the region of $� million a year. Among the actions taken by the Government to hasten the implementation of the collective agreement, when there were allegations by the Union that some clauses of the Agreement had not been implemented, was the establishment of a Commission of Inquiry under the chairmanship of the Commissioner of Labour with members nominated to represent the interest of the Union. The Commission made a thorough study of the matter and made a number of specific recommendations and wage adjustments in its findings. All these specific recommendations of the Commission had been accepted and implemented by the Government with retrospective effect from the 1st of January, 1961. There are a number of disputed grades on which even the Commission was not in a position to make direct recommendations. And as the Union is aware, on the instructions of the Prime Minister with a view to effecting a speedy end to this long drawn-out dispute and concluding a complete settlement of the 1961 collective agreement, a Job Evaluation Team with Union participation has been working for some time. The Job Evaluation Team is expected to make its recommendations soon. Everything possible has been done to conclude the 1961 collective agreement and the Union is aware that the Government is as anxious, if not more so, to see an end to this matter.

The third point that the Member for Telok Blangah made is of fundamental importance. The Member made a point that backpay is not unusual. But I say that back-pay must be discouraged, if not altogether disallowed, because no Government can plan its financial policies and administer them wisely if there is a sinister threat that out of nowhere someone is going to produce a bill that the Government has to make arrears for back-pay. I am of course aware that in certain situations, Industrial Courts as well as managements had agreed to some arrears in wage increase, but this must be the exception rather than the rule. The policy of Government on back-pay is well known to all the Staff Unions. As Minister for Finance, I am particularly anxious to see that considerable financial resources are not frittered away by demands on back-pay when such resources are desperately needed for the financing of economic projects in the country for the general upliftment of the standard of living of the people in the country. It is only in very exceptional circumstances that I would be prepared to see a departure in this ruling provided that the financial implications are not considerable. In this connection, Sir, I am reminded of a very valid point made by the late Dr F.C. Benham when he was entrusted to report on a revision of salaries for Government officers in 1951. In that Report, the author expressed the view that the practice of backdating, that is giving back-pay, is erroneous in principle. He went on to say, "If Government were to follow the general rule that whenever it revised any of its contracts it should backdate the revision in order to redress past injustices, it would be unable at any time to make a proper estimate of its financial position. A great deal of unnecessary clerical and other work would be created and the business of public administration would be hopelessly complicated." There is also the question of tactics, Mr Speaker. Back-pay weakens the bargaining position in negotiation. If the Union is assured of backdating, there would be no compelling incentive for the Union to desire a quick conclusion in negotiation as it would be assured that whatever form of agreement is ultimately reached the benefits therefore would be backdated.

I would therefore like to remind the Member for Telok Blangah, and all other Members who harbour similar sentiments, that this Government is committed to raising the standard of living of all its people, most of all the working class people; but in doing so, it must plan its limited financial resources carefully and wisely, and that the guiding motto to be followed should be one of looking ahead for further achievements rather than looking backward and long drawn-out disagreements that do nobody any good.

Question put, and agreed to.

Resolved,

That this house do now adjourn.

Adjourned accordingly at Forty-four minutes past Four o'clock p.m.