Good morning, Comrades, ladies and gentlemen, boys and girls.
It is my pleasure to be with you today at the NTUC Education Grant Award Presentation Ceremony, organised by 4 of our industrial unions – namely, BATU, SMEEU, SISEU and TIWU.
This year, 187 children from 88 families will benefit from the awards. A total of $18,700 will be given to these families to assist them in meeting their children’s education needs.
I am sure the grants will be well used to buy books and learning materials that will help the students do better in their studies. I take this opportunity to wish the recipients all the very best in their academic pursuit.
In recent weeks, retrenchments have been in the news.The Ministry of Manpower estimates that there could have been as many as 25,000 retrenchments last year.
For the unionised companies, nearly 10,000 workers were retrenched. 1,024 workers were retrenched in 1Q2001, and 2,843 in 2Q. The number went up to 4,107 in 3Q, and but dropped back to 1,742 in 4Q.
The numbers seem to show that retrenchments have tapered off. But they hide the real story. Retrenchments last year came mainly from the manufacturing sector. When the dot-com and tech stock bubble burst, sales of electronic goods and components fell. The decline in demand spread to other consumer products. Our exports declined significantly, leading to many factories having to shed their workforce, especially from the electronics industry.
Now, there is talk that the downturn in electronics has bottomed-out. There is greater demand for DRAM chips. Their price has gone up. Some electronics firms have reported more orders for components in the later part of this year. They are holding on to their staff, and looking forward to a turnaround.
But we are not out of the woods yet. Because on the other hand, retrenchments from the service sector have increased. The slowdown in manufacturing and exports has spilled over to the service side of the economy. Less manufacturing meant less need for transport and supplies, and lower budgets for advertising and other services. So these service industries were in turn badly affected. The Sep 11 terrorist attack in the US made the situation worse as it reduced travel and tourism sharply, leading to less businesses for our hotels and shops.
At the same time, the financial industry began to restructure. The banks started retrenching as a result of their mergers. The insurance industry also saw increasing mergers and downsizing in response to changing market conditions.
Last year among the unionised companies the number of service sector workers retrenched in the first half was below 10% of all workers retrenched, but it rose to 15% in 3Q2001 and to 33% in 4Q2001.
The bulk of retrenchments from the banks and companies in the financial sector will take place this year. Other service industry companies that suffered poor demand will need to consolidate as well. At this moment, some unions in service industries are already engaged in negotiations over retrenchment terms with their employers. The numbers to be affected are significant.
So, while retrenchments in the manufacturing sector may have peaked, we can expect that retrenchments in the service sector will continue to rise in the first half of this year.
The media has carried a number of reports on how retrenchments have been carried out and how they can be better handled. Some readers have written to the newspapers to express their unhappiness. My colleague, Mdm Halimah Yacob, Assistant Secretary-General NTUC, wrote an article calling for best practices to be adopted. These are important observations that should not be taken lightly.
While workers elsewhere go on strike to stop retrenchments from being carried out, our unions and workers understand the reality of the economic pressures around us. They support the approach that for our economy to grow, our companies must be successful. They know that if the companies collapse, all of us will suffer even more.
Our workers do not fight against retrenchments. All they ask for is to be treated fairly and with dignity.
Retrenchments cannot be just mechanical exercises to pay workers off with a compensation cheque and quickly shut the door on them. Many workers, especially those who have served for many years, regard their workplace as their second home. They keep photos of their babies and office outings on their desks, in the cubicles and around the office walls. It is where they have given many hours of overtime to help the company meet urgent deadlines. It is where their friends and buddies are. The workplace is not only a building with tables and machines. For the staff, there are also fond memories and relationships, invisible but real. To be cut off from all these at short notice is a most trying experience.
Employers need to manage not just the financial and physical aspects of a retrenchment exercise, but the emotional aspects too. I urge employers to take the feedback and concerns of the unions and the media reports seriously, and pay particular attention to the psychological well-being of those who are retrenched as well as those who remain.
Help those affected prepare for the transition. Help them with retraining and job placement. Give them some time to adjust, to pack up and to say goodbye. They have been loyal employees while working; please treat them as good friends when they leave.
The industrial harmony we have built up gives us a competitive edge. It has helped our companies to progress in the face of global competition. Our industrial harmony is strong during good times when there are goodies to share. It must be even stronger during bad times when there is pain to bear. With mutual support between employers and workers, Singapore will continue to succeed.
