National Wages Council
Background & Objectives
The National Wages Council (NWC) was formed in 1972, at a time when Singapore was undergoing a period of rapid industrialisation, which had resulted in rising wage expectations. There were concerns that high wage expectations would lead to serious industrial disputes, which could dampen the investment climate and adversely affect the economic progress of Singapore.
The NWC was thus set up to formulate wage guidelines to be in line with long-term economic growth, so that Singapore’s economic and social development would not be undermined.
The NWC is a tripartite body comprising representatives from the three social partners – the employers, the trade unions and the Government.
The Council meets every year to deliberate and forge national consensus on wage and wage-related matters. It issues guidelines on these matters every year based on the tripartite consensus reached during the deliberations.
Tripartite Members of the 2013/2014 National Wages Council
Formulation & Use of NWC Guidelines
How does the NWC come up with its guidelines?
In making its recommendations on wage adjustments for the year, the NWC takes into consideration factors such as productivity growth, employment situation, international competitiveness, and economic growth and prospects. Public views are also sought and taken into account when drawing up the guidelines.
A guiding principle established and observed by the NWC is that wage increase should lag behind productivity growth. This is to ensure that wage increases are in line with economic growth and sustainable in the long run, so that Singapore’s competitiveness can be preserved and enhanced.
How are the guidelines used?
The NWC wage guidelines are used by both unionised and non-unionised companies. Employers and unions in unionised companies use the guidelines as a framework for wage negotiation based on the circumstances faced by each company. Employers in the non-unionised sector that do not engage in collective bargaining have also relied on the guidelines as a reference point in determining wage increases for their employees.
After the 1985/86 recession, the NWC moved away from issuing quantitative guidelines to qualitative guidelines. This is to allow more flexibility in wage negotiations and to accelerate wage reform so that wage increases are more closely linked to the performance of the economy, company and individual employees. A flexible wage system also enables companies to adjust wage costs more responsively to changing business conditions so as to remain competitive in the global market.
For enquiries on the NWC, please contact the NWC Secretary through the following channels:
National Wages Council
c/o Labour Relations & Workplaces Department
Ministry of Manpower
1500 Bendemeer Road
Fax: 6535 4811