SMRT Bus Driver Case: More pay but more work?
A study of union, management and employees’ relationship and dispute management

SMRT Bus Driver Case: More pay but more work?
A study of union, management and employees’ relationship and dispute management

1. Negotiating Labour Agreement between Union and Management
Both unions and management of organizations have their individual objectives that could be similar or different accordingly to their perspectives. In Singapore, with tripartism, both union and management together with the government would settle their differences through a collective agreement. From the perspective of the management, profitability, growth and effective human resource management are the three main goals. For the unions, besides the management’s goals, they are concern about the welfare of the employees.
Some companies believe that it is better off remaining non-union and adopt a hard-bargaining approach towards the unions. However, some eventually accept the philosophy that with both parties cooperating, it will create a win-win situation for both and gain more out of the collaborations. Any interest dispute that was raised by employees or employers could be resolved via two collective bargaining approaches of distributive bargaining or mutual gain bargaining. The distribution bargaining approach creates a win-lose situation while mutual gain bargaining a win-win situation. In order to illustrate how the union-management relationship and the negotiating process, the case on SMRT Service Leader Revised Remuneration Package will be discussed. 2. Case Study on SMRT Service Leader (Bus Driver) Revised Remuneration Package
A recent controversy over the revised remuneration package for SMRT service Leader since May this year had caught many attentions towards the fairness of the decision.
With the intention to attract more Singaporean to take on the job of a bus driver, SMRT had announced on 18 May 2012 that there is a raise in the starting pay for new local bus driver from $1,200 to $,1,625 monthly, while new Permanent Resident (PR) and Malaysian bus driver will received $1,350. For existing bus drivers, Singaporean SMRT bus drivers will get an additional $225 and non-Singaporean driver an increase of $100. The basic salary increment for existing drivers was backdated to 1 May.
This decision of increasing the basic salary can be seen as one of the collective agreement efforts by the National Transport Workers’ Union (NTWC) around the month of March 2012. NTWC have proposed an increase in the starting basic salary for the drivers to at least $1,500 and more for the existing bus drivers. The increase is necessary for the bus operations to attract and retain drivers to run the 800 buses, which will be added over the next five years.
With the same reason of attracting more local driver, SBS Transits have implemented the same amount of increments to drivers’ compensation in May. What sets SMRT and SBS Transit apart is the change in the number of weekly work day from a five-day work week to a six-day work week capped within 44 hours weekly. The six-day work week adjustment started in 1 July 2012 in order to allow the bus drivers adapt to the changes.
After the news of the revised package was released in May, there were negative reactions from online citizens and a group of SMRT Bus drivers over compensation and number of working days. In response to these reactions, further union and management negotiation was carried out in order to achieve the best solution. On September 29, SMRT announced that the drivers were given the option to revert back to a five-day work week but without the rise of their basic salary.
However, the revision in September was not well received and this lead to more discussions through the mutual gaining bargaining approach. On 15 October 2012, SMRT introduced the Enhance Service Leader Salary Package with revised salary of as high as $400 for Singaporean and $175 for PRs and non-Singaporeans, coupled with the option to revert to five-day work week that could be done within a 6 month of implementation, so as to trigger a revised in the salary package. 3. Areas of Conflict for the May’s Remuneration Package 4.1. Perceived Unfair Compensation
By looking on the surface of the revised salary package, SMRT seemed to have misrepresented the salary adjustment where their bus drivers have to work for a longer period alongside with the increased pay. Many online citizens and bus captains had voiced their concerns of the unfairness of the revised compensation. Mr Yu have represented a group of SMRT bus captain and pointed out that there is a deceased in a sum of $1 to $3 per day for those who originally drew $1,300 in salary and an increase of 20 cent per day for those who drew $1,000 previously.
However, they had missed out the fact that the working hours will be capped to 44-hours weekly spread across six days instead of five. Hence, the daily decrease in the salary is logical with the decrease of work hours from 8.8 hours to 7.3 hours. This means that the SMRT bus drivers do benefit from SMRT decision with a higher basic remuneration but it was not communicated clearly. 4.2. Work-Life Balance and workers’ health and safety
Apart from the issue of the disparity in the salary and work scheduling, the six days work week brought into the concerns of work-life balance. Some bus drivers had raise concerns over the one lesser rest day per week which may results in more fatigued drivers which in turn may increase the probability of accident and sick leave. Furthermore, the difficulty in the application for leave due to the set quota for leave application for every set bus route worsens the situation.
In addition, SMRT appears to be contradicting their viewpoint of work-life balance. In January 2006, with the intention to promote better work-life balance, SMRT had decided to shift the driver work schedule from a six-day work week to five-day work week. And now in 2012, there is a shift back to the six-day work week. In addition, this shift will mean lesser time with their families which is in the contrary to Singapore government’s policy of promoting work-life balance. 4.3. Possible Conflict of Interest
As previously mentioned, Singapore’s unique feature of the tripartite structure allows the union-management-government collaboration that encourages fairness and regular communication between each party. However, for this case, the triple role of Mr Ong Ye Kung, the deputy secretary-general of the National Trade Union Congress (NTUC), executive secretary of National Workers’ Union and also a board member of SMRT Corporate has created a situation of possible conflict of interest. The role of a union is to negotiate on behalf of the bus drivers in order to achieve a greater welfare for their employees while on the other hand the management of SMRT carries the role of taking into consideration of the company’s profitability with the employees’ considerations in mind. With a different in roles and perspectives for the position that Mr Ong assumed, it raised some concerns over the authenticity of the situation. 4. Stakeholders’ Perspective
With the Tripartite system in Singapore, there are mainly four different parties involved in the case; they are SMRT Corporate Ltd (SMRT) as the employer, SMRT Bus Drivers as the employees, National Transport Workers’ Union (NTWC) as the Unions and Ministry of Transport from the government. 5.4. Employer - SMRT Corporation
SMRT is one of Singapore’s public transportation companies that run the mass rapid transport system, taxi services and bus services.
From the SMRT point of view, its goal is to retain and attract more bus drivers to match up to the plan of increasing the fleets of buses while remain to be profitable. To attain the goal, the introduction of the higher basic salary package together with a new work schedule was proposed and agreed by both the union and management. However, due to miscommunication on the remuneration package to their employees and public, SMRT have suffered negative publicity by the public as a “bad employer”. Hence, it calls for the management and union to address the concerns brought out by the bus drivers. However, it is worth to note that SMRT are committed to ensure the welfare of their employees from the statement by Mr Desmond Kuek, president and chief executive of SMRT, who said: "We are committed to looking after the morale and well-being of our Service Leaders. They work hard on the roads each day to ensure commuter safety and a high customer service quality. SMRT will continue to ensure that our remuneration package remains competitive, and rewards good performance and loyalty." 5.5. Employees - SMRT Bus Driver
There a total of 1,900 SMRT bus drivers and they are made up by 70% Singaporean and Permanent Residence and 30% foreign workers.
With this revised remuneration, the SMRT bus drivers could enjoy a higher basic salary but one less rest day of the week. However, due to the misunderstanding, a group of SMRT drivers felt that they were not given fair treatment. Hence, they send in an appeal petition to the union labour chief Lim See Say for a request to revert back to 5-day work week while keeping the newly-given higher salaries as they felt that although their monthly pay had risen, their daily pay fell because of the additional day per week. In addition, some raised the concerns about the problem of not having work-life balance and the possibility of accident due to having lesser day of rest weekly. 5.6. Union –National Transport Workers’ Union (NTWU)
NTWC was established in 1981 and is an affiliated Union under NTUC representing workers from the transport industry in Singapore. They aim to enhance workers’ employability and capability ensuring better and higher pay and standard of living, improve companies’ competitiveness and strengthen practice of gain sharing and uphold tripartisim.
For this saga, NTWU have stepped in and represent their members to negotiate a fair wages package for them. They have been actively addressing the grievances from the bus drivers who have voiced out their concerns and attended many discussions with SMRT to come up with a mutual agreement. Nevertheless, it seems that the union, who had agreed upon the July’s remuneration scheme, may have misinterpreted their members’ agreeability toward the package as seen from the negative responses on the announcement in July. 5.7. Government – Ministry of Transport
The Ministry of Transport have generously provide a $1.1 billion cash infusion to both SMRT and SBS Transit in order to aid the need for the additional 800 new buses with 14 new routes. The government have not step in and mitigate the situation as SMRT and the unions have been making several revision to the salary package and provide prompt response to the public and their bus drivers over the concerns. 5. Cause of the disputes 6.8. Miscommunication
From the abovementioned factors, many misunderstandings between SMRT and their bus driver, and Union and bus drivers, could be seen to be arisen due to poor internal communications. The new compensation scheme was not clearly communicated to their employees and the public over the media causing misunderstanding over the fairness of the salary package. It is also the union’s responsibility to explain the situation to the bus drivers and represent the bus drivers for the discussion with SMRT.

6.9. Poor feedback mechanism and culture
Looking at the situation, SMRT and NTWU may have neglected the need for regular communication through feedback channels from the bus drivers. From this saga, both parties have voiced their concerns of not just miscommunicated disparity of the compensation and work duration but the other many other issues.
It includes the fear of having lower income due to lesser overtime (OT) hours with more bus drivers, the compensation being unable to match up to Singapore’s high standard of living, work-life balance and long working hours leading to higher probability of accident mentioned in an interview with one SMRT drivers who state that he was warned by the union to “shut up” about the long working hours. All these could be subject to a poor feedback mechanism or regular two way communication culture. 6. Managerial Implications and recommendations 7.10. Internal Communication Mechanism and Culture
From the email interview with Mr. Alan, head of talent Acquisition, he mentioned that “The commotion around this announcement underscores the difficulty in making any changes to employment conditions” showing the possible managerial implications from this case.
In the situation, the benefit of the increase of hourly pay and the fact that the total number of hours remain was not highlighted instead it was the additional day of work that was amplified. This reflects the possible challenges that companies may face given similar situation and hence it is important for the management and HR department to be clear in communicating the situation to their employees.
Apart from that, organization and union should have in place internal communication mechanism to facilitate regular two way communication between employees to established a good communication culture. This ensures that all three parties could work towards the same goal with mutual understanding and avoid any unnecessary complications and negative impact on the reputation of the company. 7.11. Managing employees’ expectations
The need to management expectation in order to ensure good labour relations should be another priority. Regarding the issues about insufficient compensation and work-life balance bought up by the employees, they are employment conditions that could be better explain to the employees by provding them with relevant insights regarding the rationale of the decision. It is further supported by Mr Alan who says that “The way to manage employee expectation is by educating them on the principles of rewards and being as transparent as possible.” If SMRT and NTWU had managed the employees’ expectation through education, the unhappiness could have been avoided. 7.12. Flexibility of revised employment scheme
As mentioned, with the revised salary package for the SMRT bus drivers, both the public and bus drivers had not been pleased with the decision that affected the employees. It could be due to the lack of choice given to the employees as evidenced from the letter sent by the bus drivers to appeal for a 5 day work-week. Quoted from the interview with Mr Alan, “I think the flexibility of the final solution is something that might have been considered in the very first proposal. That would have avoided the unhappiness and the subsequent policy changes and re-adjustments”. This shows the importance for management to provide choices when implementing new human resources policies and employment conditions. 7. Conclusion
All-in-all, there are several learning point from the case which managers could adopt and learn from to apply to their negotiation over any changes with employees’ employment condition such as a revised remuneration scheme. From the case, it demonstrates the union and management negotiation process which could be improved with more involvement of the employees in the discussion. Overall, it shows a good working relationship between the SMRT and NTWC which is for the benefit of the employees. Nevertheless, with better communication and managing of employees’ expectation, it will ensure all parties to benefits from the partnership.

Singapore
Appendix A: SMRT bus drivers fear pay will fall

SIAU MING EN
486 words
22 May 2012
Straits Times
STIMES
English
(c) 2012 Singapore Press Holdings Limited

They say switch to six-day week may reduce OT sum
SMRT bus drivers have expressed concern that their take-home pay may fall - despite the company's announcement last week that their basic salaries will be raised.

This is because their working week is to be lengthened from five days to six, said those who spoke to TheStraits Times yesterday.

They fear the move will reduce the amount they receive in overtime.

Those who chose to work a sixth day used to get 50 per cent extra. Now, however, they will simply receive the normal daily pay.

They are also worried that with plans for more buses and drivers in the pipeline, their opportunities for putting in overtime hours will be reduced.

'Most of us rely on the overtime pay to add on to our income,' said a 44-year-old bus driver who wanted to be known only as Mr Lim.

'Now, with more working days and possibly fewer working trips, we will not be able to receive the extra overtime pay.'

A 57-year-old bus driver, who wanted to be identified as Mr Chan, said: 'I would rather they stick with the original salary and let us continue with our five-day work week.'

However, the National Transport Workers' Union (NTWU) said that although the sixth day will now be paid at the normal rate, spreading the 44-hour week over more days will mean fewer daily working hours. This will provide more chances to earn overtime pay.

SMRT brought in the five-day working week in 2006. It has explained that the changes are being made to attract more Singaporeans to the profession. Its spokesman added that they would help the firm to stay 'competitive with industry norms'.

The firm said meetings are being held with the bus drivers. These will involve SMRT presenting the changes in detail and providing opportunities for any clarifications to be made.

NTWU executive secretary Ong Ye Kung added that the proposal to alter the salaries and working days had been 'discussed at length between management and union leaders, who support it'.

'Both public transport operators have been in this line a long time. I trust that by now they understand that in bus driving, you should never fill all vacancies. Instead, leave some vacancies, so that there is always overtime for bus drivers. If for some reason new managers forget this, the union will remind them in very clear terms,' he said in response to the overtime concerns of the bus drivers.
He said that the union will continue to explain to bus drivers how the changes will help to improve their wages.

He added that working six days a week is a fairly standard arrangement in all service industries. SBS Transit is also on the same system.

siaume@sph.com.sg
Singapore Press Holdings Limited
Document STIMES0020120521e85m0001b
© 2012 Factiva, Inc. All rights reserved.

Appendix B: Email Interview with Mr Alan

Question 1
The announcement made by SMRT on 18 May 2012 to increase the starting pay of their bus driver as well as shifting from a 5 day-work week to 6 day-work week has generated much discussion on the fairness and appropriateness of this new compensation and working-hour scheme. The purpose of the change of the work terms is to attract more bus driver, in particular locals, in order to support the plan of adding 800 new buses to the fleet over the next five years and the increasing demand for public transportation. Many mentioned that SMRT was providing an unfair compensation with this revised salary and weekly work-day. However, many did not take into consideration or are unaware of the fact that the total number of hours per week is capped at 44hours. As HR personnel, what are your general views about this sage and what do you think could be the main problem? Do you think that it is SMRT’s responsibility for not providing a clear explanation to the public and their employees?

The commotion around this announcement underscores the difficulty in making any changes to employment conditions. Even though based on a per hour calculation, the drivers actually have a pay increase, the attention is focused on the downside of having to work on an extra day. The fact that they work shorter hours per day is deemphasized as well as the fact that many other professions have even more arduous working hours and conditions.
Regardless how well the communication and change was managed, it is inevitable when modifying work conditions that there will be brickbats. SMRT owes no explanation to the public other than to ensure a reasonable level of service versus the price of a ride. In fact as a public listed company, one of their main objectives is to generate returns on shareholder investment.

Question 2
The revised salary will be an increase of $425 for Singaporean Bus drivers and $150 for non-Singaporean and PR bus drivers. Some of the drivers and members of public have voiced out that the revised salary is still insufficient for the high standard of living in Singapore. What do you think of this request of increasing salary? How does your organization manage the expectations of your employees in terms of compensation?

Well, certainly it is difficult to imagine a small household surviving on $1200/- per month. But the reality is that the market pegs values to jobs and free market forces determine how much that value is. The barrier to entry (in terms of skills and knowledge) to being a driver is not high – as opposed to say being a biomedical technician. Therefore the pay accorded is commensurately lower. Of course there is no denying that driving a bus is a high stress and difficult job and so it might be argued that there should be a hardship factor. However, this is not something that is prevalent here nor globally.

In large organizations, the same applies. Jobs that can be done by fewer people are more highly rewarded and of course more difficult jobs or those that involve risks are more amply rewarded. The way to manage employee expectation is by educating them on the principles of rewards and being as transparent as possible. However, this can only work with a sufficiently mature and educated workforce. Question 3
Another subject that was bought up is the issue of work-life balance for the drivers. In Jan 2006, SMRT have decided to switch from a six-day work week to a five-day work week for their drivers with the objective of ensuring better work-life balance. However, SMRT contradict herself by re-introducing the six-day work week and in a way affects work-life balance of their employees. What is your stand on work-life balance, is it an important aspect in the HR policy of your organization? Do you think that the shift from 5 to 6-day work week affects the work-life balance of the drivers?

Certainly work life balance is important; but at different stages of an individual’s life, the importance may be less or more. A younger single person may willingly devote more time at work because he/she wants rapid growth and recognitions and may not have any other commitments. A young parent may eschew a promotion or bigger role as he or she feels that there is more to be gained by being around during the child’s early years. In the end, work-life balance is about giving employees a choice as to where they want to place the divider between work and personal time. In that sense, the amended position of SMRT to allow bus driver to opt for 5 day week but with adjusted pay is providing a choice.

Question 4

In response to the situation, on 29 September, SMRT decided to allow bus drivers to opt for five-day schedule if they give up the rise in their basic. And just recently, on 15 October, the NTWU and SMRT management have come to an agreement to further increase the salary of the bus drivers between $75 to $250, coupled with an option to revert to five-day work week, which they can exercises within six months of implementation. Do you think about this solution to situation? Are there any recommendations that you would put in place given that this happened within your organization?

I think the flexibility of the final solution is something that might have been considered in the very first proposal. That would have avoided the unhappiness and the subsequent policy changes and re-adjustments. In the end it provides a choice and based on the reports that say many drivers anyway opt to work and extra day, this should still bring about a desired outcome in terms of providing enough resources for increased passenger load. Those who are already working 6 days will continue to do so, and some of the drivers working 5 days will elect to work for 6 days to earn more money.

With the benefit of hindsight, I would say that perhaps the views of the union and driver might have been sought before making the policy change. Perhaps it was done – this is not evident from the press releases, but for a unionized company such changes are normally discussed first with the union before implementation.
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[ 1 ]. (Tan, 2012)
[ 2 ]. (Musfirah, 2012)
[ 3 ]. (Heng, The Strait Times, 2012)
[ 4 ]. (Channel News Asia, 2012)
[ 5 ]. (Kaypoh, 2012)
[ 6 ]. (Citizen, 2012)
[ 7 ]. (Citizen, 2012)
[ 8 ]. (Manpower, 2012)
[ 9 ]. (Today Online, 2012)
[ 10 ]. (TR Emeritus, 2012)
[ 11 ]. (Heng, SMRT drivers appeal for return to 5-day work week, 2012)
[ 12 ]. (Tan, 2012)
[ 13 ]. Appendix A - SMRT bus drivers fear pay will fall
[ 14 ]. (TR Emeritus, 2012)
[ 15 ]. Appendix A – Email Interview with Mr Alan
[ 16 ]. Appendix B – Email Interview with Mr Alan
[ 17 ]. Appendix B – Email Interview with Mr Alan