By Goh Chin Lian

THE Industrial Arbitration Court (IAC) has ordered a major construction company to enter into talks and conclude a collective agreement with its union.

Sembawang Engineers and Constructors had previously refused to do so - a decision which prompted Manpower Minister Gan Kim Yong to step in and refer the dispute to the IAC.

At the end of a hearing yesterday, IAC president Chan Seng Onn gave the company one month to negotiate an agreement with the Building Construction and Timber Industries Employees' Union.

The agreement would have to be signed within a week after that.

A refusal to abide by the order could amount to contempt of court and an employer could be fined up to $2,000 or jailed for up to one year, or both.

The IAC could then also make an award in favour of the union.

Earlier, in a courtroom packed with over 50 unionists, the Indian-owned construction firm cited the loss of competitiveness as a key reason why it did not want to negotiate a collective agreement.

Such agreements outline, among other things, bargaining rights of rank-and-file workers with management on issues ranging from wages to retrenchment benefits.

Sembawang's chief operating officer Chua Sek Kok argued that an agreement would lock the company into offering fixed terms for benefits. This was contrary to the flexible wage system recommended by the National Wages Council (NWC).

More than 99 per cent of construction firms here, including those from China, Japan and Korea, did not have a collective agreement with a union, he added.

'We wish we could be on an equal platform with them for the survival of our organisation,' he told the IAC panel, made up of Justice Chan, employee representative Teo Yock Ngee and employer representative Loh Oun Hean.

Having an agreement could impede global operations as his company could then be expected to enter into similar agreements in other countries, he added.

'We should not be forced to enter into a collective agreement which is not required under any legislation,' he said.

His claims were challenged by the union's representative, Madam Halimah Yacob, a deputy secretary-general of the National Trades Union Congress (NTUC).

On his assertion that having a collective agreement was at odds with a flexible wage system, she said: 'This argument really takes the cake. It's turning the NWC recommendations on its head.'

She said that 96 per cent of unionised companies had a flexible wage system. This was also the case for 79 per cent of companies whose workers are not represented by unions.

Citing the track record of unions in accepting flexibility in the wage structure and supporting wage cuts during the recent downturn, she told the hearing:

'These are clearly not the conduct of irresponsible or unreasonable unions that believe in imposing onerous obligations on employers to render them uncompetitive.'

She did not think Sembawang should be exempted from having an agreement just because others did not have one.

'That means we will never be able to organise workers in a new sector, because every company will say: 'There is no collective agreement, therefore no need to sign. Nothing you can do'.'

The right to collective bargaining and coverage by a collective agreement was a fundamental right of workers, said Madam Halimah, a lawyer by training.

She said Sembawang had 'a clear and consistent pattern of anti-union behaviour', such as in not notifying the union when it transferred workers to another firm when part of its business was sold.

It also tried to get workers who were being retrenched last year to sign a letter rejecting union representation.

'Left unchecked, the company's line of argument and conduct will destroy the strong tripartite relationship we have carefully built over the years,' she said.

Justice Chan said both sides could seek conciliation - or failing that, arbitration - should there be terms that they could not reach agreement on.

Union executive secretary Heng Chee How, who is also an NTUC deputy secretary-general, said it would do its utmost to reach a 'win-win' agreement.

Sembawang declined to comment when asked about the court's order.

About the case

NEGOTIATIONS have been ongoing between Sembawang Engineers and Constructors and its union since January 2007.

This was shortly after NewDelhi-based engineering and construction group Punj Lloyd acquired the company from Temasek-linked utilities and marine group SembCorp Industries.

But the company, which has built MRT and LRT stations here, broke off talks with the Building Construction and Timber Industries Employees' Union in May this year.

Despite the Manpower Ministry's conciliation efforts and advice, the company refused to return to the negotiating table.

It also would not agree with the union to jointly refer the dispute to the Industrial Arbitration Court (IAC).

On Aug 28, Manpower Minister Gan Kim Yong stepped in, ordering the dispute to be referred to the IAC.

The court's decision is final.

This article was first published in The Straits Times.