SINGAPORE - A court hearing to interpret the terms of a collective agreement between bus and train operator SBS Transit (SBST) and the National Transport Workers' Union (NTWU) is scheduled for tomorrow.

SBST referred the matter to the Industrial Arbitration Court (IAC) after five of its bus drivers filed lawsuits at the State Courts over alleged breaches to the terms of their employment.

The drivers claim SBST paid them below the Ministry of Manpower's (MOM) regulated rate for overtime work, and that their working hour records do not match the monthly pay slips they were given.

While industrial arbitration is seen as a more efficient and less costly method of settling labour disputes, it is a relatively unfamiliar process to many Singaporeans.

Here is a primer on what to expect.

What is the IAC?

The IAC is a court that serves as the last resort when other avenues for resolving an industrial dispute have failed.

The majority of such disputes are resolved within the company, so cases in which employees sue their employers, as the five SBST drivers have done, are unusual.

According to the National Trades Union Congress (NTUC), only about 6 per cent of reported cases between 2015 and last year - or fewer than 100 cases a year on average - could not be resolved internally and had to be escalated to MOM for conciliation. Of these, about six in 10 involved individual grievances over salary, benefits, termination, dismissal and work performance.

If a dispute still cannot be resolved by the MOM, the employer, union or both can then refer the case to the IAC for arbitration.

Four such cases were referred to the IAC in as many years between 2015 and last year. Since 2008, an average of six dispute cases a year have been lodged with the IAC.

The court consists of a three-member panel: a representative selected by the employer; one selected by the union; and the IAC president, a post currently held by High Court judge Chan Seng Onn.

The employer and union representatives assist in the deliberation but the president alone decides the outcome, which is final, legally enforceable and cannot be appealed.

Why no lawyers are allowed

Unlike other courts, practising lawyers representing either party in an industrial dispute are barred from the IAC.

Veteran mediator and labour expert Ong Yen Her said this is because the IAC takes into account the interests of the economy and the community at large, not just those of the parties involved.

Compromise, rather than a strict adherence to legal entitlements, is therefore a key feature of the IAC, added Mr Ong, 72, who has over 40 years of experience in labour relations.

He previously served as director of the MOM's labour relations and workplaces division and is now the ministry's principal consultant on trade unions and industrial relations.

"Lawyers who are hired by either the employer or the union want to win, so it is more difficult to come to a compromise. The case can drag on for a long time," Mr Ong said.

He added that unions and employers, especially those providing essential services like public transport or healthcare, cannot afford the time or legal fees that come with lawsuits. The IAC allows disputes to be resolved quickly, affordably, fairly and with finality, he said.

"The IAC plays a very important role in putting an end to disputes.

"More importantly, it sets norms and precedents which have an impact on other companies or industries."

Preventing strikes since 1960

Established in 1960 with the passing of the Industrial Relations Act, the IAC was intended to encourage collective bargaining and the free negotiation of collective agreements on matters affecting the relations between employers and employees.

The court thus helped to prevent industrial action such as strikes and picketing, which were common in Singapore in the 1950s and 60s, by offering a peaceful alternative in the form of arbitration.

A legal strike is technically still possible today if a union approves it, but they are virtually unheard of.

A strike by 171 SMRT bus drivers in 2012 was deemed illegal as the drivers were not members of a union and had caused disruption to public transport, an essential service, without giving the legally required two weeks' notice.

The drivers, all Chinese nationals, were unhappy at being paid less than their Malaysian counterparts and at the poor living conditions in their dormitories.

The last legal strike in Singapore happened in 1986 when the NTUC's then-secretary-general Ong Teng Cheong signed off on a two-day strike by members of the Shipbuilding and Marine Engineering Employees' Union against their employer Hydril, an American oilfield equipment company.

Avenues for non-union members

Unions are unlikely to approve a strike today as they adopt a more "pragmatic" approach, said veteran union leader Karthikeyan Krishnamurthy, 60, who chairs the NTUC's Oil, Petrochemical, Energy and Chemicals cluster.

Instead, unions work with the Government and employers through avenues like the Tripartite Alliance for Dispute Management (TADM), Mr Karthikeyan said.

When all else fails, cases are resolved at the IAC.

"Working conditions and benefits, as laid out in collective agreements negotiated by unions, have improved much since the 60s," Mr Karthikeyan said.

He added that this is another reason that serious disputes have become less common today, and why the IAC sees so few cases each year.

Favourable terms in collective agreements benefit even non-union members if they are working in a unionised company, he said.

Ordinarily, the IAC cannot arbitrate disputes involving non-union members. The five SBST drivers, though part of a unionised company, had resigned from the National Transport Workers' Union over the dispute as they felt they had not been properly represented.

However, the terms of their collective agreement have been raised to the IAC for interpretation as they affect not only the five drivers but also about 6,000 other SBST drivers.

Although Mr Karthikeyan declined to comment specifically on the SBST case, he said non-union members can also seek redress through the TADM or the Employment Claims Tribunals of the State Courts.