The latest update to the guidelines that were drawn up in 2001, stressed that companies should consider retrenchment as a last resort. -- PHOTO: BLOOMBERG
SENIOR management should lead by example - by reducing their salaries earlier or accepting similar or deeper cuts - before cutting the wages of their employees.
Guidelines issued on Wednesday outlining cost-cutting steps available to companies in a time of economic slowdown, say that when there is a need to implement any measures, 'the principle and spirit of leadership by example ... should prevail'.
There should also be close consultations with unions and affected empolyees and transparency in the process.
The latest update to the guidelines that were drawn up in 2001, stressed that companies should consider retrenchment as a last resort.
As was the case in previous guidelines, companies have been advised to look instead at sending their workers for training, introducing shorter work-weeks or other alternative work arrangements to cut costs.
This could include making cuts in the flexible components of wages.
One new component included in the revised guidelines is the Monthly Variable Component, whch forms a part of the basic wage and allows the company to reduce it without having to wait until the end of the year.
The guidelines, issued by the Manpower Ministry, Singapore National Employers Federation, and the National Trades Union Congress, also stress that wage cuts should be done in consultation with the union.
The three partners said in a statement that they 'strongly encourage companies to manage their excess manpower and consider retrenchment only as a last resort'.
'To help save jobs, companies should first consider alternatives such as making use of the Skills Programme for Upgrading and Resilience (Spur) to send workers for training, redeploying workers to alternative areas of work, implementing shorter work-week, temporary lay-off, flexible work schedule or other flexible work arrangements, and managing wage costs through the use of the flexible wage system'.
SNEF president Stephen Lee urged companies to use the guidelines 'to map out various options to retain their employees as far as possible'.
'Companies should work with their unions to customise the proposed measures to suit their specific circumstances and business conditions'.
'Our tripartite efforts at wage restructuring have also put many companies in a position to reduce wage costs responsibly through the flexible components that have been built up in better times'.
We must all work together to help companies and workers to ride through this tough economic phase'.
Added NTUC deputy gecretary-general Heng Chee How: 'This economic crisis will test not only the survival instincts of companies and workers but also their core values. These guidelines will help companies manage excess manpower in strategic and flexible ways, while being fair and socially responsible to their workers'.
'They also let workers and unions help companies conserve resources, stay afloat and fight on. I urge companies to use these guidelines in the right spirit to avoid, delay or minimise retrenchments and save many jobs'.
'Together, we will tackle this downturn and strengthen competitiveness, trust and confidence'.
