WITH difficult times lying ahead, labour chief Lim Swee Say says the critical question that bosses, unions and the Government must ask is this:

'Do we focus our minds and efforts on cutting jobs to save costs, or cutting costs to save jobs?'

STRENGTHENING TRUST 'This is the way to ensure that we will be able to achieve not only the right outcome for businesses, but at the same time, a good outcome for workers. And this is a win-win outcome - one that will strengthen trust, not weaken trust; one that will strengthen tripartism, not weaken tripartism.' Mr Lim Swee Say, NTUC secretary-general and Minister in the Prime Minister's Office ... more

He is clear about what the answer must be - a uniquely Singapore solution:

'In Singapore, instead of focusing on cutting jobs to save costs, we focus our energy, our efforts on cutting costs to save jobs.

'This is the way to ensure that we will be able to achieve not only the right outcome for businesses, but at the same time, a good outcome for workers.

'And this is a win-win outcome - one that will strengthen trust, not weaken trust; one that will strengthen tripartism, not weaken tripartism.'

Mr Lim, who is secretary-general of the National Trades Union Congress, and a Minister in the Prime Minister's Office, said declining global demand meant that companies and industries were or would be operating under capacity.

There would be downsizing and some companies might not even survive - which would result in retrenchments and an increase in unemployment.

'From the labour movement's point of view, we are realistic. We are realistic that we'll not see another year of low retrenchments in 2009. We'll not see another year of full employment in 2009... ' said Mr Lim.

'For us, the top priority must be one of guarding against massive retrenchments and preventing a rapid rise in unemployment.'

But he warned against taking the approach of cutting jobs to cut costs. That would translate into 'massive retrenchments ... (and) a massive rise in unemployment'. Such an approach might achieve the right outcome for businesses, but the wrong one for Singapore workers, he stressed.

'This would be a win-lose situation: a win for businesses, a lose for the workers. This win-lose situation would eventually turn into a lose-lose situation,' he said.

'Trust would be weakened and eventually cooperation would turn into confrontation. This is not what we want to see happening in Singapore.'

To Mr Lim, the uniquely Singapore approach of cutting costs to save jobs is a win-win solution.

He said the desire to forge a win-win outcome is also why the labour movement welcomed the broad shape of the upcoming Budget - which will focus on helping businesses lower their costs - as well as the new measures announced yesterday to help companies with financing and to fund training.

Mr Lim's call for companies and employees to rally together was echoed by Singapore National Employers Federation (SNEF) vice-president Bob Tan.

Mr Tan said he expects most companies to observe the guidelines issued on Wednesday by the Manpower Ministry, NTUC and SNEF regarding how to manage excess manpower.

The guidelines urge bosses to save jobs through steps such as reducing variable wages, sending staff for training or having shorter work-weeks - and to consider retrenchment only as a last resort.

'Many companies have realised that as far as possible, they'd like to retain their workforce, their talent,' said Mr Tan.

'It's an investment. You don't just throw those investments out of the window at the earliest opportunity.'

SNEF members have been asking about the guidelines, he added, which suggests they are looking at ways to cut costs first, rather than cutting jobs.

Mr Lim noted that some companies are already taking steps in this direction.

Referring to e-mailed updates he received on Thursday from unionists in the electronics and chemical sectors, he said that one firm had introduced wage cuts of 5 per cent to 20 per cent - and that senior management was taking the deeper cuts. Although he did not name the company, The Straits Times understands it is Chartered Semiconductor.

Another company had redeployed its excess workers to other projects it is undertaking, and was also looking at tapping the larger training grants that have been announced.

Mr Lim also disclosed that two other companies had decided not to renew the work permits of their foreign workers when they expire.

Although the guidelines are not legally binding, Mr Lim, like Mr Tan, believes that employers will abide by them because it is the right thing to do.

Recalling the stance taken by his professor at a business ethics course he attended 18 years ago, Mr Lim, 54, said the class was told that as they rose up the ranks, they would discover that doing 'what is legal and what is good for business' is the easy thing to do.

'He said every good chief executive officer is able to do that. But he said the bigger challenge is to do things that are ethical and that are socially responsible.'

chinlian@sph.com.sg