THE National Wages Council (NWC) wants employers to stick to the recommendations it had made six months ago: Reduce pay or freeze wages before laying off workers.

It does not see the need to make more drastic recommendations despite no improvement in the gloomy economic conditions. The reason is that government measures have helped to buffer companies against the force of the recession as well as minimise job losses, said NWC chairman Lim Pin on Wednesday.

Citing a survey of 1,900 employers at end-March, Professor Lim said more than six in 10 say they do not intend to retrench because of measures like the $4.5 billion Jobs Credit scheme, in which the Government subsidises a worker's salary.

'The measures have made a significant impact in helping companies and workers cope with the downturn,' he said, urging firms to continue to tap on such schemes. If there are pay cuts to be made, management should take the lead, NWC said.

The Government has accepted the recommendations, saying it supports the call 'for employers to look at ways to manage costs, stay viable and save jobs'.

In announcing the wage guidelines on Wednesday, Prof Lim cautioned against expecting a quick economic recovery, despite 'green shoots' suggesting recovery is imminent.

Singapore's economy shrank by 10.1 per cent in the first three months of this year, during which job losses peaked to a 10-year quarterly high of 12,600.

But lately, the stock market has rallied, gaining 21 per cent in May, while local industrial production has seen its decline levelling off.

These have prompted several analysts to declare the economy has bottomed, with some expecting a quick rebound.

Analysts interviewed hardly raised an eyebrow at the new guidelines, given the uncertainty over the recovery. The wage guidelines, though not mandatory, are followed by most companies.

Read the full report in Thursday's edition of the Straits Times

aaronl@sph.com.sg