'I can spend it on groceries, like rice, as well as defray the cost of taking public transport to work,' said the 63-year-old who earns $1,600 a month.

His employer, food manufacturer Prima Singapore Group, is among 60 unionised companies that are heeding the National Wages Council's (NWC) call last month to help workers cope with the impact of inflation.

They agreed to do so after discussions with unions during the current 'negotiation season', when bosses and unionists meet to discuss wage and other adjustments in the wake of the NWC's annual recommendations.

Some 40,000 workers in the 60 companies will receive one-off payments of $100 to - in one company's case - $1,000. That firm declined to be identified.

The average payout, according to the National Trades Union Congress, is between $400 and $500.

Building good will and motivating staff EMPLOYERS SAY 'It builds good will and morale because we share their concern and as a socially responsible employer, we can play our part to help them cope with higher inflation.' ... more

While these companies represent just a part of the 1,000 unionised firms here, NTUC deputy secretary-general Heng Chee How is encouraged.

'Three weeks ago, (after the NWC's call) you had 20. Now it has tripled to 60. It's a good momentum. Of course we expect it to build up and our unions will continue to discuss this with employers very actively,' he said yesterday.

'It's the right thing to do, to extend assistance to your workers at this time. It will be appreciated by your workers and the labour movement.'

That was a reference to the fact that inflation, which hit a 26-year high of 7.5 per cent in April, has impacted on prices and eroded wage gains.

Real wages - pay minus the effect of inflation - fell in the first three months of the year, compared to the same period last year.

Hence inflation, which is forecast at 5 per cent to 6 per cent for the year, has weighed on the minds of union leaders during negotiations with bosses.

Said Chemical Industries Employees' Union deputy executive secretary Frank Lok: 'We do drill it into employers that the cost of living has risen. But we won't push for unreasonable basic pay increases as it is not sustainable.'

While unionists hope workers will get bigger pay packets to compensate for inflation, they know that higher wages can cause inflation to worsen.

'When you use wage increases to defray inflation, it's just like a mad dog chasing its tail round and round. There is no end to it,' said Food Drinks and Allied Workers' Union general secretary Tan Hock Soon.

The best option, he said, was to follow the NWC recommendations and press companies which are doing well to provide a one-off payment.

For Prima, the one-off payment is a way to build good will with employees, said group human resource and administration manager Chua Chin Leong.

Mr Heng believes that most firms can afford to give the payment, given the economy's steady progress this year. But unions also recognise that not all companies can afford it as some are not doing well.

Others are not offering the payment because of higher annual wage increments and bonuses already given to workers based on their companies' good performance last year.

As for non-unionised companies, Singapore National Employers' Federation executive director Koh Juan Kiat said that while most were 'generally positive' about the one-off payment, there was still 'some resistance' from others.

sueann@sph.com.sg

chinlian@sph.com.sg

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