National Wages Council calls for raises for workers whose firms do well, low-wage workers

The National Wages Council has urged employers to reward their workers with wage increases and variable payments in line with their company's performance.
The National Wages Council has urged employers to reward their workers with wage increases and variable payments in line with their company's performance.PHOTO: ST FILE

SINGAPORE - Employers that are doing well and facing good business prospects have been urged by the National Wages Council (NWC) to reward their workers with built-in wage increases and variable payments in line with their companies' performance.

The NWC also wants businesses to give their low-wage workers a rise in monthly pay of $45 to $60.

And in a nod to rising wages, it recommends that these wage rises be given to those earning a basic salary of up to $1,200 a month, a higher threshold than the $1,100 used last year.

The higher pay ceiling will benefit an additional 40,700 local full-time employees, according to Manpower Ministry figures. The ceiling was last raised from $1,000 to $1,100 in 2015, which covered some 92,400 of these workers based on last year’s wages.

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These annual wage guidelines by the NWC, announced on Wednesday (May 31), was accepted by the Government and will take effect on July 1.

For the second year in a row, the NWC recommended a range of pay increments for low-wage workers instead of a fixed amount as in the previous four years.

The range, however, was lower than the $50 to $65 recommended last year.

This takes into account the patchy labour market and uncertain economic outlook, said NWC chairman Peter Seah.

"The range is to provide flexibility for employers in the application of this particular recommendation," he added.

In a further fillip for low-wage workers, the NWC also called on employers to give those earning above $1,200 a raise and/or one-off lump sum based on their skills and productivity.

For all workers, the NWC wants employers to give "fair and sustainable" wage increases.

Those that have done well but face uncertain prospects may moderate their built-in wage increases. However, they should reward workers with variable payments that reflect the companies' performance.

Those that did poorly and face uncertain prospects may exercise wage restraint, with management leading by example, and should strive harder to transform and grow.

The Government, in accepting the recommendations, said on Wednesday it would refer to the guidelines in its annual wage increment exercise even though all government employees earn above $1,200.

The Manpower Ministry's annual report on wage practices released on Tuesday (May 30) showed that the proportion of companies that raised total wages last year was lower than the year before.

Three in four employees received salary hikes last year, slightly lower than the year before as slowing economic growth hit companies. Real total wages also grew at a slower pace last year compared with 2015.

The adoption rate of the quantitative guidelines for low-wage workers was 21 per cent last year, up from 18 per cent in 2015 before the guidelines were given as a range, said the NWC.

The guidelines are not legally binding.

Unionised companies fared better, with at least half of those with workers earning up to $1,100 giving increments of at least $50, and over half of this group giving increments of over $65, the top of the recommended range, said National Trades Union Congress (NTUC) assistant secretary-general Cham Hui Fong.

“Depending on companies, if their performance is good, their workers performance is good and the industry has this tightness, they will still have to pay something that’s reasonable to this group,” she said.

Labour MP and National Transport Workers’ Union executive secretary Melvin Yong added that the quantitative wage guideline is just one of the tools to improve the lot of low-wage workers, along with the progressive wage model and Workfare.

Ms Cham and Mr Yong are NWC council members this year.

Singapore National Employers Federation Robert Yap, also a council member, said that the lowering of the recommended increment range this year is to encourage more employers to implement the pay raises and ensure they are sustainable.

“Employers may not be afraid to give an increment but can we keep on giving? It’s very difficult to give one year and the next year take it back,” he said.

Beyond looking at a specific number, he added, “it’s about looking at how we can help the lower (paid) part of society to move together.”