SINGAPORE - All employers should re-evaluate their current business situation, with the National Wages Council (NWC) urging those that are growing or recovering from the Covid-19 impact to take steps to restore their workers' wages, reward them fairly through variable payments and bring forward hiring plans.
However, employers that face significant cost pressures and poor business prospects can still implement temporary wage cuts if it means saving jobs, said the tripartite body in issuing an addendum to its current guidelines on Friday (May 14).
The guidelines issued last year remain relevant, given the current economic outlook, and will be extended to Nov 30, said the high-level council.
This comes as Singapore's gross domestic product growth this year is likely to exceed 6 per cent, barring a setback to the global economy or domestic health situation. This is higher than the 4 per cent to 6 per cent growth the Ministry of Trade and Industry had earlier forecast.
However, the NWC - which comprises representatives from the Government, employers and unions - recognised that the recovery will be uneven across sectors, with some doing so faster than others. Sectors such as manufacturing, wholesale trade, finance and insurance, and information and communications are expected to grow, but recovery for tourism and aviation sectors are likely be protracted.
Speaking at the Ministry of Manpower building in Havelock Road, NWC chairman Peter Seah said that for many employers, their circumstances would have changed significantly, compared with last year.
Hence, there is a need for employers to re-evaluate their business situation, he added. "Recovery is patchy, and different companies are facing different circumstances in their businesses."
Among other things, the guidelines, which have been accepted by the Government, recommend that employers that are heavily affected by the pandemic promptly implement a flexible wage system, by introducing a monthly variable component on top of an annual variable component for more timely wage adjustments in response to changing business conditions.
To minimise retrenchments and avoid wage cuts, they should first tap government support measures, exhaust non-wage cost-saving measures, as well as retrain and redeploy employees to new job opportunities, the NWC said.
The council also called on employers to give special consideration to low-wage workers, encouraging employers that have to resort to wage cuts to implement a wage freeze for such staff instead.
Firms that have done well or are recovering can consider built-in wage increments to boost the wages of these workers, it added.
National Trades Union Congress president Mary Liew also urged employers to pay their staff an annual wage supplement, as this would help workers with their seasonal expenses during this challenging period.
The NWC convened last month to relook guidelines on wage and employment-related issues. In its deliberations, it considered the domestic and global economic outlook, as well as Singapore's pace of recovery.
It will convene again later this year to update the guidelines for the period from Dec 1 to Nov 30 next year, said the council, citing the evolving Covid-19 situation.
Permanent Secretary for Manpower Aubeck Kam said the labour market is still not fully back to pre-pandemic conditions.
"Given the economic situation and outlook, the focus remains on sustaining businesses, saving jobs and pressing on with business and workforce transformation," he added.
The council meets every year to update guidelines on wage and employment matters.
Last year, the tripartite body, in a rare move, reviewed its wage guidelines for a second time as the coronavirus outbreak took a toll on the labour market.
It was only the fourth time since being set up in 1972 that the council was convened twice in the same year. The previous times came amid major economic crises as well, in 2009, 2001 and 1998.
The council convened earlier than usual in March last year to discuss how employers can sustain their businesses and save jobs in light of the coronavirus outbreak. It usually meets in April and May.
Its initial annual recommendations focused on reducing non-wage costs and tapping government support first.
Supplementary guidelines were issued last October as an update to to provide directions to minimise retrenchments and encourage implementation of the flexible wage system.
Then, the NWC said in updated guidelines applicable from Nov 1 last year to June 30 that employers may implement temporary wage cuts if it means saving jobs. But it added that employers should seek employees' support before doing so, and make only the reductions necessary to minimise retrenchments.
Singapore National Employers Federation president Robert Yap said it is timely for employers to look beyond business survival and focus on business sustainability too.
"I strongly urge employers to press on with wage restructuring, business and workforce transformation and uplifting low-wage workers to ensure that both economic growth and wage growth are sustainable and inclusive."
