Coronavirus pandemic

Challenging times for some workers as firms try to rein in costs

Covid-19 has hit the revenues of companies, and they are being helped to save jobs. The Straits Times looks at the impact on workers as firms try to manage costs. Economists say wages will be affected on a large scale, while retrenchments will also rise

Despite government support, some firms may still have to put workers on shorter work weeks or no-pay leave, ask them to take pay cuts, or reduce bonuses.
Despite government support, some firms may still have to put workers on shorter work weeks or no-pay leave, ask them to take pay cuts, or reduce bonuses.PHOTO: ST FILE

Things went south pretty quickly for part-time aquarist Yee Jiaying when the Covid-19 outbreak hit Singapore.

Ms Yee, 27, had been working part time at Resorts World Sentosa, looking after marine life at the aquarium and had been hoping to land a full-time position.

She was told to wait until February, but the company implemented a hiring freeze as it was affected by travel restrictions to stem the spread of the virus. Then in mid-March, she was let go, along with some other part-timers.

"I initially had hopes of becoming a full-timer who was earning about $2,500 a month at that time.

More stories like hers are surfacing as companies tighten their belts to try to survive the economic fallout from the pandemic.

As of the end of last month, the Ministry of Manpower (MOM) had received about 3,000 notifications since the middle of March from firms implementing cost-cutting measures affecting about 100,000 members of Singapore's workforce.

Employers who implement cost-saving measures during the circuit breaker period from April 7 to June 1 must notify the ministry if they have at least 10 employees and have cut salaries by more than 25 per cent.

Wages, rather than employment, are likely to bear the brunt of the labour market adjustment in the near term, the Monetary Authority of Singapore said last month.

Despite government support such as wage subsidies and loan schemes, some firms may still have to put workers on shorter work weeks or no-pay leave, ask them to take pay cuts, or reduce bonuses, it noted.

OCBC Bank chief economist Selena Ling said: "Wage cuts are likely to become more widespread and entrenched, while retrenchments may be a last resort since the policy tone is still very much supportive and protective of local employment."

Still, she and other economists expect layoffs to climb this year to anywhere from 45,600 to 200,000, with foreigners to form the bulk of those affected. There were 10,690 layoffs last year.

 
 
 
 

Preliminary data from MOM showed that 3,000 workers were retrenched in the three months to March 31, up from 2,670 in the preceding quarter, but that was before circuit breaker measures forced most workplaces to close for two months.

Ms Winnie Low, who was an administrative assistant at an Australian legal solutions firm until last month, was let go just two weeks before she was due to go on maternity leave when her employer filed for voluntary liquidation.

The 15 Singapore staff were told via teleconference that they did not have to report to work from the next day.

Ms Low, 25, said she has not been paid her outstanding salary or been paid in lieu of notice, unconsumed annual leave or maternity benefits.

"There is no telling when I will be unemployed until, as the earliest I would be physically able to find a job is when I have recovered after the confinement period," she said.

Her baby girl was born last Wednesday.

Associate Professor Randolph Tan of the Singapore University of Social Sciences said the impact of job losses will be especially hard in what are considered low-skilled occupations, which make up about 7 per cent of the resident workforce.

They would generally be less able to do their work due to social distancing requirements, compared with those who can work through technology channels, he said.

Other issues workers are facing include forced resignations and job offers being retracted, although these remain uncommon, an MOM spokesman said.

She added that any worker asked to resign against his will should file a wrongful dismissal claim with the Tripartite Alliance for Dispute Management. The claim can be taken to the Employment Claims Tribunals.

Mr Ian Lim, TSMP Law Corporation's head of employment and labour, said firms may legally rescind job offers before the prospective employee has accepted. But after acceptance, depending on the contract terms, the applicant may have a right to claim notice pay.

Government measures to help workers cope with the impact of the crisis include the Covid-19 Support Grant and the Self-Employed Person Income Relief Scheme.

The situation has improved for Ms Yee, who lost her job at Resorts World Sentosa in March.

 
 

Ms Yee, who had been receiving career guidance from Workforce Singapore's Careers Connect since late last year, eventually landed a post as a research associate at a biotechnology company. She started work on April 1 and received a pay hike of about 12 per cent.

Her advice to other job seekers: "It's better to keep on trying than to not do anything at all. As long as you try, you're giving yourself a chance."

 
A version of this article appeared in the print edition of The Straits Times on May 11, 2020, with the headline 'Challenging times for some workers as firms try to rein in costs'. Subscribe