National Wages Council to reconvene this year amid Covid-19's rising toll on Singapore jobs

Manpower Minister Josephine Teo at a recent meeting with NTUC secretary-general Ng Chee Meng (right) and SNEF president Robert Yap to share information on ground concerns.
Manpower Minister Josephine Teo at a recent meeting with NTUC secretary-general Ng Chee Meng (right) and SNEF president Robert Yap to share information on ground concerns.PHOTO: JOSEPHINE TEO/FACEBOOK

SINGAPORE - The National Wages Council (NWC) will reconvene this year as the Covid-19 pandemic takes a toll on the labour market.

Manpower Minister Josephine Teo announced this in a Facebook post on Monday (Aug 3) after a recent meeting with National Trades Union Congress (NTUC) secretary-general Ng Chee Meng and Singapore National Employers Federation (SNEF) president Robert Yap to share information on ground concerns.

"Both the views of workers and employers matter, especially at this critical time... We will remain in close consultation on jobs and the economy," said Mrs Teo.

She said they agreed to reconvene the NWC, which is usually convened once a year. 

The high-level council, chaired by DBS Bank chairman Peter Seah and comprising representatives from the Government, employers and unions, had already been convened earlier than usual this year and released wage recommendations for April 1 this year to 30 June next year. 

The guidelines are typically from July to June the next year and released in end-May.

This is only the fourth time since being set up in 1972 that the council has relooked its guidelines twice in the same year.

In 2009 amid the global financial crisis, it updated its guidelines in January to recommend – among other things – that companies work with unions and workers to manage costs, such as through wage freezes or wage cuts, to save jobs.

Before that, it had also released recommendations twice in the same year in 2001, after the Sept 11 attacks on the United States, and in 1998 during the Asian financial crisis.

The council released its recommendations on March 30. It had recommended, among other things, that employers affected by the pandemic first reduce non-wage costs and tap government support before looking to reduce their workers’ wages.

Special consideration should be given to low-wage workers earning a basic monthly wage of up to $1,400. Their pay should be frozen rather than cut, if there are company-wide wage cuts, or if a wage freeze or increase is planned, employers should consider giving low-wage workers a built-in wage increase of up to $50.

Retrenchment should be a last resort, and employers doing so should ensure they conduct the exercise fairly and according to the tripartite advisory on managing excess manpower and responsible retrenchment which was updated in March, it had said.

 
 
 

Mrs Teo said in her post on Monday that about 3,600 employers notified the Ministry of Manpower of cost-cutting measures taken since April that had impacted workers’ salaries, protecting some 150,000 jobs that might otherwise have been lost and workers displaced.

Many employers took the cue from the council’s recommendations this year to manage excess manpower, such as by implementing a flexible work schedule to time-bank the hours not worked while continuing to pay their workers’ salaries in full, or supporting those whose commission or overtime pay were reduced to get a second job to supplement their income, she said.

Mrs Teo noted that the majority of employers have been responsible and fair in implementing cost-saving measures and preventing job losses. In many of the cases in which her ministry had to intervene, the employers were prepared to review their initial plans to lighten the burden on employees.

“However, significant economic headwinds and uncertainty remain. Many employers will continue to see weak demand, and face pressure to retrench workers. It is therefore timely for NWC to update the tripartite position on wages and other issues of concern to workers and employers,” she said.

The minister’s comments come after the preliminary labour market data for the second quarter of the year, released on July 29, showed that unemployment and retrenchments have risen from the first quarter.

“It is quite likely that the spike would have been sharper if not for employers and unions working hand-in-hand to save jobs through other cost-saving measures,” she said.

The overall unemployment rate rose to 2.9 per cent in June after taking into account seasonal variations – the highest in just over a decade, and up from 2.4 per cent in March. But it was still below the previous peaks during the global financial crisis and the Sars outbreak.

Retrenchments more than doubled in the second quarter, with 6,700 workers laid off, up from 3,220 in the first quarter. This was higher than the peak of 5,510 during the 2003 Sars outbreak, but below the 2009 global financial crisis high of 12,760.

Mrs Teo also commented on the Fair Retrenchment Framework proposed last month by the NTUC, which includes protecting the Singaporean core of the workforce while foreigners with special or critical skills could be retained as well.

She said Snef will consider the framework and discuss a mutually acceptable way forward with NTUC. 
In the meantime, the ministry will continue its work on the Fair Consideration Framework, she said, adding that there would be updates soon.

“Tripartite partners are aligned on one thing – the need to support our workers and businesses through the storm brought about by Covid-19. Much work ahead,” she said.