As it has done for the last five years, the National Wages Council (NWC) yesterday called for more pay hikes to lift the salaries of low-wage workers, but unionists are concerned not enough companies are following the non-legally binding recommendations.
Just 18 per cent of private sector employers followed NWC's guidelines last year to give increments of $60 or more to workers earning up to $1,100 a month.
National Trades Union Congress assistant secretary-general Zainal Sapari called for the Manpower Ministry (MOM) to dangle more carrots to incentivise companies to adopt the NWC guidelines.
"MOM has many levers it can use, such as approval for work permits or grants, and we could explore some of these," he said. He suggested making the wage hikes part of the criteria for the Lean Enterprise Development Scheme, an initiative that allows firms temporary leeway on their foreign worker quota to help them restructure.
This year, NWC has suggested employers give workers earning monthly wages of up to $1,100 pay rises of between $50 and $65. It is the first time it has suggested an increment range instead of a minimum amount, to give employers breathing room in raising wages.
Unionists hope this will make companies more amenable to the increments. Noted Mr Nasordin Mohd Hashim, president of the Building Construction And Timber Industries Employees' Union: "Only 50 per cent of (unionised) companies gave increments last year, and many workers in outsourced companies don't even benefit."
In a Facebook post, NTUC assistant secretary-general Patrick Tay addressed naysayers doubting the effectiveness of the NWC. He said that when NTUC had taken employers to the Industrial Arbitration Court (IAC) in the past few years, the IAC president had made "explicit reference" to the NWC guidelines in his grounds of decision.
Employers welcomed the more flexible guidelines in view of a gloomy economic forecast.
Singapore Business Federation chief executive Ho Meng Kit said the range "offers flexibility to businesses to reward their workers (in a way that is commensurate) with the companies' performance and prospects amid the sluggish global economy".
Association of Small and Medium Enterprises president Kurt Wee said: "I think it signals that they want to offer employers a bit of leeway."
He said companies, especially small and medium-sized enterprises, are suffering cash-flow issues from falling orders, and productivity has not necessarily risen in tandem with wage hikes in past years.
Singapore Chinese Chamber of Commerce and Industry president Thomas Chua stressed that "continued emphasis on skills upgrading is necessary to underpin wage increases".
Eight out of 10 employers The Straits Times spoke to supported the new recommendations.
Ms Helen Thiang, executive director of piping supplier Soonsteel International, called the measures a "win-win situation".
"The recommended wage increases are fair enough in accommodating the current cost of living, and employers can also retain talent that way," she said.
But others felt they might not be able to handle the hikes.
Mr Rodney Seah, head of talent management at a Keppel subsidiary, said: "With the current market conditions, especially in the oil and gas industry, it may be quite difficult for us to adhere to the recommendations."