NWC proposes one-off bonus as economy and productivity grow

The National Wages Council recommended that those earning a basic salary of up to $1,300 a month should get built-in increments of between $50 and $70.
The National Wages Council recommended that those earning a basic salary of up to $1,300 a month should get built-in increments of between $50 and $70.ST PHOTO: JOYCE FANG

A one-off bonus has been proposed for the first time by the National Wages Council (NWC) as a reward for workers, following the robust growth of the economy and labour productivity more than doubling last year.

It made the call to companies that achieved productivity gains to share them with workers.

But it did not suggest any amount or proportion, except for workers earning a basic monthly wage of up to $1,300. They should get between $300 and $600 of this special payment, either in a lump sum or over several payments, the NWC said yesterday when issuing its annual wage guidelines.

The recommendation was made as labour productivity more than doubled to 3.8 per cent last year, from 1.4 per cent in 2016, while the economy expanded 3.6 per cent, up from 2.4 per cent the year before.

Speaking at a media briefing on the NWC guidelines, which takes into account input from employers and unionists, NTUC assistant secretary-general Melvin Yong said the bonus was the most difficult item for the parties to agree on.

"I am sure you can guess that each party asked for more," he quipped.

"A range gives us flexibility in terms of implementation when you negotiate with the companies. At the same time, just like the annual wage increment, the range gives a guideline to employers," he added.

When asked how the range was reached, Singapore National Employers Federation chairman Robert Yap quipped: "After a lot of negotiations."

NTUC president Mary Liew added: "Into the early mornings."

ROOM FOR FLEXIBILITY

It has to be something manageable, rather than something that companies would regret paying out. Recommending a range also allows more companies to participate. Those that enjoyed higher productivity gains can give more.

SINGAPORE NATIONAL EMPLOYERS FEDERATION CHAIRMAN ROBERT YAP, on the special one-off payment.

Dr Yap said it was important for the recommended range to be sustainable for companies.

"It has to be something manageable, rather than something that companies would regret paying out," he said. "Recommending a range also allows more companies to participate. Those that enjoyed higher productivity gains can give more."

CIMB Private Bank economist Song Seng Wun noted that much of the productivity gains made last year were due to big boosts in export-oriented sectors such as manufacturing, wholesale trade, and transport and storage.

Productivity in outward-oriented sectors surged by 6.7 per cent last year, while that in domestically oriented services fell by 0.2 per cent.

"However, service sectors are doing better this year amid a broadening of the economic recovery, so perhaps workers in these industries could receive the bonus later this year or in 2019," Mr Song said.

Some employers told The Straits Times that they were open to the special payment, which they said would boost the morale of their workers, while others were more circumspect.

Mr Raj Joshua Thomas, chief executive of security firm TwinRock, said: "Low-wage workers' days could be filled with routine and administrative tasks, and they might not feel like they belong. When companies share their gains, these workers would see they have a stake in the company.''

Mr Raj, who has about 150 workers, added that employees who feel this sense of belonging may be motivated to work harder, resulting in even higher productivity.

Mr Vicky Nathan, chief executive of Assured Protection and Consultancy, agreed the bonus is a good idea. But his company may not offer it as it already shares productivity gains with workers through bursaries and awards.

Similarly, Mr Darren Lim, executive director of home-grown sauce and paste manufacturer Hai's, said instead of the one-off payment, he prefers to raise the salaries and performance bonuses of his workers.

A version of this article appeared in the print edition of The Straits Times on June 01, 2018, with the headline 'NWC proposes one-off bonus as economy and productivity grow'. Print Edition | Subscribe