Over 187,000 workers' salaries affected in past 3 months, but most employers fair and reasonable: MOM

The largest group of about 45,000 affected workers are in the accommodation and food services industry.
The largest group of about 45,000 affected workers are in the accommodation and food services industry.ST PHOTO: GAVIN FOO

SINGAPORE - In the three months from March 12, more than 4,800 employers notified the Ministry of Manpower (MOM) about cost-saving measures that impacted their employees' monthly salaries.

In all, the measures they reported so far affected more than 187,000 workers, with the majority coming from sectors severely impacted by Covid-19, said the ministry in a statement on Wednesday (June 24).

The workers affected make up about 5 per cent of the total workforce here, excluding maids.

Most had their salaries cut by up to 25 per cent as a result of the cost-saving measures implemented.

The largest group of about 45,000 affected workers are in the accommodation and food services industry.

Their employers, such as hotels and restaurants, made up 24 per cent of those who submitted notifications.

Another 25,000 work in construction firms such as builders and demolition companies, while 19,000 are in wholesale and retail trade firms, which could include confectionery stores and departmental stores.

Firms with 10 or more staff must notify the ministry if they take cost-saving measures that affect employees' monthly salaries.

The MOM and the Tripartite Alliance for Fair and Progressive Employment Practices (Tafep) said in the joint statement that the top three cost-saving measures implemented were no-pay leave, adjustments to monthly salary components, and shorter work week.

More than 600 employees approached the ministry for help as they felt the steps taken by their companies were unfair or unreasonable.

But the MOM and Tafep found that 74 per cent of the cases arose due to misunderstandings because employers did not communicate well with employees about what measures they were taking, and why they were needed.

 
 
 

Some employers were also unsure at the start of the circuit breaker period as to how much support they would be receiving and how they should use the Jobs Support Scheme (JSS) payout.

The most common issue raised in complaints by employees was whether employers were allowed to ask workers to use their annual leave or take no-pay leave, given that there is government support, such as the JSS and foreign worker levy rebates.

For example, a sales manager thought that her employer received JSS payouts since October last year, and was unhappy that her employer was implementing cost-saving measures from April this year.

The MOM explained that the JSS payouts started only in April this year, though the payout for April was calculated based on salaries paid in October to December last year.

In another case, a contact lens shop employee complained that she was the only one of six staff told not to work and had her salary halved during the circuit breaker.

It turned out that the company was required to limit the staff at the shop to five due to safe distancing rules, but this reason was not explained to her.

The worker eventually understood the rationale and came to an agreement with her employer to receive 75 per cent of her salary, instead of 50 per cent.

The MOM said that employers it dealt with were cooperative and prepared to review their practices, while employees were also willing to accept the cost-saving measures to save their jobs.

"Many disputes can be avoided if both parties communicate, make some sacrifices, and work together to help the company pull through this crisis," it said in Wednesday's statement.

It added that there has not been a case so far of any employer willfully refusing to channel government funding to proper use.

The Government, employers and unions had previously agreed that it is reasonable for bosses to ask workers to tap existing leave entitlements or even take some no-pay leave when business activity has fallen sharply, in order to manage cost pressures and conserve manpower.

MOM director for employment standards enforcement Christine Loh said: "To weather the impact of Covid-19 in the months ahead, employers and employees have a shared responsibility to work together and make sacrifices to prevent retrenchment and preserve jobs."

She added that MOM will investigate complaints and take actions against employers who do not treat employees fairly.

Tafep also contacted about 700 employers, which employ more than 33,000 workers whose salaries were affected, over the three months from March 12 as their cost-saving measures appeared to be excessive from the notifications they submitted.

About 300 employers agreed to review their measures, while the remaining 400 were able to justify the need for their measures for business survival.

Some of those who changed their measures gave employees more wage support or lowered the number of days of annual leave they were requiring their workers to clear.

For example, contractor Samkang Construction had planned to ask employees to take turns to go on unpaid sabbatical leave until normal work could resume.

The firm, which has 73 staff, had no revenue during the circuit breaker as it had to cease operations completely and could not make work from home arrangements for staff due to the nature of their jobs.

 
 
 

After working with Tafep, it did not ask staff to go on sabbatical, and instead channeled the full JSS payouts to employees.

It worked out salary cuts of between 25 and 40 per cent with staff, taking into account the JSS and foreign worker levy rebates.

Tafep general manager Roslyn Ten said that while the Government has rolled out wage support through the JSS, employers need to be responsible in how they adopt cost-saving measures to keep their businesses afloat.

"Employers also need to be open and transparent with employees on the need for cost-saving measures, and how these are to be implemented.

"Open and honest communication will go a long way in ensuring that these sometimes painful measures are carried out smoothly," she said.