Slow recovery prompts review

Points to consider for employers? employees?

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EMPLOYMENT GUIDELINES

Pearl Forss, pearlmaria@mediacorp.com.sg 

WITH the increasing unemployment rate and a projected fall in GDP in Singapore, the tripartite partners — comprising the government, employers and unions — have issued updated guidelines to help companies lower costs and save jobs.

Some green shoots may have appeared in the economy but we are not out of the woods. Hence, the tripartite labour partners have decided to update their guidelines that were first issued last November, as many companies continue to grapple with low demand and excess manpower.

Secretary-general of NTUC, Lim Swee Say, who is also Minister in the Prime Minister’s Office, said: “The global economy may be performing better, at least for the second quarter. But in Singapore, the tripartite partners are very mindful that we are still a long way from a sustained recovery.”

The guidelines state that if shorter work weeks are to be implemented, it should not exceed three days in a week, or last more than three months at any one instance, subject to review.

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SOME RECOMMENDATIONS

Shorter work week

• Ask workers to take up to 50 per cent of their earned annual leave
• Implement the reduction in work week such that it does not exceed three days in a week and not last for more than three months at any one time, subject to review
• Pay the affected employees not less than half of their salary on the day(s) when the employees are not working, during the period when the shorter week is implemented
• Leverage on Spur to send workers for skills upgrading on the day(s) when they are not working, and claim absentee payroll — a move that will benefit both employees and employer

Temporary layoff

• Request for employees to take up to 50 per cent of their annual leave
• Implement the lay off period such that it does not exceed one month at any one instance subject to review
• Pay the affected employee not less than half of their salary during the layoff period

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Employees should also not be paid less than half of their salaries on the days they are not working.

Likewise, if temporary layoffs are necessary, the period should not exceed one month, subject to review, and employees should not be paid less than half their salaries.

For shorter work weeks and temporary layoffs, the guidelines also suggest requesting workers to take up to 50 per cent of their earned annual leave.

In implementing no-pay leave, companies should have first put in place other cost-cutting measures.

Vice-president of the Singapore National Employers Federation, Bob Tan, said: “Workers don’t earn a lot . So if they have no-pay leave, they got to find other ways and means of earning a living ... But it’s better to have no-pay leave and send the workers for training than to retrench the workers. So I think these guidelines take into account what is fair for the workers but at the same time enables the company to continue operating.”

As for pay cuts, the guidelines recommend management should lead by example and take deeper cuts.

Deputy secretary-general of NTUC, Heng Chee How, said: “When it comes to things that affect wages, then can you do it in such a way that you can get a buy-in from the workers? Management should lead by example so workers will know that this is true and they are not taken for a ride.”

In a period of slack, companies are also encouraged to send their workers for upgrading. They can pick from the over 1000 subsidised courses under the Skills Programme for Upgrading and Resilience (Spur).

And if retrenchment is inevitable, the compensation should be calculated based on the pay the worker was drawing prior to any wage cuts.

The prevailing norm is to pay a retrenchment benefit varying between two weeks and one month salary per year of service.

Companies should consult workers if retrenchment becomes necessary and notify the Manpower Ministry as soon as possible.

The guidelines also recommend making the monthly variable component (MVC) a permanent feature in calculating salaries.

Manpower Minister Gan Kim Yong said: “We want to encourage our employers who have implemented wage cuts this time, that when they restore the wage cuts, to put in the MVC so that it will create more flexibility in our wage system.”

Companies facing problems can turn to the tripartite upturn strategy teams at www.mom.gov.sg for help. Channel NewsAsia

From TODAY, News – Monday, 18-May-2009

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