Labour Movement urges continued vigilance, cost containment, workers' retraining and organisational upgrading in second half of 2009
17 July 2009
Media Release
Overview
1 While the unionised sector saw a sharp slow down in shorter work-week, temporary lay-off and retrenchment in second quarter (2Q) as compared to first quarter (1Q) of 2009, the National Trades Union Congress (NTUC) urges companies and workers to continue to be vigilant in cost containment, workers’ retraining efforts and organisational upgrading as there is still uncertainty in second half (2H) of 2009
2 In January 2009, NTUC set out to achieve three Key Performance Indicators – avoid massive retrenchments, avoid rapid unemployment and be ‘more up when up’ (or build up capabilities to seize opportunities for eventual upturn) – in response to the global economic downturn
3 The NTUC and its affiliated unions supported the tripartite partners’ quick response to upturn the downturn and worked closely with unionised companies to tap on the Jobs Credit scheme, Skills Programme for Upgrading and Resilience (SPUR) and Tripartite Guidelines on Managing Excess Manpower to help them manage their wage costs and up-skill their workers’ capabilities. The unions also persuaded their companies to send their workers, including retrenched workers, to NTUC’s e2i (Employment and Employability Institute) for retraining, skills upgrading and job matching. These efforts have helped to slow the rise in retrenchment and the unemployment rates
Mixed Business Performance
4 Based on unions’ feedback, unionised companies in the metalworks, electronics, chemical/petrochemical, construction and building, and hospitality sectors saw poorer business performance in the first half of 2009 (1H) as the impact of the economic downturn hits Singapore. In contrast, the marine, healthcare, land transport, education and high-end pharmaceutical sectors did better
5 In 1Q, the electronics, chemical and petrochemical, metal works, hospitality, construction and building management sectors faced low and declining demands which led to poor business performance. In 2Q, some recovery in the electronics sector was seen mainly because of higher inventory-driven demand arising from earlier production freezes and not because of increased consumer spending. The chemical and petrochemical sector also saw improved orders
Shorter Work-week, Temporary Lay-off and Retrenchments
6 In 1H, 31,177 workers in the unionised sectors were placed on shorter work-week and temporary lay-off as companies cut cost to save jobs. This is in comparison to 14,898 (full year figure) in 1998 during the Asian Financial Crisis and 45,561 (full year figure) in 2001 after the September 11 incident. For 1H, workers also faced a longer duration of shorter work-week and temporary lay-off as compared to the past crises. The mandays lost due to shorter work-week and temporary lay-off in 1H is four times higher than 1998 and as high as the whole of 2001
7 The unions understood the need to help companies stay afloat and thus, convinced their members and workers to accept smaller pay packets as a result of shorter work-week and temporary lay-off. These painful but necessary cost-cutting measures have helped to avoid a massive rise in retrenchments at the unionised companies. Compared to 1Q, 2Q saw a sharp slow down in the rate of shorter work-week and temporary lay-off (1Q 2009: 24,135 workers affected; 2Q 2009: 7,608 workers affected)
8 Despite the tripartite partners’ effort in helping companies cut cost to save jobs, some unionised companies still resorted to retrenchments as global demand and production fell drastically. 1H saw a total of 6,150 workers in the unionised sector being retrenched, mostly in the manufacturing sector, followed by the services sector. 1Q saw record high retrenchments followed by a two-third drop in number of retrenchments in 2Q (1Q: 4,744 workers retrenched, 2Q: 1,406 workers retrenched). Noticeably, 29% of those retrenched in 1H are aged 50 years and above, which is thirteen percentage points higher than in 1998, reflecting an ageing workforce here. Also, production and manual workers in the manufacturing sector bore the brunt of retrenchments, with more PMETs being affected as well
9 The slow down in shorter work-week, temporary lay-off and retrenchments in 2Q is a result of the following factors
a) Gradual business improvement in pockets of sectors in the electronics and chemical clusters driving up demand and production levels
b) Companies benefited from wage cost savings by tapping on Jobs Credit scheme and SPUR, which helped to reduce retrenchments.
c) Companies being cautious in not overly downsizing workforce as they would need to ramp up production when economy recovers
d) Workers and unions co-operated with employers in accepting cost cutting measures.
10 The unionised sector also saw severe wage freeze and wage cuts since 2Q 2008.
Labour Movement’s Assistance for Workers in Unionised Companies
11 In addition to helping workers save their jobs by working with unionised companies to cut costs, unions also team up with e2i to assist retrenched workers. In 1H, e2i assisted a total of 3,212 retrenched Singaporean and Permanent Resident in terms of employment advice and counseling, retraining and reskilling, and job matching and placement. This is almost half the 6,150 workers retrenched in 1H, as majority of the other half were foreigners. Additionally, under SPUR@e2i, 36,190 workers from 175 unionised companies were committed to skills upgrading and training under SPUR
12 The Labour Movement, with help from its unions, associations, co-operatives and partners like unionised companies and Singapore Labour Foundation, also raised $23.8 million for its U Care fund to provide immediate assistance to union members who are affected by the economic downturn.
Outlook for Second Half of 2009
13 For 2H, the global economic outlook remains uncertain as the World Bank and the International Monetary Fund further revised their respective global growth forecasts downwards. The unemployment situation in many major economies is also worsening with the International Labour Organization revising its global unemployment projections upwards.
14 Singapore’s economic outlook remains uncertain and is not likely to see a strong rebound. While there may be some signs of recovery in 2Q, there is no certainty that the economic downturn has bottomed out and that economic recovery has started. Also, it does not necessarily mean that 2H will be better than 1H. In 2H, the possibility of another wave of retrenchment cannot be ruled out as unions have been receiving notifications of impending retrenchments and signs of shorter work week. Additionally, unionised companies are likely to cut or freeze wages as business prospects remain uncertain. Bonuses will be dependent on individual companies’ performances
15 Given the uncertain outlook, the Labour Movement urges companies to stay the course to tap on SPUR to cut costs and save jobs, and to make full use of this lull period to build up their capabilities and competency. If we stop cutting costs to save jobs now, retrenchments will go up. And if we stop retraining workers and placing them into jobs, unemployment will rise. At the same time, workers should accept that cost-cutting measures to keep companies afloat are necessary to save their jobs in this unprecedented economic downturn. They should continue to re-skill and up-skill to prepare themselves for the upturn
Ms Cham Hui Fong
Director
Industrial Relations Department
National Trades Union Congress
