25 May 2010
Recognise Sacrifices and Reward Efforts with Sustainable Wage Increase
1. With a strong and broad-based recovery of the Singapore’s economy, employees can look forward to wage increase and bonuses. The National Trades Union Congress (NTUC) welcomes the National Wages Council’s (NWC) recommendations to grant sustainable wage increase to employees, taking into account company performance and prospects. The recommendation is reflective of the current tight labour market situation, and further recognises the sacrifices made by workers during the downturn last year. Such a reciprocal move from employers will deepen mutual trust between employers and employees, strengthen labour management relationship and put us in a stronger position to overcome future challenges together.
2. Despite a broad-based recovery of the Singapore economy, NTUC is also mindful that there are companies who have not fully recovered from the downturn and our priority is to save jobs in these companies. Therefore, NTUC supports NWC’s recommendations for these companies to grant variable payments instead.
3. NTUC is also reiterating its support to the recently announced increase in employers’ Central Provident Fund (CPF) contribution rate, and agrees with NWC’s recommendation that unions and companies take into account the increase in employers’ CPF contribution rate as part of the overall wage package.
4. NTUC also backs NWC’s recommendations for companies to continue to maintain and enhance flexibility in their wage structures by building up the monthly variable component (MVC) from wage increases, and rewarding employees for their contributions through variable payments linked to performance and productivity. A flexible wage system has served workers well in riding through economic ups and downs. In good times, it motivates workers to perform; and in bad times, it helps them keep their jobs as companies are able to adjust wages and respond quickly to market conditions and business performance.
Total Productivity Drive and Gain Sharing
5. NTUC would like to emphasise the need for wage increases to be sustainable. To achieve this, productivity growth must lead wage increase over the long term. If the reverse happens, Singapore’s competitiveness will be eroded, investment and job creation will slow down, and workers will be worse off. NTUC therefore calls on tripartite partners to strongly support the Economic Strategies Committee’s recommendations to drive productivity led growth. In particular, management has to take the lead in this effort, with the strong support of unions and
workers.
6. NTUC would like to underscore that to gain workers’ support, fruits of productivity growth must be shared with the workers, who are the key stakeholders. This will help create a virtuous cycle of higher productivity, better business performance, and better pay.
Inclusive Workforce and Labour Movement
7. Low-wage workers were hardest hit during the recession as job loss and/or income reduction has a direct impact on their daily lives. Hence NTUC strongly backs the call for employers to give special attention to low-wage workers. They could consider giving a dollar quantum in the built-in wage increase or variable payment for them. Efforts to enhance low-wage older workers’ employment and employability should also be intensified so that they can benefit from the enhanced Workfare Income Supplement scheme and Workfare Training Scheme.
8. The job market will continue to tighten as more job opportunities are created in a growing economy, and employers are faced with supply limitation of the local workforce and adjustments to foreign worker policy. NTUC therefore urges companies to continue advancing with their initiatives in attracting and retaining women and older workers in the workforce.
9. In view that the legislation on re-employment of older workers will come into force in 2012, NTUC also urges employers who have not embarked on the reemployment practice to quickly work with employees and/or unions to implement reemployment policies and systems as soon as possible by adopting the Tripartite Guidelines on Re-employment of Older Employees and be re-employment ready before 2012. To-date, over 890 unionised companies have committed to reemployment and re-employed about 9,300 older workers.
Moving Ahead the Tripartite Way
10. NTUC would like to thank NWC Chairman Professor Lim Pin, representatives from the Government and employers’ federations for upholding the spirit of tripartism in the latest NWC exercise - tighten our belts together during bad times but share the fruits during good times.
11. Singapore’s unique tripartism has helped us overcome numerous challenges over the last few decades, and provided us with the competitive edge to attract investments and create jobs for Singaporeans. The recent downturn once again demonstrated the strength of tripartism in Singapore and the benefits of the Government, employers and workers collaborating for win-win-win outcomes. Riding on our tripartite unity, we will continue to create sustainable long-term growth and improve the lives of our workers and all Singaporeans.
