NTUC's response to National Wages Council's Revised Guidelines (16 Jan - 30 Jun 09)
16 January 2009
Media Statement
1. The Gross Domestic Product (GDP) growth for 2008 was a meagre 1.5%, a far cry from the 4%-6% projected at the beginning of the year. Ministry of Trade and Industry (MTI) has projected GDP growth to slow further in 2009. Singapore is in recession.
2. The sharp downturn and fall in demand resulted in excess capacity and manpower for many companies. As companies cut back on capacity, costs and manpower to survive, earnings and jobs were hit. Number of workers on shorter work week and retrenchments rose.
3. The immediate priority for the Labour Movement is to save jobs. The tripartite partners will help workers maximise their employability and companies strengthen their competitiveness to cope with the current difficulties and be ready to capitalise on the upturn when it comes.
Flexible Wages, Fair Rewards
4. The National Trades Union Congress (NTUC) therefore fully supports the National Wages Council’s (NWC) call for companies to use the flexible wage system to adjust wages according to market conditions and business performance, as part of the companies’ total cost reduction efforts.
5 Companies that are genuinely adversely affected by the downturn may, after consultations with their unions, make appropriate use of the variable components to cut, freeze or restrain wages so as to help keep the business going and save jobs. Management should lead by example.
6 Companies that are less affected or continue to perform well should reward workers with moderate wage increase in line with company performance and prospects. The increase should be in the form of variable payments in view of the unpredictable economic climate and to ensure long term sustainability.
Cut Costs, Save Jobs
7 NTUC strongly backs and reiterates the NWC’s call for companies to reduce non-wage costs and retrench only as a last resort. The Tripartite Guidelines on Managing Excess Manpower give practical and flexible suggestions on how to reduce overall business cost before retrenchments. Companies should make full use of the guidelines and work closely with their unions to cut costs and save jobs. From November to December last year, NTUC-affiliated unions worked with 37 companies to implement shorter work week or temporary layoff, and assisted companies to send affected workers for training. To-date, 18,170 workers from unionised companies are on shorter work week or temporary layoff.
8 NTUC also urges the Government to do its utmost to help businesses save cost and have adequate access to credit.
9 NTUC also strongly urges companies to quickly tap the Skills Programme for Upgrading and Resilience (SPUR) scheme to lighten their manpower cost, enhance their competitiveness and improve their workers’ employability. Since SPUR was launched on 1 December 2008, NTUC e2i (Employment and Employability Institute) has helped 38 companies and 4,319 workers under the programme. The pipeline is growing.
Continue with Long-term Initiatives
10 While we deal with the downturn, NTUC strongly urges companies not to let up on the progress with long-term initiatives. The re-employment of older workers, helping women to return to work, helping low wage, contract and informal workers, and improving productivity to raise our competitiveness are all critical for the longer term well-being of our economy and society.
The Tripartite Way to Upturn the Downturn
11 Singapore’s tripartite partnership is the key to our competitiveness and social cohesion. We have faced and overcome many challenges together. This storm we are in is big, and it may last long. With resolve and commitment, we will be able to weather it, and emerge stronger and ready to soar with the opportunities of an upturn.
Heng Chee How
Deputy Secretary-General
National Trades Union Congress
