Work with NTUC and our unions to protect workers and preserve Jobs

Companies must continue to treat workers fairly and reasonably while implementing cost-saving measures, wage cuts, Flexible Wage System or during retrenchments.

The National Trades Union Congress (NTUC) and our affiliated unions support the National Wages Council (NWC) Supplementary Guidelines for 2020/2021. The tripartite partners understand that current economic circumstances are more serious as compared to when the NWC guidelines were initially released in March 2020. Thus, we have agreed to reconvene to provide timely and relevant guidance to companies and workers.

In line with the global economic downturn, Singapore’s economy has contracted year on year. The outlook for companies remains bleak with many of them being in a worse state than before. We are also aware that the performances of the different sectors vary. Therefore, the negotiations for the NWC Supplementary Guidelines have been particularly challenging as there is no one-size-fits-all prescriptive solution. The tripartite partners had to strike a balance to ensure that the guidelines are meaningful yet not overly prescriptive. 

1. For sectors and businesses that are doing well, they should continue to reward workers with variable payments and bonuses. 
2. For sectors and businesses that have been affected, they should cut non-wage cost first, tap on Government support to offset costs as well as to work with unions and NTUC to manage excess manpower through training and upskilling. If implementing wage reductions, it should be done fairly and reasonably as workers have basic expenses to upkeep. All these cost-savings measures should also be communicated to workers transparently. Just as workers have accepted wage cuts in good faith, their wages should be restored in tandem when the business recovers.
3. Where possible, NTUC hopes that employers will continue to pay Annual Wage Supplement to workers. 

Given that businesses are unevenly impacted, tripartite partners have agreed that quantitative wage reduction guidelines will not be practicable. Likewise, implementing Central Provident Fund cuts will also be a blunt tool that will not benefit our local workers in the long run. Instead, together with the tripartite partners, we urge businesses to follow the key principles on appropriating wage cuts. In addition to the performance and outlook of the company, as well as the level of Government support provided, businesses should also be mindful of the following:

1. cumulative effect of prior wage cuts and other cost-savings measures that have already been implemented to-date on workers;
2. workers’ ability to cope with wage cuts at the different salary tiers; and  
3. whether workers continue to contribute full or longer hours despite the business downturn. 

The tripartite partners strongly urge businesses to implement the Flexible Wage System (FWS) so that they can remain nimble as well as adapt quickly to any changes. Employers who have adopted the FWS should utilise the range of flexibility provided for in the variable components. When businesses recover, FWS will also provide companies with more flexibility to quickly restore the wages of workers. Our unions will continue to engage our unionised companies to negotiate on FWS implementation and any wage adjustments to ensure win-win outcomes for both the companies as well as our workers.   

When retrenchment becomes inevitable because companies face severe cashflow issues and have no more retained earnings, it should be done in a fair and reasonable manner in accordance with the revised Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment, which has included the NTUC Fair Retrenchment Framework. We also urge these businesses to work with our unions and NTUC to pre-emptively redeploy affected workers and match them to new jobs through the NTUC Job Security Council. 

NTUC is heartened that the NWC Supplementary Guidelines continue to pay special attention to our low-wage workers. Many of whom have worked harder during this pandemic, especially those in the essential services sector. NTUC hopes that companies will recognise the work of these workers and reward them fairly. We have also advocated for the following to safeguard the wages of low-wage workers and we are glad to have the support of our tripartite partners on the below should companies need to adjust wages: 

1. Wage freeze for low-wage workers earning less than $1,400.
2. Wage cuts for low-wage workers earning more than $1,400 must be reasonable and their basic monthly wage should not fall below $1,400 after wage adjustments. 

For the first time ever, the welfare of our self-employed persons (SEPs) were also included in the NWC guidelines. This was something that NTUC has highlighted and advocated for. In line with #everyworkermatters, we are glad that the guidelines have become more inclusive and hope that our service buyers and intermediaries will provide fairer support to our SEPs during this period. 

NTUC and our unions stand ready to continue working closely with businesses and employers to see how best we can help keep workers in their jobs. We will continue to stand by the side of our workers and continue to care and support them.