SINGAPORE — From Thursday (March 12), employers must tell the Ministry of Manpower (MOM) if they roll out cost-saving measures affecting their employees’ monthly wages, and indicate that this has been done fairly.

This requirement will apply to employers with 10 or more workers, and will be a temporary measure until the economy recovers from the Covid-19 outbreak, the MOM said on Wednesday.

The move will encourage a sense of social responsibility and prevent salary disputes down the road, said Manpower Minister Josephine Teo, who announced the move — which is part of an updated advisory that offers employers guidance on responsible retrenchment practices and the management of excess labour.

The refreshed Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment also recommends, among other things, that employers put in place a flexible work schedule for workers and equip them with new skills amid a slowdown in business.

Mrs Teo was speaking during a dialogue with the Singapore National Employers Federation and Singapore Business Federation (SBF) at the SBF Centre on Robinson Road.

She said the notification rule would allow the MOM to monitor the scope and scale of firms’ cost-cutting measures, and to assess whether more government intervention is needed.

FLEXIBLE WORK SCHEDULE

Apart from the new notification requirement, the advisory recommends that employers put in place a flexible work schedule for workers as business slows.

Employers can consider reducing weekly working hours and creating a “time bank” of unused working hours.

“What if the hours they did not work could be ‘banked’ today, that is, put into a personal account, which the employer can draw on for future overtime hours?” she suggested.

Mrs Teo said that workers would still need to earn their basic salaries at least, even as firms shorten work weeks and cut manpower on certain days when business volumes drop.

In offsetting future overtime pay, the MOM said employees or unions could agree with employers on the rates at which the hours amassed are to be valued.

Employers wishing to roll out a flexible work schedule will need the support of employees and unions, and must make an application to the Commissioner for Labour.

FOCUS ON TRAINING AND UPSKILLING

MOM stressed that training and equipping workers with skills in a downturn would greatly benefit firms.

Employers can retain skilled workers, so that they can meet demand during a rebound. Workers, on the other hand, can seize the opportunity to equip themselves with better skills and knowledge to raise productivity, the ministry said.

There are various government schemes that employers can tap, including those under the national SkillsFuture programme and the Adapt and Grow job-support initiative.

Reiterating that the Government’s priority in the next few months is to prevent large-scale job losses, Mrs Teo said: “I understand this is a difficult time, and you already have revenue and cash flow concerns.

“This is why besides other support, the Government has enhanced training support that effectively helps you with salary costs.”

WAGE CUTS A LAST RESORT, SAY SOME EMPLOYERS

Some employers interviewed by TODAY on Wednesday said that they would exhaust all other cost-saving measures before cutting wages, which is a last resort. But they acknowledged the need for the latest rule to protect workers.

Mr Pang Fu Wei, managing director of baby products store Mothercare Singapore, said: “With this new rule, MOM is just trying to protect the rights of the workers.”

Mr Randall Ang, business development director of food manufacturer Ha Li Fa, said: “I think this rule was put in place to prevent employers from misusing Covid-19 to pay their employees less.”

Ha Li Fa’s business took the greatest hit in January when the Covid-19 outbreak started. It makes fish balls and fishcakes, among other products.

“Our customers in the tourist areas like Chinatown and Orchard Road didn’t have much business so they put in less orders. One or two restaurants who used to order from us even shut completely because they felt that it was not worth paying rent when they weren’t making any money,” Mr Ang said.

While only a few of Mothercare’s stores have seen a decline in sales, Mr Pang said that he has come up with a business contingency plan “in case business drops by 20 or 30 per cent”.

Cutting wages, he has decided, will be the last resort and they are still “far away” from it.

“I have complete transparency with my employees. If things take a turn for the worse, they’re prepared and will not be caught off-guard. If we really need to make changes, first to go will be bonus provisions, then management will take a cut, then I will ask my staff to clear leave. Then finally, wage cuts,” he said.

Mr Ang agreed that reducing wages is a last resort because “it will really reduce the morale of the workers”.

“What we’re doing now is looking at ways of increasing productivity and taking other cost-saving measures. For example, when someone leaves the job, we won’t find a replacement, but we will try to find a new job flow or process that doesn’t require this role,” he said.

Ms Nichol Ng, managing director of food distribution firm FoodXervices Inc, also stated that her employees will not receive wage cuts anytime soon.

“No one's salary needs to be cut. No one needs to be put on no-pay leave. This is the time to streamline to review the entire team and our processes,” she said.