(Singapore, March 12, 2020) Singapore is urging local employers to take flexible work schedule and other appropriate measures to manage excess manpower caused by the COVID-19 pandemic.
The Ministry of Manpower (MOM), the National Trades Union Congress (NTUC), and the Singapore National Employers Federation (SNEF) have jointly updated the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment (“Advisory”) in view of the evolving COVID-19 situation.
Mr Then Yee Thoong, Divisional Director of Labour Relations and Workplaces Division, MOM, said: “The Advisory lays out the measures ordered in terms of severity of impact on employees’ livelihood, and work with their unions and employees on a set of mutually agreeable measures. ”
“Working together, we will be able to save jobs and overcome the impact of COVID-19,” he added.
Even before the coronavirus outbreak, local employers were more cautious about hiring last year amid economic uncertainties.
As a result, the seasonally adjusted ratio of job vacancies to unemployed persons fell to 0.84 in December, down from 1.09 a year earlier, according to MOM’s latest figures.
Thus, the Advisory states that businesses in some sectors have suffered sharp declines in volume and revenue. As a response, some employers have started to implement cost-saving measures. The tripartite partners have thus updated the Advisory to provide clearer guidance to affected employers on the appropriate measures to manage excess manpower.
It says that implementing a Flexible Work Schedule (FWS) would allow companies to optimise the use of manpower when they go through cyclical troughs and peaks, and employees are assured of a stable monthly income.
As businesses slow during this period, employers can consider reducing weekly working hours, creating a “timebank” of unused working hours. These can then be used to offset the increase in working hours in subsequent periods. In offsetting future overtime pay, the employee and employer may agree on the rate at which the accrued hours are to be valued, the Tripartite Advisory states.
With effect from 12 March 2020, employers are required to notify MOM if they implement any cost-saving measures during this period that affects the employees’ monthly salaries, and indicate that they have done so fairly.
This would encourage responsible implementation of such measures, prevent downstream salary disputes, and allow MOM to monitor the scope and scale of such measures. This would also enable tripartite partners to step in to provide the appropriate support to both employers and employees when needed, the Advisory says.
The new requirement applies to employers with 10 or more employees and is intended to be a temporary measure, until the economy recovers.
The updated Advisory also highlights that during a business downturn, focusing on training and upskilling greatly benefits both employers and employees. Employers will be able to retain skilled employees to enable the company to meet business demand when demand rebounds. Employees can also take the opportunity to update themselves with better skills and knowledge to improve their productivity.
It says the Government provides significant support to employers who are prepared to invest and develop capabilities in their employees.
Employers can tap on training support schemes under the SkillsFuture movement, redeployment programmes under the Adapt and Grow initiative, and other government grants. (You may refer to the annex for other types of grants the Government is providing as part of the Stabilisation and Support Package).
Mr Koh Juan Kiat, Executive Director, SNEF, said, “Businesses will differ in their operation and financial circumstances. As such they should evaluate the options and notify MOM after their adoption. This information will help the tripartite partners to better appreciate the ground and decide on further targeted support for employers and employees.”
Ms Cham Hui Fong, Assistant Secretary-General, NTUC, said, “Companies should explore all other cost-cutting measures before considering retrenchment. If retrenchment is inevitable, companies should conduct the retrenchment exercise in a fair and sensitive manner.”
“They should inform their unions and the Ministry of Manpower in advance, and work with unions to ensure that affected workers are compensated fairly and are assisted with proper outplacement services.”