<TABLE cellSpacing=0 cellPadding=0 width=452 border=0><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published January 17, 2009
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>NWC asks firms to cut costs, save jobs
It revises wage guidelines, which are to take effect immediately until June30 this year
By CHUANG PECK MING AND EMILYN YAP
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and WITH the economy sinking fast and more job cuts on the line, the National Wages Council (NWC) has made a rare move - the third time in its 37-year history - to revise its wage guidelines and 'strongly' recommend companies hit by the downturn to freeze or cut wages to stay competitive and save jobs.
<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD>MAIN THRUST From left, Prof Lim and Mr Heng at the release of the NWC's revised wage guidelines yesterday. Prof Lim said the main thrust of the revised guidelines was to cut costs to save jobs</TD></TR></TBODY></TABLE>'We are doing our best to be prepared for the worst,' NWC chairman Lim Pin said yesterday when the council announced updated wage guidelines.
The NWC last released its annual wage guidelines in May 2008 against a backdrop of global economic uncertainty and high inflation.
The guidelines, among other things, urged companies doing reasonably well to grant built-in pay increases and to consider giving a one-off special lump sum to workers to cope with inflation.
The revised wage guidelines are to take effect immediately until June 30 this year. The council will meet again to decide on the 2009/2010 guidelines, which take effect on July 1.
Professor Lim said the main thrust of the revised wage guidelines is to cut costs to save jobs.
Noting that a rising number of companies are facing low demand and excess capacity, the NWC 'strongly recommends that companies adversely affected by the economic downturn work with the unions and workers to reduce and manage total costs'.
In consultation with unions and workers, the companies may 'implement a wage freeze or wage cut commensurate with their performance and prospects in order to help companies stay competitive and save jobs'.
The NWC suggested that companies turn to their flexi-wage systems to act swiftly.
'They should make use of the variable components in the wage structure, such as the annual variable component and monthly variable component to reduce their wage costs,' it said in its guidelines.
For companies less hit by the downturn or still doing well, the NWC said 'they should reward their workers with moderate wage increase'.
But in view of the uncertain short-term outlook, the increase should be made largely in the form of variable payment so that their long-term cost competitiveness will not be eroded.
The NWC noted that layoffs reported to the Manpower Ministry and the National Trades Union Congress (NTUC) rose 'significantly' in Q4 2008. Unemployment and retrenchment this year could also be 'substantially higher' than in 2008.
Singapore's resident unemployment rate in September 2008 was 3.3 per cent, up from 2.4 per cent a year ago. The figure once hit 6.2 per cent in September 2003 during the Sars crisis.
'By helping companies to reduce costs, especially the manpower costs, we hope in return companies can moderate their headcount reduction. . . We think retrenchment can be worse if we don't do this,' said NWC member Stephen Lee, who is also president of the Singapore National Employers Federation.
But Lawrence Leow, president of the Association of Small and Medium Enterprises, said the revised wage guidelines would only go some way to help save jobs. 'In a protracted downturn, companies may not have a choice but to retrench if there is just not enough work available.'
Accepting the revised guidelines, the government said in a statement that they are 'timely'.
'Companies should implement this recommendation based on their individual circumstances and taking into consideration the impact of the downturn on the company,' it said.
Indicating the 'immediate priority' of the labour movement is to save jobs, union representative Heng Chee How, who is also NTUC's deputy secretary-general, backs NWC's call to use the flexi-wage system to cushion against the impact of the downturn.
The NWC also urged companies to turn to the Tripartite Guidelines in Managing Excess Manpower and the $600 million Skills Programme for Upgrading and Resilience (SPUR) to help cut cost.
The Tripartite Guidelines include measures such as shorter work week and temporary layoff. SPUR helps companies foot the bill for retaining and retraining workers.
The NWC further said companies should not let up in the push for long-term initiatives, including retraining older workers and women wanting to work and raising productivity.
</TD></TR></TBODY></TABLE>
U peasants deserve it! *hee*hee*
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>NWC asks firms to cut costs, save jobs
It revises wage guidelines, which are to take effect immediately until June30 this year
By CHUANG PECK MING AND EMILYN YAP
<TABLE class=storyLinks cellSpacing=4 cellPadding=1 width=136 align=right border=0><TBODY><TR class=font10><TD align=right width=20>
</TD><TD>Email this article</TD></TR><TR class=font10><TD align=right width=20>
</TD><TD>Print article </TD></TR><TR class=font10><TD align=right width=20>
</TD><TD>Feedback</TD></TR></TBODY></TABLE>and WITH the economy sinking fast and more job cuts on the line, the National Wages Council (NWC) has made a rare move - the third time in its 37-year history - to revise its wage guidelines and 'strongly' recommend companies hit by the downturn to freeze or cut wages to stay competitive and save jobs.
<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD>MAIN THRUST From left, Prof Lim and Mr Heng at the release of the NWC's revised wage guidelines yesterday. Prof Lim said the main thrust of the revised guidelines was to cut costs to save jobs</TD></TR></TBODY></TABLE>'We are doing our best to be prepared for the worst,' NWC chairman Lim Pin said yesterday when the council announced updated wage guidelines. The NWC last released its annual wage guidelines in May 2008 against a backdrop of global economic uncertainty and high inflation.
The guidelines, among other things, urged companies doing reasonably well to grant built-in pay increases and to consider giving a one-off special lump sum to workers to cope with inflation.
The revised wage guidelines are to take effect immediately until June 30 this year. The council will meet again to decide on the 2009/2010 guidelines, which take effect on July 1.
Professor Lim said the main thrust of the revised wage guidelines is to cut costs to save jobs.
Noting that a rising number of companies are facing low demand and excess capacity, the NWC 'strongly recommends that companies adversely affected by the economic downturn work with the unions and workers to reduce and manage total costs'.
In consultation with unions and workers, the companies may 'implement a wage freeze or wage cut commensurate with their performance and prospects in order to help companies stay competitive and save jobs'.
The NWC suggested that companies turn to their flexi-wage systems to act swiftly.
'They should make use of the variable components in the wage structure, such as the annual variable component and monthly variable component to reduce their wage costs,' it said in its guidelines.
For companies less hit by the downturn or still doing well, the NWC said 'they should reward their workers with moderate wage increase'.
But in view of the uncertain short-term outlook, the increase should be made largely in the form of variable payment so that their long-term cost competitiveness will not be eroded.
The NWC noted that layoffs reported to the Manpower Ministry and the National Trades Union Congress (NTUC) rose 'significantly' in Q4 2008. Unemployment and retrenchment this year could also be 'substantially higher' than in 2008.
Singapore's resident unemployment rate in September 2008 was 3.3 per cent, up from 2.4 per cent a year ago. The figure once hit 6.2 per cent in September 2003 during the Sars crisis.
'By helping companies to reduce costs, especially the manpower costs, we hope in return companies can moderate their headcount reduction. . . We think retrenchment can be worse if we don't do this,' said NWC member Stephen Lee, who is also president of the Singapore National Employers Federation.
But Lawrence Leow, president of the Association of Small and Medium Enterprises, said the revised wage guidelines would only go some way to help save jobs. 'In a protracted downturn, companies may not have a choice but to retrench if there is just not enough work available.'
Accepting the revised guidelines, the government said in a statement that they are 'timely'.
'Companies should implement this recommendation based on their individual circumstances and taking into consideration the impact of the downturn on the company,' it said.
Indicating the 'immediate priority' of the labour movement is to save jobs, union representative Heng Chee How, who is also NTUC's deputy secretary-general, backs NWC's call to use the flexi-wage system to cushion against the impact of the downturn.
The NWC also urged companies to turn to the Tripartite Guidelines in Managing Excess Manpower and the $600 million Skills Programme for Upgrading and Resilience (SPUR) to help cut cost.
The Tripartite Guidelines include measures such as shorter work week and temporary layoff. SPUR helps companies foot the bill for retaining and retraining workers.
The NWC further said companies should not let up in the push for long-term initiatives, including retraining older workers and women wanting to work and raising productivity.
</TD></TR></TBODY></TABLE>
U peasants deserve it! *hee*hee*
