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Employers to notify MOM of cost-saving practices that affect workers’ wages

Minister for Manpower Josephine Teo said the new measures would "encourage a sense of social responsibility and prevent downstream salary disputes”

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SINGAPORE — Beginning Thursday (March 12), all companies are required by the Ministry of Manpower (MOM) to notify them of any cost-saving measures that will affect the monthly salaries of their employees.

On Wednesday (March 11), Minister for Manpower Josephine Teo shared the ministry’s new policy measures in a dialogue with the Singapore Business Federation (SBF) and the Singapore National Employers Federation (SNEF) on guiding companies on managing excess manpower responsibly.

The new measure, which will be enforced from Thursday (March 12), is applicable to businesses that have 10 or more workers. According to a separate MOM statement, this is a temporary rule while the economy recovers.

Ms Teo noted that the requirement of notifying MOM of cost-saving measures that affect workers’ wages should “encourage a sense of social responsibility and prevent downstream salary disputes”.

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“The notifications will also allow MOM to monitor the scope and scale of such measures, and whether more government interventions are needed,” Ms Teo added.

Companies that do not comply with the new measure will be investigated by MOM, and any necessary action will be taken against them.

Ms Teo spoke about other updates and additions to the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment, which is available to give companies “guidance on their options”.

Given the uncertain economic outlook, especially admits the COVID-19 outbreak, MOM’s priority is “to prevent large-scale job losses”, noted the Manpower minister. With a substantial package of wage and training support and many other plans in place, the government is ready to assist companies who are struggling under the pressures of overwhelming costs.

Some of the suggestions for companies were centred around manpower handling and capacity—flexible work schedules or reassigning employees to other departments in need.

Also added to the Advisory was the option of “time banking”, where firms who are slowing down can choose to cut down weekly working hours and create a “timebank” of unused working hours. Employees would continue to receive their basic salary during this period, but the “timebank” could be used to offset future overtime pay when business picks up again.

“Simply put, they are paid now for work later,” explained the minister, adding that at a future time, when overtime is necessary, “the employer can then withdraw the extra hours based on an agreed formula”.

MOM also noted that employers need to agree on the salary rate of the accrued hours with their workers, and those who wish to implement flexible work schedules in their businesses must first seek approval from employees and unions and then apply to the Commissioner for Labour.

In a Facebook post on Wednesday (Mar 11), Ms Teo shared the main points from her talk with the SNEF and the SBF:

GUIDING COMPANIES ON MANAGING EXCESS MANPOWER RESPONSIBLY Had a dialogue with the Singapore National Employers…

Posted by Josephine Teo on Wednesday, March 11, 2020

“I encourage employers to study the updated Advisory to better manage manpower under challenging business conditions. Workers should also support their employers, so that jobs can be saved. The Government will do our best to support both businesses and workers. I have no doubt that together, we can weather the challenges and emerge stronger!” wrote Ms Teo.

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