Employers have been given the green light by the National Wages Council (NWC) to implement temporary wage cuts if it means saving jobs.

They should seek employees' support before doing so and make only the reductions necessary to minimise retrenchments, the tripartite body said yesterday, in updated guidelines that will apply from Nov 1 to June 30 next year.

The quantum of the cuts should depend on the sector's and company's outlook, and employees should be told how the wages will eventually be restored.

The guidelines, which are not compulsory but have been accepted by the Government, come after the council was convened in August for a second time this year.

Among other key principles, they recommend that employers use the annual and monthly variable components to adjust wages and cut basic pay only if really necessary to avoid retrenchments. Managements should take earlier and deeper cuts to their wages.

The council also said wages should be frozen instead of cut for workers earning up to $1,400 a month. Cuts for those earning more than that should not leave basic monthly pay below $1,400.

Council chairman Peter Seah said the tripartite body tried to come up with solutions that were good for both firms and employees.

Taking note of the recommendations, Manpower Minister Josephine Teo said on Facebook: "While painful, employers, unions and employees must work together to implement temporary wage cuts to the extent necessary to keep retrenchment down."

National Trades Union Congress president Mary Liew said the labour movement agreed that there was a need to support "more drastic, immediate measures" because of the need to minimise retrenchments after efforts to retain and redeploy existing workers have been exhausted.

"Sacrifice will definitely be required on the workers' part, but we hope that employers will bear their sacrifices in mind when things get better, whenever possible recognise their efforts and reward them as well," she said.

Singapore National Employers Federation president Robert Yap said employers may still face significant cost pressure and poor business prospects despite the strong government support.

But they recognise that retaining workers will keep them better prepared for when demand recovers, said Mr Yap. "As we have managed to flatten the curve for Covid-19, we should now focus on flattening the curve for retrenchments, which increased to more than 8,000 in the second quarter of 2020," he added.

The NWC's initial annual recommendations in March focused on reducing non-wage costs first.

But Singapore's economy has entered a recession since then with more slack in the labour market, noted the council, which comprises Mr Seah and 21 other members.

Although the guidelines are not legally binding, the fact that the leadership of employer groups, unions and the Government stand behind them says something, Mr Seah noted at a press conference yesterday.

"We all gather with one common objective, and if we work well together, we will not only navigate the crisis well but as a country we will also come out stronger. And if our economy emerges stronger, it is good for everybody," he said.