National Wages Council to convene again as Covid-19 pandemic takes toll on jobs

Wages council to relook its guidelines as labour market braces itself for difficult days

This is only the fourth time since being set up in 1972 that the National Wages Council has been convened twice in the same year. PHOTO: ST FILE

In a rare move, the National Wages Council (NWC) will review its wage guidelines for a second time this year as the Covid-19 pandemic takes a toll on the labour market.

Manpower Minister Josephine Teo announced this in a Facebook post yesterday after a meeting last week with National Trades Union Congress (NTUC) secretary-general Ng Chee Meng and Singapore National Employers Federation president Robert Yap to discuss concerns on the ground.

"Both the views of workers and employers matter, especially at this critical time... We will remain in close consultation on jobs and the economy," said Mrs Teo.

She said they agreed to reconvene the NWC, which is usually convened once a year. More details will be provided later this month, The Straits Times understands.

The high-level council, which is chaired by DBS Bank chairman Peter Seah and comprises representatives from the Government, employers and unions, had already been convened earlier than usual this year and released wage recommendations for April 1 this year to June 30 next year.

The guidelines are typically for July to June the next year and released in end-May.

This is only the fourth time since being set up in 1972 that the council has been convened twice in the same year. The previous times came amid major economic crises as well, in 2009, 2001 and 1998.

Mr Ng said in his National Day message yesterday that there will likely be retrenchments, cutbacks and more difficult days ahead, even as workers have been shielded from the worst eco-nomic effects of the Covid-19 pandemic through substantial government support.

Already, the preliminary labour market data for the second quarter of the year showed that unemployment and retrenchments surged compared with the first quarter, and observers said they expect unemployment to climb further.

Mrs Teo said: "It is quite likely that the spike would have been sharper if not for employers and unions working hand in hand to save jobs through other cost-saving measures."

The NWC released its latest guidelines on March 30. It had recommended, among other things, that employers affected by the pandemic first reduce non-wage costs and tap government support before looking to reduce their workers' wages. Special consideration should be given to low-wage workers earning a basic monthly wage of up to $1,400.

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Retrenchment should be a last resort, it had said.

Mrs Teo said in her post yesterday that about 3,600 employers notified the Ministry of Manpower of cost-cutting measures taken since April that had impacted workers' salaries, protecting some 150,000 jobs that might otherwise have been lost and workers displaced.

Many employers took the cue from the council's recommendations this year, she said. Some are implementing a flexible work schedule to time-bank the hours not worked while continuing to pay their workers' salaries in full. Others are helping those whose commission or overtime pay were cut to get a second job.

"Many employers will continue to see weak demand and face pressure to retrench workers. It is therefore timely for NWC to update the tripartite position on wages and other issues of concern to workers and employers," said Mrs Teo.

Yesterday, aircraft engine manufacturer Pratt & Whitney laid off about 400 staff here, driven by the prolonged recovery projected for commercial aviation traffic.

Mr Ng said in his National Day message that NTUC remains prepared to support workers amid these challenging times by helping to preserve jobs and providing care and support for those in need.

"I call on our (tripartite) partners today to continue working with us, in the spirit of shared responsibility and common understanding, to ensure that we pull through this crisis together," he said.

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A version of this article appeared in the print edition of The Straits Times on August 04, 2020, with the headline National Wages Council to convene again as Covid-19 pandemic takes toll on jobs. Subscribe