The National Wages Council (NWC) has intervened in the economic uncertainty caused by the Covid-19 pandemic with a number of worthwhile recommendations. The council has prioritised what employers should consider to sustain businesses and save jobs. First, they should reduce non-wage costs, and consider various measures to utilise and manage excess manpower. Second, they should tap government support to offset business and wage costs, and press on with business and workforce transformation. Third, they should trim wage costs. Fourth, if it is necessary to retrench workers as a last resort, they should ensure that this is done responsibly.
These suggestions offer a useful counterpoint to the possibility of hurried or panicked responses by some employers who feel overwhelmed as Singapore's economy heads into what could be its worst annual contraction. The guidelines, made earlier than usual this year, come as unemployment is expected to rise and cause uncertainty and disruption, unless employers, employees and the Government play their complementary roles in the tripartite system that has seen Singapore through earlier crises. Employers would do well to heed the NWC's recommendations because they ultimately help secure the prospects of companies by looking after the interests of workers whose labour upholds the viability of businesses. A small but worthwhile gesture would be management leading by example if a company has to resort to reducing wages. Workers are more likely to understand and accept the need for cuts if they see managers doing likewise.
The NWC has made the important point that, in the unfortunate event of a retrenchment exercise, such a move should be based on objective criteria, such as an employee's ability to contribute to a company's future business needs. It says that the Government will not tolerate discrimination against local employees, for example. This cautionary advice is important because the pandemic, terrible though it is, cannot be allowed to derail the advances that Singapore has made in ensuring an equitable workplace for its citizens.
The Singapore National Employers Federation has highlighted exigencies on the business front by noting that reducing non-wage costs alone has not been sufficient for some employers to stay afloat. This situation is understandable, given the magnitude of the current economic decline. However, in deciding the fortunes of labour, capital is hardly without the support of the State. The Government has deployed almost $55 billion to respond to the pandemic - an amount that represents 11 per cent of the gross domestic product. Businesses could draw fruitfully on those budgetary provisions to minimise retrenchments. They must not look at easy options, such as layoffs and even pay cuts, but stay focused on the long term.
