Notifications on cost-saving measures affected over 187,000 workers: MOM

IN the three months from March 12, more than 4,800 employers submitted notifications on cost-saving measures amid the Covid-19 pandemic, affecting more than 187,000 employees, the Ministry of Manpower and the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP) said in a joint statement on Wednesday. 

With effect from March 12, employers with 10 or more employees are required to notify MOM if they implement cost-saving measures that affect employees' monthly salaries.

The majority of employers that submitted these notifications are from sectors severely impacted by Covid-19, MOM and TAFEP said.

Almost one quarter, or 24 per cent of the notifications received were from the accommodation and food services sector, which affected 45,000 employees, while 16 per cent of the notifications were from the construction sector, which affected 25,000 employees. Another 15 per cent were from the wholesale and retail trade, which affected some 19,000 employees. 

The top three cost-saving measures implemented were no-pay leave, adjustments to monthly salary components and a shorter work week. Based on the notifications received, most employees experienced salary reductions of up to 25 per cent, as a result of these cost-saving measures, MOM and TAFEP said. 

Over the three-month period, TAFEP also engaged about 700 employers employing over 33,000 affected employees.

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"If an employer's cost-saving measures appeared to be excessive in the notification submitted to MOM, TAFEP would intervene to further assess if the measures were fair and reasonable, taking reference from the relevant advisories issued by the tripartite partners," the authorities said. 

Following TAFEP's intervention, about 300 employers agreed to review their measures, including providing more wage support, or requiring employees to clear fewer days of annual leave. The remaining employers were able to justify the necessity of their cost-saving measures for business survival, MOM and TAFEP said. 

In addition, MOM found that the majority of the complaints it received from employees arose due to "poor or delayed communications" by employers. 

More than 600 employees have approached MOM for assistance, as they felt that the measures implemented by their company were "unfair or unreasonable", MOM and TAFEP noted. The most common issue raised was whether it was acceptable for employers to ask employees to consume annual leave or take no-pay leave, given that employers are receiving government support such as the Jobs Support Scheme (JSS) and the Foreign Worker Levy rebates.

"To manage cost pressures and conserve manpower for when they are most needed, the tripartite partners agreed that it is reasonable for employers to ask employees to tap on existing leave entitlements, or even take some no-pay leave when business activity has been sharply reduced," MOM and TAFEP said. 

They added: "Our interventions revealed that in the majority of cases (74 per cent), misunderstandings arose because employers did not communicate the measures well and/or failed to explain the necessity for adopting the cost-saving measures."

At the start of the "circuit-breaker", some employers were also unsure of the quantum of support they would be receiving and how they should use the JSS payout, the authorities said.  

MOM and TAFEP said they will continue to guide and support both employees and employers to weather the impact of Covid-19 in the months ahead, as Singapore embarks on the "long road to recovery".

Christine Loh, director of employment standards enforcement at MOM, said: "To weather the impact of Covid-19 in the months ahead, employers and employees have a shared responsibility to work together and make sacrifices to prevent retrenchment and preserve jobs. MOM will investigate complaints and take actions against employers who do not treat employees fairly."