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Updated Guidelines On Managing Excess Manpower To Further Help Companies Lower Costs and Save Jobs

Employment practices Skills, training and development

With Singapore's GDP projected to contract between 6% to 9% this year, coupled with the increasing unemployment rate [1], the tripartite partners - the Ministry of Manpower (MOM), the Singapore National Employers Federation (SNEF) and the National Trades Union Congress (NTUC) – have worked to release the updated Tripartite Guidelines on Managing Excess Manpower (see Annex A). Since the guidelines were first issued in November 2008, the economic situation has changed considerably and the downturn is expected to be a prolonged one. The updated guidelines contain additional recommendations and incorporate feedback from consultations with industries and unions over the last few months.

2   The guidelines strongly encourage companies to implement alternative ways to manage their excess manpower. Key refinements to the updated guidelines include:

  • Updates to recently announced schemes such as Jobs Credits, SPUR and SPUR-related schemes such as Professional Skills Programme (PSP);
  • Refinements to recommendations on a shorter work week, and flexible work arrangements;
  • Recommendation for companies which have not implemented Monthly Variable Component (MVC), to convert part of the existing basic salary into MVC, when they effect wage cuts; and
  • Guidelines on other cost cutting measures such as no pay leave.

3   Mr Stephen Lee, President, SNEF said, “Since the guidelines were first released in Nov 2008, SNEF has advised and assisted 233 companies to implement the various measures recommended. Together with other initiatives such as SPUR and Jobs Credit, retrenchments have moderated. More than 1300 companies are sending their employees for SPUR programmes. However the economic situation is still uncertain and companies may need to be prepared for a prolonged difficult period. The revised guidelines take into account feedback from some companies on their need to further cut costs to save jobs and survive the downturn. Management and workers, and their unions must work together to implement the guidelines responsibly and flexibly by adapting them to suit their company situations. At the same time senior management must lead by example, especially in implementing more severe cost cutting measures. SNEF strongly encourages companies to implement the guidelines to respond to lower demand while saving jobs, retain and retrain, and upgrade the skills of their employees, including managers, so as to work themselves into a stronger position in an economic rebound.”

4   Deputy Secretary-General, NTUC, Mr Heng Chee How said, “The Tripartite Guidelines on Managing Excess Manpower are important in this extraordinarily trying period. They help companies cope better with their payroll and headcounts, without resorting to retrenchment prematurely. Companies last longer as a result, and more workers can keep their jobs. As the recession wears on, these guidelines must adapt and remain clear and feasible; helping companies facing different situations to continue to act fairly and responsibly, with management leading by example.”

5   Mr Ong Yen Her, Divisional Director, Labour Relations and Workplaces (MOM) said, “The updated Guidelines are timely to ensure that the recommended measures remain relevant and continue to help employers and workers to lower costs and save jobs. The tripartite partners will continue with outreach activities to help employers understand and implement the guidelines. One such example is the Tripartite Upturn Strategy Teams (TRUST Teams) [2] made up of representatives from MOM, SNEF and NTUC. We are confident that with the updated guidelines, companies will be better equipped to manage their excess manpower such that retrenchment is a last resort.”

6   The tripartite partners will continue to proactively monitor the employment situation to render assistance when needed to help companies and affected workers cope with the downturn.

1 The overall unemployment rate rose from 2.5% in December 2008 to 3.2% in March 2009, according to the preliminary Q1 estimates released by MOM on 30 April 2009.

2 The six TRUST Teams were launched by Minister for Manpower, Mr Gan Kim Yong on 29 April 09. The teams provide advice and assistance to companies on how various measures announced (SPUR, MEM Guidelines, etc) can be implemented. Each team is made up of members from MOM, NTUC and SNEF. Further details are available at www.mom.gov.sg