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Tripartite partners update advisory on managing excess manpower and responsible retrenchment in view of COVID-19

  1. The Ministry of Manpower (MOM), the National Trades Union Congress (NTUC), and the Singapore National Employers Federation (SNEF) have jointly updated the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment (“Advisory”) in view of the evolving COVID-19 situation. 
  2. Businesses in some sectors have suffered sharp declines in volume and revenue. As a response, some employers have started to implement cost-saving measures. The tripartite partners have thus updated the Advisory to provide clearer guidance to affected employers on the appropriate measures to manage excess manpower.

    Flexible Work Schedule

  3. Implementing a Flexible Work Schedule (FWS) would allow companies to optimise the use of manpower when they go through cyclical troughs and peaks, and employees are assured of a stable monthly income. 
  4. As businesses slow during this period, employers can consider reducing weekly working hours, creating a “timebank” of unused working hours. These can then be used to offset the increase in working hours in subsequent periods. In offsetting future overtime pay, the employee (or union if company is unionised) and employer may agree on the rate at which the accrued hours are to be valued. Employers who wish to implement FWS need to seek the support of the employees (and union if company is unionised) and thereafter apply to the Commissioner for Labour.

    Mandatory reporting to MOM on cost-saving measures

  5. With effect from 12 March 2020, employers are also required to notify MOM if they implement any cost-saving measures during this period that affects the employees’ monthly salaries, and indicate that they have done so fairly. This would encourage responsible implementation of such measures, prevent downstream salary disputes, and allow MOM to monitor the scope and scale of such measures. This would also enable tripartite partners to step in to provide the appropriate support to both employers and employees when needed.  
  6. The new requirement applies to employers with 10 or more employees and is intended to be a temporary measure, until the economy recovers.

    Training and Upskilling

  7. The updated Advisory also highlights that during a business downturn, focusing on training and upskilling greatly benefits both employers and employees. Employers will be able to retain skilled employees to enable the company to meet business demand when demand rebounds. Employees can also take the opportunity to update themselves with better skills and knowledge to improve their productivity. 
  8. The Government provides significant support to employers who are prepared to invest and develop capabilities in their employees. Employers can tap on training support schemes under the SkillsFuture movement, redeployment programmes under the Adapt and Grow initiative, and other government grants. (You may refer to the annex for other types of grants the Government is providing as part of the Stabilisation and Support Package) 
  9. Mr Koh Juan Kiat, Executive Director, SNEF, noted that the updated Advisory offered useful options for employers to cope with the current business downturn arising from COVID-19.  He said, “Businesses will differ in their operation and financial circumstances. As such they should evaluate the options and notify MOM after their adoption. This information will help the tripartite partners to better appreciate the ground and decide on further targeted support for employers and employees.” 
  10. Ms Cham Hui Fong, Assistant Secretary-General, NTUC, said, “During this downtime, we urge companies to work closely with our unions on cost-cutting measures to manage excess manpower. Companies can leverage Company Training Committees to drive transformation and ramp up training of their workers. They can also join NTUC Job Security Council for pre-emptive placement assistance for affected workers and necessary training to be placed in new jobs. Companies should explore all other cost-cutting measures before considering retrenchment. If retrenchment is inevitable, companies should conduct the retrenchment exercise in a fair and sensitive manner. They should inform their unions and the Ministry of Manpower in advance, and work with unions to ensure that affected workers are compensated fairly and are assisted with proper outplacement services.” 
  11. Mr Then Yee Thoong, Divisional Director of Labour Relations and Workplaces Division, MOM, said, “In sectors affected by COVID-19, tripartite partners recognise that businesses may need to implement cost-saving measures as they strive to keep afloat. I strongly encourage employers to study the Advisory, including the Annex of the Advisory that lays out the measures ordered in terms of severity of impact on employees’ livelihood, and work with their unions and employees on a set of mutually agreeable measures. Working together, we will be able to save jobs and overcome the impact of COVID-19.” 
  12. Please visit www.mom.gov.sg/TAMEM for the updated Advisory.