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Closing Speech at SNEF-SBF Post-Committee of Supply 2020 Dialogue

Minister for Manpower Mrs Josephine Teo , SBF Centre

Dr Robert Yap, President, SNEF,

Mr Teo Siong Seng, Chairman, SBF,

Distinguished Guests,

Ladies and Gentlemen, 

Good afternoon. 

Introduction

  1. Thank you for your patience for
    • Listening to my earlier briefing.
    • Allowing me to address you for public reporting.

  2. The outlook for 2020 has become very uncertain.
    • Given the COVID-19 outbreak, it would be unrealistic to expect employment growth to keep pace with the last few years.
    • It will also be a challenge for unemployment to remain in the relatively low range of recent years. 

  3. For the next few months at least, MOM will focus on preventing large-scale job losses.
    • This is not a shift away from promoting job and wage growth in the medium to longer term.
    • But our immediate priority is clear i.e. prevent large scale job losses.

  4. How can we do that?  It is clear in the mind of my colleagues and I to help our workers, helping employers is key.
    • Understand your pressures – revenue and cash may be down, but pay checks must still be honoured.
    • Government will watch closely and help.
    • The first is wage support - 60% of the Stabilisation and Support Package goes towards Jobs Support and Wage Credits.
    • The second, and equally important, is training support.  I will say more about this later.

  5. I already touched on the foreign worker levy during the dialogue, so I won’t repeat it here.

  6. But,
    • We recognise that even with wage and training support, some businesses may still have excess manpower.  
    • What can we do to help?

  7. Two weeks ago, MOM announced a scheme to allow employers in the manufacturing and services sector to transfer their excess PRC work permit holders to others who may still have manpower shortages.
    • I thank SBF for very quickly agreeing to administer the “Manpower Connect” scheme.
    • The existing employer gains because you don’t need to pay for the worker to go home.
    • The new employer gains because the worker is readily available, no employment agent involved, and there’s no need to get approval for the worker to come in and then wait 14 days for the Stay-Home-Notice to be served.
    • This is a practical way for MOM to help both sets of employers save costs.

  8. Earlier, there were suggestions to further adjust our schemes to support businesses. What about your local employees?
    • Redeployment
    • Retain skills within sectors to bounce back when economy recovers
    • Monthly variable component to be used more widely to support cost pressures
    These are all good suggestions and we will consider and come back to you in due course.

  9. The tripartite partners – MOM, NTUC and SNEF – have been working together to update the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment.
    • The original Advisory focuses more on retrenchment guidelines.
    • The revised Advisory gives clearer guidance to employers on the measures to manage excess manpower, including in the Annex an ordering of the measures by severity of the impact on employees.
    • On top of the original principles, which remain valid, let me highlight three important additions to this advisory.

    #1 – Use Government Support to Train and Upskill 

  10. The first addition is to make clear that employers should consider using this period to train and upgrade your workers before other manpower-cutting measures.

  11. I understand this is a difficult time and you already have revenue and cash flow concerns. This is why besides other support, the Government has enhanced training support that effectively helps you with salary costs.

  12. Take for example, Mandarin Oriental Singapore.

  13. The hotel is making full use of the downtime to carry out all the training they had no spare capacity to run when occupancy was high.  With the enhanced support by SkillsFuture Singapore, the hotel will get absentee payroll of 90% of hourly basic salary and course fee support at 90%. Apart from retaining skilled and experienced workers, for the Mentor Assistance Programmes, the hotel enjoys funding support from e2i, of up to $3,500 per PMET trainee and $2,000 per non-PMET trainee.

  14. Likewise for ST Logistics which I visited yesterday, about 100 staff will go through redeployment training, with majority of the salary costs during the 3- to 6-month on-the-job training paid for by WSG.  Across the sectors most seriously hit by the COVID-19 outbreak, about 2,600 people will get similar support.

    #2 – Introduce Flexible Work Schedule or Time-banking

  15. The second addition in the updated advisory is the Flexible Work Schedule (FWS) option, or “time-banking”. How does this work? What is it?

  16. During such times, instead of retrenching staff and having trouble in hiring later, it may better to shorten the work day or the work week. For example, retail stores or restaurants may prefer to start later and end earlier because there are too few shoppers. Similarly, restaurants may not have enough diners. To save utilities cost, they may get everyone to work 4 days or reduce manning levels on certain days when business volume is likely to be lower.

  17. But even when you implement such measures, the workers will still need incomes, if not including overtime, then their basic salaries at least.  What if the hours they did not work could be “banked” today i.e. put into a personal account, which the employer can draw on for future overtime hours? 

  18. In fact, Sembcorp Marine Contractors Private Limited has implemented time-banking since 2005 for about 400 welders, fitters and general workers.
    • Their work intensity can be unpredictable due to weather conditions, even the tide levels, and the availability of yard facilities.
    • The work processes are sequential too. For example, painting can only be done after blasting, and neither of these activities can be carried out when it is raining.
    • As such, there are times when some workers have extended hours while others have little to do.

  19. As a result of this time-banking, the workers are paid the same basic salaries each month for an expected number of work hours.
    • In one month, overtime may be paid when actual work exceeds what was expected. This comes on top of the basic salary.
    • Supposing the worker clocked fewer hours than expected, the basic salary is still paid but the value of the unworked hours are “banked” in the workers’ individual “working time accounts”. Simply put, they are paid now, work later.
    • At some point in future, when overtime is required, the employer can then withdraw the extra hours based on an agreed formula.

  20. Time-banking gave SembCorp flexibility to cope with the uneven and fluctuating manpower demand.
    • To be fair to the employees, the formula is agreed based on established principles of overtime pay. This was 1.5 times.
    • As recognition to workers for their help, SembCorp also pays a performance incentive of up to 0.5 months every three months – quite generous.
    • The worker would at least receive his basic monthly wage regardless of hours worked. But in some months, he also gets a bit more in overtime.
    • It is win-win for both.

  21. In summary, “time-banking” can preserve employment while helping you reduce future manpower costs due to overtime ramp-up in the business recovery phase.
    • MOM has further streamlined the application process for time-banking. The details have been uploaded on MOM’s website.
    • I encourage unions and employees to work with employers to find the most suitable time-banking arrangement instead of resorting to retrenchment.

    #3 – Notify MOM if monthly salaries are impacted

  22. The third addition to the tripartite advisory is a requirement for companies to notify MOM if they have implemented any cost-saving measures that affects employees’ monthly salaries.
    • This is to encourage a sense of social responsibility and prevent downstream salary disputes. 
    • The notifications will also allow MOM to monitor the scope and scale of such measures, and whether more Government interventions are needed.

    Conclusion

  23. So let me conclude. These are uncertain times and this calls for a united response from all of us.

  24. I urge employers to review the updated Tripartite Advisory to better manage manpower under challenging business conditions. Workers should also do your best to support employers through this difficult period, so that we can all save jobs.

  25. The Government will do our best to manage the COVID-19 outbreak, and work closely with both unions and employers to support businesses and our workers.

  26. There is no doubt in my mind that together, we can weather the many challenges and emerge stronger. Thank you!