By Kor Kian Beng

EMPLOYERS have been given a revised set of guidelines on managing excess workers, in a move to further help them cut costs and save jobs.

It was prompted by the worsening economy and prospects of a prolonged recession, said the Ministry of Manpower (MOM) yesterday, in a statement with tripartite partners the National Trades Union Congress (NTUC) and the Singapore National Employers Federation (SNEF).

The changes are targeted primarily at giving businesses that continue to struggle to stay afloat, more room to design new work arrangements before considering layoffs.

Said Manpower Minister Gan Kim Yong, in announcing them: 'It's important to provide adequate flexibility to employers so that they can weather the recession because we really don't know how long this recession will last.'

Some of the key changes include a shorter work week; introducing no-pay leave; urging companies without a Monthly Variable Component (MVC) in their wage structures to treat any cut in basic pay of up to 10 per cent as an MVC cut; and, if reductions of the variable components are not enough, to consider cutting the Annual Wage Supplement or 13th month payment.

News on the updated Tripartite Guidelines on Managing Excess Manpower was given on Saturday for release to the media yesterday.

The announcement was made at a NTUC event by Mr Gan, with Mr Bob Tan, SNEF's vice-president, and Mr Heng Chee How, deputy secretary-general of NTUC. The minister also noted that the earlier guidelines had saved jobs and prevented higher unemployment.

But despite some economists seeing signs of recovery in this second quarter, 'the tripartite partners are very mindful that we are still a long way from a sustained recovery', said NTUC secretary-general Lim Swee Say yesterday, when commenting on the new guidelines.

He also stressed that management must lead by example, taking deeper pay cuts and ahead of rank and file workers. By doing so, 'we as a labour movement...are more committed, more willing to go along', he added.

Last November, when the guidelines were announced, Singapore's unemployment rate was 2.2 per cent and the economy was forecast to shrink by as much as 1 per cent this year or grow by up to 2 per cent.

But since then, the unemployment rate has risen to 3.2 per cent in March this year and the economy is projected to contract between 6 per cent and 9 per cent this year.

Redundancies, including retrenchment and early termination of contracts,also peaked to a 10-year quarterly high of 12,600 in the first quarter this year.

The latest guideline changes, however, may not be the last, warned Mr Gan, who said more revisions could be made depending on how the economy performs.

Commenting on the updated recommendations, SNEF's Mr Tan said: 'All companies are preparing for an upturn, so any measures that help them to do so...will go a long way in helping them achieve this objective.'

He also said SNEF supports the recommendation that management should take the lead in cost-cutting measures. 'Otherwise we would have no moral authority to ask workers to follow suit.'

NTUC's Mr Heng, in underlining the same point, said: 'From a union standpoint, we want the companies to survive because we want them to keep jobs for the workers.

'(But) we want them to survive in a responsible, fair and practical way for workers.'

This article was first published in The Straits Times.