In view of the worsening economic conditions and continued uncertainty in the year ahead, the Government strongly supports the NWC’s call for severe wage restraint, including wage cuts. The Government agrees with the need for companies to take steps to reduce wage cost. This will help to save jobs and enable more companies to survive the downturn.

Specifically, the Government supports NWC’s recommendation that companies, whose business, profitability and prospects are adversely affected by the downturn, may implement a wage freeze or cut in consultation with workers/unions, commensurate with their performance and prospects. The Government also supports NWC’s recommendation that companies that are profitable and performing well should reward workers with appropriate wage increases, preferably in the form of a monthly variable component or special payments.

The Government strongly supports and reiterates NWC’s call for management to lead by example in wage freeze/cuts. On its part, it has already implemented a substantial cut in the monthly salaries of the political/statutory and judicial appointment holders and senior civil servants whose salaries are tied to the private sector salary benchmarks. The cuts amounted to between 17% - 20%, including the reduction in year-end payments.

The Government also strongly supports NWC’s call to employers to consider sending their surplus workers for skills upgrading under the various Government funded training schemes. Employers should take advantage of such assisted training schemes to minimize the need to retrench surplus workers.

The Government is confident that with close labour management co-operation and the strong tripartite partnership based on trust and confidence, the wage restraint guidelines will be successfully implemented to help companies ride the economic downturn and preserve jobs for the workers.

NWC's Revised Wages Guidelines for 2001-2002

Singapore Government Press Release 9 Dec 2001