Singapore's government yesterday accepted an official panel's recommendation that companies use "severe wage restraint" to save jobs as the country battles its worst-ever recession.
The government-appointed National Wages Council on Saturday made the call for wage cuts or freezes as hopes for a global economic recovery fade after the Sept. 11 terrorist attacks in the US, which is Singapore's largest export market.
"The government strongly supports the council's call for severe wage restraint, including wage cuts," the Ministry of Manpower said in a statement.
"This will help to save jobs and enable more companies to survive the downturn," the statement said.
The council, which includes representatives from unions, businesses and the government, normally meets once a year to suggest guidelines on wages.
The panel made its previous regular recommendations in May, but issued revised guidelines ahead of schedule on Saturday amid a deepening recession.
"The main thrust of the [new] guidelines is severe wage restraint," National Wages Council chairman Lim Pin said on Saturday at a news conference. ``This is in order to save jobs.''
The Ministry of Manpower statement issued yesterday said the government "strongly supports and reiterates the council's call for management to lead by example in wage freezes [or] cuts.''
The government also agreed with the council 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.
Though the council's guidelines are not directly enforced by law, they "provide a legal basis" for employers, employees and unions when they negotiate, said council member Ong Yen-her.
Arbitration courts would use the council's guidelines as a benchmark for coming up with judgments in disputes, Ong said.
RSS