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Industry Insights

250,000 workers had wages cut from March to September: MOM

Posted on 27/11/2020 by Paula Formantes

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Between March and September this year, about 250,000 workers have had their wages cut, a report by the Ministry of Manpower (MOM) showed.

Since MOM required companies with 10 or more employees to notify the Ministry if they were going ahead with wage cut measures in March, it has received 7,300 notifications from about 5,000 companies.

The latest Employment Standards Report, which was released on Thursday, November 19th, said that the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP) worked with 900 of these companies, which employ close to 52,000 workers, to revise their measures because their planned wage cuts were deemed excessive.

Of these, close to 330 of the employers agreed to review their measures, while the rest could justify the need for those cuts for business survival.

This is the second time the Ministry has come up with an Employment Standards Report, which tracks labour disputes on issues such as salary and dismissal.

SALARY DISPUTES

Of the overall employment claims, 13,591 (86 percent) out of 15,717 claims that were filed were related to wages.

Singapore employees

The number of claims per 1,000 employees in 2019: 1.53 (up from 1.43 in 2018).

  • Increase in claims from wholesale and retail trade industry in line with its weak performance in 2019

The number of claims per 1,000 employees in the first half of 2020: 1.73 (up from 2019).

  • Increase in claims due to economic disruptions from Covid-19.

Most common claim items:

  • Basic salary
  • Salary-in-lieu of notice

Foreign workers

Number of claims per 1,000 employees in 2019: 4.98 (up from 4.45 in 2018)

  • Increase in claims partly due to more group claims in the construction sector

Number of claims per 1,000 employees in the first half of 2020: 3.96 (down from 2019)

  • The decrease was due to a significant drop in the number of claims by foreign workers in the construction sector
  • Fewer complaints lodged because the Tripartite Alliance for Dispute Management (TADM) helped resolve salary issues for the foreign workers quarantined in the dormitories

Most common claim items:

  • Basic salary
  • Overtime salary

A MOM spokesperson said during a press briefing on Wednesday that both groups of employees have the same legal rights when asked whether there was a lack of legal rights for foreign workers given their much higher number of claims compared with Singapore residents.

The issue is the nature of the construction industry where employers do not keep proper records or issue itemized payslips. The situation is further exacerbated since the sector was on the decline since 2019, even before the pandemic hit.

Resolving salary claims

The salary that has been recovered:

  • 90 percent of workers who filed complaints recovered their salaries fully
  • The total recovered sum amounted to about S$23 million
  • The majority of these monies recovered came from employers
  • Some of the money came from the National Trades Union Congress U Care Centre, set up for low-income union members, and the Migrant Workers’ Centre because some employers could not pay due to financial distress

Salary not fully recovered:

  • About 5 percent of workers who filed claims merely recovered their salaries partially
  • The rest were largely high-income professionals whose companies could not pay due to financial difficulties

Cost-saving measures:

Wage cuts:

  • 580 complaints relating to cost-saving measures were filed between May and August this year
  • 470 employers were involved
  • Most complaints were resolved amicably because they arose due to poor communication

Retrenchment packages:

  • 80 complaints were filed involving retrenchment benefits
  • More than 60 percent of employers had provided fair and reasonable retrenchment benefits
  • Other employers were assessed to have genuine financial difficulties

DISMISSAL HIRING

Out of 1,431 complaints that were made for dismissal without just cause or excuse:

  • 26 are still pending mediation
  • 286 were privately settled or withdrawn
  • 277 were substantiated claims
  • 842 were unsubstantiated
  • 60 percent of disputes were settled with TADM, while the rest were referred to the employment claims tribunals

MOM reported a significant increase in dismissal complaints in the second quarter of this year.

  • The jump is in line with the drop in resident employment when the two-month partial lockdown in April and May was imposed during this period
  • There was no evidence that employers have terminated their workers unfairly to deny them retrenchment benefits despite the increase in dismissal complaints
  • Many of the claims were filed by employees who were unhappy with the abrupt manner of termination

DISCRIMINATORY HIRING

A MOM survey in 2018 found that the percentage of Singapore jobseekers who perceived discrimination during their job search had increased, from 10 percent in 2014 to 15 percent in 2018.

TAFEP investigated 260 cases of discriminatory hiring practices in the first half of this year.

This is higher than the 160 cases over the same period last year.

In the first half of this year, 70 employers had their application for work pass privileges revoked. This is much higher than the 35 being sanctioned in the whole last year.

When asked why the numbers went up, MOM said that there have been more complaints reported to TAFEP due to more awareness among workers.

MOM also proactively initiated investigations into companies even before a complaint comes in using data analytics, which will look at indicators that point to a high risk of possible offense.

The ministry also said that the perception of being discriminated against could be influenced by the prevailing economic conditions.

For example, when times are bad, there may be a heightened sense that jobs should be protected for the resident workforce.

The most common types of complaints lodged at TAFEP were discrimination by nationality, age, and gender.

For more information on Employment Pass and S-Pass Application process and on Fair Hiring Practices, please contact +65 6334 4328 or email at enquiry@primehr.com.sg

Reference: https://www.todayonline.com/singapore/250000-workers-had-wages-cut-march-september-mom