Sunday 2 June 2013

NWC proposes wage increase of at least S$60 for low-wage workers: National Wages Council Guidelines 2013/2014

NWC urges more effort to lift low-wage earners' pay
It raises pay-hike target to at least $60 for those earning below $1,000
By Toh Yong Chuan And Elgin Toh, The Straits Times, 1 Jun 2013

THE National Wages Council (NWC) yesterday called for a "special effort" to raise wages at the bottom, with its annual guidelines once again focusing on the poorest-paid workers.

As it did last year, it set a specific target for companies: Raise the pay of those earning below $1,000 by at least $60. Last year, it recommended a $50 increase.

It went a step further yesterday, urging companies to incorporate NWC recommendations into outsourcing contracts which lock service buyers and sellers into a fixed price over a period.

Such contracts were cited as a key reason why only three in 10 non-unionised firms followed last year's guidelines.

Apart from measures for low-wage workers, NWC repeated calls from previous years for firms to give built-in wage hikes to workers that take into account business performance and prospects, and to reward good performers with variable pay rises.

It also said firms should share productivity gains with workers and give raises in line with productivity growth.

But it pointed to the 2.6 per cent fall in labour productivity last year and warned that pay rises have to be supported by productivity gains. Otherwise, economic competitiveness would be eroded.

It noted that while total wages of workers rose 4.2 per cent last year, their real wages fell 0.4 per cent due to inflation. With rentals taken out, real total wages rose, but only by 0.5 per cent.

In response, the Government said it accepted the council's recommendations and would "lead by example, not only as an employer but also a service buyer" when it came to raising wages of the low-income.

Manpower Ministry Permanent Secretary Loh Khum Yean said government agencies would study the recommendations, including how contracts are awarded, but that it was too early to give details or timelines.

NTUC, in turn, said it was "very concerned" with how most non-unionised firms did not implement last year's guidelines.

NTUC president Diana Chia said the NWC talks this year were "not an easy negotiation". A source told The Straits Times that NTUC had wanted a bigger increase since the Government's Wage Credit Scheme would subsidise part of the pay hike, but employer groups were hesitant.

"We also think that employer groups could have pushed firms harder to implement NWC guidelines," a unionist said.

Singapore National Employers Federation (SNEF) president Stephen Lee acknowledged the lower compliance rate in the non-unionised sector and pledged that SNEF would step up its publicity drive to get more firms to comply this year. For workers whose companies refuse to comply, he said: "Since the labour market is so tight, workers who are earning very low pay now can move to unionised companies."

NWC's new guidelines welcomed by unions, firms
But call over raising contract values may not be accepted in private sector
By Elgin Toh And Toh Yong Chuan, The Straits Times, 1 Jun 2013

UNIONS and companies have welcomed the latest National Wages Council (NWC) guidelines, with many calling the $60 raise for low-wage workers fair and much needed.

But they were more circumspect about whether one particular NWC recommendation will be accepted in the private sector.

This is the call on buyers of outsourced services to allow contract values to rise so workers can enjoy salary increases before the end of existing contracts.

For services such as cleaning and security, the outsourced contract is locked in for an agreed period, sometimes up to three years. Contract values are settled before the start of the contract.

Therefore, in order for annual NWC recommendations, such as the latest $60 raise, to be implemented, the workers' employers - that is, the service providers - have to absorb it in their costs.

For smaller service providers already surviving on thin margins, the raise simply does not happen.

Acknowledging the difficulties faced by these providers, Singapore National Employers Federation (SNEF) chief Stephen Lee said the NWC made it a point to highlight the problem this year.

"Hopefully, the service buyers can allow for service providers to do some renegotiation to take into account (the raise)," he said.

As a major buyer of such services, the Government has already taken the positive step of promising it will "lead by example". But getting private-sector service buyers to comply may be easier said than done.

For instance, condominium management committees will be reluctant to pay more than what was agreed upon. They have to answer to residents, said Mr T. Mogan, president of the Security Association of Singapore.

Agreeing that renegotiating contracts with private buyers is an uphill task is Mr Robert Wiener, president of the Association of Certified Security Agencies.

He said that while "there are some enlightened clients", for the rest, a renegotiation would have to be pitched alongside other service improvements - such as software or hardware upgrades to reduce overall manpower deployment.

This year's proposed $60 hike received praise from unions like the Amalgamated Union of Public Daily Rated Workers and employers such as the PAP town councils and the Association of Small and Medium Enterprises (Asme).

PAP town councils issued a statement saying they will make sure their cleaners get the raise.

President of the Singapore Chinese Chamber of Commerce and Industry Thomas Chua said his grouping "appreciates the special attention being given to low- wage workers... as this is the group that needs extra help".

But given patchy implementation of last year's $50 raise - only three in 10 firms complied - those interviewed said more needs to be done to ensure firms fall in line.

National Trades Union Congress (NTUC) vice-president K. Karthikeyan suggested naming and shaming firms that were profitable yet did not give the raise.

Asme president Chan Chong Beng said workers should not let intransigent SME bosses get away by pleading ignorance about the NWC guidelines. He said: "Know your rights. Do something to pressure the boss and highlight that you should get what you deserve."

Citing how unionised companies have a much better record - 80 per cent last year - of complying with NWC, labour MP Zainal Sapari said one of NTUC's approach is to unionise more firms.

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