Saturday, 18 June 2016

Civil servants mid-year bonus (2016) and its message

By Charissa Yong, The Straits Times, 17 Jun 2016

Civil servants will get a mid-year bonus of 0.45 of a month's pay this year, lower than the half-month payouts they received for the last two years.

The lower bonus is significant because it affects a large number of workers across various industries.

The reason? As Singapore's biggest employer with 84,000 workers, the civil service and its payouts are watched closely by the private sector as a guide for its own bonus payments.

But more importantly, the announcement on Tuesday by the Public Service Division (PSD) drives home the message that tougher times are ahead with a slowing Singapore economy. It also reinforces the signs economists have been flagging.

In the first quarter of this year, the economy grew by 1.8 per cent and is likely to continue growing sluggishly for the rest of the year.

This is cause for concern because the service sector, a key engine of growth, is in a slump. It grew at 1.4 per cent in the first quarter, the slowest pace since the 2009 financial crisis.

With a weaker global economic outlook, trade cannot be counted on to pull up growth either.

The Government has forecast growth of 1 per cent to 3 per cent for the full year. But private sector economists are predicting 1.8 per cent growth, down from an earlier forecast of 1.9 per cent.

In turn, employment growth has slowed.

The PSD has said that labour demand is expected to be uneven across sectors, and also warned of possible layoffs in some sectors as the economy restructures.

While the average worker may not immediately grasp the significance of the economic and employment figures, the lower mid-year bonus is a clear and early warning to moderate expectations. It will also help to drive home the need to stay relevant by learning the right skills.

For job-seekers, it is a wake-up call that there may be fewer openings. For companies, it is a sign from the Government that there is no need to shrink bonuses or salaries drastically for now, even as they take measures to deal with the economic slowdown.

Civil servants to get 0.45 month mid-year bonus in 2016
By Charissa Yong, The Straits Times, 15 Jun 2016

The mid-year bonus for all 84,000 civil servants here will be lower this year compared with the last two years, because of the slowing down of the Singapore economy.

Civil servants will receive a bonus of 0.45 of a month's pay against 0.5 month previously.

Similarly, the additional built-in pay increase for lower-wage workers will be smaller than the sum recommended by the National Wages Council (NWC).

About 1,500 of these workers will get $20 to $25 more a month, on top of their annual pay increment for the year.

The NWC, however, had called for an increase of $50 to $65 for low-wage workers earning a basic salary of up to $1,100 a month.

The Public Service Division (PSD), in acknowledging this, said all civil servants already earn more than $1,100.

Its statement yesterday also said the lower payments and pay rise - which will take effect next month - stem from the slowing down of the Singapore economy.

The economy grew by 1.8 per cent in the first quarter of this year and is forecast to grow by 1 per cent to 3 per cent for the full year, amid a weaker global economic outlook.

Labour demand is expected to be uneven across sectors this year.

While the unemployment rate has remained low, employment growth has slowed and redundancies are expected in some sectors as the economy restructures, said the PSD statement. The mid-year payments were decided in close consultation with public sector unions, it added.

Unionists said the pay hikes were fair.

"Considering the slowdown in our economic growth, the payment fairly rewards civil servants for their dedication and contributions," said National Trades Union Congress assistant secretary-general Cham Hui Fong.

Those who will benefit from the wage increases are Grade IV and Grade V officers in the Operations Support Scheme. They perform administrative support duties such as office maintenance.

About 900 Grade IV officers, with a monthly salary of between $1,446 and $1,843, will get a built-in wage increase of $20.

Grade V officers under the same scheme will get a $25 pay rise. There are about 600 of them and they earn between $1,205 and $1,536 a month.

Mr G. Muthukumarasamy, general secretary of the Amalgamated Union of Public Daily Rated Workers, said the increases would be a big help to lower-wage civil servants and their families, "especially during these challenging times".

The pay rises signal the Government's continued commitment to help raise the salaries of low-wage civil servants, said the PSD.

It added that year-end bonuses for civil servants would be decided after taking into consideration Singapore's economic performance in the second half of the year.

Said Mr Yeo Chun Fing, general secretary of the Amalgamated Union of Public Employees: "We hope that if the economy recovers, the Government will duly reward our civil servants."

* Half-month year-end bonus for civil servants in 2016
Total bonus of 1.95 months for 2016 is smaller than last year's due to slowing economy
By Rachel Au-Yong, The Straits Times, 26 Nov 2016

Civil servants will get a smaller year-end bonus of half a month as the slow economy continues to slide further.

But 1,900 low-wage workers will be given at least $900, signalling the Government's continued commitment to helping these workers, the Public Service Division said yesterday.

For instance, an officer earning $1,500 a month will get $900, which is $150 more than the bonus based on his monthly salary, it added in its statement.

Along with their mid-year bonus of 0.45 month and the traditional 13th-month bonus paid in December, civil servants will get a total bonus of 1.95 months this year.

This is lower than the bonus of 2.15 months given last year, when civil servants also received a one- time $500 bonus in celebration of Singapore's jubilee year.

The minimum year-end bonus for low-wage workers was higher as well: $1,100.

The decrease is the third in a row. In 2014, civil servants received a total bonus of 2.3 months and, in 2013, 2.5 months.

The smaller payout comes on the heels of the Government revising downwards on Thursday its growth forecast for the whole of this year. The new forecast is 1 per cent to 1.5 per cent, compared with 1 per cent to 2 per cent earlier.

The civil service year-end bonus is watched closely by the private sector, which uses the figure as a guide for its bonus payments.

The National Trades Union Congress welcomed the payout. Assistant secretary-general Cham Hui Fong said it "fairly reflects the Government's financial prudence while taking into account the recommendations of the National Wages Council".

Despite low-wage workers getting $200 less than last year's minimum amount, union leaders such as the general secretary of the Amalgamated Union of Public Daily Rated Workers, Mr G. Muthukumarasamy, said they are heartened that "our low-wage public servants are not forgotten''.

He added: "The bonus... is a timely sum to help our members cope with year-end expenditures such as their children's education and back-to-school spending."

Mr Yeo Chun Fing, general secretary of the Amalgamated Union of Public Employees, said: "We look forward to better rewards when the economy recovers."

School operations support officer Khamis Jamain, 55, said the $900 will go towards his 78-year-old mother's medical bills and loans he had taken from friends.

"We have heard the economy is not doing well, so anything is a bonus," he said.

OCBC Bank economist Selena Ling said most people would have taken into account the gloomy situation.

She warned that tougher times may lie ahead. "Companies may still reward their workers at similar levels to 2015, but they are also bracing themselves for the real challenge that is 2017," she said.

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