COVID-19: Many Employers’ Cost-Saving Measures Are Not Well Communicated, Finding Shows

However, majority of employers are found to be reasonable and fair when it comes to implementing cost-savings measures.
By Ian Tan Hanhonn 24 Jun 2020

The Ministry of Manpower (MOM) and the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP) have released key findings on the cost-saving measures adopted by employers who were severely impacted by COVID-19.

In a joint release on 24 June 2020, MOM found that 74 per cent of the complaints received were due to employers not communicating the measures well or failing to explain the need for cost-saving measures.

To date, there have been no cases of employers refusing to channel Government support funding to its proper use.

MOM Employment Standards Enforcement Director Christine Loh said: “To weather the impact of COVID-19 in the months ahead, employers and employees have a shared responsibility to work together and make sacrifices to prevent retrenchment and preserve jobs.

“MOM will investigate complaints and take actions against employers who do not treat employees fairly.”

Other Key Findings

4,800 employers notified MOM on cost-savings measures

From 12 March 2020, employers with 10 or more employees are required to notify MOM if they implement cost-saving measures that will affect employees’ monthly salaries.

Since then, more than 4,800 employers have submitted notifications on cost-saving measures, affecting some 187,000 employees.

The majority of these employers were from sectors severely impacted by COVID19 – 24 per cent were from accommodation and food services, 16 per cent were from construction, and 15 per cent where from wholesale and retail trade.

Top 3 Cost-saving Measures

The top three cost-saving measures implemented by employers were no-pay leave, adjustments to monthly salary components and shorter work week.

Based on the notifications received by MOM, most employees experienced salary reductions of up to 25 per cent because of the cost-saving measures.

Intervention by TAFEP

If an employer submits an excessive cost-saving measure to MOM, TAFEP would proactively reach out to the employer to review the measures.

TAFEP has engaged about 700 employers with over 33,000 affected employees.

So far, about 300 employers have agreed to review their measures. These include measures to provide more wage support or require employees to clear fewer days of annual leave.

Remaining employers were able to justify the necessity of their cost-saving measures for business survival.

TAFEP General Manager Roslyn Ten said: “To get through this crisis and save jobs, everyone must come together and do their part. The Government has rolled out the JSS [Jobs Support Scheme] to support employers to retain employees and avoid retrenchment for as long as possible.

“Employers will need to be responsible in how they adopt cost-saving measures to keep their businesses afloat.”