Tripartite advisory on managing excess manpower and responsible retrenchment
This advisory was updated as of 11 March 2020 in view of COVID-19, to include further guidance on the implementation of shorter work weeks, temporary layoffs, and adjustments to annual leave, variable bonus payment and monthly variable component of an employee's wage.
Shorter Work Week: With employee consent, Companies can request employees to take up to 50% of their annual leave, and implement a reduction in work week that doesn't exceed 3 days and does not last for more than three months at any one instance. This does not affect the parties' ability to mutually agree on different arrangements.
Temporary Layoff: With employee consent, Companies can request employees to take up to 50% of their annual leave, and implement a layoff period that does not exceed 1 month at any instance subject to review, during which employees will be paid not less than 50% of their wages during the layoff period. This does not affect the parties' ability to mutually agree on different arrangements.
National Wages Council 2020/2021 Guidelines (W.e.f 1 April 2020 to 30 June 2021)
Employers should consider the following measures in order of priority when reducing wages:
- First, reduce non-wage costs, and consider measures to utilise and manage excess manpower (e.g. employers can focus on training and upskilling employees, adopt Flexible Work Schedules or support affected local employees who wish to seek a second job by implementing job-sharing arrangements, shorter work week , or temporary layoffs.)
- Second, make full use of Government support to offset business and wage costs.
- Third, consider salary reductions.
- Fourth, consider retrenchment as a last resort.
Mandatory Notifications on Cost-Saving Measures
All employers registered in Singapore, with at least 10 employees who have implemented costs-saving measures resulting in employee's salaries falling below (i) 75% of the gross monthly salary for local employees or (ii) 75% of the basic monthly salary for foreign employees, must notify the Ministry of Manpower of these chances within seven days after implementation.
Advisory on Collection of Personal Data for COVID-19
All employers are permitted to collect, use and disclose Relevant personal data (including NRIC/FIN/passport numbers), for the purpose of carrying out contact tracing and other response measures. Employee consent is not required as such personal data are necessary to respond to an emergency that threatens the life, health or safety of other individuals. However, employers must nonetheless comply with the data protection obligations under the PDPA (e.g. ensuring reasonable security arrangements are in place and that the personal data will not be used for other purposes without the consent of the data subject or permitted under law).
This article is produced by our Singapore office, Bird & Bird ATMD LLP, and does not constitute legal advice. It is intended to provide general information only. Please note that the information in this article is accurate as at 14 May 2020. We will continue to monitor the situation and provide updates on any changes as soon as these are communicated to us. Please contact our lawyers if you have any specific queries.
Last reviewed: 14 May 2020