The Ministry of Manpower has reported that it has accepted the recommendations of the National Wages Council (“NWC”) for 2014/2015. The NWC Guidelines cover the period 1 Jul 2014 to 30 Jun 2015. These recommendations are applicable to all employees, inclusive of PMETs and Rank-and-File Employees in both the private and public sectors, whether they are unionised or not.
Highlights of the NWC Recommendations are summarized here.
- Focus on Productivity Growth– the NWC recognizes that the labour situation will continue to remain tight and that this might lead to upward pressures on wages. To improve productivity, the NWC recommends that:
- real wage increases should be in line with productivity growth over the long term in order to remain competitive and sustainable
- firms move toward productivity driven growth rather than employment driven growth. this should be done through the introduction of more manpower-lean approaches to business operations
- tap on Government Assistance Schemes, including the Productivity and Innovation Credit Scheme (PIC and PIC+) and the Wage Credit Scheme
- employers augment the workforce by attracting the economically inactive (eg housewives, mature workers etc) back to work
- Share Productivity Gains Equitably with Workers– the NWC recommends that
- employers consider the prevailing economic and labour conditions when deciding on wage increases
- employers give built in wage increases to workers, after taking into consideration business performance, prospects, and long-term sustainability
- employers who perform well further reward workers through variable wage components
- For Low-Wage Workers – the NWC recognizes the challenges faced by low wage workers and recommends that
- employers grant low-wage workers a built in wage increase of a dollar quantum and a percentage. This gives low-wage workers a higher percentage of built-in wage increase, allowing these workers to better manage cost increases
- employers grant a built-in wage increase of at least $60 for workers earning less than $1,000 per month
- employers grant an equitable and reasonable wage increase and/or one-off lump sum based on skills and productivity for low wage workers earning more than $1,000 per month
Key Indicators Influencing the NWC Recommendations
These are some of the indicators the NWC took into consideration when making its recommendations.
Other NWC Recommendations
These are some of the other recommendations by the NWC.
- The NWC welcomes efforts in introducing the progressive wage model across various sectors. It appreciates how progressive wage models allow employers to make better use of manpower and pay higher wages, commensurate with workers’ job responsibilities and productivity. The NWC encourages other industries to adopt the concept of “progressive wages” and provide a clear progression path for workers to up-skill and upgrade.
- The NWC urges the government to continue to actively help employers raise productivity and moderate non-wage business costs.
- The NWC encourages employers to continue to invest in staff training to help workers upgrade and raise productivity. It highlights the importance of employers to have in place processes to systematically train the workforce.
Follow-Up
Contact us if you have any questions or face any difficulties implementing the recommendations, improving labour productivity, establishing a structured training plan, or introducing a progressive wage model and employee career progression pathways.