From 12 March 2020, employers are required to notify the Ministry of Manpower (MOM) if they implement any cost-saving measures that affect monthly salaries of their employees, and indicate that they have done so fairly.

The Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment (the Advisory) has also been updated in view of business slowdowns faced by employers due to the COVID-19 situation. The Advisory emphasises that retrenchment should always be the last resort in the management of excess manpower, and suggests alternatives to retrenchments.

The updates to the Advisory focuses on alternatives to retrenchment and reveals the MOM’s focus on job preservation in light of the business slowdown arising from the COVID-19 situation. The Advisory’s wage adjustment suggestions show that while the MOM is focused on employee job security, it also has a realistic view of the difficulties faced by employers. The new reporting requirement to the MOM on cost-saving measures affecting salaries is a way for the MOM to monitor the impact of the economic slowdown on employee wages.

Explore More Insight