What you need to know
- The Job Support Scheme (JSS) has been extended (at lower support levels) for a further seven months until March 2021.
- The Jobs Growth Incentive (JGI) has been introduced to incentivise the hiring of local workers by providing wage support.
- The applicable retrenchment guidelines in Singapore will soon be amended.
What you need to do
- Employers should familiarise themselves with the latest measures and ensure that they utilise them to the fullest extent possible to protect jobs.
- Retrenchments continue to be a closely-scrutinised issue and employers should explore all available cost-saving measures before considering retrenchments.
Job retention, particularly in respect of local workers, has been a major focus of the Singapore Government's response to the COVID-19 pandemic. On 17 August 2020, various measures were announced to assist employers to protect jobs and avoid retrenchments.
Extension of the JSS
The JSS has been the primary support measure introduced by the Singapore Government since the beginning of the COVID-19 pandemic. Under the JSS, the Government co-funds the wages of local (Singapore Citizen and Permanent Resident) employees to ease the financial burden on their employers and help protect jobs. The level of co-funding ranges between 25% to 75% of the first SGD 4,600 of the employee's gross monthly wages paid in 10-month period up to August 2020, depending on the employer's industry and the relevant month.
The JSS was due to cease in August 2020, but has since been extended (at lower support levels of 10% to 50%) for a further 7 months to March 2021. The levels of support during the extended period depends on industry, with those which have been most badly affected by the COVID-19 pandemic receiving the highest level of support:
| industry |
Level of Support |
Period |
| Aerospace, aviation, and tourism |
50% of the first SGD 4,600 of the employee's gross monthly wages |
September 2020 to March 2021 |
| Businesses which are not allowed to resume on-site operations |
50% of the first SGD 4,600 of the employee's gross monthly wages |
September 2020 to March 2021 or until on-site operations are allowed to be resumed, whichever is earlier |
| Built environment |
50% of the first SGD 4,600 of the employee's gross monthly wages |
September 2020 to October 2020 |
| 30% of the first SGD 4,600 of the employee's gross monthly wages |
November 2020 to March 2021 |
| Food services, retail, marine and offshore, and arts and entertainment |
30% of the first SGD 4,600 of the employee's gross monthly wages |
September 2020 to March 2021 |
| Financial services, information and communications technology and media, biomedical sciences, precision engineering, electronics and online retail, and supermarkets |
10% of the first SGD 4,600 of the employee's gross monthly wages |
September 2020 to December 2020 |
Taking into account the latest extension, the JSS will provide wage support for a duration of 17 months to help employers retain as many employees as possible.
JGI
The JGI is a SGD 1 billion scheme intended to incentivise the hiring of local workers, particularly older workers in eligible growth enterprises. Under the JGI, the Government will co-fund up to 25% of the salaries of all new local hires aged 39 and below and up to 50% of salaries of all new local hires aged 40 and above, subject to a cap. The duration of co-funding will be one year. The Government has also announced that employers must maintain (or increase) the size of its workforce during the one-year period in order to receive the full amount of JGI support.
Further details on the JGI are expected to be released later this month, which should clarify issues such as whether there are any qualifying requirements, the quantum of the cap on co-funding and whether the JGI will apply to all sectors or only "growth sectors" such as biomedical sciences, financial services, and information and communications technology.
Retrenchments
In July 2020, the National Trade Unions Congress (NTUC) proposed a Fair Retrenchment Framework (FRF) to guide employers on responsible retrenchment practices and to supplement the existing Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment (Tripartite Advisory). The key recommendations of the FRF, which are based on NTUC's three principles of Protecting Singaporean Core, Preserving Jobs and Providing Job Support are:
- Retrenchments should be the last resort, and employers should work with unions and their employees to explore possible alternatives before considering retrenchments;
- Employers should implement fair selection criteria to ensure that the Singaporean core of its workforce is safeguarded. Measures like job protection and redeployment should be implemented to enable Singaporeans to keep their jobs while at the same time giving due consideration to foreign employees;
- The section criteria for managing excess manpower should be based on business needs and reasonableness;
- Older employees should be evaluated on an equal basis to their younger employees; and
- If retrenchments are inevitable, employers should provide employees with fair retrenchment packages and processes.
The Government has announced that the Tripartite Advisory will soon be amended to incorporate the FRF. This upcoming amendment will supplement the amendments made to the Tripartite Advisory in March 2020 (discussed here) and the supplemental advisory issued by the Tripartite Partners on retrenchment payments issued in May 2020 (discussed here).
Conclusion
The Singapore Government has again demonstrated its emphasis on protecting jobs, particularly those of local employees, during the COVID-19 pandemic. It is important that employers utilise all available support from the Government to protect jobs and employers can continue to expect that any retrenchment exercises will be closely scrutinised. For more information, please contact the persons listed below:
