By Goh Chin Lian

Companies that are doing well and enjoying good business prospects should consider reversing the wage cuts made during the recession.

They should 'take this opportunity to recognise the efforts and sacrifices that workers have put in', Manpower Minister Gan Kim Yong told reporters yesterday.

But he cautioned that in doing so, companies should still remain flexible and responsive to economic changes, as the outlook for next year remains uncertain.

He was asked if companies should reverse their wage cuts, after attending an awards ceremony organised by the Chinese Development Assistance Council.

In its half-yearly macroeconomic review released last week, the Monetary Authority of Singapore (MAS) similarly warned of uncertainties as governments exit from their expansionary policies.

The MAS also noted that half of the country's exports go to economies that are expected to grow more slowly than usual next year.

And while the worst of the recession was over, Mr Gan pointed out that the recovery here remained uneven across sectors and firms.

The services sector is set to lead the way, with an estimated 13,400 jobs added between July and September.

Manufacturing is still languishing, with employment shrinking for the fourth straight quarter.

At the company level, some are struggling while others are seeing record performance in the third quarter, said Mr Gan.

In the light of these differences, he encouraged companies to 'look at their individual situation, discuss with their workers and decide what is best for them to ensure that they continue to remain competitive and viable going forward'.

His comments were made a day after his ministry released estimates of the job situation. They showed signs of a turnaround with 15,400 jobs added from July to September, compared to the 13,900 lost in the first half of the year.

Coupled with fewer layoffs and improving hiring sentiments, the labour market should stay stable for the rest of the year, Mr Gan said.

He urged companies and workers to focus on training and improving productivity, so as to seize the opportunities presented by an economic recovery and to achieve sustainable growth.

When contacted by The Sunday Times last night, National Trades Union Congress (NTUC) deputy secretary-general Halimah Yacob reminded companies of the sacrifices workers had made: 'In bad times, workers had supported tough measures such as wage cuts and shorter work weeks, and overtime was zero in most cases.'

By rewarding them when times are better, companies would build trust, a critical factor in weathering future uncertainties, she added.

To her, whether companies should restore wages or give bonuses would depend on their own circumstances. What is certain is that recessions typically set back workers' earnings, as international labour studies show.

According to NTUC, seven in 10 unionised companies froze or cut wages in the first six months of the year. Basic wages in unionised companies fell by 0.42 per cent in the second quarter of this year, compared to the figure in the previous quarter.

Madam Halimah said: 'So, if companies can afford it and it is sustainable from a business angle, restoring cut wages will be good for workers' morale and is in the companies' interest as well.'

Asked about reversing wage cuts, Singapore National Employers Federation executive director Koh Juan Kiat pointed out that employers were saying there was a need to address the issue of retaining their employees in an economic recovery.

This article was first published in The Straits Times.