NWC's new guidelines welcomed by unions, firms

The latest NWC guidelines were announced at a press conference chaired by Professor Lim Pin (centre) yesterday

Unions and companies have welcomed the latest National Wages Council (NWC) guidelines, with many calling the $60 raise for low-wage workers fair and much needed.

But they were more circumspect about whether one particular NWC recommendation will be accepted in the private sector.

This is the call on buyers of outsourced services to allow contract values to rise so workers can enjoy salary increases before the end of existing contracts.

For services such as cleaning and security, the outsourced contract is locked in for an agreed period, sometimes up to three years. Contract values are settled before the start of the contract.

Therefore, in order for annual NWC recommendations, such as the latest $60 raise, to be implemented, the workers' employers - that is, the service providers - have to absorb it in their costs.

For smaller service providers already surviving on thin margins, the raise simply does not happen.

Acknowledging the difficulties faced by these providers, Singapore National Employers Federation (SNEF) chief Stephen Lee said the NWC made it a point to highlight the problem this year.

"Hopefully, the service buyers can allow for service providers to do some renegotiation to take into account (the raise)," he said.

As a major buyer of such services, the Government has already taken the positive step of promising it will "lead by example". But getting private-sector service buyers to comply may be easier said than done.

For instance, condominium management committees will be reluctant to pay more than what was agreed upon. They have to answer to residents, said Mr T. Mogan, president of the Security Association of Singapore.

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