Basic pay: Give time for businesses to adjust

PHOTO: Basic pay: Give time for businesses to adjust

In implementing the progressive wage model, the National Trades Union Congress (NTUC) should allow ample time for companies to adjust ("Labour chief hits out at security firms body"; last Thursday).

Security, cleaning, horticultural, pest control and maintenance companies usually take up term contracts of between two and three years, during which the tender prices are fixed.

Setting the basic pay of their workers at $1,000 will affect overheads as these companies did not factor in such increases at the time of the tender.

The transport and hotel sectors will not be as badly affected because higher costs can be easily passed on to their customers.

Even then, some hotels have long-term contracts that guarantee minimum occupancy rates, and some transport firms have to make a certain number of trips per day.

One idea is to specify the minimum basic pay in new public- and private-sector tenders of such services. This will allow companies to factor in the increased labour cost in their tender prices.

Francis Cheng

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