Planning To Send Staff On No-Pay Leave? Here’s What Companies Need To Consider

Helping your employees keep their jobs will benefit your business as well.

We are living in difficult times.

The microbe that is the coronavirus has brought the world down to its knees.

Singapore, being an open and small economy, has not been spared the economic and social fallout of the COVID-19 pandemic either.

The closure of various factories, production lines, tourism and aviation businesses worldwide and in Singapore might have had an adverse impact on your business and profits over the past weeks.

You might have found it increasingly difficult to cope with the strain in supply chain disruptions or manpower unavailabilities due to lockdowns and travel restrictions.

Thus, you might be thinking of sending your staff on compulsory no-pay leave in an effort to stay afloat and deal with the crisis.

However, you do not want to be violating government regulations on the no-pay leave policy.

Besides, you do not want to unnecessarily jeopardise the relationship between you and your staff in these uncertain and emotionally volatile times.

Read on to find out what you should and should not do when sending staff on no-pay leave.

Do: Consider Alternative Ways To Manage Excess Manpower Without Cutting Wages

Show your staff that you care for their livelihoods by first exploring alternative manpower arrangements instead of cutting their wages or sending them on no-pay leave.

Adopt flexible work-arrangements to utilise manpower in these critical times.

For example, you could temporarily reduce working hours without reducing wages, and establish a “timebank” of unused working hours to keep track. When things get better eventually, use the banked hours to compensate for the rise in working hours.

A good recent illustration is how Singapore Airlines would be providing 300 ‘care ambassadors’ to fill up the manpower gap in hospitals to take care of other patients, as many hospital staff have been re-deployed to care of COVID-19 patients.

Another way you could maximise the use of the current downtime would be to send employees for upskilling and retraining courses.

Encourage your employees to spend this downtime productively by using government initiatives such as SkillsFuture Singapore (“SSG”) with considerable course fee subsidies to upgrade themselves for future needs.

Draw up training plans for your staff with help from the governmental organisations like the National Centre of Excellence for Workplace Learning (“NACE”), the Singapore National Employers Federation (“SNEF”), and the Singapore Business Federation (“SBF”).

The silver lining is that if your business belongs to the badly affected sectors such as tourism and aviation, you will receive further support in the form of enhanced course fee subsidies.

Do: Leverage Upon Government Wage Offsets To Keep Staff Salaries

The Singapore authorities have unleashed a slew of cost-cutting measures under the enhanced Jobs Support Scheme for businesses like yours to preserve jobs while not cutting employees’ wages as much as possible.

For instance, the Government will co-fund a quarter of the gross monthly wages of each local employee who earns up to a monthly wage of $4,600.

If your business belongs to the food services sector, you will receive more government support at 50% of employees’ wages.

If your business belongs to the most badly affected sectors of tourism and aviation, you will be greatly helped at 75% of staff wages.

Thus, you are strongly urged to take advantage of the various government subsidies before considering sending your staff home on no-pay leave or even retrenching them.

Do: Support Local Employees Who Wish To Seek Alternative Jobs To Supplement Their Affected Income

If your business has had no choice but to reduce staff workload, temporarily layoff your staff or ask them to go on no-pay leave, you should support employees who are keen to take on temporary or part-time jobs for other employers.

If your employees have very niche skills (eg: teaching a particular musical instrument), be understanding enough to let them freelance or working for another company during these trying months of unpaid leave.

Do: Provide Practical Support For Staff On LOA Or SHN To Work Remotely

If you have some employees who have to serve Stay At Home Notices (SHNs) or Leave Of Absences (LOAs), adopt a flexible approach with regard to how they can still contribute to your business remotely.

While it might be harder for you to communicate the workload across to your staff while they are working remotely, be careful not to penalise them due to circumstances beyond their control (serving out quarantine orders).

Use various free workforce tools designed to enhance staff productivity when working remotely, and give staff the necessary IT support to work effectively from home.

Constant in-face video calls and quantifiable performance metrics can motivate your remote staff to achieve what is expected of them while not majorly disrupting your business operations.

Read Also: 5 Free Tools To Help You Be More Productive When Working Remotely

Do: Redesign Workflow Processes And Job Scopes

During these tough times, how about implementing long-awaited (or long overdue) business and workplace transformation initiatives?

For example, you might want to redesign existing job roles into more productive and efficient roles for your business.

Manual business operations can be replaced by artificial intelligence whereas your staff can be redeployed into other more productive areas of your business that could make remote working possible.

This downtime could be a trial period for you to conduct pilot tests with cooperative staff.

Think in terms of long-term industry trends rather than in terms of short-term wage or manpower cutting measures.

By doing so, your business will be poised to tackle challenges in the long-term while preserving your talent in the short-run.

Don’t: Force Your Staff To Take No-Pay Leave When They Don’t Have Enough Annual Leave For Their LOAs and SHNs

Avoid forcing staff to take no-pay leave when they are on the 14-day compulsory stay-home notice (SHN), quarantine order or leave of absence (LOA).

If you coerce employees into no-pay leave under these circumstances, you run the risk of having your  privilege to apply for work passes suspended.

No-pay leave should only be given with the agreement of employees.

If you have lingering doubts, contact the Singapore National Employers Federation for clarification and advisories.

Don’t: Threaten Your Staff To Come To Work Or Face No-Pay Leave

We have all heard stories about bad bosses yelling down their employees’ throats and threatening them in fits of frustration.

Just don’t be one of these notorious bosses by threatening your staff to come to work if they are legally mandated not to (for example, when they are serving their stay-home notice or leave of absence orders).

Rather, show your staff that you care by checking in with them regularly about their health and well-being and not just work-related matters.

Read Also: Show Your Staff You Care For Their Health When They Have To Report To Work

Don’t: Reduce Employees’ Wages Unfairly And Fail To Inform MOM

You should not fail to inform the Ministry of Manpower (MOM) if you have enforced any cost-cutting measures that have reduced or temporarily cut off employees’ wages.

Moreover, you must not fail to prove that you have reduced staff wages in a fair manner.

For instance, you would be engaging in unfair wage reduction practices if you have only reduced the wages of the lower ranks of your staff.

This requirement applies if you have at least ten or more employees.

Furthermore, if your only reason for asking staff to go on unpaid leave is because you want to preserve your profit margins, chances are MOM will not buy your case and your staff could lodge a complaint against you.

Read Also: Retrenchment Should Be The Last Resort: 4 Options Companies Can Consider To Reduce Cost First

Retrenchment & No-Pay Leave Are Measures Of Last Resort

In light of all these tips above, try to preserve existing jobs and salaries of employees as much as possible.

Meanwhile, do leverage upon existing and enhanced governmental initiatives to help your business tide over this crisis.

The bottom line is that no-pay leave or staff retrenchments should only be explored after your business has exhausted all means to protect employees’ jobs and wages.

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