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

What to consider when sending employees on no-pay leave
Helping your employees keep their jobs will benefit your business as well.

This article was originally published on 7 April 2020 and updated to reflect the tighter safe management measures.

For business owners, many of you may be experiencing a sense of deja vu. More than a year after the initial Circuit Breaker in 2020, we are again reverting into stricter safe management measures in Singapore.

Being an open and small economy, Singapore will unlikely be able to avoid new waves of infection if borders are kept open. On the other hand, the government has explained that we cannot keep our borders shut indefinitely.

Introduction Of Phase 2 (Heightened Alert) Measures

With the introduction of Phase 2 (Heightened Alert) measures lasting till 13 June 2021, many businesses have already began suffering from a drop in activity. However, only the F&B sector, gyms and fitness studio operators and taxi and private hire car drivers are benefitting from new government support, while the rest of the business sectors are not.

Apart from these sectors, retailers, cinema operators, and event companies are also struggling. In addition, many self-employed individuals will likely find themselves being the hardest hit, without being able to tap on new government support measures.

Read Also: 7 Biggest Losers In The Phase 2 “Heightened Alert” Announcement On 14 May 2021

As a business owner, you might have found it increasingly difficult to again cope with the strain in incurring heavy business costs while not being able to receive any financial support. At the same time, manpower unavailabilities continue to persist due to ongoing 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 round 2 of Phase 2.

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.

Here’s what you should and should not do when considering to send your 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.

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 government organisations like the National Centre of Excellence for Workplace Learning (“NACE”), the Singapore National Employers Federation (“SNEF”), and the Singapore Business Federation (“SBF”).

When doing so, you can also tap on further course fee subsidies form the government.

Do: Leverage Upon Government Wage Offsets To Keep Staff Salaries

For those still receiving Jobs Support Scheme (JSS) payouts, you will be in a better position to preserve jobs while not cutting employees’ wages as much as possible. The JSS scheme was recently enhanced for F&B establishments, while the Sports Resilience Package is also providing gyms and fitness studios with a financial payout.

On the JSS, the Government is still co-funding between 10% and 30% of the gross monthly wages of each local employee who earns up to a monthly wage of $4,600, for those in Tier 1 and Tier 2 sectors. The JSS has also been enhanced to 50% for the F&B sector for the period that no dine-in customers are allowed (between 16 May to 13 June 2021).

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.

Read Also: Here’s What You Need To Know About The Jobs Support Scheme (JSS)

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

If your business has 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.

Read Also: 5 Things You Need To Know About Allowing Your Employees To Take A Second Job

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.

You can also leverage on relevant government grants such as the PSG Job Redesign programme to conduct pilot tests during this downtime.

Read Also: PSG Job Redesign: How Businesses Can Receive Up To 80% Funding For Consultancy Services

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 compulsory stay-home notice (SHN) or quarantine order.

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 bosses yelling down their employees and threatening them in fits of frustration.

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). Similarly, if your employees can work from home, avoid calling back to the office, as MOM has already fined 11 companies for failing to ensure that work-from-home is the default work arrangement.

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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