You are on page 1of 4

B221 Human Resource Management

Confidential: Information for the Company

The Company has decided to negotiate the amendment or inclusion of the following
clauses in the new collective agreement. Your justification and fall-back position for
each clause are included.

Current Clause Proposed New Clause & Rationale


Retrenchment Benefits

(1) In the event of redundancy, the There is some concern with the existing
Company shall inform the Union in clause in the collective agreement as
writing of impending retrenchment at Union has fought very hard for high
least one month before retrenchment retrenchment benefits in the past. A
notice is given to the affected check with similar restaurants in the
employee or employees. industry shows that they have agreed to
(2) The notice of termination of service to a fixed benefit of one month’s last
any employee so affected shall not be drawn salary for each completed year
less than one month or one month’s of service. Management has decided to
notice pay in lieu of notice. follow suit as it would make preparing
(3) The Company and the Union shall for such exercises easier to plan and
enter into negotiation on retrenchment implement.
benefits as soon as the Union
receives notice of impending Management has decided to change
retrenchment. section 3 of the clause on retrenchment
as shown in bold.

Proposed clause:
(1) In the event of redundancy, the
Company shall inform the Union in
writing of impending retrenchment at
least one month before
retrenchment notice is given to the
affected employee or employees.
(2) The notice of termination of service
to any employee so affected shall
not be less than one month or one
month’s notice pay in lieu of notice.
(3) Subject to section 45 of the
Employment Act, the
retrenchment benefit shall two
weeks’ last drawn salary for each
complete year of service and a
proportion thereof for any
incomplete year of service,
subject to a maximum of 15
months.

© 2011 RP/CIE/OD/BH Page 1


B221 Human Resource Management

Current Clause Proposed New Clause & Rationale

Monthly Variable Component


Currently there is no provision for the Rationale
monthly variable component (MVC). In line with tripartite guidelines to
incorporate more flexibility in salaries
so that the Company can adjust wages
immediately when faced with short-
term economic shocks. The purpose of
the MVC is to protect jobs by reducing
salaries when the company encounters
short-term economic shocks such as a
recession or an incident like the H1N1
Influenza outbreak in 2009.

The employees’ salaries will remain the


same except that 20% of the salaries
will now be counted as the monthly
variable component. Senior
management is adamant that this
clause be included in the collective
agreement.

Proposed clause:
(1) With effect from 1st December 2011,
a confirmed staff who has
completed at least three months’
continuous service with the
Company, shall be paid a monthly
variable component based on 20%
of the basic salary.
(2) The monthly variable component
shall be treated as part of the basic
salary for compensation of rates of
pay including the calculation and
payment for overtime, annual wage
supplement, and form of bonus,
salary in lieu of annual leave, or any
other such payment.
(3) The monthly variable component
shall be suspended if the
Company’s business sustains a loss
in a particular year.

A basic understanding of Singapore’s

© 2011 RP/CIE/OD/BH Page 2


B221 Human Resource Management

Current Clause Proposed New Clause & Rationale


flexible wage system can be found at
http://www.business.gov.sg/EN/Busines
sTopic/HiringNTraining/EmployersResp
onsibilities/WagesNBenefits/hiring_ben
efits_wagesystem.htm

© 2011 RP/CIE/OD/BH Page 3


B221 Human Resource Management

You have also been informed that the Union will be negotiating on the following
clauses. You do not know what they will be asking for, but the Management’s
position for each clause is as follows:

Current Clause Proposed New Clause & Rationale


Retirement
Current clause Management understands that the
The retirement age of an employee shall Retirement and Re-Employment Act will
be 62 years but the Company may, at its come into effect on 1 January 2012.
discretion and with the consent of the They are willing to follow the
employee concerned, continue to employ requirements of the new law in the
such employee beyond the age of 62 collective agreement.
years provided that where an employee’s
62nd birthday falls within the first half of a Highlights of the Retirement and Re-
calendar year, the employee shall be Employment Age act can be found at
allowed to continue in employment until http://www.solutionsatwork.com.sg/2011
30th June of the same year. Where an /01/12/the-retirement-and-re-
employee’s 62nd birthday falls within the employment-act/
second half of a calendar year, the
employee shall be allowed to continue in http://www.mom.gov.sg/newsroom/Pag
employment until 31st December of the es/SpeechesDetail.aspx?listid=308
same year.

Paternity Leave
Currently no provision for Paternity leave. There is currently no provision for
paternity leave and research of other
restaurants shows that they give
between one and three days of leave to
their male staff on the occasion of the
birth of their first two children, or within
a week of the child’s birth.

Management is willing to allow for one


day of paternity leave on the day the
child is born, or within a week of the
child’s birth. They feel that the nature of
the business does not allow for a
longer period of paternity leave.

© 2011 RP/CIE/OD/BH Page 4