Managing Excess Manpower
Find out how your company can manage excess manpower appropriately so that your workers' interests would not be compromised.

Temporary Layoffs and Shorter Workweek

•	Shorter Workweek The reduction in workweek should not exceed 2 days in a week and it should not last for more than 2 months.
•	Temporary Layoff If temporary layoff is implemented, the period should not exceed 1 month.

How can my company implement temporary layoffs or shorter workweeks?
A shorter workweek or temporary layoff may be considered if the lull period in work is expected to be for a short-term.

As far as possible, you should try to pay employees their full gross salary on the days that they are not required to work. In any instance, the affected employees should not receive less than half of their gross daily salary during the days of layoff. In the event that you are paying the employees half of their salary during the days of layoff, you may wish to arrange to take half-day paid annual leave on those days of layoff. By doing so, the employees will be able to continue to receive their full-day earnings including the half-day salary you are paying. The employees, however, should not be made to consume more than 50% of their earned annual leave for this purpose.

If your company is unionised, you should adhere to what has been agreed in the collective agreement, or consult the union on the implementation of the layoff.

Can my company implement either a shorter workweek for more than 2 months or layoff employees for more than 1 month?
You should continue to consult and obtain the consent from the union or the employees concerned. To help defray part of the wage costs and enable your employees to continue to enjoy their regular earnings during the period of shorter workweek or temporary layoff, you should take advantage of the incentives provided under the SRP and send your employees for skills upgrading.

What does my company gain from sending employees for SRP training during the period of temporary layoff or shorter workweek?
Let us look at a company which contemplates laying off 20 workers for 1 month. The salary of each worker is $1,300 per month. During the layoff period, the company needs to pay a minimum salary of at least half of the gross salary at $650.

ONE MONTH TEMPORARY LAYOFF

Employee's Basic Salary	$650
Cost per Employee [a]	$650

However, if the company sends these employees (assuming they are below 40 years old) for full-time SRP courses for 8 hours of training a day, 5 days a week for 1 month (20 days), the final cost to employer is $379 per employee.

ONE MONTH FULL-TIME SRP TRAINING

Employee's Basic Salary [b]	$1,300 (Hourly rate = $1,300 x 12 / 2288 = $6.82)
Course fees incurred [c]	10% x $550 (per module) = $55
Claims from Absentee Payroll [d]	$6.10 x 8hrs x 20days = $976
Cost per Employee [e]=[b]+[c]-[d]	$379

Based on this example, total savings of $5,420 can be achieved. Your employees will be equipped with better skills and be more productive after the training. You will also save costs because of the SRP funding.

SAVINGS ACHIEVED

Total Savings per Employee [f] = [a] - [e]	$650 - $379 = $271
Total Savings for 20 Employees [g] = [f] x 20	$5,420

Back to Top

---