Strait Lies, 10.06.03
“The court (Industrial Arbitration Court, Singapore) is likely to use the recent National Wages Council recommendation as the basis for its decision (when it inevitably finds against Alpa-s in the current tussle with SIA over pay cuts). The council has, amongst other things, urged companies facing stiff competition and reduced profits to restructure their wages immediately, by moving away from fixed and seniority-based wages (structures) to one(s) based on productivity and profit-sharing bonuses.”
Unless I’ve missed some fundamental point here, I understood that before the current SARS shock horror, the airline was certainly holding its own in the international league table of comparative profitability (surely always the world’s most profitable airline – over S$1 bn profit this fiscal year, as usual?). I am similarly unaware of any fundamental change in the salary cost base of the major international competitors to SIA (I don’t count such drops in the ocean as Lufthansa’s much quoted 1.5 hour per week work reduction for ground staff or the fiddling around the edges by BA in its staff reduction programme – that airline still has the same number of pilots, engineers, pax services people).
I also understand that just about every other airline which could conceivably be considered as providing competition to SIA has also taken financial hits of varying magnitudes, during the East Asian SARS epidemic, without resorting to threats of wage cuts on their staff, merely shrugging them off as part of the spectrum of business risk and funding them from reserves. – Why is SIA supposed to be so different? – Surely it can’t have suffered more of a “SARS loss” than Cathay, China Southern, China Airlines, Eva, etc?
So why suddenly the big rush to restructure the long term salary cost base on the basis of unrevealed financial information and ahead of the up-coming CA negotiations in November 2003? And please, no one say because of the “desperate” current situation.
Colleagues of jaundiced and cynical outlook, at counterpoint, incidentally to my own sunny, happy and trusting disposition since coming to Singapore, tell me that the manoeuvres by SIA, MoM and IAG are inspired by the inner circle of government here and are designed to claw back the salary gains, heroically achieved a couple of years ago by Alpa-s, hence insulating the major shareholder of SIA – Taemasek Holdings (prop Singapore Government) – from any major financial pain. I do not believe such a baseless calumny. Surely the Government has the best interest of its people at heart?
Finally, and again I may have missed a major and similarly fundamental point, but last time I checked, my remuneration from SIA was based on “productivity and profit-sharing bonuses.” as part of an overall package that also includes an element of “fixed and seniority-based” payment. Specifically, hourly flying pay and meal allowances of a seventy hour month (x 10 months) provides circa 19% of total salary (productivity) whilst a “normal” bonus (3 x monthly basic salary) provides approximately 14%. A seniority increment provides a further 5%, whilst my fixed monthly salary (including 13th month) accounts for 62% of total remuneration. Hence a third of my total remuneration is currently based on the NWC ideology, envisioned in place on the sunlit elysian uplands of pay, ideally and perhaps exclusively, by “productivity and profit-sharing bonuses.” What, therefore, does the NWC consider to be a reasonable proportion of remuneration so to be paid and what is the percentage of salaries so paid by other major companies in Singapore? Details have been a little fuzzy of late.