My wife is working in the MICE industry with mostly international traveling customers. With the pandemic restricting travel, the company is in dire situation since the Covid19 ordeal. Workforce has been cut by more than 50 percent since March. With cash extremely tight, the company is barely keeping afloat by Singapore government’s budget aid. There is a high likelihood that survival may only last a few more months.
TAKE 50% PAY CUT AND WORK PART TIME
Most recently, her company requested all the staffs to work part time and take 50 per cent pay cut. In doing so, all the employees have to sign a new letter of offer. The letter is simple and vague and is to be signed urgently by all employees on 31 May, giving only a few days to consider. Thereafter, employees are also not allowed to take their annual leave for at least the next two months. This is because as told by her company, they are still very busy running backlog businesses with much reduced workforce and reduced workhours.
MY ADVICE IS TO RESIGN IMMEDIATELY
My wife consulted me on this matter. I told her to resign without much thought. To me, it is a trick by the company to con employees into signing an unfair deal.
The rationale is as follows:
Let’s hypothetically say her gross salary is SGD8,000 a month, with 2 months-notice period.
Her balance of leave is 10 days after pro-rated.
Assuming the company closed down in August,
If she accepted the new offer
Her salary in June and July will be SGD8,000. Her leave of 10 days will be forfeited.
Even if miracle take place, and her company survives until early October, her part time salary in June, July, Aug, and Sep will be SGD16,000.
And also, let’s assume in mid-June she manages to find a new full-time job to start in 1 Aug. Then she will require to give 2 months’ notice to her company. Her new offer letter did not state whether the 2 months’ notice is full time workday or part time workday. Due to the new letter of offer is in 50 percent part time work day mode, the 2 months’ notice period can effectively be a 4 months period. This means if she resigns on 15 June, her last day is until 14 Sep. In the current employers’ job market, how many companies out there will wait 4 months for you to be available.
And to think that her company intentionally only give her a few days to consider without much time to think properly and to clarify all the details before putting ink to paper.
If she resigns 1 June
Base on her original letter of offer, she will serve 2 months’ notice period, and her last day is 31 July. She is still able to utilise her 10 days of leave, which effectively means last working day is 17 July. This means working for 1.5 months for two full months of salary of SGD16,000.
Therefore, for the same income of SGD16,000,
If she resigns,
· She just needs to work from 1 June until 17 July (1.5 months)
· Furthermore, her workload is not so high considering all her colleagues are working part-time
· She can find a new job with a firm start date 1 Aug.
If she accepts the new offer,
· She needs to work from 1 June until 30 Sep (4 months). Even if it is part-time but a long dreadful period.
· It will be very difficult for her to find new job in the next 1 to 2 months and may have to work until Sep, despite taking the painful 50 percent pay cut.
· What is even worse is that the company is likely to run out of cash and decide to close in August or September, her leave will be forfeited with a much-reduced monthly salary in June and July.
Anyway, my wife has resigned under my influence. This is despite her company and her superior calling her many times to reconsider her decision. She was almost moved and tempted to sign the new offer letter.
I SAID NO OUTRIGHT!
I can understand that she soft-hearted by her company’s persuasion. She is also a bit reluctant having worked more than 12 years in the company. But to me, her company is trying to take advantage of the situation. Furthermore, in my opinion, her company and her superior whom I also know are never that good of a career choice.
In the past, I have encouraged her, in her own decision to leave the company. Her role is not very niche and quite versatile in several other industries. Hence, I feel it is not very difficult to find a new job. Anyway, just less than a few days of updating her resume online, she already received several calls for interviews. And these are much bigger and better companies at least on the surface for now.
Even if she cannot find a new job, I will rather her be a house-wife for my many kids. I am pretty confident that my financial is able to support the big household for a long time. I humbly give thanks to my prudence and financial planning in the past 10 years. Above all, I attribute it to my always “prepare for the worst” mindset.
We agree that this is unprecedented times where many people are going to lose their jobs. And to preserve job is top priority. Still, there are company out there who are going to take advantage of you. My advice is NOT to simply sign a new offer of letter accepting reduced benefits without much thought and clarifications.