Factories using temporary lay off provisions eligible for Export Reward Scheme

Factories that temporarily lay off workers, according to an agreed ‘administrative arrangement’ between companies, workers and the national labour authorities, can still be eligible for the government’s Export Reward Scheme.

“Factories that temporarily lay off workers can apply for the Export Reward Scheme, but they have to show employment retention,” said the Secretary to the Ministry of Export Development and International Trade, S Ranugge.

Exporters can claim a 3% or 5% export rebate every quarter this year under the government’s Export Reward Scheme. To get the rebates, exporters have to show 90% or 100% of last years export incomes. Exporters must also show the same level of employment as last year.

The government also arrived at an ‘administrative arrangement’ on labour management, for factories hit by the current global recession. Factories can temporarily lay off workers, for up to three months, after getting worker agreement and approval from the Commissioner of Labour. However companies must pay workers some part of their salaries during this period. Factories can also adjust their working hours, with agreement from workers and approval from the Commissioner of Labour. These flexibilities are expected to allow factories to adjust their operations according to export orders, instead of having to shut down if volumes of orders drop drastically.

As long as they do not permanently lay off workers, these factories will be eligible for the export rebates.
“If it is a temporary lay off and they are still paying their workers some part of their salaries, they can apply for the export rebate. But we expect the labour retention criteria to be met 100%, because safeguarding jobs is the main government concern,” said Mr Ranugge.

The government is also adjusting the reward scheme to accommodate exporters’ concerns. Some export sectors like tea and ceramics, say the scheme’s export earning requirement is too stringent.
“We will consider reducing the export income criteria for some sectors but we can’t give a large reduction because this is a reward scheme to encourage exports,” said Mr Ranugge.