Impact of Progressive Wage Model Wages on Retrenchments in Food Services Sector

Mr Christopher de Souza asked the Minister for Manpower (a) what is the Ministry's assessment of the long-term wage impact of the Progressive Wage Model in the food services sector on retrenchments in the sector; and (b) whether requirements for advanced retrenchment or restructuring notifications within this sector can be further strengthened to better enable our unions to assist affected workers.

Dr Tan See Leng: The Progressive Wage Model (PWM) for the food services sector is not expected to have a long-term adverse impact on retrenchments in the sector. Since the introduction of the PWM for the sector in 2023, the number of workers covered under the Food Services PWM increased from 49,000 in 2023 to 53,000 in 2025. While there are retrenchments in the sector, these can be due to many factors, including the overall economic situation, rising energy costs and food ingredient prices, enterprise restructuring and market competition. The Ministry of Manpower (MOM) is closely monitoring the situation and will work with other agencies to consider appropriate support if necessary.

To the Member’s second question, all companies with 10 or more employees are required to submit a Mandatory Retrenchment Notification (MRN) to MOM within five working days of informing any employee of their retrenchment. This often occurs before their last working day, allowing the provision of employment facilitation support before the employee leaves the company. The Tripartite Partners are currently discussing the reduction of MRN notice period. The outcome of the discussions will be released when ready.