Retrenchment checklist: 10 ways to keep it a 'fair' exercise

Times are tough and the company is considering a retrenchment exercise – how can you help keep the process sensitive and fair for everyone?

Singapore’s tripartite partners this week announced an updated advisory to ensure ‘responsible’ retrenchment.

This update includes key principles from NTUC’s proposed framework, such as maintaining a strong Singaporean core workforce.

Read more: MOM updates retrenchment guidelines amid COVID-19

The leaders, made up of the Ministry of Manpower (MOM), NTUC and the Singapore National Employers Federation (SNEF), maintain that layoffs should be a “last resort”. They’ve thus offered a checklist of things to consider and help you manage retrenchments more responsibly.

Some questions to answer before you carry out an exercise:

1. Does the business situation warrant a retrenchment?
2. Did your company tap on government support as well as reskill and redeploy employees where possible?
3. Have you implemented other cost-cutting alternatives before this?
4. Did you use objective and non-discriminatory criteria when deciding who to lay off?
5. Did you ensure to keep a fair number of local employees on the workforce?
6. Have you discussed details of the process with the labour union(s)?
7. Did you communicate the retrenchment plans clearly with employees?
8. Did you adhere to the legally binding notice period for employees?
9. Does your retrenchment benefit align with recommended guidelines?
10. Are there measures in place to help support affect employees after the exercise?

“Employers should consider business sustainability and long-term manpower needs when managing excess manpower,” said Sim Gim Guan, executive director at SNEF.

“If retrenchments are inevitable after considering and exhausting other options, employers should properly plan their retrenchment exercise and communicate with affected employees with empathy and care.”

Read more: How to manage retrenchments with dignity

Best practices
If the company’s leadership decides to push on with layoffs, the tripartite partners suggested some additional ‘good practices’ to help affected employees:

• Provide a longer notice period than contracted where possible, so employees can be mentally prepared earlier.
• Help managers to notify employees in a sensitive manner.
• Keep HR personnel and union representatives accessible to address queries from retrenched employees
• Maintain an open communication channel with affected employees.
• Give affected employees the time and space to adjust to the news, before requesting them to vacate their workplaces.
• Be sensitive to their emotional needs, including offering counselling support.

“Retrenchment is never easy and affects the livelihoods of employees,” said Then Yee Thoong, Divisional Director of Labour Relations and Workplaces Division at MOM.

“Hence, it is important that companies handle them responsibly and treat their employees with respect and compassion.”