Following a number of recent mass layoffs, the partners suggest firms act responsibly and think long-term before simply retrenching staff
These go over possible ways businesses can avoid retrenchment as they adjust to the Singaporean economy. The guidelines also list how firms can retrench responsibly if absolutely necessary.
“As companies restructure in their efforts to raise productivity as well as amidst slower growth, organisational rightsizing will be necessary and some redundancies may be unavoidable,” said Koh Juan Kiat, executive director of the Singapore National Employers Federation (SNEF).
“SNEF would like to encourage employers to retain their manpower through appropriate adjustments in their work schedules in the face of lower demand over the short-term and to use their lull periods to upskill their workers.”
The revised guidelines list a number of cost-saving ways to manage staff without the need for retrenchment. Some of these are listed below:
- Redeploying or rotating workers to other areas in the company
- Introducing shorter work weeks, temporary layoffs or flexible work schedules
- Using a flexible wage system with variable bonus payments, annual wage increments, etc
If retrenchment is unavoidable, Koh urged employers to move forward responsibly and provide the appropriate assistance to all affected workers.
Employers should also notify MOM or the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP) of their retrenchment plans as early as possible, Lim said.
“Early notification to MOM/TAFEP will allow the tripartite partners and the relevant agencies such as WDA and the Employment and Employability Institute (e2i) to work with companies and help their affected Singaporean employees find alternative employment.”
Other considerations include clear communication with employees about any retrenchment efforts. The proper notice period should also be provided to affected staff. The Employment Act already lists the following minimum requirements for retrenchment under normal circumstances:
|Length of service||Notice period|
|Less than 26 weeks||1 day|
|26 weeks to less than 2 years||1 week|
|2 years to less than 5 years||2 weeks|
|5 years and above||4 weeks|
The guidelines also say that employers should offer the appropriate retrenchment benefits to affected staff. This will depend on the terms of the collective agreement or contract of service. If neither of these exists, both employer and employee will have to negotiate the final benefits.
“The prevailing norm is to pay a retrenchment benefit varying between two weeks to one month salary per year of service, depending on the financial position of the company and taking into consideration the industry norm,” the guidelines state.
The Ministry also warned it will investigate any alleged discriminatory practices such as retrenchments that unfairly target Singaporeans or those which replace Singaporeans with foreigners. If complaints are verified, firms may have their work pass privileges suspended.
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