Singapore

Retrenchment should be last resort, companies told

Retrenchment should be last resort, companies told
TODAY file photo
Published: 4:15 AM, May 25, 2016

SINGAPORE — While layoffs are inevitable as companies restructure, they should consider alternative ways of managing excess manpower, such as redeploying workers, having a shorter work week and a flexible wage system, before turning to retrenchment as a last resort.

The recommendations are part of the updated ‘Tripartite Guidelines on Managing Excess Manpower and Responsible Retrenchment released by the Ministry of Manpower (MOM), the Singapore National Employers Federation (SNEF) and the National Trades Union Congress (NTUC).

In a joint press release yesterday, the tripartite partners stressed on the need for companies to maintain a strong Singaporean core and help workers who have been displaced.

Mr Koh Juan Kiat, SNEF’s executive director, noted that the local workforce growth is expected to grow by only 1 per cent per annum until 2020.

“We urge employers to take a longer-term view of their manpower needs and make efforts towards strengthening their competencies and maintaining a strong Singaporean core. These will enable their companies to seize growth opportunities quickly once their business rebounds,” he said.

When faced with excess manpower amid a challenging business environment, a company can redeploy its workers to alternative areas of work within the organisation, the tripartite partners said in their revised guidelines.

Other possible cost-saving measures include a shorter work week, temporary layoff, part-time work, sharing of jobs and a flexible work schedule.

Companies with a flexible wage system may also consider adjusting the various wage components, such as annual salary increment, after consulting their employees and unions.

In the event of a prolonged downturn, a company may want to implement no-pay leave to save jobs. During the no-pay leave period, affected workers should be sent for training since this will benefit both the employees and company in the long run.

If retrenchment is still inevitable despite all the cost-saving measures taken, the tripartite partners say companies should implement their retrenchment exercise “in a responsible and sensitive manner”.

Among other things, companies should inform employees about the impending retrenchment before public notice of the exercise is given. This may include explaining the company’s business situation and specifying the assistance offered to those affected.

Apart from helping affected employees look for alternative jobs in associate companies, the revised guidelines also urge companies to “go beyond advisory assistance”.

They should make “practicable efforts to place affected employees in their next jobs, possibly with the help of intermediaries such as employment/placement agencies”, the tripartite partners said.

Mr Alvin Lim, MOM divisional director of workplace policy & strategy, called on employers to notify the ministry and the Tripartite Alliance for Fair and Progressive Employment Practices of their impending retrenchment exercises early. Early notification will allow the tripartite partners and the relevant agencies to work with companies and help their affected Singaporean employees find alternative employment, he noted.

MOM said it will also investigate complaints of discriminatory employment practices, including retrenchments that unfairly target Singaporeans or result in Singaporeans being replaced with foreigners. If the complaints are substantiated, companies may have their work pass privileges curtailed, it added.

The tripartite guidelines were first issued in November 2008 during the recession and was last revised in May 2009.