'We were often told firm was doing well': Axed DFS staff surprised by lay-offs, wants higher compensation

SINGAPORE — It was supposed to be her day off last Thursday (Sept 26), but Rachel (not her real name) received an urgent message the night before telling her that she had to go back to her workplace for an important meeting.

Little did she expect, after a few words and a letter, that she would be unceremoniously retrenched by her long-time employer, DFS. She was told to pack and leave immediately.

“Why were we not given advance notice?” asked Rachel, who is above 50 years old.

Unhappy with the way she was let go by the company that she worked for for more than 30 years, Rachel is among about 60 retrenched staff who are trying to seek a better severance package from DFS with the help of the Tripartite Alliance of Dispute Management (TADM).

They have asked DFS to compensate them one month of pay for each year of service, with a cap of 24 years, a bump-up from the severance package offered on Wednesday (Oct 2) to all retrenched staff who were called to attend meetings at Royal Plaza on Scotts, which is where its T Galleria outlet is located at.

In response to TODAY’s queries, a spokesperson from the Tripartite Alliance for Fair and Progressive Employment Practices (Tafep) said that DFS acknowledged its “shortcomings in the handling of the retrenchment and is committed to taking corrective actions”.

This comes after a meeting on Sept 30 between the company as well as representatives from TADM, the Ministry of Manpower (MOM), Tafep and Workforce Singapore, which told the company that it should adhere to tripartite guidelines in the event of a retrenchment.

While DFS has revised its original severance package to “within the norms” for non-unionised companies, Tafep noted that “many affected employees are still unhappy about the revised retrenchment benefits”.

Besides the 60-odd employees who were reportedly retrenched from T Galleria, another 100 from its finance department located at its shared services centre at Chai Chee have received their retrenchment notice, though the bulk of them would be serving their last day in June next year, two sources told TODAY.

This is on top of the 500 employees who, DFS said earlier in August, would be affected by its decision to close its tobacco and liquor stores at Changi Airport.

DFS did not respond to queries from TODAY on these developments.

In a press statement on Wednesday, the company said that it undertook a “workforce reduction exercise” last week in response to “a challenging travel retail environment, compounded by steep losses incurred by the liquor and tobacco concession operations at Changi Airport”.

It also said that staff members from T Galleria store and Chai Chee office were axed, and those working at its Changi Airport store were notified of their termination, which will come into effect in June 2020.

The travel retailer did not disclose any numbers.

FAIRER COMPENSATION

Several former employees told TODAY that they are pushing for a “fair” compensation.

The company had initially offered the retrenched employees one week’s pay for each year of service, capped at 13 years of service — below the minimum compensation stipulated in MOM's guidelines.

DFS on Wednesday revised this to two weeks of salary for each year of service, capped at 13 years of service, but former employees said the offer was insincere.

“(The revised package) is just meeting the minimum guidelines. It should have been what they offered in the first place. We felt cheated back then. Now you try to do the right thing, you think we can accept it?” said Linda (not her real name), another DFS employee who was also laid off last Thursday.

The second set of severance package came about after TADM mediated between the retrenched employees and DFS. Several DFS staff members approached MOM and TADM for help last Friday after learning about the first compensation amount they were supposed to receive.

Even though the revised severance package met minimum guidelines, Mr David Yeo, Secretary-General of the Singapore Manual and Mercantile Workers’ Union (SMMWU), said it was not enough.

The norm in unionised sectors is for companies to pay one month of salary for each year of service, capped at 25 years, and that is what the union will be negotiating for DFS workers, if the company agrees to SMMWU representing its workers.

LIKE ‘USED TISSUE PAPER’

Through interviews with a few retrenched employees, one common sentiment was how they felt “easily discarded” by the company.

Based on information provided to TADM and seen by TODAY, over 66 per cent of the 60-odd people negotiating for a higher severance package have been with the company for more than 15 years.

Former employees said that about two-thirds are aged 50 years and older, and they would likely face greater difficulties finding another job.

Beyond the original compensation, they were upset about how they were not given any prior warnings and told to leave immediately when given the retrenchment notice.

“In this whole exercise, money is the top consideration, not people. That’s what made us feel very, very upset. We are like a piece of used tissue paper,” said Judy (not her real name).

“There was no pre-warning, too sudden, no dialogue. In the past, when business was down, they used to consult with employees, redeploy them or ask them to take no-pay leave,” said Jack (not his real name).

WORKERS WERE TOLD DFS DOING WELL FINANCIALLY

Retrenched employees told TODAY that they were often told how DFS is performing well financially, even as recent as during the July townhall this year.

“We were told our sales was record sales in history. Better than last year when last year was already record breaking. We never envisaged it will come down to this,” said Linda.

Owned by luxury retailer LVMH, financial documents from the listed luxury retailer showed that it raked in 6.35 billion euros (S$9.6 billion) in profit in 2018.

While there was no information on DFS alone, the selective retailing group — which DFS is categorised under along with cosmetics retailer Sephora — made a profit of 1.4 billion euros in 2018, a 29 per cent jump from 2017.

“This improvement was driven by DFS, which benefited from its strong commercial performance and from the favourable impact of the termination of the Hong Kong airport concessions,” said LVMH in its 2018 financial documents.

It also said that DFS would enter 2019 “with confidence”.

For the first half of 2019, LVMH’s financial documents showed that the selective retailing division made 714 million euros, a performance “driven by DFS, which improved its profitability”, said its interim financial report for the first half of 2019.

LVMH, as a whole, made 3.27 billion euros in profits for the first half of this year.

Praying hard that she and her ex-colleagues will get a better severance package, Judy said: "The amount is a drop in the ocean for them but it means a lot for people who need money and cannot find a job."