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Tripartite partners update retrenchment guidelines for firms, including longer notice periods

SINGAPORE — Clearer guidelines on how companies can carry out responsible retrenchment exercises have been spelt out in an updated advisory issued by the tripartite partners — the Manpower Ministry, the National Trades Union Congress (NTUC) and the Singapore National Employers Federation — on Saturday (Oct 17).

The updated set of guidelines on retrenchment practices calls on employers to act more sensitively, and to carry out layoffs only as a last resort.

The updated set of guidelines on retrenchment practices calls on employers to act more sensitively, and to carry out layoffs only as a last resort.

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  • Guidelines include allowing for a longer notice period beyond statutory requirements or what is spelt out in the employment contract
  • Companies that do not comply with the guidelines may be denied Government support grants or have work pass privileges suspended
  • Any retrenchment exercise should seek to preserve Singaporean core and be conducted in a responsible and sensitive manner.

 

SINGAPORE — Clearer guidelines on how companies can carry out responsible retrenchment exercises have been spelt out in an updated advisory issued by the tripartite partners — the Manpower Ministry (MOM), the National Trades Union Congress (NTUC) and the Singapore National Employers Federation — on Saturday (Oct 17).

Some of the guidelines include allowing for a longer notice period beyond statutory requirements or what is spelt out in the employment contract, said the tripartite partners in a joint statement.

A new checklist on what constitutes responsible retrenchment practices has also been added along with the updated advisory.

In a media briefing on Friday, the three bodies also said they are prepared to deny Government support grants or suspend work pass privileges for companies that do not comply with the guidelines laid out in the tripartite advisory.

The tripartite partners noted that they have received feedback from workers who have been retrenched over the last few months who said that they were not notified about being laid off or not told the reason why they were selected over others.

A MOM spokesman said on Saturday that the tripartite advisory also “calls on employers to lean in favour of Singapore citizens” in maintaining a Singaporean core in their headcount if retrenchments are necessary.  

“It also recognises the importance of allowing employers to retain capable permanent residents as part of their local workforce. The primary considerations are the merit and skills of the individuals and how they help to keep the business viable,” the spokesman added.

The inclusion of clearer guidelines in the tripartite advisory on managing excess manpower and responsible retrenchment comes a day after the National Wage Council set out recommendations on how employers should carry out wage cuts in order to minimise retrenchment. 

Tripartite partners told reporters during the briefing that the update was necessary as the market conditions are different since March, which was when the advisory was last updated.

Then, many businesses tried to retain their staff due to Government support, such as the Jobs Support Scheme, which helps to subsidise workers’ wages.

However, with the Covid-19 pandemic dragging on, with no end in sight, some employers in harder-hit sectors have realised that recovery could be a long way off and that they may have to carry out a retrenchment exercise.

Besides a longer notice period, clearer guidelines spelt out in the advisory include:

  • Prepare managers responsible for notifying affected workers to deliver the news in person and in a sensitive manner

  • Having human resource staff on site to take in feedback and answer queries from retrenched staff

  • Give affected staff time to adjust to the news that they have been laid off before requesting them to vacate their workplaces

  • Affected staff should not be asked to leave their workplaces abruptly or be escorted out by security officers unless there are legitimate reasons

  • For employers to be sensitive to the needs of the staff they have retrenched and to provide counselling support, if necessary

SINGAPOREAN CORE

The tripartite partners reiterated that companies should resort to retrenchment as a last resort and should consider other options first, such as implementing flexible work arrangements or instituting wage cuts.

However, they did note that retrenchment exercises will not be ending any time soon due to the economic downturn caused by Covid-19.

Any retrenchment exercise should seek to preserve Singaporean workers as much as possible and be conducted in a responsible and sensitive manner.

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

Employers should properly plan any retrenchment exercise and communicate with affected employees with empathy and care, he added. 

"We also encourage employers to maintain a strong Singaporean core so that they would have the capabilities and capacities to seize opportunities when the economy starts to recover.”

Mr Then Yee Thong, MOM’s director of the labour relations and workplaces division, added: “Retrenchment is never easy and affects the livelihoods of employees. Hence, it is important that companies handle them responsibly and treat their employees with respect and compassion.”

The MOM spokesman said that the ministry’s probe of retrenchment cases found that employers have generally not discriminated against Singaporeans.  

Of the few complaints MOM has received on discriminatory retrenchments, the employers have been able to demonstrate measures undertaken to upkeep the Singaporean core.

“If companies act irresponsibly in cost-saving measures or retrenchments, the Government will consider denying them future Government support or suspending their work pass privileges. So far, the authorities have not had to do so.”

The spokesman added that every effort will be made to help Singaporeans affected by retrenchment to get back to work.

“This is central to how we sustain support to Singaporeans and their families on an ongoing basis,” said the spokesman, adding that the Government has provided employers with stronger support for their local employees via the Jobs Support Scheme and Jobs Growth Initiative, among others.

Related topics

retrenchment NTUC recession MOM

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