Rules on retrenchments updated as Singapore labour union expects more layoffs amid COVID-19

The tripartite advisory on managing excess manpower and responsible retrenchment has been updated to provide more guidance about how employers should lay off workers, as further job cuts are anticipated amid the COVID-19 crisis. 

The latest advisory, released on Saturday (Oct 17), is jointly published by the Ministry of Manpower (MOM), the National Trades Union Congress (NTUC), and the Singapore National Employers Federation (SNEF).

It includes demands companies to retain Singaporean workers, guidelines on how employers can break the news headlines to their personnel more sensitively, as well concerning make training programs portion of the post-retrenchment package.

A checklist of how to conduct retrenchments properly was added as well.

For example, under a new section titled Maintaining a solid Singapore Core, it states that selecting employees to be retrenched should be based on “objective standards with primary considerations given to employee merit and preserving skills to make sure business sustainability”.

“Employers should also take a long-term view of their manpower needs, like the need to maintain a solid Singaporean core. Retrenchments should generally not result in a reduced proportion of local employees,” it said. 

In informing staff of layoffs, employers should communicate it early, which should be done personally unless it really is impractical to do so, said the advisory.

They should give a longer notice period beyond contractual or statutory requirements where possible, in order that employees can be mentally prepared earlier, it added.

Employers shouldn't ask afflicted employees to leave workplaces abruptly or even to be escorted out by security officers.

Companies that usually do not adhere to the advisory could be denied government support or have their work pass privileges suspended. But up to now, authorities have not had to take action, a MOM spokesperson said. 

A separate MOM statement said that predicated on its investigations of retrenchment cases, employers have generally not discriminated against Singaporeans. 

Of the few complaints it received on discriminatory retrenchments, it found that the employers made efforts to upkeep the Singaporean core.

The advisory was last revised in March when the work market began to weaken. 

Six months in, representatives from the ministry and the labor union expect the financial situation to stay weak for quite a while and retrenchments to keep. 

“What we've seen over the last, maybe three to six months, is at the start when COVID-19 struck, many employees - as a result of the work support that was given to them by the federal government - try so far as possible to retain all the staff, because they don't … have the type of sight when this thing will end,” said Then Yee Thoong, the divisional director of labor relations and workplaces division at MOM.

“As COVID-19 drags on, I believe it dawns on a number of the employers, particularly in the more seriously damaged sectors, that for a few of them, recovery is a far cry and the painful decision should be made about whether retrenchment should actually happen,” he added. 

NTUC deputy secretary-general Cham Hui Fong said it is “not uncommon” to listen to of personnel who were suddenly told of their retrenchment, or not given reasons why these were getting axed. 

“I don't think wish guideline has been published and for that reason, miracles may happen (but) we're able to create far more awareness, both for the employees and for the employers,” she said.

The MOM spokesperson added that companies that implement cost-saving measures are more likely to conduct a retrenchment exercise as the necessity for cost-saving measures could indicate some type of financial difficulty. Concurrently, only a little minority of the firms that submitted cost-saving measures notifications continued to handle a retrenchment exercise.