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

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

The latest advisory, released yesterday, is jointly published by the Ministry of Manpower (MoM), the National Trades Union Congress (NTUC) and the Singapore National Employers Federation (SNEF).

It includes calls for companies to retain Singaporean workers, guidelines on how employers can break the news to their workers more sensitively, as well as to make training programmes part of the post-retrenchment package. A checklist on how to conduct retrenchments properly was added as well.

For example, under a new section titled Maintaining a Strong Singapore Core, it states that the selection of employees to be retrenched should be based on “objective criteria with primary considerations given to employee merit and preserving skills to ensure business sustainability”.

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

In informing workers of layoffs, employers should communicate it early, and this should be done in person unless it is impractical to do so, said the advisory.

People work at a construction site in the city centre of Singapore. PHOTO: XINHUA

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

Employers should not ask affected employees to leave workplaces abruptly or to be escorted out by security officers.

Companies that do not comply with the advisory may be denied government support or have their work pass privileges suspended. But so far, authorities have not had to do so, an MoM spokesperson said.

A separate MoM statement said that based 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 job market started to weaken.

Six months in, representatives from the ministry and the labour union expect the economic situation to remain weak for some time and retrenchments to continue.

“What we have seen over the last, maybe three to six months, is at the beginning when COVID-19 struck, many employees – because of the job support that was given to them by the government – try as far as possible to retain all the staff, because they don’t … have line of sight when this thing is going to end,” Divisional Director of Labour Relations and Workplaces Division at MoM Then Yee Thoong said.

“As COVID-19 drags on, I think it dawns on some of the employers, particularly in the more seriously affected sectors, that for some of them, recovery is a long way off and the painful decision needs to be made about whether retrenchment should actually happen,” he added.

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

“I don’t think just because a guideline is being published and therefore miracles will happen (but) we could create a lot 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 need for cost-saving measures could indicate some form of financial difficulty. At the same time, only a small minority of the companies that submitted cost-saving measures notifications went on to carry out a retrenchment exercise.