What SG employers need to note as retrenchment talks loom


As the pandemic continues to take more lives, it is also quickly impacting jobs and livelihoods across the ad and marketing industry.  Several companies such as Agoda, Airbnb, and Sojern, have had to lay off its global workforce as part of cost-cutting measures and to stay afloat. The impact of these companies pertain to local staff as well. 

In light of the current situation, Marketing has tapped onto resources of its sister publication Human Resources Online to outline key points employers need to consider following the government's launch of its advisory to guide for employers in Singapore. Business owners in Singapore are encouraged to tap on to the job support scheme and measures put in place by the government, from training grants, financial support and more to manage manpower costs. Employers are also urged to refer to the earlier-released Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment for other cost-saving measures they can take to manage manpower costs. 

That said, retrenchment may be inevitable in some instances, and here are some situations to guide you through:

Scenario 1: The employer is in sound financial position

In the event an employer is still in sound financial position (e.g. those who have returned the JSS payments and declined future pay-out, or donated these payments to worthy causes), they should continue to pay the retrenchment benefit according to their existing employment contracts, collective agreements, memoranda of understanding, or the prevailing norms for retrenchment benefit detailed in the earlier Tripartite Advisory.

Scenario 2: The employer's business is adversely affected

Notwithstanding Scenario 1, employers whose operations and business prospects are adversely affected should work with the union or their employees to renegotiate for a fair retrenchment benefit linked to the employee’s years of service.

Scenario 3: The employer is facing severe financial difficulties

Despite the various Government support measures available, some employers may still face severe financial difficulties. Some may even be on the brink of ceasing business.

Retrenchments may thus be necessary in such cases to keep the business afloat and to preserve some jobs. In these cases, the following should be noted:

Unionised employers should negotiate with their unions for a mutually-acceptable retrenchment benefit package.

At the same time, non-unionised employers should support their retrenched employees by providing a lump sum retrenchment benefit. Instead of linking retrenchment benefit to employees’ years of service, a lump sum of between one and three months of salary could be provided, taking into consideration the JSS payouts that employers have received and their financial position.

Consideration for lower-wage employees, and support for retrenched workers

In all cases of retrenchment, employers are urged to be more generous towards their lower-wage employees (e.g. employees eligible for the Workfare Income Supplement). Employers can do so by providing them with more weeks of retrenchment benefit payout per year of service, or additional training grants. Further, employers should also consider and assess all relevant factors carefully, including the impact of retrenchment on the livelihoods of the affected employees.

As for employees who have been retrenched, employers should support them in seeking new employment, either through their business networks, or by referring them to Workforce Singapore or the Employment and Employability Institute for employment facilitation. On the employee's end, retrenched Singaporean and Permanent Resident employees who meet the eligibility criteria can also apply for the COVID-19 Support Grant as well as tap on the various training support grants.

The advisory reminds employers to ensure that their employees are treated with empathy and dignity and the retrenchment exercise is conducted in adherence to the Tripartite Advisory. The employer should also notify the Ministry of Manpower of the retrenchment exercise if the employer has at least 10 employees and retrenches five or more employees within any 6-month period.

Read the full article here.

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