Firms in Singapore told to be responsible, sensitive if retrenching staff

A day after the National Wages Council issued fresh guidelines on pay, tripartite partners followed up with an updated framework for retrenchments signalling that the job situation ahead remains grim.

Employers must ensure objective criteria, such as ability, experience and skills, are used should they need to retrench workers. They should also lean towards retaining Singaporeans, while recognising the importance of permanent residents in their workforce.

"The tripartite advisory on managing excess manpower and responsible retrenchment calls on employers to lean in favour of Singapore citizens," said a Ministry of Manpower (MOM) spokesman.

"It also recognises the importance of allowing employers to retain capable PRs 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 advisory was previously updated in March to lay out options employers have besides retrenchment, such as training or "time banking" unused working hours to be repaid when business picks up.

The latest updates released yesterday were made jointly by MOM, the National Trades Union Congress (NTUC) and the Singapore National Employers Federation (SNEF) and come amid concern that layoffs may rise given the Covid-19 pandemic. The first six months of 2020 saw 11,350 retrenchments.

The advisory reiterates that retrenchments should be a last resort. In the event retrenchments are inevitable, employers should select staff to let go based on objective criteria such as merit, and preserve those with skills to support business sustainability.

And they should take a long-term view of their manpower needs, including the need to maintain "a strong Singaporean core".

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"Retrenchments should generally not result in a reduced proportion of local employees. This can be achieved by retaining proportionately more locals during a retrenchment exercise," the guidelines say.

When business activities pick up later, employers should make a "deliberate effort" to strengthen their local workforce by hiring locals when they are able to do so.

Singapore will stay open and welcoming to foreigners who can help grow the economy and create good jobs for locals, the guidelines add.

The updated advisory emphasises the need to safeguard firms' Singaporean core during retrenchment exercises, said NTUC deputy secretary-general Cham Hui Fong.

She also urged companies to notify unions early so that NTUC's Job Security Council and Employment and Employability Institute (e2i) can help affected workers quickly.

The update also spells out how employers can conduct a retrenchment exercise in a responsible and sensitive way. These include notifying workers earlier than required, and in person.

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If the company is unionised, relevant unions should be informed of any retrenchment plans early, typically one month before the affected employees are notified.

To guide employers, the advisory also now includes a checklist of responsible retrenchment practices.

An MOM spokesman said yesterday that of the few complaints received on discriminatory retrenchments, investigations show that the employers were able to demonstrate measures taken 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," the spokesman said. "So far, the authorities have not had to do so."

This article was first published in The Straits Times. Permission required for reproduction.