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Amidst the increasing number of retrenchments and redundancies this year, irresponsible retrenchment is on the rise as companies look to cut costs with slow economic growth expected to continue.
These disguised retrenchments occur when companies want to reduce headcount but are not willing to take the necessary responsibilities that come with it, such as paying retrenchment benefits to workers made redundant.
NTUC Assistant Secretary-General (ASG) Patrick Tay said the increase in such disguised retrenchments is proportionate to the growing number of layoffs. The increase is also due to a slowdown in demand and many companies undergoing restructuring.
ASG Tay, who is also a Member of Parliament (MP) and director of the NTUC Legal Services and NTUC PME Unit, had also urged the Ministry of Manpower (MOM) in September’s Parliament sitting to pay more attention to these cases.
Types of Cases
Disguised retrenchments can come in a number of ways. Full-time workers are terminated at the permissible one month’s notice without clear explanation, but do not get any retrenchment benefits. Some then later find out the companies have moved their operations overseas.
Workers are asked to voluntarily resign or risk being terminated, with the latter being a black mark on workers’ records. Workers are then left without much choice but to submit their resignation.
Workers have also been known to be given poor performance ratings out of the blue, especially when they have been consistently receiving good ratings in past years. It is a tell-tale sign of when companies are looking to reduce headcount.
There have also been cases of “golden handshakes”, where axed workers are given one-off payouts that are not made known to the public.
Increasing Cases
ASG Tay that the NTUC’s U PME Centre has seen an increase in these cases in the past year, with 15 to 20 professionals, managers and executives (PMEs) approaching the centre, in comparison to less than 10 the year before.
One such case is 45-year-old Mary (not her real name), who sought help from the centre in July this year.
A restructure in her previous company’s strategy meant there was no longer a need for her position. She was given the choice of finding a separate role within the organisation or take the offered retrenchment package. She was also told she could start looking for other jobs outside.
Mary found two positions, including one within the company. She decided to go for the external role, but the company’s human resource department told her she was no longer entitled to the retrenchment package, having already been offered a role internally.
Feeling the procedures were unfair, especially with this ‘policy’ not being made aware to her, Mary decided to approach U PME Centre for assistance. With NTUC’s assistance, Mary eventually received her retrenchment package.
Labour Movement's Efforts
The Labour Movement is lobbying to change this, with Nominated Labour MP K Thanaletchimi enquiring in Parliament on the possibility of making this compulsory for companies to notify MOM of any retrenchment.
While collective agreements (CAs) cover rank-and-file workers, not all CAs include PMEs.
“With last year’s changes to the Industrial Relations Act, this is the time for our unions to relook our CAs to bring PMEs within their scope of representation,” said ASG Tay.
He added that PMEs should join the union to ensure they are not left in the lurch.
Source: NTUC This Week
