By Ryan Chan
The Ministry of Manpower (MOM) released a revised set of Tripartite Guidelines on Managing Excess Manpower and Responsible Retrenchment on 24 May 2016 for employers. .
The guidelines come at a time when there is a pressing need for companies to restructure and adjust to stay competitive in the face of fast changing global trends.
The tripartite partners, consisting of MOM, NTUC and the Singapore National Employers Federation (SNEF), are advising businesses to consider alternative ways of managing excess manpower in difficult times.
Some of the measures they can take are:
- Redeploy workers within the organisation: Workers can be upskilled to be redeployed or have their jobs redesigned so they can take on other roles within the organisation.
- Flexible work arrangements: Employers can implement shorter work weeks, temporary layoffs and flexible work schedules.
- Flexible wage system: Companies with flexible wage systems in place can also opt to reduce variable bonus payment, annual wage increment, annual wage supplement and monthly variable component.
- Other measures: Implement no-pay leave. During this period, companies should also send affected workers for training and upgrading to benefit both workers and the company in the long run.
In the event of inevitable retrenchment, the tripartite partners have also advised companies to carry out retrenchment exercises responsibly.
If Retrenchment is Inevitable
- Responsible retrenchment: Selection of employees for retrenchment should be based on objective criteria, such as the employee’s ability to contribute to the company. Companies should not discriminate against age, race, gender, religion, marital status and family responsibility, or disability.
- Pre-retrenchment preparations: Companies should notify MOM of retrenchment exercises. If the company is unionised, the relevant union should be consulted as early as possible. The norm is one month, as highlighted in collective agreements.
- Communication to employees: Companies should inform employees the reasons for retrenchment, and how it will be carried out. Where necessary, counselling support should be offered.
- Retrenchment notice period: The retrenchment notice period for employees should be in accordance with the collective agreement, contract of service or Employment Act. However, employers are encouraged to adopt a longer notice period to give employees time to prepare and look for alternate arrangements.
- Retrenchment benefits: Extend retrenchment benefits to employees with two or more years of service, with the norm varying between two weeks to a month’s pay for every year of service. If the retrenchment occurs shortly after a wage cut, the new guidelines state that the salary drawn before the cut should be used to compute the retrenchment benefits.
- Employment facilitation: Companies should help affected employees to find alternate jobs by providing supporting documentation where necessary and work with unions, the Singapore National Employers Federation, and agencies such as NTUC’s U PME Centre and NTUC’s e2i (Employment and Employability Institute) to provide employment facilitation services.
The full guidelines can be found on www.mom.gov.sg.
“Companies should send their workers for skills upgrading so that workers remain relevant and adaptable. While retrenchment may sometimes be inevitable, companies should conduct the retrenchment exercise in a fair and sensitive manner.
“Unionised companies should inform their unions earlier on any impending retrenchment and work with unions closely to ensure that fair retrenchment packages are offered and displaced workers are assisted with proper outplacement services.”
NTUC Assistant Secretary-General Cham Hui Fong
Source: NTUC This Week
