All companies except micro enterprises are required to notify the Ministry of Manpower (MOM) about any retrenchment activity initiated after January 1, 2017 within five working days of informing the affected employees.
This move by the Ministry is aimed at helping government agencies provide prompt support to the affected workers in case of retrenchments. Companies who fail to inform the MOM would face penalty of upto $5,000.
This mandatory requirement comes amid the rising number of layoffs, volatility of the economy and slump in the market. The rule is applicable to companies, who hire at least 10 employees, and if five or more employees are retrenched within any six month period from next year.
This big step was publically announced by the Ministry, Singapore National Employers Federation and labour movement last week. It aims to help government agencies have access to more timely and complete information on retrenchment exercises.
The companies will have to submit the size of their workforce prior to retrenchment, contact information and details of the retrenched workers that include – residential status, date of retrenchment, job titles and identification numbers.
In a recent visit to the Lifelong Learning Institute, Manpower Minister Lim Swee Say spoke about one of the major shortcomings faced, they are not notified prior or after about the retrenchment exercises. The MOM is only informed during the quarterly census of all companies that hire 25 or more workers.
Since there is a time gap, Lim was quoted by Today saying, “The tripartite partners feel this is an area we need to improve because the sooner we are notified of the retrenchment, the sooner we know who are the workers who’re being affected, we can move in faster to provide support to various workers.”
Based on the preliminary estimates, the total number of layoffs this year has reached more than 13,600 in the first nine months, the highest since the global financial crisis some seven years ago. The total number of layoffs is further anticipated to surpass last year’s figure of 15,580 workers. Some of the companies who have let go of their workers in the recent months include Resort World Sentosa, The Australia and New Zealand Banking Group (ANZ) and Singapore Press Holdings (SPH).
While applying the same threshold to the new notification requirement, the ministry is mindful that the reporting should be not too onerous for the companies. Elaborating on reasons why companies were not required to notify MOM before retrenchment in the past, is because any information leaks prior could dampen employee morale.
However, this led to unionised companies informing the National Trades Union Congress (NTUC) ahead of retrenchments, and the information was kept confidential by the unions.
Defining retrenchment as dismissal on the ground of redundancy or reorganisation of the employer’s profession, business or trade, the notification requirement applies to permanent employees and contract workers with full contract terms of at least six months.
Dr Lim assured this new mandate will not violate the Personal Data Protection Act, and those workers laid off in disguise or by using irresponsible means can lodge complaints with the MOM to investigate on the matter further.
Retrenched workers in the past believe, this new notification requirement would provide prompt help to less educated and less aware workers to seek help from agencies such as Workforce Singapore (WSG). Kurt Wee, President of Association of Small and Medium Enterprises, feels that MOM should allow notification window of 10 working days or two weeks for companies to organise their paperwork and make necessary filings.
Wee further hopes that this move by the MOM is not to excessively scrutinise if an employee should be retrenched or should not be retrenched, as companies do not frivolously layoff their workers.
Mr Patrick Tay, NTUC assistant secretary-general and member of the Taskforce for Responsible Retrenchment and Employment Facilitation, has urged employers hit by the labour market conditions to consult the unions at the earliest, such that NTUC can work with employers first to manage excess manpower, before companies resort to retrenchment.