More employers ‘cheating’ retrenched workers out of benefits

November 4, 20166:46 pm879 views
More employers ‘cheating’ retrenched workers out of benefits

NTUC assistant secretary-general says number of disguised retrenchment cases up, more people seeking help.

More cases of disguised retrenchments – workers getting laid off without their employers treating it as a retrenchment to avoid paying a fair package – are surfacing.

There has been an increase in disguised retrenchment cases, said NTUC assistant secretary-general Patrick Tay, who is also the director of NTUC Legal Services and its PME (professionals, managers, executives) unit.

About 15 to 20 people have approached the NTUC’s U PME Centre for help, compared to fewer than 10 in 2015.

In disguised retrenchment, a company avoids treating the layoff as a retrenchment so as not to pay fair benefits.

Mr Tay told The New Paper on Wednesday that cases of irresponsible retrenchments are not rampant. But they remain a concern because companies are carrying out such practices without breaking the law.

UNFAIR: NTUC assistant secretary-general Patrick Tay says irresponsible retrenchments remain a concern.​ ​TNP PHOTO: OH XING YEE

For example, some workers are terminated with a month’s notice – allowed under provisions in employment contracts – and do not get retrenchment benefits.

He said: “The employee might be working for them for 15, 20 years, then they are told, ‘You don’t have to come back any more.’

“Legally, the employer may have the right to do that because the employment contract doesn’t have any severance package but this is not progressive.”

Nine in 10 companies paid retrenchment benefits, according to the last survey in 2013 on retrenchment carried out in the previous year.

It showed that the prevailing norm was to pay a retrenchment benefit of between two weeks’ and one month’s salary per year of service, Manpower Minister Lim Swee Say told Parliament in September.

In May, tripartite guidelines on managing excess manpower and responsible retrenchment were issued by the Ministry of Manpower (MOM), the Singapore National Employers Federation and NTUC. They highlighted the measures that companies are supposed to take during a retrenchment exercise, such as giving ample notice to affected employees and paying them benefits.

Mr Tay thinks irresponsible retrenchments could happen to employees across all industries and age groups.

He said: “It affects firms that are facing challenges and need to fire people. If (disguised retrenchments) are legal, it doesn’t matter if you are old or young.”

There are tell-tale signs when a company is trying to get rid of employees to reduce costs, Mr Tay added.

For instance, workers who have been doing the same job are suddenly given poor performance ratings when they had previously received consistently good ratings. Another sign is when a company’s order books are empty.

Mr Tay urged companies to inform MOM and the Tripartite Alliance for Fair and Progressive Employment Practice of any impending retrenchment exercise so that affected employees can get help finding another job.

According to the tripartite guidelines on retrenchment, the relevant union is supposed to be consulted as early as possible if the company is unionised.

Where it is provided in the collective agreement, the norm is one month before notifying the employee.

Mr Tay said: “We want to know early so that we can help workers who are affected as best as we can. We want to help them with a seamless transition to another employer.

“We can also negotiate the retrenchment payout which might not be prescribed in the collective agreement.”

In September, Labour NMP K. Thanaletchimi asked in Parliament whether it could be made compulsory for companies to notify MOM about any retrenchment exercise.

Mr Tay said the matter is currently being discussed with MOM and there will be an announcement in the coming months.

Asked if compulsory notifications could lead to more disguised retrenchments, he thinks that would be unlikely but he called on companies to conduct retrenchment exercises in a “fair, responsible and progressive” manner.

“There is more to lose for the employer if word goes around and employees still with the company will give them a dirty look. It affects morale and productivity.”

He added that the employer’s reputation could suffer, especially if the “retrenched” employees go to the media or use social media to reveal how the employer had treated them.

Legally, the employer may have the right to do that because the employment contract doesn’t have any severance package but this is not progressive.

–​ Mr Patrick Tay

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