MOM Reminds Employers to Offer Fair Retrenchment Package As More Lay-Offs Expected

Companies when reading this headline:

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Just kidding. Companies who do that would be too busy counting their money they didn’t pay to their employees rather than reading Goody Feed.

The MOM has sent out a kind reminder for companies to treat their employees with “empathy and dignity” and provide retrenchment benefits according to their financial position.

This is a new advisory specifically for Covid-19 jointly issued with the Singapore National Employers Federation and the National Trades Union Congress (NTUC).

Retrenchments in just the first three months this year was a preliminary number of 3,000, compared to 2,670 last quarter. Want even more bad news?

This number is probably going to get worse since this doesn’t take into account the circuit breaker period.

Companies Should Pay Out Benefits Agreed On Contracts

It sounds like common sense to actually write that out, but hear me. Companies in sound financial position can afford to do that. The norms are between two weeks and one month of salary per year of service.

What about those who can’t, like those whose business was affected by the virus?

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They should work with their union or the employees to renegotiate a fair package linked with the number of years of service with the firm.

Those companies in a really difficult situation even with government help like rental waivers and training subsidies should negotiate a retrenchment benefit package with their union if they are unionized.

Otherwise, they should support the staff by providing a lump sum benefit of between one and three months’ salary.

Should Be More Generous To Those With Lower Salary

This sounds stupid to write out again, but here it goes: those with less salary are more likely to actually need money.

The fact that I have to write that probably means there are workers out there who were like:

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Anyway, MOM urged employers to be more generous to the lower-wage workers (like those earning up to S$2,300 a month, who would also be eligible for Workfare Income Supplement).

They can give these in the form of more weeks of retrenchment benefits per year of service, or more training grants.

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Companies Should Consider Cost-Saving Measures Instead Of Layoffs

Don’t be too hasty on writing that retrenchment letter, cause there are actually schemes that help employers to help retain workers. Like the Jobs Support Scheme, which provides wage subsidies in April, May, July and October of up to 75% on the first S$4,600 of monthly wages even when they are not working.

Lay-offs Must Be Fair

The selection of employees to be laid off, if it comes to that, must be selected fairly. Unions must be consulted early, and the affected employees must also be told early.

Bosses can then support their retrenched employees to look for new jobs through their own business networks or by referring them to Workforce Singapore or the Employment and Employability Institute.

Employers who have at least 10 employees and laid off five or more staff within any six-month period must notify the ministry.

Those planning to a restructuring or retrenchment exercise can join NTUC’s Job Security Council, a programme that aims to match displaced workers with other employers within its network.


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What About Retrenched Staff?

The retrenched Singaporeans and PRs can apply for the COVID-19 Support Grant, which are monthly cash payouts of up to $800 for three months to those eligible.

If they have been with their company for at least two years, they are eligible for retrenchment benefits. Claims can be lodged at the Tripartite Alliance for Dispute Management (TADM) if they are not paid the benefits.


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There is also a growing concern of “disguised retrenchments”, meaning workers getting laid off but the boss doesn’t call it a retrenchment in order to not pay the package. Like, for example, your boss says you’re fired due to bad performance but you know that’s not true.

If this happens, contact the TADM.

But anyways, for MOM to come out and remind employers about this, you can bet that you’re going to see many people with dishevelled hair holding boxes with files on the streets – oh, no, not really.

Many are probably just ghosted by their employers.

Welcome to the world of COVID-19, whereby self-righteous people who’re not affected would keep on saying, “Extend Circuit Breaker to save lives, please!”


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