SINGAPORE: Requiring employers to notify authorities before they retrench workers may discourage talks to save jobs, Manpower Minister Tan See Leng said on Tuesday (Mar 3).
He was responding to calls by labour chief Ng Chee Meng and other members of parliament (MPs) from the National Trades Union Congress (NTUC) to implement advance mandatory retrenchment notifications.
Dr Tan said: “While advance notification has merits, mandating such a requirement poses non-trivial challenges.
“Retrenchment is … always a difficult process for all parties involved, and is often a last resort for companies.
“Many a time, the senior management, together with the board, conduct backroom negotiations to try to save as many jobs as possible.
“If we mandate advance notifications, this may inadvertently push companies to finalise retrenchments faster, discouraging such dispute negotiations.
“Businesses have also expressed concerns over the potential leakage of confidential, market-sensitive information.”
The Ministry of Manpower (MOM) is not ruling out any options, and is consulting tripartite partners on these issues and will provide an update in due course, said Dr Tan.
The minister also responded to a suggestion made by Workers’ Party chief Pritam Singh to require bigger companies to give higher retrenchment benefits.
Dr Tan said: “We adopt a balanced approach. We protect our workers, but at the same time, we need to give businesses some flexibility to adjust in different situations, because retrenchments occur for a whole variety of reasons.”
He added that company size is not an indicator of its ability to give retrenchment benefits.
“For example, if you mandate retrenchment benefits in larger companies facing financial difficulties, I think we may inadvertently put even more jobs at risk.
“So on balance, we are reviewing it,” said the minister.
Currently, companies with at least 10 employees must notify MOM of any retrenchment within five working days after the affected employee is informed.
An administrative penalty of S$1,000 can be imposed if the employer fails to do so.
Labour MPs have said that early notification to unions is the difference between “proactive help and reactive damage control”.
An Economic Strategy Review committee to manage the impact of restructuring has also said there is scope to work with the tripartite partners to bring retrenchment notifications earlier.
Shortly after the comments by Mr Ng, the Singapore National Employers Federation (SNEF) expressed strong reservations, saying that advance notification may reduce businesses’ operational flexibility and unintentionally narrow the window for redeploying workers.