SUPPORT FOR RETRENCHED WORKERS
In regard to retrenchment, the authorities have trodden carefully. Companies in Singapore have always had the right to release workers on grounds of reorganisation or redundancy.
However, providing timely job assistance to retrenched workers is a priority. Since November 2021, the Ministry of Manpower has mandated that all companies with at least 10 employees inform MOM within five days after notifying employees of retrenchment, regardless of the number of workers retrenched. This is to give MOM and relevant agencies sufficient time to extend support to affected workers.
It is worth considering NTUC’s recent call for MOM to be informed of retrenchments before they take place, rather than after employees are notified.
On retrenchment benefits, MOM and NTUC have prescribed norms rather than mandated payments. Employees with at least two years of service should be paid retrenchment benefits based on their employment contract, or collective agreement for unionised companies. Benefits should be negotiated with employees in the absence of contractual provisions.
The prevailing norm is for a payout of two weeks’ to one month’s salary per year of service, depending on industry practice and the company’s financial position.
The government has also opted to provide unemployment benefits via the new SkillsFuture Jobseeker Support scheme. The scheme grants jobseekers who were involuntarily unemployed up to S$6,000 over six months. MOM has indicated that this support is not intended to replace retrenchment benefits, which companies are still obliged to provide.