Employers in Singapore must declare all retrenchments, effective 2017

Singapore's tripartite partners have issued a new requirement for employers on mandatory retrenchment notifications, effective 1 January 2017.

Under the Workforce Singapore Agency Act, employers with at least 10 employees are required to notify the Ministry of Manpower (MOM) if five or more employees are retrenched within any six-month period beginning 1 January 2017.

For the purpose of this advisory, retrenchments are defined as dismissal on the ground of redundancy or by reason of any reorganisation of the employer’s profession, business, trade or work. This applies to permanent employees, as well as contract workers with full contract terms of at least six months.

Failure to notify MOM within five working days is an offence and employers may be liable on conviction to penalties, including a fine of up to S$5,000.

Rosaline Chow Koo, founder and CEO of CXA Group, commended the initiative, speaking to Human Resources. "It’s wonderful that the government is helping to retrain employees. It shows how proactive the government is. I believe they recognise the importance of caring for the health and wellbeing of employees in Singapore."

She added about the perils of ineffective retrenchment: "When mismanaged, people can fall into depression as a result of retrenchment. On the flip side, if handled well, people are known to discover new skills and sometimes realise their life ambitions when faced with retrenchment."

From the HR viewpoint, Joan Hoon, chief people officer of CXA Group, added that the intent of the guideline is to remind employers to consider retrenchment as a final resort after exhausting other options including retraining, redeployment and flexible work schemes amongst others. "We believe the guideline prioritises the health and wellbeing of employees in Singapore."

Adding that CXA is a "startup in hyper growth", the challenge is not in retrenchment, but rather in "recruiting the right talent and developing teams across the region." Although CXA does not have a formal plan as such, but flexible work schedules and hours, retraining and redeployment is part of its day-to-day business.

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On the same issue, Singapore's Taskforce for Responsible Retrenchment and Employment Facilitation has reinforced support for retrenched workers. For the first three quarters of 2016, WSG and NTUC have reached out to more than 3,000 retrenched workers.

The Taskforce was set up in March 2016 to provide assistance to retrenched individuals and ensure that employers treat their workers fairly if retrenchment is inevitable.

It is led by Workforce Singapore (WSG), comprising representatives from MOM, National Trades Union Congress (NTUC) and NTUC’s e2i (Employment and Employability Institute).

Tan Choon Shian, Taskforce chairman and chief executive of WSG, said: "WSG will continue to strengthen our employment facilitation support for retrenched individuals and job seekers to meet the needs of hiring employers and facilitate job matching. We will also ramp up our outreach initiatives to ensure that retrenching companies and individuals are offered timely support and assistance."

Patrick Tay, Taskforce member and assistant secretary general of NTUC, added: "NTUC urges employers who are affected by the ongoing labour market conditions to consult their unions as early as possible, so that we can first work with employers to manage the excess manpower before employers resort to retrenchment."

"If workers have to be retrenched, employers should reference the updated guidelines for responsible retrenchment and employment facilitation."

Speaking to Human Resources, CXA's Hoon added, in her experience, outplacement support is very common in Singapore, especially amongst financial services companies. "Typically, outplacement firms are engaged to provide employees with the necessary counselling to handle the traumatic experience and to help them connect with new opportunities."

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