Oral Answer by Mr Lim Swee Say, Minister for Manpower, to Parliamentary Question on Retrenchment

Notice paper no. 430 of 2016 for the sitting on 7 November 2016

Question no. 732 for oral answer

MP: Mr Seah Kian Peng

To ask the Minister for Manpower what are the projected retrenchment numbers for this year and how does this compare with that of 2015.

Question no. 738 for oral answer

MP: Dr Tan Wu Meng

To ask the Minister for Manpower in light of rising “disguised retrenchments” by employers to avoid paying retrenchment benefits (a) how will the Ministry address such occurrences; (b) what measures will the Ministry put in place to monitor and deter future practices; and (c) how will the Government continue to ensure that public sector agencies abide by human resource best practices and do not engage in “disguised retrenchments”.

Answer

1. Madam Speaker, may I have your permission to take questions 6 and 7 together.
2. For the first three quarters of this year, 11,890 workers were retrenched, compared to 8,590 in the same period last year. In total, 13,440 workers were retrenched last year and we expect the number this year to be higher due to on-going business restructuring and slowing economic growth.
3. There is no clear evidence that irresponsible retrenchment is on the rise. Under the Employment Act, an employee who has served less than 2 years is not entitled to retrenchment benefits. For those who have served more than 2 years, payment of retrenchment benefits is mandatory if it is specified in their individual employment contracts or the collective agreements negotiated by their unions.
4. Even so, based on the last survey conducted in 2013, 9 out of 10 companies with more than 25 employees do pay retrenchment benefits. The prevailing norm then was 2 weeks to 1 month of salary for each year of service. We are now conducting another survey and findings will be ready by end of the year.
5. Workers who feel that they have been treated unfairly during any retrenchment exercise can report to MOM for investigation. In 2015, the Ministry of Manpower (MOM) received 94 cases from employees with retrenchment-related issues. Out of which 15 appeals were from employees who were dismissed but felt they were retrenched and deprived of retrenchment benefit. In the first three quarters of this year, out of 63 retrenchment-related cases, the number of appeals is 14. On the whole, these cases account for a small proportion of the total number of local employees retrenched in 2015 and 2016 so far.
6. In 28 out of these 29 appeals (15 in 2015 and 14 in 2016 so far), the workers were either not entitled to retrenchment benefits as they have less than 2 years of service or there were no retrenchment benefits specified in their contracts or collective agreements. For the one remaining appeal, MOM is now helping the worker to resolve the issue.
7. The public sector is committed to progressive HR practices. Public sector agencies have signed the Employers’ Pledge of Fair Employment Practices since 2007. They will continue to abide by tripartite guidelines to carry out restructuring responsibly and in consultation with public sector unions.
8. Madam, under the Adapt and Grow initiative, MOM and its tripartite partners will step up our support for retrenched workers through job matching and career services. To enable us to reach more retrenched workers and offer more timely assistance to them, MOM is now in consultation with unions and employers to strengthen our framework for retrenchment reporting. We are aware of the different positions of the unions and employers on this, but MOM believes that we can find a way forward for the interest of the retrenched workers.