Written Answer to PQ on Retrenchment and tripartism-related issues
NOTICE PAPER NO. 2499 OF 2024 FOR SITTING ON OR AFTER 5 FEBRUARY 2024
QUESTION NO. 5590 FOR ORAL ANSWER
MP: Dr Tan Wu Meng
To ask the Minister for Manpower (a) whether the retrenchment exercise carried out by an e-commerce company in early January 2024 has been notified to the Ministry in line with mandatory requirements for employers with Singapore-registered businesses with at least ten employees; (b) if so, what has been the timeline and what action has been taken by the Ministry following the notification; and (c) if not notified, what action has the Ministry taken regarding the non-compliance with mandatory retrenchment notification requirements.
NOTICE PAPER NO. 2513 OF 2024 FOR THE NEXT AVAILABLE SITTING
QUESTION NO. 5600 FOR ORAL ANSWER
MP: Mr Patrick Tay Teck Guan
To ask the Minister for Manpower (a) in each year from 2019 to 2023, what is the number of companies that have failed to provide the Ministry with Mandatory Retrenchment Notifications within the required period of five working days after affected employees are notified of their retrenchment; and (b) what actions have been taken against such companies.
NOTICE PAPER NO. 2518 OF 2024 FOR SITTING ON OR AFTER 1 FEBRUARY 2024
QUESTION NO. 5608 FOR ORAL ANSWER
MP: Mr Neil Parekh Nimil Rajnikant
To ask the Minister for Manpower in view of the recent episodes of manpower reduction exercises carried out by several leading companies, what is the Ministry's overall view of the job market in the next few months.
NOTICE PAPER NO. 2518 OF 2024 FOR SITTING ON OR AFTER 1 FEBRUARY 2024
QUESTION NO. 5609 FOR ORAL ANSWER
MP: Mr Neil Parekh Nimil Rajnikant
To ask the Minister for Manpower in view of the sudden retrenchment exercise in early January 2024 that was conducted by a large e-commerce company before consulting the workers’ union, what steps will the Ministry take to ensure that tripartism is maintained when companies carry out retrenchment exercises.
NOTICE PAPER NO. 2528 OF 2024 FOR THE SITTING ON OR AFTER 5 FEBRUARY 2024
QUESTION NO. 5627 FOR ORAL ANSWER
MP: Ms Hazel Poa
To ask the Minister for Manpower regarding the recent layoffs by an e-commerce company which was not notified to the unions (a) whether the Ministry has data on the number of employees who were laid off with a breakdown by nationality; and (b) whether the Ministry will consider regulating non-compete clauses in employment contracts.
NOTICE PAPER NO. 2541 OF 2024 FOR THE SITTING ON OR AFTER 5 FEBRUARY 2024
QUESTION NO. 5678 FOR ORAL ANSWER
MP: Mr Chua Kheng Wee Louis
To ask the Minister for Manpower (a) whether there are any penalties for companies who carry out retrenchment exercises without notifying and consulting the relevant trade unions; and (b) what specific measures is the Ministry taking to ensure that companies operating in Singapore adhere to fair labour practices, particularly in terms of providing advance notice and adequate compensation to employees in the event of layoffs.
NOTICE PAPER NO. 2541 OF 2024 FOR THE SITTING ON 05 FEBRUARY 2024
QUESTION NO. 5429 FOR WRITTEN ANSWER
MP: Mr Desmond Choo
To ask the Minister for Manpower (a) whether the Ministry regulates the inclusion of non-compete clauses in employment contracts; and (b) whether the Ministry will consider issuing guidelines to employers and employees on the incorporation of non-compete clauses in employment contracts.
NOTICE PAPER NO. 2541 OF 2024 FOR THE SITTING ON 5 FEBRUARY 2024
QUESTION NO. 5430 FOR WRITTEN ANSWER
MP: Mr Yip Hon Weng
To ask the Minister for Manpower following the recent layoffs by an e-commerce company which was not notified to the unions (a) what are the lessons learned that will require the Government, NTUC and employer bodies to review the tripartite relationship in today's economic environment; (b) what specific areas need to be strengthened; and (c) whether the Ministry should mandate all companies that have at least 10 workers to notify unions about any upcoming lay-offs.
Answer:
1. Mr Speaker, may I have your permission to address six oral PQs No. 32 to No. 37 on 5 February 2024. In addition, I will also address four oral PQs scheduled for the sitting on 6 February 2024, and four written PQs scheduled for the sittings on 5 and 7 February 2024. Members have filed these PQs on various issues related to retrenchment and arising from a recent retrenchment exercise that has been in the news. I am taking these PQs together to provide a more holistic response.
Lazada retrenchment exercise
2. I will begin by addressing the Lazada Group’s retrenchment exercise conducted in January 2024. I believe that this was the e-commerce company referred to by Dr Tan Wu Meng, Ms Hazel Poa, Mr Yip Hon Weng and Mr Neil Parekh in their PQs.
3. I would first like to assure the members that the Ministry of Manpower (MOM) has been actively involved in this matter to ensure that Lazada’s retrenchment is conducted in a fair and responsible manner. To recap, in early January this year, there were news reports of sudden layoffs at Lazada Singapore Pte Ltd conducted without consultation with their union, the Food, Drinks and Allied Workers Union (FDAWU). If Lazada had correctly notified the FDAWU early, they would have been able to work together with the union to ensure that the retrenchment exercise was carried out fairly and responsibly, and proper support was given to the affected workers.
4. However, Lazada did not notify the FDAWU of the retrenchment exercise. This was not in line with the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment, or TAMEM. TAMEM sets out the guidelines for employers on how to manage retrenchment exercises in a fair and responsible manner. MOM stepped in immediately to inform Lazada that their action was not aligned with TAMEM.
5. Through MOM’s intervention, Lazada apologised to the union and acknowledged that they should have notified them before informing employees. FDAWU accepted Lazada’s apology. In the past few weeks, MOM has been actively facilitating many rounds of negotiations between the FDAWU and Lazada. This is to ensure a fair outcome for the affected employees and to ensure that such an incident does not occur again. As you may have heard in the news, MOM has managed to facilitate an amicable settlement between Lazada and FDAWU. FDAWU managed to secure an improved overall retrenchment package, with retrenchment benefits that are in line with industry standards. Lazada has also committed to working in closer partnership with FDAWU moving forward.
6. To Dr Tan Wu Meng’s question, Lazada had submitted the Mandatory Retrenchment Notifications (MRNs) for its January 2024 retrenchment exercise on time, within 5 working days after the employees were notified. Following the submission, the Taskforce for Responsible Retrenchment and Employment Facilitation worked with Lazada to provide the affected employees with career facilitation services and information kits on career resources. This taskforce comprises representatives from the MOM, Workforce Singapore (WSG), National Trades Union Congress (NTUC), NTUC’s Employment and Employability Institute (e2i) and Enterprise Singapore (ESG).
7. To Ms Hazel Poa’s question about the number and nationality profile of the affected Lazada employees, MOM does not publicly provide such information about a company’s business operations. Nonetheless, we reiterate that employers must conduct retrenchment exercises based on objective selection criteria.
Lazada incident shows the success of tripartism
8. Mr Speaker and Members, Mr Yip Hon Weng asked about the lessons learnt from the Lazada incident. Dr Tan Wu Meng and Mr Neil Parekh also asked about steps to ensure tripartism is maintained.
9. The Lazada incident clearly demonstrates the success of Singapore’s unique model of tripartism. While there was an initial lapse on Lazada’s part in not notifying the union on the retrenchment exercise which contravened the TAMEM, MOM actively stepped in and facilitated the discussion between Lazada and the FDAWU to help them reach an amicable and fair resolution that achieved win-win outcomes for the affected workers and the company. Lazada has also committed to working closely with FDAWU in the future. The satisfactory resolution to this matter was possible because of tripartism. This is a model where unions, companies and government work together in a collaborative spirit, to find solutions and build even stronger partnerships. In many other countries, the unions and companies would have approached similar issues in a more confrontational manner. This would have resulted in more conflicts, with potentially acrimonious and longer-term negative implications for the parties involved. In Singapore, our ability to resolve such incidents (in this particular case it was quite a swift resolution) attests to the high levels of trust amongst the tripartite partners.
10. This is also why unionised companies should always consult their unions when making decisions that fundamentally impact workers, such as retrenchments. Members of the house, retrenchment exercises impact workers emotionally, psychologically, and financially. Unions will have the expertise to ensure that the exercise is carried out fairly, responsibly and communicated in a sensitive manner to the affected workers. This will help to smoothen the process for companies and enable the affected workers going through this difficult period to be better supported.
Ensuring Responsible Retrenchment
11. Beyond this specific incident, several members have also asked about how we ensure that retrenchment exercises are conducted in a fair and responsible manner.
a) Mr Yip Hon Weng asked whether MOM should mandate all companies with at least 10 workers to notify unions about upcoming layoffs.
b) Mr Christopher de Souza and Mr Louis Chua asked whether there should be penalties on companies who do not notify and consult unions about a retrenchment exercise, and whether adequate compensation is made to employees.
c) Mr Patrick Tay, Dr Tan Wu Meng, Mr Louis Chua and Mr Christopher de Souza asked about the measures to ensure responsible employment practices, compliance of companies with regard to MRN requirements, and action that can be taken against employers who are recalcitrant.
12. I will address these questions together and start with our overall approach towards retrenchment issues. Singapore’s approach has always been on that is balanced, that protects workers, while giving businesses flexibility. Let me make three points on our approach.
a) First, we engage and educate employers to act responsibly.
b) Secondly, employers are required to notify MOM within 5 days of the retrenchment exercise.
c) Third, we protect workers and we will not wait until retrenchment happens to do so. We also help workers to build career resilience, so that they can find new and better jobs when they face disruptions.
13. I want to record that point that while some amongst us have called for stronger action to protect workers,. even without legally mandating retrenchment benefits, our MRN data from 2019 to 2023 shows that around 9 in 10 eligible employees received retrenchment benefits. As I have alluded to our approach ensuring that while we protect workers, we must continue to preserve that flexibility for businesses to adjust to market conditions. Because this will ultimately create and sustain more good jobs for Singaporeans.
Collective agreement
14. During this particular period, Mr Gan and a few other members of the house also asked about collective agreements, non-compete clauses and restricted stock units. Suffice to say, whether or not a collective agreement should be put in place, our approach has been to let the employer and union decide. But any disagreements, including whether a CA should be put in place, can be raised to MOM for conciliation and IAC or Industrial Arbitration Court for arbitration if conciliation is unsuccessful.
Job market outlook
15. I would like to assure Members of the House, that whilst there have been a few high-profile retrenchments and Mr Neil Parekh has asked about the Singapore job market over the next few months. Our assessment is that while the economy is projected to improve in 2024, there are still downside risks in the global economy remain. So what we are doing, is to make sure that we continue to work with our tripartite partners to keep a close watch on the situation to continue to be ready to provide employment facilitation and ensure that any retrenched workers will be treated fairly.
Conclusion
16. I want to end by exhorting all of our employers, retrenchment is a difficult period employers have to go through, especially when they are undergoing financial difficulties or restructuring their operations. It is even more difficult for workers, because it takes an emotional toll on them when it affects their livelihoods. The tripartite partners understood this and developed TAMEM to guide companies to carry out retrenchment exercises responsibly, if retrenchment is unavoidable.
17. We will work closely, and as seen in how the Lazada case was managed, the spirit of collaboration and tripartism in Singapore remains strong. We will continue to stand committed to work together to protect our workers’ interests and at the same time do our best to ensure that Singapore continues to remain competitive to provide good jobs.