Ensure companies do not game the system with retrenchments

Motor distributing giant Inchcape has laid off some 120 mostly long-time employees, among them top honchos ("Layoffs send worrying signals", "Inchcape staff fear more job cuts ahead"; both published Jan 7).

This move is perplexing, since Singapore is a key and highly profitable market for the company.

That Inchcape has done well all these years speaks volumes of the quality and dedication of its management and staff.

The union needs to ensure that these long-time staff are properly compensated for their years of service and contribution.

I hope the company also pays for reskilling and outplacement services for these staff.

There is nothing wrong with companies choosing to retrench staff to be more nimble and effective in this disruptive business environment.

The fastest and proven way to show new management effectiveness and increased bottomline contribution in a challenging business environment is to reduce costs; and staff cost is usually the biggest and easiest to justify for cuts.

The authorities should take a close look at such exercises and ensure that companies are not gaming the system and using it as an excuse to replace more costly, long-serving staff with cheaper, younger staff.

Ng Chor Chye

A version of this article appeared in the print edition of The Straits Times on January 13, 2017, with the headline 'Ensure companies do not game the system with retrenchments'. Print Edition | Subscribe