It is commendable that the Manpower Ministry (MOM) has introduced a new rule regarding retrenchments which kicks in next year (Companies must report retrenchments to Manpower Ministry from January 2017; ST Online, Nov 25).

Among other things, this would enable government agencies to provide help to the affected workers, especially those on contract and the elderly staff.

Among the objectives of doing business are: ensuring a company continues to be profitable and that it grows in a highly competitive business environment, as well as fulfil its basic social obligations.

So when global and regional economic conditions turn sour, retrenchment may be inevitable. We can see examples of this in the oil and gas sector as well as the shipping and maritime services.

Sometimes, restructuring within the company too leads to retrenchment.

Companies have spent, time, effort and much of their resources to recruit, coach and train staff. So, retrenchment is always understood to be the last course of action for companies.

Still, companies planning to have one would have seen it coming and these plans are usually hatched weeks, if not months, before the actual execution. So MOM's new rule is a reasonable one.

Teo Kueh Liang