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Lessons from the Surbana sackings saga

Reminder that firms are answerable to MOM, new rules for mass firings are positive effects

Surbana Jurong is an award-winning company on many fronts.

Four months ago, the Temasek Holdings-owned infrastructure consultancy snagged a Platinum Award in modelling given out by the Building and Construction Authority.

In a statement, a director in the company attributed the win to the "dedication, strong collaboration and hard work" of staff.

Three months before that, the home-grown company was lauded by the Institution of Engineers for building five of Singapore's top 50 engineering feats such as Jurong Island and Punggol Waterway flats.

Its board is a list of who's who in the corporate sector, and its top management includes a former top civil servant who previously headed two statutory boards.

So, one wonders what led to such an accomplished company being openly rapped this week in Parliament by Manpower Minister Lim Swee Say, who said that it was unacceptable for Surbana to publicly label the 54 employees it recently axed as "poor performers".

This is the short version of, what I call, the Surbana sackings saga.

The Straits Times first reported on the sackings last month, about two weeks before Chinese New Year. The company would not say then how many workers had been axed. It stressed that no one was retrenched but "a small number of poor performers were communicated with and released".

For the rest of the employers in Singapore who watch this saga from the sidelines, the bottom line is clear. Employers have the power to hire and fire, and no employer owes any worker a living. But, it does not hurt for them to treat workers with sensitivity, compassion and dignity, especially when the workers have to be let go.

 

A few days later, several local newspapers reported that Surbana chief executive Wong Heang Fine told his staff in a strongly worded e-mail that the company could not allow a small proportion of poor performers to drag down the rest of the organisation. The number of affected workers - 54 - was revealed for the first time.

They represented 0.41 per cent of Surbana's 13,000-strong global workforce and 0.79 per cent of its roughly 3,000 employees here. And 18 were union members.

A day later, the two unions that represent Surbana workers hit back through Facebook.

One union leader challenged the company's assertion that the axed workers were poor performers, saying that eight were either re-employed after they reached retirement age or had their contracts renewed.

Another union leader added: "To sack them just before (the Chinese New Year) is heartless to the extreme."

The sackings got an airing in Parliament this week. Four MPs spoke about the matter.

How did the sacking of these workers become such big news?

There are a number of reasons but here are four.

One, such mass sackings in full public view are rare. Companies that sack poor performers tend to do so in small numbers to stay below the radar.

Two, Surbana is a Temasek Holdings-owned company. The Temasek brand carries cachet and an expectation that the company does things right.

If a Temasek-linked company can treat workers badly and get away with it, it sets a bad example for other employers.

Three, the sackings happened under the unions' watch. It raises a key question: If unions cannot protect their members, what chance do other non-unionised workers have? After all, the majority of workers in Singapore are not union members.

Four, the dismissals came at a time when the economy is slowing and more workers are losing their jobs. The prospect of the sacked workers finding new jobs is dim. The timing also compounds workers' fear that Surbana might have axed them to avoid paying retrenchment benefits.

The drama aside, there is a silver lining to the saga. It is what those in the education circle will call "a teaching moment". There are, at least, three lessons for employers.

One, no one can escape Ministry of Manpower (MOM) scrutiny.

The MOM has made it clear that a big name like Surbana can be called to account for its actions and even chided in public.

Said Mr Lim: "Whether GLC (government-linked company), MNC (multinational company), large local enterprises or, for that matter, public service… we do expect all of them to conduct HR (human resources) practices in a responsible and progressive manner."

Two, tripartite guidelines are now being drafted for mass terminations, in addition to the existing guidelines that cover mass retrenchments. This will allay workers' fears of employers who disguise retrenchments as sackings to avoid paying workers retrenchment benefits. It will also deter employers from even thinking about such a move.

Three, employers should think carefully before they slap the "poor performer" label on their staff.

"If the performance of employees is not up to mark, there could be contributing factors on the part of employers as well," Mr Lim noted.

The public airing of the sackings must have caused red faces among the head honchos in Surbana. To the company's credit, it conceded subsequently that the dismissal of the workers could have been managed better.

While the Surbana sackings may not be a case of a company trying to avoid paying retrenchment benefits by sacking workers, the unions and Surbana have nonetheless reached a settlement for the workers which the MOM described as fair. That indicates the interests of the workers were protected, even though the details of the deal were not disclosed.

This is an important outcome because whether it was a sacking or a retrenchment, the effect is the same for the workers - they lost their jobs.

And, for the rest of the employers in Singapore who watch this saga from the sidelines, the bottom line is clear. Employers have the power to hire and fire, and no employer owes any worker a living. But, it does not hurt for them to treat workers with sensitivity, compassion and dignity, especially when the workers have to be let go.

A version of this article appeared in the print edition of The Straits Times on February 10, 2017, with the headline 'Lessons from the Surbana sackings saga'. Print Edition | Subscribe