Retrenchment benefits for Lazada employees in Singapore raised to ‘unionised norms’: Labour chief

SINGAPORE - Lazada employees who were laid off in January will have an enhanced package of benefits, similar in scale to what unionised companies have to compensate their staff with when they are retrenched. 

In a joint statement on Feb 4, the National Trades Union Congress (NTUC), its affiliate – the Food, Drinks and Allied Workers Union (FDAWU) – and Lazada said they have arrived at an amicable settlement following weeks of negotiations.

Lazada will also set up a dedicated training fund to help affected employees find jobs and learn new skills to boost their employment prospects.

The joint statement did not provide details of the package. The Straits Times reported in January that the laid-off workers

were offered two weeks’ pay for each year of service,

and the FDAWU was negotiating for better benefits.

NTUC secretary-general Ng Chee Meng said in a post on Facebook on Feb 4 that the FDAWU and Lazada have resolved their differences, adding: “Our unionised workers will have an enhanced package mirroring unionised norms.”

When contacted for more details on the compensation package, an NTUC spokesperson referred ST to the Ministry of Manpower (MOM) website, which states that the amount of retrenchment benefit depends on what is agreed in the employment contract. For unionised companies, the retrenchment benefits are stated in the collective agreement.

The MOM website noted that affected employees typically receive between two weeks and one month’s salary for each year of service, depending on the company’s financial position and the industry that it is in. For unionised companies, the norm is one month’s salary for each year of service.

As for the number of workers who are expected to benefit from the package, the NTUC spokesperson said affected union members will first have to register with FDAWU at

fdawu@ntuc.org.sg

by 5pm on Feb 20.

The union will then be able to work out the final payout and the number of workers who can benefit from the enhanced package.

No further information on the training fund was given, due to a confidentiality agreement between FDAWU and Lazada Singapore.

Nevertheless, the NTUC spokesperson said eligible affected union members can be assured that “they will now be better off”.

MOM, which facilitated discussions between the union and Lazada, said that while Lazada

did not start off in the right manner with the union,

it is pleased that all parties have since resolved the issue and, going forward, will work together to achieve win-win outcomes for the business and workers.

The spokesperson reiterated that all employers should act responsibly when they are mulling over cost-cutting measures and that retrenchment should be their last resort.

Lazada

let go of an undisclosed number of its Singapore workforce in January

, without informing the union, despite these workers being unionised. The cuts at Lazada spanned various departments across the company as well as its regional offices in countries including Malaysia, Indonesia and Vietnam.

The e-commerce unit of Alibaba claimed then that the move was part of a business transformation exercise, to “better position the company for a more agile, streamlined way of working to meet future business needs”.