Employers who retrench their staff, but disguise it as something else to avoid giving out retrenchment benefits, run the risk of incurring penalties, Manpower Minister Josephine Teo told Parliament yesterday.
As many as 100,000 people could be retrenched this year, as Singapore - hard hit by the Covid-19 outbreak - heads for its worst recession since independence in 1965. The economy is expected to shrink by 4 per cent to 7 per cent this year.
An employee is presumed to have been retrenched if the employer cannot show a plan to fill the vacancy any time soon, and this rings true regardless of what the termination of employment is called, Mrs Teo said.
"If the retrenchment benefit is spelt out in the employment contract or collective agreement, the employer has a clear obligation to pay. He cannot sidestep it by calling the retrenchment something else.
"If a company is found to have disguised their retrenchments, MOM can and will consider withdrawing government support like JSS and suspending their work pass privileges," she added, referring to the Covid-19 Jobs Support Scheme that co-pays salaries to help firms retain workers.
The minister was replying to MPs who had asked about fair treatment of workers when they are retrenched, terminated or have their wages reduced.
She noted that employers might struggle to fulfil their obligations.
"The tripartite partners have, therefore, agreed that in instances of genuine financial difficulty for the employer, retrenchment benefit may be renegotiated or moderated," she said.
"Nevertheless, businesses should still give some support to retrenched employees, to the extent that they can afford."
She also said that the Ministry of Manpower (MOM) requires employers to submit notifications of cost-saving measures they plan to introduce.
Her ministry and the Tripartite Alliance for Fair and Progressive Employment Practices will then "identify companies for further engagement", if, for instance, the planned wage cuts seem excessive.
She urged employers and employees to communicate openly.
Mr Saktiandi Supaat (Bishan-Toa Payoh GRC) asked, among other things, how common it was for employers and recruiters to ask job seekers to declare their last drawn salary and whether there are studies on how this might affect people's employability and their salary.
Mrs Teo said there is no rule requiring job seekers to comply with requests for their last drawn salary, nor can employers insist on it.
She added: "The last drawn salary is a relevant input to employers seeking to gauge a candidate's seniority or to make an appropriate job offer. However, if employers use last drawn salary to screen applicants, they risk losing out on good candidates who are prepared to adjust their salary expectations, especially in today's context.
"It is similarly unwise for employers to overlook the longer track record of the applicant, and make an offer based solely on the last drawn salary, especially if the last held position was an interim one."
Mr Saktiandi said he knows of fresh graduates who are wary of taking up jobs that pay below the median salary, "for fear that their salaries will always be pegged to it".
"They would rather wait it out... if they can rely on their parents, leading to months of post-graduation unemployment," he added.
Referring to a study in the United States, Mr Louis Ng (Nee Soon GRC) asked if MOM had studied whether having job seekers declare their last drawn salary contributes to the gender wage gap in Singapore.
"Not specifically," Mrs Teo replied. "There are many other contributing factors that are more prominent... It would not be realistic to chase down every study."
