Firms with at least 10 staff must notify MOM of any retrenchment

Firms with at least 10 employees will have to notify the Ministry of Manpower (MOM) each time they retrench any staff from Nov 1, according to new requirements out yesterday. Currently, employers need to notify MOM only when they retrench five or more employees within a six-month period.

Employers must also file the mandatory retrenchment notification within five working days after they serve the notice of retrenchment to an affected worker.

MOM said: "The revised notification enables the tripartite partners, Workforce Singapore, the Employment and Employability Institute as well as other agencies to better reach out to affected local employees to provide employment and job search support."

Such support includes workshops, career coaching, job fairs, and job matching and referrals.

Singapore's labour market in the second quarter of this year took a hit from the tightened rules to curb the spread of Covid-19 during phase two (heightened alert).

Advance estimates by MOM show that retrenchments rose slightly to 2,500 in the April to June period, from 2,270 in the previous quarter.

Senior Minister of State for Manpower Koh Poh Koon said: "One particular group of job seekers that we are especially concerned about are people who have been retrenched.

"So, part of the way to help them better is to go upstream, to be notified earlier of when they may be at risk of retrenchment, so that we can execute the measures that can help them to look for a new job."

He added that this reduces the burden on employers of tracking the six-month period when they have to notify MOM.

Dr Koh, who was visiting Workforce Singapore's Careers Connect office at Our Tampines Hub, said the latest move was also propelled by industry transformation. This affected workers even before the pandemic hit Singapore.

"We have been seeing disruptive technologies causing quite a bit of technology transformation within different sectors... So, over time, we do see that companies are looking at restructuring their workforce," he said.

"Covid-19 has brought about sharper disruption to certain sectors, and therefore you do see some retrenchment activities happening in the past year."

Maybank Kim Eng senior economist Chua Hak Bin said: "This requirement should better capture the swings in employment and help the Government to decide on any policy responses."

He noted that the tapering of wage subsidies in the third quarter could pressure some firms and increase retrenchments, especially those in the food and beverage, retail and hospitality sectors.

AYP Group managing director Jolin Nguyen said the move might also help to reduce the number of workers who could be faced with prolonged joblessness.

"It will definitely benefit employees working for smaller companies as the Government can step in to provide assistance," she said.

National Trades Union Congress assistant secretary-general Patrick Tay added in a Facebook post: "Even though our economy is recovering, we understand that the recovery trajectory is not broad-based. This latest update will allow us to extend prompt support and assistance to affected workers, no matter the size of the retrenchment.

"We urge companies to save jobs, protect the Singaporean core especially and retrench only as a last resort."

Companies can notify MOM of retrenchments via its website. Penalties of up to $2,000 can be imposed on employers who do not comply with this regulation.

MOM added: "Employers should also ensure that they manage any retrenchment exercises responsibly and fairly."