More than nine in 10 companies paid retrenchment benefits in 2015: MOM survey

People cross a street at Robinson Road in the Central Business District of Singapore.
People cross a street at Robinson Road in the Central Business District of Singapore. PHOTO: ST FILE

SINGAPORE - The proportion of establishments paying retrenchment benefits was 90.6 per cent in 2015, although it had fallen slightly from past years, a report by the Ministry of Manpower (MOM) revealed on Thursday (Dec 29).

The findings were part of the ministry's Retrenchment Benefits Survey done every four years, which also showed that the 2015 rate was the lowest since 2004, when the retrenchment benefits payment rate was 95.7 per cent.

The report also said that unionised establishments and large establishments with at least 200 employees were more likely to pay retrenchment benefits.

In 2015, while all unionised establishments continued to pay retrenchment benefits, the proportion of non-unionised establishments paying retrenchment benefits was 89.3 per cent, down from 93.9 per cent in 2004.

In April 2015, the eligibility service period for retrenchment benefits was shortened from three years to two years, but it is not clear whether this was a factor in the drop in the proportion of establishments paying the benefits.

Some 83 per cent of establishments paid retrenchment benefits based on the number of years of service. However, the proportion paying benefits in a lump sum - typically one to two months' salary - increased from 7 per cent in 2012 to 17 per cent in 2015.

Some 15,580 workers were retrenched in 2015, up from 12,930 in 2014.

From Jan 1 next year, employers will have to notify MOM of retrenchment exercises within five working days after informing their employees. The ministry said this will help agencies assist retrenched locals in finding alternative employment and training.