NTUC's fair retrenchment framework principles not new, but useful reminder for firms: Experts

The National Trades Union Congress urged companies to observe fair and responsible practices when laying off employees.
The National Trades Union Congress urged companies to observe fair and responsible practices when laying off employees.PHOTO: KELVIN CHNG

SINGAPORE - The principles in the labour movement's proposed fair retrenchment framework are not new but they will help guide firms when layoffs become inevitable, observers said.

The National Trades Union Congress (NTUC) urged companies on Friday (July 24) to observe fair and responsible practices when laying off employees, emphasising the importance of preserving a Singaporean core in the workforce.

Ms Low Peck Kem, president of the Singapore Human Resources Institute, outlined key reasons for bosses to treat workers fairly, including the impact on employees who were spared the chop.

"When they see that their colleagues have been fairly retrenched, and... retrenchment is indeed the last resort, they will be thankful and work doubly hard to cover for a leaner team," she noted.

"Similarly, if the retrenchment is poorly managed, morale and engagement of remaining staff will be low as they can anticipate how badly they will also be treated if they were eventually retrenched."

Association of Small and Medium Enterprises president Kurt Wee noted that NTUC's proposed guidelines are not new and cover practices that companies try to observe as much as possible.

He added that small and medium-sized enterprises (SMEs) are generally aware of the importance of retaining their workforce: "Many SME employers are not (likely to) 'hire and fire', and normally treat their employees like an extension of their own family unit."

But companies are worried about the outlook in the coming months, especially with the last Jobs Support Scheme payout coming in October. They fear there may not be sufficient support to help the business community sustain livelihoods, he added.

Mr Wee expects the situation will be "much worse" in the third and fourth quarters as most firms can now tap assistance schemes as a buffer and are trying their best to minimise costs.

Trade and Industry Minister Chan Chun Sing said in a Facebook post on Friday that while government measures have helped support businesses and stave off retrenchment, some firms in harder hit sectors will have to let some workers go in order to remain viable.

Mr Chan urged firms to approach government economic agencies or the SME Centres for assistance if they are unsure of the support that is still available.

 
 
 

He added that if layoffs are unavoidable, employers must offer reasonable retrenchment packages and ensure that the process is done in an empathetic manner.

"It is not sufficient to protect the livelihoods of our workers. We must also protect their sense of dignity and pride to allow them to transition into the next phase of their careers smoothly," Mr Chan said.

The Singapore National Employers Federation said in a statement: "With the challenging economic environment and as businesses transform, it may be difficult to preserve jobs and alternatives should be sought, such as redeploying workers or to support affected workers to regain employment through training, job matching and other assistance."

The federation will help employers to tap various schemes so they can manage costs and transform to emerge stronger from the crisis, it added.