SINGAPORE - About nine in 10 eligible employees received a payout upon being laid off, based on Ministry of Manpower (MOM) data for the last six months.

This is despite such compensation not being mandated by law.

Manpower Minister Josephine Teo told Parliament on Tuesday (Oct 6) that about 84 per cent of workers in this group were given at least two weeks' salary per year of service.

The figures are based on retrenchment notifications received by her ministry between April and September, she said.

About two in three of the employees who lost their jobs were eligible for retrenchment benefits, she added. Staff who have worked for a company for at least two years are eligible.

Mrs Teo noted that even among employees who were not eligible, almost half received some retrenchment payout.

The prevailing norm is a payout of between two weeks' and one month's salary per year of service, depending on the financial position of the company and industry practices, according to the tripartite advisory on managing excess manpower and responsible retrenchment.

The norm among unionised companies where the quantum of retrenchment benefit is in the collective agreement is one month's salary per year of service.

Mrs Teo said that Parliament has debated in the past the question of whether a baseline retrenchment benefit should be legislated, but the consensus among the Government, unions and employers is that it does not guarantee better outcomes for retrenched employees.

"The legislated baseline would likely become the default. Even when employers can afford to pay more, they would be unlikely to do so.

"On the other hand, setting a high baseline retrenchment benefit would strain the financial health of businesses that are already struggling, and potentially jeopardise their viability and the jobs of the remaining employees," she said, responding to Workers' Party MP Louis Chua (Sengkang GRC).

The minister added that if a retrenchment benefit was legislated, employers would also be less likely to offer long-term or permanent contracts to employees, and resort more to hiring employees on short-term contracts.

"Hence, while recognising the usefulness of retrenchment benefits and encouraging employers to pay according to prevailing norms, we are even more focused on helping retrenched workers return to the workforce," she said, citing the Government's provision of heavy subsidies for skills programmes, as well as training and wage support to employers while new hires undergo conversion programmes.

Mrs Teo also said that about 90 per cent of the workforce is covered by the retrenchment notification requirement, under which employers must notify MOM within five working days of telling staff of their retrenchment, if they have at least 10 employees and lay off at least five of them within any six-month period.

Workers' Party chairman Sylvia Lim (Aljunied GRC) asked how the tripartite advisory on managing excess manpower and responsible retrenchment, and government policies, ensure that Singaporeans are better off compared with permanent residents and non-Singaporeans in terms of job and income security.

In reply, Mrs Teo said that based on her ministry's investigation of retrenchment cases, firms have generally made serious efforts to retain Singaporeans in their workforce.

Where layoffs are unavoidable, Workforce Singapore and the National Trades Union Congress offer job assistance, she added.

"Beyond efforts to help them stay in work... Singaporeans also get extra help, extra support in social policies such as education, training and healthcare. Schemes like Workfare and Silver Support, which help to boost incomes during work and in retirement, apply only to citizens," she said.

She added that the tripartite advisory emphasises layoffs as a last resort, and calls on employers to maintain a strong Singaporean core even as they adjust their headcount.

"Until the economy recovers more fully, we will maintain the stance of heightened vigilance on the job situation," she said.

"Where retrenchment can be avoided through cost-cutting measures, we will keep a lookout for instances where the wage cuts cause excessive hardship to workers... Where retrenchments cannot be avoided, we will watch out for Singaporeans, give full support to employers' efforts to retain them or to help them move into new jobs as quickly as possible."

Mrs Teo noted that in the first half of this year, the incidence of retrenchment among local staff - that is, Singaporeans and permanent residents - was 4.9 per 1,000 employees.

The incidence among those aged 60 and above was generally comparable, at 5.2 per 1,000 local employees.

As for contract workers, Mrs Teo said the number of contracts not renewed in the first half of 2020 has remained stable compared with the second half of 2019. She said her ministry does not have the data broken down by age groups.

Staff on fixed-term contracts make up about 8 per cent of all employees.

Addressing concerns raised by Mr Yip Hon Weng (Yio Chu Kang) about ageism, especially in the current slack job market, Mrs Teo said that Singapore's employment laws protect employees against discriminatory employment practices, including wrongful dismissal on grounds of age.

In January this year, MOM also raised administrative penalties under the Fair Consideration Framework to increase deterrence against all forms of workplace discrimination.

She added that despite the current period of economic uncertainty, the unemployment rate for locals aged 60 and above remains comparable to that of the overall workforce.

The employment rate for Singaporeans and permanent residents aged 60 and above has risen over the past decade to 38.5 per cent last year, up from 27.2 per cent in 2009, she said.

Mrs Teo highlighted measures introduced over the years to boost employment for seniors.

These include the Special Employment Credit - which offsets wages of Singaporeans aged 55 and above - and a new Part-Time Re-employment Grant rolled out this year, which provides up to $125,000 to companies that commit to offering part-time re-employment in company policy.

"Our seniors are important and are valued members of our workforce. We will continue to look out for them and support their employers' efforts to retain them," she said.