25 February 2016
‘More protection for retrenched PMEs needed’ as further layoffs anticipated
NEO CHAI CHIN

SINGAPORE — The recent weaker economic figures and sombre market outlook could result in more professionals, managers and executives (PMEs) being laid off, and National Trades Union Congress (NTUC) assistant secretary-general Patrick Tay wants better protection and benefits for such employees who are retrenched.

The amount paid to retrenched PMEs “has not been addressed in a widespread manner” by the tripartite partners, said Mr Tay yesterday in a post on the labour movement’s blog.

He questioned if there should be express provisions for the quantum of retrenchment or severance in individual employment contracts or union/management collective agreements, on top of existing guidelines on good industrial relations practice.

The appropriate period of notice to give employees to be retrenched was also raised. This is a “particularly sticky area as in most retrenchment exercises, workers are not informed by employers till the final hour for fear of sabotage or theft of confidential data, which employees have access to”, said Mr Tay, who is also Member of Parliament for West Coast Group Representation Constituency.

Layoffs this year and in the next few years are likely to affect more PMEs, given the spike in the number of PMEs in the workforce, he said. There are about 738,200 resident PMEs in Singapore, about 100,000 more than in 2014. The companies likely to be affected by a weaker market also have a higher concentration of PMEs, he said.

Employers reacted cautiously to Mr Tay’s suggestions, with Association of Small and Medium Enterprises president Kurt Wee noting that businesses are already bearing the brunt of an economic slowdown and entering into a consolidation phase.

“The more important question is about business sustainability, and how to safekeep jobs and how to avoid … structural unemployment,” he said. Discussion on this issue is welcome, but business costs must be watched “with great sensitivity” during this period of time, said Mr Wee, who felt the issues raised by Mr Tay could be addressed in 18 to 24 months’ time, or when the economy is poised for recovery.

“If it’s got to do with better communication during retrenchment, planning ahead to give employees more advance notice and all that, we support that. But if it’s a measure that’s likely to load more cost on businesses, we have to look at it and see what it really means,” he said, adding that some employers do give “soft notice” to employees to provide more time for them to look for other jobs.

Singapore National Employers Federation executive director Koh Juan Kiat said it is always a last resort when a company has to restructure, sell off its business or shut down. It is difficult to predict and prescribe in such scenarios the quantum of retrenchments that can be paid by the company, he said.

“If you look at countries that provide for retrenchment benefits by law or agreements, the quantum can run from a few days to a few weeks of pay per year of service, with caps on quantums and years of service, and different eligibility criteria,” said Mr Koh. The quantum should be reasonable — taking into account the circumstances of the company — and tide the employee over a certain period of job-seeking and unemployment, he said.

Vice-president of the Singapore Retailers Association R Dhinakaran noted that contractual obligations should be met; in the absence of such a commitment in the employment contract, it may not be fair to “push too hard” if a company is already in a very bad state. But employers should try to give as much notice as possible; they should be honest with their employees, help them to reskill and refer them to new jobs, said Mr Dhinakaran, who is managing director of the Jay Gee Melwani Group.

PMEs can now be collectively represented by all unions, and NTUC’s Mr Tay said joining a union could shield them partially from unpredictable eventualities. NTUC has successfully helped PME members to pursue retrenchment payouts via the Ministry of Manpower and the Industrial Arbitration Court, he added.