Employers must refrain from laying off their workers under the guise of other forms of termination or prepare to face penalties such as the withdrawal of government financial support, said Manpower Minister Josephine Teo.
Mrs Teo told Parliament on Thursday (4 June) that employers have “a clear obligation to pay” retrenched employees the relevant benefit and “cannot sidestep it by calling the retrenchment something else”.
“If a company is found to have disguised their retrenchments, the Ministry of Manpower (MOM) can and will consider withdrawing government support like JSS [Jobs Support Scheme] and suspending their work pass privileges,” she added.
The JSS assists workers by subsidising workers’ salaries
Mrs Teo’s statement was made in response to questions from other Members of Parliament (MPs) regarding fair treatment of workers in cases of retrenchment, termination or salary reduction.
Acknowledging the issue, she said that while “businesses should still give some support to retrenched employees, to the extent that they can afford”, tripartite partners are of the view that employers experiencing “genuine” financial hardship may “renegotiate” retrenchment benefits for their employees.
Such “norms”, said Mrs Teo, “may have to be set aside in these abnormal times”.
She added that employers and employees must improve mutual communication in such cases.
“Quite often, the worker suspects he has not been fairly treated because of poor communication with his employer.
“The cases we reviewed show that in the course of saving the business and preserving jobs, workers and employers need to build trust and maintain open communication,” said Mrs Teo.
West Coast MP Patrick Tay, during the debate on the supplementary Fortitude Budget, revealed some of the “horror stories” certain workers have told him regarding unfair treatment during the COVID-19 pandemic such as the unilateral reduction of salaries and work hours, sudden and inexplicable poor performance ratings despite a consistently good track record, and forced exits from companies.
Mr Tay, who is also the assistant secretary-general of the National Trades Union Congress (NTUC) and a People’s Action Party (PAP) member, said that certain employees have even been reassigned or tasked to do work markedly different from their previous work, excluded from important company meetings and events, and being called back to their workplaces despite being able to work from home during the circuit breaker period.
Such issues mostly take place in “non-unionised companies”, he said, as unionised companies are bound by “a collective agreement as well as a lot of negotiation”.
Responding to Mrs Teo’s statement regarding punishing employers found to engage in such practices, Mr Tay stressed that now is “the best time to build up trust, not just with affected workers”.
“Those who are not affected are actually looking at how their employer treats employees,” he added, reiterating the need to investigate such cases.
Mr Tay said, however, that the companies retrenching their staff “are a small group”.
Surbana Jurong retrenched workers allege being made to choose between termination letter and resignation letter without due notice
Issues highlighted by Mr Tay have not just recently arisen due to the COVID-19 pandemic, as workers who spoke to TOC in 2017 disclosed that they were dismissed by Temasek-owned infrastructure firm Surbana Jurong for “poor performance”.
The employees, who spoke under the condition of anonymity, were made to choose between a termination letter and a resignation letter after meeting their Human Resource department in January that year without being informed what the meeting was going to be about in advance.
In contrast, employers must notify MOM of retrenchments within five working days after they notify the affected employees starting 1 January 2017.
MOM had also made it mandatory for employers with at least 10 employees who have retrenched five or more employees within any six-month period to inform MOM of the retrenchment exercise.
For those who have served five years or more, MOM stipulated that the staff be given a notice period of 4 weeks or more.
A staff member who was retrenched by Surbana Jurong told The Business Times in 2017 that the company made the mistake of failing to negotiate with affected workers before terminating them.
“At least hear them out and offer them alternative employment in other subsidiaries or overseas companies. Discuss with them if they are agreeable to a salary cut or removal of their variable bonus,” said the employee.
“If these fall through, then ask if they would consider a mutually agreeable exit package. These are the things that I feel the company could have handled better, but didn’t,” the employee added.
18 out of the 54 employees terminated by Surbana Jurong were union members.
Building Construction and Timber Industries Employees’ Union (Batu) president Nasordin Mohd Hashim said that Surbana Jurong did not observe due process before terminating them, and noted that “before a union member is terminated, the details of the case would be officially given to the union to ensure our members will be given fair treatment and that due process is followed”.
Surbana Jurong’s management was undergoing discussions with Mr Nasordin and Singapore Industrial and Services Employees’ Union general secretary Philip Lee to seek reasonable ex-gratia payments for those who were let go, BT reported.
The Employment Act does not dictate the nature or amount of such benefits and leaves it to the mutual agreement between the employee and the employer.
However, the common practice in Singapore is to pay between two weeks’ to one month’s salary per year of service. This would mean a sizeable amount of retrenchment benefits that the company would have to pay out to affected staff if it had labelled its dismissals as a retrenchment exercise.