Fair Process for Termination Due to Poor Performance and Recourse for Employees

1 Dr Tan Wu Meng asked the Minister for Manpower whether the Ministry can provide an update on investigations into the recent termination of multiple employees of Surbana Jurong.

2 Assoc Prof Daniel Goh Pei Siong asked the Minister for Manpower (a) what constitutes due and fair process in terminating employees due to poor performance; (b) what recourse do employees have to access crucial evidence on performance held by employers to prove unfair dismissal; and (c) what are the penalties for employers who disguise retrenchment as termination due to poor performance.

The Minister for Manpower (Mr Lim Swee Say): Mdm Speaker, may I have your permission to take Question Nos 1 and 2 together, please.

Mdm Speaker: Yes, please.

Mr Lim Swee Say: Mdm Speaker, employers who terminate employment contracts on the ground of poor performance have to be able to substantiate their claim of poor performance. The Tripartite Guidelines on Fair Employment Practices make it clear that employers who wish to terminate the services of employees on the ground of poor performance are to apply relevant and objective performance criteria. The criteria should be made known to all employees. Employers should also keep records of their employees' performance and a decision to terminate the service of an employee should be based on documented poor performance. The key word is "documented". Where it involves a unionised employee, the union should also be consulted.

If the employee files an appeal of unfair dismissal to MOM, we will first mediate. Should mediation fail, we will conduct an inquiry and require the employer to show cause and produce evidence to justify the termination. This remedy is provided under the Employment Act, as well as the Industrial Relations Act for union members.

If an employer is unable to substantiate his claim that the employee's performance is poor, the employer may be ordered to reinstate the employee or to provide compensation. If the employer does not comply with the order, he can be prosecuted.

In the case of Surbana Jurong's recent exercise to terminate the services of 54 employees, the company has acknowledged that the process could have been better managed. The management and unions have since reached an agreement on an ex-gratia payment which, in our view, is a fair outcome for the affected employees.

This episode serves as a good reminder to employers that termination exercises should be conducted in a responsible and sensitive manner.

Dr Tan Wu Meng (Jurong): I thank the Minister for Manpower for his comprehensive answer. Big companies have a certain footprint, especially those which are linked to the Government or doing significant business with the public sector. How can we strengthen human resource best practices in such companies and are there lessons which can be applied more broadly from what happened in Surbana?

Mr Lim Swee Say: Mdm Speaker, I agree fully with the Member. As far as MOM is concerned, we expect all companies to behave in a responsible manner, especially the major employers, whether it is a GLC, MNC, large local enterprise or, for that matter, public services. MOM does expect all companies, but especially major employers, to conduct their HR practices in a responsible and progressive manner.

In this particular case, we are certainly concerned that a major employer could commit such an HR practice lapse. Looking forward, TAFEP is stepping up efforts to engage the employers out there, including the major ones. Members may be pleased to know that, last year, I talked about our plan to set up a programme known as the "Human Capital Partnership Programme", which is to reach out to employers, especially the major ones, to work together to value our precious human resources in a more responsive, sensitive, constructive manner. That programme will be launched quite soon, within the next few weeks.

I would hope that, in time to come, we can continue to reach out to more employers, especially the larger employers, so that mistakes such as this need not happen again in the future.

Assoc Prof Daniel Goh Pei Siong (Non-Constituency Member): Mdm Speaker, I thank the Minister. In the case of Surbana, was documented evidence given to the employees of their poor performance? And do the employees have recourse to ask the employers for evidence, if they are not given the evidence? Are the employers obliged to give the evidence? Thirdly, does MOM step in when it comes to this kind of mass terminations where you have large numbers of people being laid off due to poor performance? Do they come in to investigate even if there are no reports of unfair dismissal by the employees?

Mr Lim Swee Say: Mdm Speaker, firstly, there is no need for the employees to have access to the documented proof. As long as an employee feels that he has been dismissed unfairly, he can just come to MOM. In other words, he does not need the cooperation of the employer. Just come to MOM and we will require the employer to produce the documented proof, failing which we will rule it as an unfair dismissal.

Secondly, termination exercises happen within the purview of the companies. MOM will come in only when either the union brings it to our attention or the affected employees come to MOM. This has been the approach because it is not possible for MOM to investigate whenever there is a termination exercise, big or small.

Mr Zainal Sapari (Pasir Ris-Punggol): A question for the Minister: would MOM consider having tripartite guidelines for mass terminations, similar to those that we have for mass retrenchments?

Mr Lim Swee Say: Mdm Speaker, certainly. The tripartite partners have been and will continue to issue various HR guidelines for progressive HR practices. We will continue to widen the scope. The tripartite partners are also in the process right now of formulating something beyond guidelines. Hopefully, come the time for the Committee of Supply (COS) debate, I will be able to share with this House on how we can strengthen progressive HR practices in our HR community.

Er Dr Lee Bee Wah (Nee Soon): Mdm Speaker, I would like to ask the Minister: for this case involving Surbana Jurong terminating the 54 workers, they were labelled poor performers. With this label, it is very difficult for them or it would be an additional challenge for them to find the next job. I would like to ask MOM: if they need help, is MOM going to help them to find their next job?

Mr Lim Swee Say: Mdm Speaker, I share the concern of the Member. I spent many years with the Labour Movement and now with MOM. To the best of my recollection, this is the first time that an employer has conducted such a major termination exercise and to declare publicly and to label the workers as poor performers. This is something that, as the Manpower Minister, I do not find acceptable. If the performance of the employees is not up to the mark, there could be contributing factors on the part of the employers as well. In other words, performance management should be a joint responsibility of employees and employers.

In most organisations, if it reaches such a stage whereby the employees and employers can no longer continue the working relationship, they will find a way to go separate ways, but you do not label the person publicly. The management realises this as well and that is why they publicly acknowledged that the way they conducted the exercise could have been much better managed.

I hope to make clear to all employers out there that when it comes to performance management, do it responsibly and, at the same time, do it sensitively. I hope that we will not come across another case where a company does a major termination and labels the employees as poor performers publicly. At the end of the day, yes, it may be poor performance in one organisation, but it does not mean a person cannot do well in other places. As I had mentioned, the work environment, HR practices and so on are also contributing factors.