Retrenchment Numbers and Trends

6 Mr Seah Kian Peng asked the Minister for Manpower what are the projected retrenchment numbers for this year and how does this compare with that of 2015.

7 Dr Tan Wu Meng asked the Minister for Manpower (a) how does the Ministry address occurrences of "disguised retrenchments" by employers to avoid paying retrenchment benefits; (b) what measures will the Ministry put in place to monitor and deter such practices; and (c) how will the Government continue to ensure that public sector agencies abide by human resource best practices and do not engage in "disguised retrenchments".

The Minister for Manpower (Mr Lim Swee Say): Mdm Speaker, may I have your permission to take Question Nos 6 and 7 together, please?

Mdm Speaker: Yes, please.

Mr Lim Swee Say: Mdm Speaker, for the first three quarters of this year, 11,890 workers were retrenched, compared to 8,590 in the same period last year. In total, 13,440 workers were retrenched last year. We expect the number this year to be higher due to ongoing business restructuring and slowing economic growth. There is no clear evidence that irresponsible retrenchment is on the rise.

Under the Employment Act, an employee who has served less than two years is not entitled to retrenchment benefits. For those who have served more than two years, payment of retrenchment benefits is mandatory if it is specified in their individual employment contracts or in the collective agreements negotiated by their unions.

Even so, based on the last survey conducted in 2013, nine out of 10 companies with at least 25 employees did pay retrenchment benefits. The prevailing norm at that time was two weeks to one month of salary for each year of service. We are now conducting another survey and the findings will be ready by end of the year. Workers who feel that they have been treated unfairly during any retrenchment exercise can report to the Ministry of Manpower (MOM) for investigation.

In 2015, MOM received 94 cases from employees with retrenchment-related issues, out of which 15 appeals were from employees who were dismissed but felt they were retrenched and thereby deprived of retrenchment benefits. In the first three quarters of this year, out of 63 retrenchment-related cases, the number of appeals is 14. So, on the whole, these cases account for a small proportion of the total number of local employees retrenched in 2015 and 2016 so far.

In 28 out of these 29 appeals – 15 in 2015 and 14 in 2016 so far – the workers were either not entitled to retrenchment benefits as they have less than two years of service or there were no retrenchment benefits specified in their contracts or collective agreements. For the one remaining appeal, MOM is helping the workers to resolve the issues.

The public sector is committed to progressive human resource practices. Public sector agencies have signed the Employers' Pledge of Fair Employment Practices since 2007. They will continue to abide by tripartite guidelines to carry out restructuring responsibly and in consultation with public sector unions.

Madam, under the Adapt and Grow initiative, MOM and its tripartite partners have stepped up our support for retrenched workers through job matching and career services. To enable us to reach more retrenched workers and offer more timely assistance to them, MOM is now in consultation with unions and employers to strengthen our framework for retrenchment reporting. We are aware of the different positions of the unions and employers on this, but MOM believes that we can find a way forward for the interests of the retrenched workers.

Mdm Speaker: Mr Seah Kian Peng.

Mr Seah Kian Peng (Marine Parade): I thank the Minister for the answer. I would just like to seek a few clarifications. First, based on the first three quarters, we already see an almost 33% increase in retrenchment numbers. Based on this rate, I think we can expect for the last quarter, probably over 2,000 more retrenchments. So, my first supplementary question is: is the rate of retrenchment on the increase? And are we concerned about these numbers? What steps should we take going forward and, in anticipation of the worsening economic climate, what steps can we take to preserve more jobs for Singaporeans?

Mr Lim Swee Say: Mdm Speaker, the Member asked whether the rate of retrenchment is on the increase. For the first three quarters of this year, compared to the same period last year, certainly the number is higher and will be higher for the whole of this year. MOM does not make any attempt to forecast. There is no formula for forecasting retrenchments. But what we do is to track the number. As the Member mentioned, based on the first three quarters of this year, it is higher than last year. For the whole of this year, we believe it will be higher than the whole of last year.

What can we do? At the last Sitting, the Minister for Trade and Industry had already stated his position that, if need be, when the time comes, we will provide support assistance either at the sectoral level or broad-based level. But we are monitoring the situation.

For MOM and its tripartite partners, we accept that retrenchment will continue to happen because in Singapore, we have always believed in continuous restructuring. In good times or in bad, retrenchment has always been there. Therefore, ongoing restructuring is not necessarily bad. In fact, it is good for our economy and good for the workers as well, so that they can continue to, hopefully, take on better jobs.

Having said so, we recognise that retrenchment will be a very difficult experience for our retrenched workers. This is the reason why the tripartite partners have put in place a special task force since early this year. As and when there is a retrenchment exercise, our task force will engage the employer, engage the workers and, together with the union, we will ensure that the retrenchment is carried out in a fair manner. For example, if it is a unionised company, we will ensure that the union will negotiate for the retrenchment benefits. For companies that are not unionised, we will try to do mediation as well.

But more importantly is that having gone through the retrenchment exercise, we will collate information on the profile of the workers affected by retrenchment, in terms of their skills and education profile as well as their job preference. In some cases, with the support of the employers and the union, we are even able to conduct career fairs onsite with the company for the retrenched workers. In cases where they do not have a critical mass, we organise off-site job fairs for them.

In the first nine months of this year, we have assisted more than 3,000 retrenched workers under this special arrangement. So, the moment they are retrenched, we move in, work with the companies to help the workers. We assisted about 3,300 of them. Of the 3,300, we were able to help close to 2,000 secure new jobs and new employment. So, I would say that, on the whole, let us support the retrenched workers the best that we can.

Our main objective is to ensure that the retrenched workers will be able to go back to work as quickly as possible. Because the longer they stay out of a job, the harder it would be for them to come back to work. And that is the reason why MOM is now exploring with the unions and the employers to strengthen the retrenchment reporting framework. Because we believe that with more timely reporting, we will be able to reach out to these retrenched workers earlier so that we can help them even more.

Mdm Speaker: Dr Tan Wu Meng.

Dr Tan Wu Meng (Jurong): I thank the Minister for his answer and I was wondering if the Minister could reassure us that as part of the ongoing labour market study, whether MOM will continue looking at changing employment norms, especially with new trends, such as the "gig economy"?

Mr Lim Swee Say: Mdm Speaker, yes. We are now doing a survey on the changes in the employment landscape. We are going to gather more employment information regarding workers – either self-employed or as part of the gig economy – because we believe that there will be implications for the workers. Within the gig economy, the relationship between employer and employee has changed. And what we are concerned about would be, if we see more workers becoming portfolio workers without the employer-employee relationship, then how would their welfare, their well-being, be taken care of, including skills upgrading, employability, retirement planning and so on? MOM is conducting a survey now. Based on the survey findings, we will then decide on the next step.