Singapore's updated advisory on retrenchment: A new checklist for employers, how to retrench sensitively, and more

The Ministry of Manpower (MOM), National Trades Union Congress (NTUC), and the Singapore National Employers Federation (SNEF) have jointly updated the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment (Advisory), this time to emphasise the "key desired outcomes" in any retrenchment exercise if it cannot be avoided.

Sharing the updates in a LinkedIn post, NTUC Assistant Secretary-General Patrick Tay said in particular, the updated Advisory emphasises the need to maintain a Singaporean core and to carry out the retrenchment in a "responsible and sensitive manner", including the provision of necessary support to affected employees.

Key changes to note in the updated Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment

The key changes made to the Advisory focus on two key areas - maintaining a Singaporean core, and conducting retrenchments responsibly, sensitively and providing support, as detailed below.

Maintaining a strong Singaporean core

The tripartite partners have incorporated the key principles of NTUC’s Fair Retrenchment Framework (FRF) in updating the Advisory, in particular the need to maintain a strong Singaporean core.

In the FRF, in the event retrenchments are inevitable, NTUC calls on companies to implement fair selection criteria to ensure that the Singaporean Core is safeguarded with Singaporeans keeping their jobs in terms of job protection and redeployment, while due considerations are given to foreign workers.

Thus, the Advisory continues to call for the use of objective criteria in the selection of employees to be retrenched.

In addition, it reminds employers to take a long-term view of their manpower needs, including maintaining a strong Singaporean core even as they retrench.

Conducting retrenchments responsibly, sensitively and providing support

Apart from the above, the updated Advisory also provides clarity on how employees are notified of their retrenchment, and the type of support they receive thereafter.

Responsible employers are to consider the following good practices, the Advisory notes:

• Providing a longer notice period beyond contractual or statutory requirements where possible, so employees can be mentally prepared earlier;
• Preparing managers for notifying employees of retrenchment in a sensitive manner, such as notifying in person unless impractical to do so;
• Having HR personnel and union representatives onsite to address queries from retrenched employees, and maintaining an open communication channel with affected employees;
• Giving affected employees the time and space to adjust to the news, before requesting them to vacate their workplaces; and
• Being sensitive to emotional needs of affected employees, including offering counselling support.

To help retrenched local employees maintain or build up relevant skills, employers should also consider providing training assistance to them post-retrenchment. Employers that had carried out retrenchment but subsequently experienced a pick-up in business activities should also make a deliberate effort to strengthen their local workforce by hiring locals when they are able to do so.

In addition to the above, a new Responsible Retrenchment Practices checklist (found in Annex B) has also been added to the Advisory as a quick guide to help employers manage retrenchments responsibly. This includes the following points for employers to refer to:

1. Does the business situation warrant a retrenchment?
2. Did the company tap on government support, put in effort to reskill and deploy employees where possible, before embarking on a retrenchment exercise?
3. Did the company implement other alternatives before embarking on a retrenchment exercise? Examples include, but are not limited to: flexible work schedule, shorter work-week, no-pay leave.
4. Did the company use objective criteria to identify employees to be retrenched and that the criteria used do not discriminate against any employee on the basis of age, race, gender, religion, marital status and family responsibility, or disability?
5. Did the company ensure that the proportion of local employees is not lower, after retrenchment?
6. If company is unionised, were the selection criteria and retrenchment benefit discussed and agreed to with the union?
7. Did the company communicate its business situation and retrenchment plans clearly and in a sensitive manner with compassion to employees?
8. Did the company adhere to the notice period for retrenchment in accordance with the employment contract, collective agreement, or the Employment Act?
9. Did the company provide retrenchment benefit in accordance with the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment?
10. Did the company put in place measures to support the affected employees to move on to new jobs, e.g. engaging WSG or e2i for employment facilitation?

Photo / Screenshot of infographic shared on ASG Patrick Tay's LinkedIn page