A SURPRISE move on Oct 1 by consumer electronics giant Dyson to retrench staff has put the topic of layoffs in the spotlight again.
A union the Singapore-headquartered company signed a collective agreement with expressed its disappointment at being given only one day’s notice of the exercise. The United Workers of Electronics and Electrical Industries noted that this leaves insufficient time for meaningful discussion between the parties involved.
Dyson is among several well-known companies that have laid off staff in Singapore recently. Logistics start-up Ninja Van, e-commerce retailer Shein, fintech firm MoneyHero and electronics maker Epson have also cut their workforce earlier this year. Samsung Electronics is also set to lay off workers globally, including in Singapore, according to reports on Wednesday (Oct 2).
The Straits Times looks at the rights retrenched workers have in Singapore.
Q: Was I retrenched or terminated?
A: The Employment Act defines retrenchment as “dismissal on the ground of redundancy or by reason of any re-organisation of the employer’s profession, business, trade or work”.
This means that an employer can be said to have retrenched workers only under certain conditions, such as if the company is restructuring or the jobs are no longer there after the business has dwindled, and not any instance in which a contract of service is terminated.
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An employee is presumed to have been retrenched if the employer is unable to show plans to hire a replacement, even if the employer attempts to sidestep the obligation to pay retrenchment benefits by calling the retrenchment something else.
Q: Is there a minimum notice period?
A: The Employment Act stipulates minimum notice periods that employers are required to give when ceasing employment of their workers.
The notice periods range from one day for those who have served less than 26 weeks to four weeks for those who have worked with the employer for five or more years.
However, an employer can pay the retrenched worker a quantum, such as an amount equivalent to the worker’s pay for the notice period, in lieu of the notice.
Q: Are workers entitled to retrenchment payouts?
A: Only workers who have worked for the employer for two years or more, and have these payouts stipulated in either a union’s collective agreement with the company or the workers’ individual contracts, are entitled to these payouts.
Those who have worked for the employer for less than two years are not entitled to payouts, but companies may choose to make a goodwill payment.
Retrenched workers who are pregnant are also entitled to maternity benefits if they have worked for the employer for at least three months and were certified by a doctor to be pregnant before their job was cut.
A tripartite advisory on how companies should manage excess manpower and carry out retrenchments responsibly states that the prevailing norm is for employers to pay a retrenchment benefit amounting to between two weeks’ and a month’s salary for each year of service.
This advisory, however, has no force of law, according to an employment lawyer whom ST spoke to recently.
Instead, it is more common for an employer to specify retrenchment benefits in an internal policy, as opposed to an employment contract, which would generally not grant employees any rights or entitlements to retrenchment benefits.
Q: Who does a company need to inform ahead of a retrenchment?
A: It is mandatory for Singapore-registered employers with at least 10 employees to notify the Ministry of Manpower (MOM) within five working days of affected employees being told.
Those failing to do so may be issued administrative penalties of up to S$2,000 each time this requirement is breached.
The advisory issued by the three-way partnership between the MOM, National Trades Union Congress and Singapore National Employers Federation also calls for unionised companies to notify the relevant unions early.
The advisory also says that the norm for this early notification is a month before affected employees are told.
A union that has been accorded recognition by an employer has the legal right to collectively bargain for the employer’s workers, under the law.
(This article is updated from a Jan 9, 2024 report.) THE STRAITS TIMES
