Sunday, 27 November 2016

Employers must report retrenchments to Manpower Ministry from January 2017

Retrenched workers to get faster help with new MOM rule
By Joanna Seow, The Straits Times, 26 Nov 2016

Help for retrenched workers will come sooner under a new rule that takes effect on 1 Jan 2017.

They will get guidance earlier on jobs that could suit them and be asked to attend workshops on handling interviews, among other things.

The quicker help follows the new rule which requires employers to inform the Ministry of Manpower (MOM) within five days of laying off workers and give details of the employees told to go.

It applies to all companies with at least 10 workers, and which are retrenching five or more employees in any six-month period.

They must report the move once the fifth worker is notified, and must report every subsequent retrenchment as well.

Currently, companies with at least 25 employees report only the number retrenched in the MOM's mandatory quarterly surveys.

Employers who flout the new rule will get warnings and, on conviction, could face penalties, including a fine of up to $5,000.

With the long-term unemployment rate creeping up and the rate of re-entry into employment slowing, helping people get back to work is a top concern, Manpower Minister Lim Swee Say said yesterday when announcing the rule.

"The sooner employers report to us, the sooner we can reach out to retrenched workers, and the sooner we can put them under employment support," he said when visiting the Lifelong Learning Institute in Paya Lebar.

He foresees professionals, managers, executives and technicians (PMETs) being in the majority of those laid off amid the global economic slowdown and economic restructuring in Singapore.

MOM's estimates show that 11,890 people were retrenched in the first nine months of this year, up from 8,590 in the same period last year.

When the new rule takes effect, his ministry can enforce it by verifying the reported numbers with its quarterly surveys, Mr Lim said.

He also said companies need to provide just four personal details on each worker: The NRIC, residential status, job title and retrenchment date. The process is not too onerous for small businesses without big human resource departments, he added.

MOM will give the data to a taskforce set up in March this year to help Singaporeans get back to work. The Taskforce for Responsible Retrenchment and Employment Facilitation is led by statutory board Workforce Singapore (WSG) and comprises officers from MOM, the National Trades Union Congress and Employment and Employability Institute (e2i).

In the first nine months of this year, a total of 200 companies have reported retrenchments to MOM, and the taskforce has offered help to 3,000 people, said its chairman and WSG chief executive Tan Choon Shian.

Of these, about 2,000 asked for career support and about 60 per cent of them were placed in jobs.

Mr Tan also said 18,300 job seekers sought help from the five career centres run by WSG and e2i in the same period.

Singapore Human Resources Institute president Erman Tan said the rule will also encourage companies to be prudent and look for alternatives to job cuts as they are accountable to MOM.

Former senior R&D supervisor Victor Pang, who was laid off in January from the offshore and marine industry, spent several months looking unsuccessfully for job .

The 52-year-old landed a job last month as a project manager in the water industry through the Career Support Programme, which helps jobless PMETs.

"Seeing what is available at the start of their job search will help retrenched workers know they are not in it alone," he said.

Faster help for laid-off workers
By Joanna Seow, The Straits Times, 30 Nov 2016

A new rule that requires employers to notify the Manpower Ministry of retrenchments within five working days is a timely move.

The importance of helping laid-off workers is becoming more urgent as the gloomy world economy and Singapore's economic restructuring drive up retrenchments.

The rule, which takes effect on Jan 1, will ensure that help reaches the workers sooner rather than later, because companies will have to give the ministry details of those retrenched within five working days of the fifth person being told to go, or risk penalties.

Such workers' personal particulars will be given to a multi-agency task force that will direct them to where they can get help quickly to land a job swiftly.

For instance, they may be asked to go for workshops on networking and communication skills, and offered career guidance from coaches at statutory board Workforce Singapore or the National Trades Union Congress' Employment and Employability Institute.

Currently, firms have to inform the ministry of the number retrenched only during its quarterly surveys, and need not give details of those laid off.

Unionised firms, however, would inform the unions before any retrenchment exercise so unions can negotiate terms and help workers look for jobs.

The new rule will affect most firms, as it applies to those with at least 10 workers and whenever five or more people are retrenched in a six-month period.

Although it does not deal with disguised retrenchment, such as outplacement, Manpower Minister Lim Swee Say has said workers can seek help from his ministry if they feel they have been treated unfairly.

The latest move is a boon as well to firms hungry for workers, because they can be matched faster with suitable job seekers. But the bigger boost is for the retrenched worker, facing the stress of losing a job, financial difficulties, and finding work.

The struggle is especially acute for older workers who often say they are turned away when companies find out their age. In these painful times, the sooner a person returns to work, the better.

Retrenchment Benefits Survey 2015: Most bosses give retrenched workers payout
But more employers choosing lump sum rather than amount based on length of service as economy slows
By Joanna Seow, The Straits Times, 30 Dec 2016

Nine out of 10 companies that retrenched workers last year gave retrenchment benefits to eligible local employees.

Still, the 91 per cent that did so represented a dip from the 94 per cent in 2012.

Also, the latest official figures show a bigger proportion of these companies gave a lump-sum payment, which is typically one to two months of a worker's wages, instead of an amount based on the number of years the person has worked in the company.

The comparative figures are 17 per cent in 2015 and 7 per cent in 2012, according to Manpower Ministry figures released yesterday.

The survey on retrenchment benefits is done every four years and the next was due in the new year. But it was brought forward to see how badly the labour market has been hit by the slowing economy.

Human resource experts believe the rise in lump-sum payments was probably due to employers reining in their expenses as the economy wobbled. "One to two months' salary is hardly sufficient to tide most job seekers over till they get another job," said NeXT Career Consulting Group managing director Paul Heng. "Still, some help is better than no help."

Retrenchment benefits are not compulsory, though companies tend to give the payout to workers with at least two years of service.

But last year, two out of three companies gave them to staff with less than two years of service, the survey found.

More workers, however, are likely to face uncertainty as they change jobs more often, said an assistant secretary-general of the National Trades Union Congress (NTUC), Mr Patrick Tay.

Most collective agreements unions sign with companies include retrenchment benefits and all these businesses gave them last year. But only 89 per cent of non-unionised companies did so, said the ministry.

Bigger companies tend to give the payout: 98 per cent of businesses with at least 200 workers did so against 88 per cent of smaller firms.

A total of 12,010 workers were retrenched from January to September this year.

The NTUC's Mr Tay said the retrenchment numbers are not likely to go down next year. The pain, however, will be felt most severely in such sectors as retail and foreign financial institutions and more small and medium-sized enterprises.

From Jan 1, employers have to notify the ministry of retrenchments within five working days, so that help from agencies can reach the workers faster.

Singapore Human Resources Institute president Erman Tan urged workers to learn new skills."If you are retrenched, be courageous and take it as a good starting point for a new career."

A senior executive, laid off earlier this year when her real estate firm closed its Singapore office, said the staff were not given retrenchment benefits. But the employees asked for help, said the 40-year-old job seeker.

"The firm gave us two months' salary, a thank-you lunch and offered to write reference letters for us, so it ended well," she said.

Why can't retrenchment benefits be mandatory?
Flexibility to negotiate such payments better than a rigid law as firms' situations will vary
By Toh Yong Chuan, Manpower Correspondent, The Straits Times, 10 Dec 2016

Reader Gabriel Tham wrote in to askST: "Why does Singapore not have a mandatory retrenchment benefits scheme?

"First, it will make employers weigh the cost of retrenchment in the short term.

"Second, it will make employers think twice about over-hiring and then abusing the system."

Manpower correspondent Toh Yong Chuan answers.

This issue crops up from time to time, especially during economic slowdowns when retrenchments rise. The Government has always rejected suggestions to make it mandatory for companies to pay retrenchment benefits to workers who are laid off.

It has always maintained that it is not necessary for such payments to be made mandatory because the practice is already widespread. According to its own surveys, as many as nine in 10 companies which retrenched workers paid such benefits. It would rather give companies and unions the flexibility to negotiate such payments, rather than prescribing them under the law, because the circumstances of companies that retrenched workers are different and there cannot be a one-size-fits-all approach.

This approach is consistent with the longstanding view of the Government that if labour laws are rigid, such as making retrenchment payments compulsory, firms will be deterred from hiring workers from the onset and workers will be hurt.

The furthest that the Government will go, for now, is to make it compulsory for firms to report to the Ministry of Manpower within five working days of laying off workers. The new rule, which kicks in from Jan 1, will make sure that retrenched workers get timely help, the Government said when it announced the new rule last month.

The pressure on the Government to make retrenchment payments compulsory will continue to increase. As workers become more educated, they will want to see their rights protected. The Government will have to balance the desire for more protection by workers against the flexibility that it gives companies in hiring and firing.

Mandatory retrenchment notifications from 1 January 2017
Mandatory Retrenchment Notifications
Retrenchment Benefits Survey 2015

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