Summary of MOM retrenchment's advisories

6/10/2020, By Gabrielle Loh

There has been a lot of retrenchment-focused news recently, so we decided to put together some advisories that our Ministry of Manpower has announced for your easy reference.

In view of the high retrenchment figures this year, the Singapore Government has issued penalties for companies who disguise their retrenchments to avoid paying retrenchment benefits.   

In March 2020, a tripartite advisory on managing excess manpower and responsible retrenchment was released that stipulated specific responsible retrenchment practices for all Singapore employers. They have taken into consideration the financial position of employers as the C19 pandemic has caused many companies to suffer substantial financial losses.  

If your company is thinking of reducing your headcount, the Ministry of Manpower has advised the following: 

  1. Employers should tap onto the Jobs Support scheme to offset wage costs for local workers. 
  2. Retrenchment as a last resort – other cost-cutting measures such as part-time work, flexible work schedule, pay cuts, voluntary leave, no-pay leave, or temporary layoffs should be considered first.  
  3. If retrenchment is inevitable, employers should provide retrenchment benefits according to their financial position. For companies adversely affected by the C19, they should work with unions (if unionized), to negotiate a retrenchment benefit package or provide a lump sum benefit of between one month and three months’ salary. 

Do have a look through these documents...and if you have any questions, please reach out to us at [email protected]