Most bosses give retrenched workers payout

Most bosses give retrenched workers payout
PHOTO: The Straits Times

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.

joseow@sph.com.sg


This article was first published on Dec 30, 2016.
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