About 90% of retrenched employees received benefits in past 5 years: Koh Poh Koon

About 90 per cent of employees have received retrenchment benefits within the past five years, Senior Minister of State for Manpower Koh Poh Koon said in Parliament on Wednesday (Feb 4).

He was responding to queries from Pioneer SMC MP Patrick Tay and Aljunied GRC MP Pritam Singh on the payment of retrenchment benefits.

Koh said: "Among them, around eight in 10 received retrenchment benefits of at least two weeks' salary per year of service, in line with the norm stated in the tripartite advisory on managing excess manpower and responsible retrenchment of Tafep (Tripartite Alliance for Fair and Progressive Employment Practices)."

In response, former Leader of Opposition Singh posed further questions, asking if the Government mandates that all retrenchments — regardless of size — would have to be reported before the exercise is carried out.

He also questioned if a company can have its work pass privileges revoked in addition to other penalties should it include "punitive and unreasonable clauses" in its retrenchment proceedings.

Last year, 50 employees in Singapore were retrenched by Agoda, and the announcement was made at a closed town hall on Aug 4.

Singh further asked if the Government might consider a "differentiated guideline" on retrenchment benefits between companies with more and less than 25 workers — companies with more would require an increase in benefits provided.

This would allow workers to "receive equitable retrenchment benefits" instead of having a "one-size-fits-all" guideline for companies big or small, he added.

Companies with at least 10 employees must notify MOM of any retrenchment

Replying to Singh's query on whether companies can be mandated to notify the Ministry of Manpower (MOM) on retrenchments, SMS Koh clarified that companies with at least 10 workers will be required to notify the ministry of any retrenchment within five working days. 

Koh then referred to a previous Parliamentary reply made on punitive clauses, requesting Singh to check that response for his reply to the latter's query on penalties for companies who take advantage of the retrenchment process. 

In a response to questions by NCMP Andre Low in November regarding Agoda's severance clauses, MOM had stated that workers who encounter unfair or illegal clauses in their severance agreements should approach MOM or Tafep, stressing that MOM "takes a serious view of such clauses" and "will not hesitate to take action" against errant employers where necessary.

Koh further reasoned that mandatory retrenchment benefits may also see employers hesitate to offer long-term or permanent contracts to employees. 

"And of course, stipulating a minimum retrenchment benefit quantum in law will likely result in a quantum becoming the norm itself, such that even when companies are able to give more, they may then say, if this is the only thing that is required by the law, let's just do the minimum as required and not go beyond that."

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khooyihang@asiaone.com