Retrenchments and withdrawn job offers: Singapore's labour market shows signs of COVID-19 strain
SINGAPORE: It was painful but seemingly inevitable. In mid-March, Mr Tan was retrenched from his role as a manager at a business tourism company.
International travel has plunged since the onset of the COVID-19 pandemic at the start of 2020. Changi Airport passenger traffic fell by 98 per cent year-on-year in the last week of March.
Worldwide, the World Travel and Tourism Council predicted that 75 million tourism sector workers could lose their jobs, with close to two-thirds of them in the Asia-Pacific.
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Mr Tan, who asked for his full name not to be used, was with the company for five-and-a-half years, taking home about S$5,000 a month.
His morale has taken a hit, the 55-year-old said, while pressure at home underscores the challenges he faces.
Besides two teenage sons to take care of, he has his 89-year-old mum’s kidney dialysis treatment to pay for, as well as two domestic helpers - one to take care of his 88-year-old dad, who has prostate cancer and dementia.
“No one knows when this virus will be gone,” Mr Tan said, adding that he now wonders how long it will take to find a suitable job with a decent salary with the current state of the industry.
Many others have lost their jobs due to the economic crisis caused by the global spread of COVID-19 and there may soon be many more.
According to the Ministry of Manpower (MOM), the number of retrenched workers has increased since January, based on the mandatory retrenchment notifications filed up until Mar 30.
The figure is expected to continue rising in the coming months, MOM added in its response to CNA's queries.
This comes even as the Government rolled out measures specifically designed to protect jobs, such as a wage subsidy of between 25 and 75 per cent, and foreign worker levy rebates.
On Tuesday (Apr 21), Deputy Prime Minister Heng Swee Keat said that the levy rebates and 75 per cent wage subsidy for firms in all sectors would be extended until the end of the "circuit breaker" period on Jun 1.
In an Apr 6 note, Maybank economists Chua Hak Bin and Lee Ju Ye predicted 150,000 to 200,000 job losses in Singapore this year, even with fiscal aid from the Government.
In comparison, there were 10,690 retrenchments in 2019, according to an MOM report published in March.
Half of the layoffs are expected to affect foreigners, as the Government’s stimulus is targeted at saving local jobs, they wrote, adding that the unemployment rate is expected to spike above 5 per cent - higher than 4.1 per cent during the 2008 global financial crisis and 4.5 per cent during the Severe Acute Respiratory Syndrome outbreak.
Still, while economists are forecasting job losses, only 1 per cent of 232 companies in Mercer’s Pay & Bonus Survey said they were considering retrenchments, the company’s career products leader for Singapore and frontier markets Kulapalee Tobing said. The companies were surveyed in March.
However, another 8 per cent have either implemented or are considering a salary cut, which could be an indicator of retrenchments, she said. Also, 47 per cent of the organisations said they are reducing their recruitment budgets and 22 per cent are planning to freeze hiring.
“As the full economic impact becomes clearer, companies are likely to review and adjust strategies accordingly," said Ms Tobing.
FURLOUGHS AND WITHDRAWN JOB OFFERS
A layoff is one possible outcome of the economic fallout on the jobs market. But the pandemic has resulted in other employment issues cropping up, such as furloughs, salary reductions and rescinded job offers.
In March, Singapore Airlines said it would take several cost-cutting measures, including pay cuts for executives and no-pay leave, that would affect 10,000 employees. BreadTalk also announced cuts to middle and senior management’s pay, among them 137 staff members in Southeast Asia.
Sng Xu Jie was supposed to start his new guest relations role at a consultancy on Apr 1, but about two days before, they told him they had to pull the offer.
Fortunately, the 26-year-old, who has been unemployed for two-and-a-half months, has some savings and family members to lean on, he said.
“I was disappointed (but) I also understand what they are facing,” Mr Sng said. “I lost my job, but their entire business has been disrupted.”
Labour experts have observed a growing trend of similar issues.
Lawyer Muntaz Zainuddin said that in February and March, she received a 50 per cent increase in employment enquiries, both from firms and workers. Most asked about settlement agreements, no-pay leave and salary cuts. Some were new hires whose companies stopped contacting them.
READ: COVID-19: Law firms see rise in queries on employee rights, employer obligations as economy slows
In such cases where a company “ghosts” the incoming employee, she said, “being uncertain itself is putting (the worker) in a lot of difficulty”.
“They aren’t sure whether they should pursue (the case) further and risk losing the job eventually or just keep quiet for one month,” the IRB Law partner said.
Avodah People Solutions' career coach Gerald Tan said he has heard about people being forced to go on unpaid leave or students who had gotten their internships or job offers rescinded.
He said he has not seen an uptick in formal consultations yet as companies are probably trying to hold on to their workers using the government subsidies. But he said: "I think we are just at the beginning and the employment landscape is going to change drastically.”
Individuals who have job woes are encouraged to look beyond the monetary assistance available, said Mr Tan, who has been conducting COVID-19-related career webinars. Sign up for training courses or take on temporary jobs, he added.
As retrenchments rise, so could unfair dismissals, he pointed out.
One method of “disguised retrenchment” is by compelling workers to leave on their own accord - either by asking them to resign or transferring them to another department with a significant wage cut. This way, the company can save on severance packages.
Before there is a chance of getting axed unfairly, read through the employment act and talk to a lawyer about your rights, said Ms Muntaz.
And if you think you have been dealt a bad hand, keep in mind that there is a deadline of one month to file a wrongful dismissal claim if you wish to pursue this with the tripartite alliance.
Anyone is at risk of an unlawful termination, she added. “You should always be prepared to protect your own rice bowl.”