DFS offers retrenched employees better severance deal, but some say it's not enough

DFS offers retrenched employees better severance deal, but some say it's not enough

Retrenched DFS Group employees were offered better severance packages on Wednesday (Oct 2), but some CNA spoke to remained critical of how the exercise was conducted. Nisha Rahim with more.

SINGAPORE: Retrenched DFS Group employees were offered better severance packages on Wednesday (Oct 2), but some CNA spoke to remained critical of how the exercise was conducted. 

The retrenched workers would receive two weeks' salary for each year of service, capped at 13 years or the equivalent of 26 weeks' pay. They could either serve out their notice period or be paid in lieu of notice. 

This was more than the original offer of serving notice or payment in lieu of notice period, and a severance package capped at 13 weeks of pay, which the employees received when they were notified of the retrenchment on Thursday. 

The new terms were announced on Wednesday morning in meetings held at the hotel Royal Plaza on Scotts.

The meetings followed comments by Manpower Minister Josephine Teo, who said on Saturday that the DFS Group "could have better handled" the retrenchment exercise, particularly in the way it was communicated to employees and how the severance packages were offered.  


In a statement on Wednesday afternoon, a DFS spokesperson said the company has “made best efforts” to communicate its support in face-to-face meetings with affected staff. 

DFS has increased its "engagement and dialogue with the Ministry of Manpower (MOM), the Tripartite Alliance for Fair and Progressive Employment Practices (TAFEP) and the Taskforce for Responsible Retrenchment and Employment Facilitation (TASKFORCE)", said the spokesperson. 

“We remain committed to carrying out this exercise in a fair and sensitive manner," said DFS, adding that it had in a place a series of measures to assist affected staff. 

These measures were aligned with the Tripartite Advisory from the tripartite partners - MOM, the National Trades Union Congress (NTUC) and the Singapore National Employers Federation (SNEF), it said. 

“We will continue to work closely with TASKFORCE, Workforce Singapore (WSG) and external outplacement agencies to provide support to affected staff in their transition in the next several months.”

In the statement, the LVMH-owned retailer confirmed that employees at its T Galleria in Scottswalk and its shared services centre in Chai Chee were affected by the retrenchment exercise, some with immediate effect, and some over the next few months.

Staff working in the liquor and tobacco concession operations at Changi had also been given formal notice of their termination of employment with DFS, said the spokesperson. 

“This will take effect in June 2020 when DFS will officially exit the concession and a new operator will assume management.” 

READ: TAFEP looking into DFS Group's retrenchment exercise after dozens laid off

READ: DFS to close its tobacco and liquor stores at Changi Airport

DFS Group announced in August that it would not retain its duty-free liquor and tobacco concession at Changi Airport when its lease expires in June next year.

It had previously said that about 500 people were employed at DFS's liquor and tobacco duty-free outlets at Changi Airport and that staff members would be offered options regarding their employment, which include deployment to other DFS concessions and working for the new operator.

When CNA visited Royal Plaza on Scotts between 10am and 12pm on Wednesday, there were DFS employees gathered in the hotel lobby. 

Some had just attended their allocated meetings, while others were still waiting their turn.  

Employees CNA spoke to said they were shocked and hurt by the sudden retrenchment, and felt that the updated terms of the severance package were still below expectations. 

Several of them had walked out of the rooms designated for the meetings in tears, while others broke down as they recounted last Thursday's announcement. 

Ms Celeste (not her real name), told CNA she had worked for the DFS Group for more than 30 years and that she was disappointed with how the retrenchment was handled, especially for long-term employees. 

“It really is so cruel. Most of us have children or parents to take care of, and they didn’t even warn us about the retrenchment,” she said. 

Another employee, who did not want to be identified but said she worked at DFS for 17 years, told CNA she was worried about how the retrenchment would affect her financial commitments. 

She told CNA how her sick husband would unlikely be able to work for a long time and how her two children were still in school. 

“I don’t think this is the right way to treat your employees. They never asked us about family background and whether we can survive if we don’t have a job. I just wish they would be more caring,” she said. 

severance letter dfs
Retrenched employees were offered new severance terms of two weeks of pay for each year of service capped at 13 years, or the equivalent of 26 weeks of pay. (Photo: Ang Hwee Min)

Employees said they felt the way the exercise was carried out was unprecedented. 

Those whose employment was terminated on Thursday with immediate effect were made to sign and return the retrenchment package agreement by noon the next day. They were also given a bag into which they were to pack their belongings, and asked to leave. 

In previous retrenchment exercises, affected staff were informed in advance so they could make the necessary preparations, according to Ms Celeste. 

“This time, there was no compassion and it was so sudden. Even with the new terms capped at 13 years, that’s less than half of the time some of us have spent at this company.

"Why can’t they have different packages for short-term and long-term employees?” she said. 

Ms Celeste told CNA that several of those who had been asked to leave on Thursday formed a Whatsapp group chat. There were 66 members, many of whom were those who had worked with DFS for more than 15 years. 

One of them, Ms Jessica (not her real name), told CNA: “As a very dedicated employee, I must say that DFS has treated me very well all these years. 

"I love this company, but with this particular incident I feel very sad that we’ve made the news for all the wrong reasons,” said Ms Jessica, who was a DFS employee for 17 years. 

“It is very inconsistent with all the values and teachings they have taught us all these years, to value our people,” she added. “This retrenchment is really like a surprise nuclear bomb.” 

Another employee, who worked for DFS Group for about 40 years, told CNA: “I was very upset over the past few days and I complained to my friends a lot.

“Now I just have no more words to express my disappointment. I never expected this to happen,” she added, tearing up. 

A number of employees said they were aware that the Singapore Manual and Mercantile Workers’ Union (SMMWU), a general union affiliated with NTUC, had reached out to DFS Group.

They told CNA they were hopeful the union could help negotiate for better severance terms. 

“We look forward to further dialogues with SMMWU and NTUC to promote good industrial relations for our mutual benefit and that of our staff,” said the DFS spokesperson. 

Secretary-general of SMMWU David Yeo told CNA that in a unionised situation, the norm for severance packages is one month for each year of service, subject to a cap of 25 years of service. 

Any deviation from the norm would be based on the company’s financial position and viability, he added. 

“If recognition is obtained by the Union to represent the workers, we will revisit the package,” said Mr Yeo. 

"What the outcome of the revisit will be is another thing altogether."

Source: CNA/hw(hs)

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