SINGAPORE: Companies found to have "disguised their retrenchments" might have their Jobs Support Scheme wage subsidies and work pass privileges revoked, Minister for Manpower Josephine Teo said on Thursday (Jun 4).
Retrenchments are guided by manpower laws, and employers are obliged to pay the retrenchment benefits spelt out in employment contracts or collective agreement, she said.
“Even during the COVID-19 period, whatever the termination of employment is called, an employee is presumed to have been retrenched if the employer cannot show a plan to fill the vacancy any time soon," Mrs Teo said in Parliament on Thursday.
Employers cannot "sidestep it by calling the retrenchment something else", she added.
READ: Retrenchments and withdrawn job offers: Singapore's labour market shows signs of COVID-19 strain
The minister was responding to parliamentary questions by Members of Parliament Patrick Tay and Joan Pereira about fair treatment of workers when they are retrenched or have their wages reduced.
Mrs Teo said that some employers may not have the means to pay these retrenchment benefits because they are financially strapped.
"The tripartite partners have therefore agreed that in instances of genuine financial difficulty for the employer, retrenchment benefits may be re-negotiated or moderated," she added.
"The norms may have to be set aside in these abnormal times. Nevertheless, businesses should still give some support to retrenched employees, to the extent that they can afford."
She emphasised that retrenchments should only be the last resort, and companies should first try to adjust their costs. She pointed to the advisories on managing excess manpower issued by the Ministry of Manpower (MOM) previously.
MOM has required employers to submit notifications of cost-saving measures they intend to undertake. This is to ensure “fair and responsible implementation of tripartite advisories”, Mrs Teo said.
MOM and the Tripartite Alliance for Fair and Progressive Employment Practices will talk to companies whose planned wage cuts “appear excessive”, she said. With the authorities help, these companies have managed to "give more wage support" to employees.
Sometimes, poor communication between employers and employees can lead to workers complaining about being unfairly treated.
She cited the example of a private preschool operator who did not clearly explain their cost-saving measures to their employees while asking them to clear their annual leave. One employee was “aggrieved” with the decision.
It turned out that the operator was suffering a sharp drop in revenue and the JSS payout was not enough to cover employees' full wages during the “circuit breaker”.
The employer’s request was not unreasonable, Mrs Teo said, but the case showed that workers and employers need to build trust and maintain open communication during this "difficult time".