No need for unemployment benefits in Singapore: Lim Swee Say

No need for unemployment benefits in Singapore: Lim Swee Say

Responding to questions by Members of Parliament, the Manpower Minister explains why it is not appropriate for the Republic to put in place unemployment benefits or redundancy insurance for those who are retrenched.

Singapore CBD crowd
People cross a street in Singapore's central business district. (Photo: Sutrisno Foo)

SINGAPORE: Low unemployment rates and a widespread practice of companies in the Republic paying retrenchment benefits are reasons why it is not appropriate for the country to put in place unemployment benefits or redundancy insurance, said Manpower Minister Lim Swee Say in Parliament on Friday (Apr 8).

Mr Lim made this case in response to calls by Nominated Member of Parliament Azmoon Ahmad, and MPs Patrick Tay and Sylvia Lim for greater support to retrenched workers.

Rejecting the suggestions mooted, Mr Lim said that Singapore’s employment situation is “quite different” from that in countries providing unemployment benefits.

“Our unemployment rates are low, our long-term unemployment rates are also low,” he said. “At the same time, the practice of paying retrenchment benefits is widespread.”


Citing an MOM survey, Mr Lim said it was “standard practice” for companies in Singapore to pay retrenchment benefits, with nine in 10 retrenching firms doing so. At the same time, nine in 10 retrenched workers received retrenchment benefits, including from non-unionised companies.

“I do sympathise and empathise with workers who are affected by retrenchment and I appreciate the suggestions by various members,” said Mr Lim, emphasising that efforts to help those retrenched must be focused on getting them to “go back to work as quickly as possible”.

Responding to a question by MP Lim Biow Chuan, he also explained why Government does not support making retrenchment benefits “compulsory”.

Noting that this is a topic discussed from time to time, the Manpower Minister said the tripartite partners agree that it is important to allow for the “flexibility to negotiate … rather than prescribing it in the law”.

“This is because different retrenching companies are in different circumstances. And therefore there should not be a one-size-fits-all rule,” he said.

Source: CNA/ll