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COVID-19: Law firms see rise in queries on employee rights, employer obligations as economy slows

COVID-19: Law firms see rise in queries on employee rights, employer obligations as economy slows

While the CBD was still visibly bustling with office workers at lunchtime on Wednesday (Feb12), eateries and retailers located in the area said sales have gone down since the beginning of this week. (Photo: Rachel Phua).

SINGAPORE: Some law firms are seeing a surge in queries on employee rights and employer obligations as the economy takes a hit from the COVID-19 outbreak, with the Government issuing guidelines on retrenchments and cost-cutting.

Employees have asked about their rights as contract staff or permanent staff and what to do if they are laid off without any retrenchment incentives, while employers have sought legal advice on whether they can retrench workers during the pandemic.

One firm, IRB Law, has seen "non-stop inquiries" from both employers and employees, while Tembusu Law has seen a 50 per cent increase in such inquiries and Withers KhattarWong an increase of 30 to 40 per cent.

Tembusu Law managing director Jonathan Wong said some of the most common questions his firm has received are on whether employers can reduce wages in light of the current COVID-19 situation and whether they can dismiss or terminate employees now.

The answer? It largely depends on the terms of employment set out in an employee's contract, while the method and manner of termination is governed by the employment contract or the Employment Act.

READ: Commentary: The heavy lifting needed to get Singapore through the COVID-19 slump

Over at Withers KhattarWong, clients have been sending in queries about how to navigate the climate and tap government support, such as a Singapore-based hotel operator hoping to receive wage offsets given to hotel owners but not managers.

One client who planned to undertake a retrenchment exercise before COVID-19 broke out is holding off to reduce hardship on its employees and exploring other cost-cutting alternatives instead, Withers partner Amarjit Kaur told CNA.

IRB Law partner Muntaz Zainuddin said that a person who is retrenched under the guise of termination can report the company to the Ministry of Manpower (MOM) for unlawful dismissal, as there are guidelines on retrenchment benefits a company must abide by.

"The guidelines provide that retrenchment is assumed if more than five employees are let go in a period of six months for a company that has more than 10 workers," said Ms Muntaz. "In these cases, notifications to MOM are compulsory."

She added that other evidence that a termination is actually retrenchment includes a reorganisation of the company that amalgamates or extinguishes a department or division.

READ: Events postponed, restaurants ‘near empty’: F&B industry on the chopping block as COVID-19 measures bite


One woman who was laid off earlier this year started questioning the circumstances of her firing after it happened, and even now is unsure about her employment rights.

The 34-year-old woman, who gave her name only as Ms Alice, told CNA that she had worked at an events company for more than a decade before being told of her termination.

The company had already been struggling and had let go a few employees late last year, but the local impact of the COVID-19 pandemic has made things much worse. However, while Ms Alice was also shown the door, her ex-colleagues kept their job - albeit on reduced wages - leading her to question the circumstances of her departure.

Ms Alice, then a full-time project manager, said she was not given alternatives of taking pay cuts or no-pay-leave.

READ: Singapore ready to do more if COVID-19 outbreak worsens: DPM Heng

The pregnant woman said she was told that the reason for her termination was that "business was bad" because of COVID-19, and was told "up to you" when asked when her last day would be.

Asked if she felt her former company violated any laws, Ms Alice said: "I think it's very hard to say with all this virus going on. Maybe they are not aware?"

She said she felt that it was unfair when she went home and thought about it.

"When I was let go, I agreed to everything because ... it's on the spot. When I went home, I was thinking - What should the company be doing for me instead, because I am pregnant, so can they even terminate me at this point of time?" 

At the time of her dismissal, her husband had been jobless, and only just received a job offer recently.

READ: COVID-19: Firms that do not allow telecommuting where 'reasonably practicable' may be issued stop-work order, says Josephine Teo

"I'm still looking for a job," said Ms Alice, who has two sons. "Hopefully I get something."

She said she does not wish to take action against her company as she had worked there for many years, but lawyers say she might have a case for wrongful dismissal.

Invictus Law director Darren Tan said the description of Ms Alice's termination is a violation of employment laws, but added that it also depends on the company's reason for her termination.


He referred to the updates to the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment released last month in view of the evolving COVID-19 situation.

Under the guidelines, companies are urged to consider alternatives to retrenchment such as redeployment, no-pay leave, flexi-hours or adjusting of wages.

Mr Tan explained that the tripartite guidelines are a type of "soft law", not a law that can be enforced, but not something employers can ignore.

READ: COVID-19: Grab's senior leaders to take pay cut of up to 20%

On top of this, the National Wages Council released guidelines earlier this week urging employers to first reduce non-wage costs and turn to Government support, and to retrench only as a last resort.

Lawyer Amarjit Kaur said that employers looking to undertake retrenchment or alternative cost-cutting measures should familiarise themselves with the recently amended Tripartite Guidelines on Managing Excess Manpower and Responsible Retrenchment, The National Wage Council's 2020/2021 Guidelines and the MOM's Guide on Second Job Arrangements for Employees with Reduced Work Hours.

Tembusu Law's Mr Wong said that "these are indeed unique and uncertain times with unprecedented challenges and changes on the horizon".

"We advise both employers and employees to take holistic and long-term views of their manpower and employment needs," he said.

"It may be prudent for both employers and employees to look beyond contractual or legal rights and, rather, consider making decisions based on what is ultimately more pragmatic and practical in terms of keeping their business afloat and their employment alive respectively."

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Source: CNA/ll


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