Lazada layoffs: Workers to get 'enhanced support package' after company and union reach settlement

SINGAPORE: Employees retrenched during Lazada's recent layoffs will get "an enhanced support package" following talks between the company and the workers' union.  

In a joint statement on Sunday (Feb 4), Lazada, the National Trades Union Congress (NTUC) and its affiliate Food, Drinks and Allied Workers Union (FDAWU) said that "an amicable settlement" has been reached, and the package will be used to help eligible affected union members.

Lazada has also established a dedicated training fund for FDAWU to provide employment and employability support for affected members in collaboration with NTUC’s e2i (Employment and Employability Institute).

In response to CNA's queries, an NTUC spokesperson said it was unable to disclose the amount that those who were laid off would be getting, due to a confidentiality clause in agreement between the FDAWU and Lazada.

"However, eligible affected union members can be assured that they will now be better off," said the spokesperson, adding that the package comprises financial support and training support for eligible union members.

Members will have to register with the FDAWU and provide documentation. The union will work out the final payout to affected members.

Stressing that all considerations were taken seriously, Lazada and FDAWU said they would continue working closely to address the workers' needs and concerns.

"Lazada gave FDAWU direct recognition in October 2020. This means that as the legally recognised union for Lazada, FDAWU could enter into further discussions with Lazada to secure a better outcome for FDAWU union members," the statement read.

"FDAWU also recognises that there are affected general branch members from other Lazada entities that are non-unionised. Although these are non-unionised entities, FDAWU hopes to support eligible general branch members."

The NTUC spokesperson said that affected general branch members in non-unionised entities can expect to "receive something but it will not be the same as eligible affected union members".

CNA has contacted Lazada for more information. 

Lazada has agreed to maintain open channels of communication with the FDAWU, said the Ministry of Manpower (MOM) on Sunday.

It added that all employers should "act responsibly" when considering cost-cutting measures, with retrenchment as the last resort. 

Retrenched Lazada workers were initially told that they would receive two weeks' salary for every year of service.

However, FDAWU said on Jan 6 that it did not find this satisfactory and was negotiating for additional benefits for affected eligible workers.

The latest development on Sunday came after FDAWU said it was disappointed at not being notified or consulted prior to Lazada's retrenchment exercise in early January, calling it "unacceptable".

Employees whom CNA spoke to shortly after the retrenchment exercise estimated that nearly 100 people from departments across the company had been informed they were laid off.

Some people were also left in tears by the news and were perplexed by the sudden announcement.

FDAWU's reaction on the matter prompted an apology from Lazada a few days later. The company also assured FDAWU that it will be consulted in advance for any future exercises.

"Both parties have agreed to work closely together and to put workers’ interests at the forefront of their negotiations," Lazada, NTUC and FDAWU said on Jan 6.

In Sunday's statement, the parties said they are committed to strengthening labour-management relations and ensuring workers’ interests are looked after. 

Former Lazada employees who are FDAWU union members affected by the Jan 3 to Jan 5 business transformation exercise are encouraged to email FDAWU by 5pm on Feb 20 for further instructions.

The NTUC spokesperson said it "did not see a need to dwell" on why Lazada did not inform the union about the layoffs, as the company had extended its apologies.

The intervention by the FDAWU is a "strong testament" to how unions can represent and protect their members' interests, said NTUC secretary-general Ng Chee Meng.

"We understand that companies may from time to time need to restructure but retrenchment should always be the last resort," he wrote in a Facebook post.

"Both management and union should work together to find amicable and fair solutions for our workers."

MOM added: "The swift resolution of this incident and subsequent settlement reached between Lazada and FDAWU was possible because of tripartism, which enables employers, unions and the government to work together to find solutions and overcome challenges together.

"While Lazada did not start off in the right manner with the union, we are pleased that all parties have settled the matter and moving forward, agreed to build a strong partnership to achieve win-win outcomes for the business and workers."