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NTUC proposes framework as it calls on companies to fairly treat workers affected by retrenchments

NTUC proposes framework as it calls on companies to fairly treat workers affected by retrenchments

The Singapore city skyline as seen from Jubilee Bridge (Photo: Jeremy Long)

SINGAPORE: The National Trades Union Congress (NTUC) on Friday (Jul 24) proposed a framework to guide companies on how to fairly treat workers affected by retrenchments. 

In a media release, the labour union said that the Fair Retrenchment Framework would help companies carry out responsible retrenchment practices.

READ: COVID-19: More than 7,000 workers matched to new jobs under NTUC’s Job Security Council

LISTEN: Retrenchment: What is fair compensation, clear communication and empathy in letting people go?

“With more retrenchments becoming inevitable in the coming months, NTUC calls on companies to ensure openness, transparency and consultation with our unions and workers,” it said.  

The framework, which would complement the existing tripartite advisory, outlined three guiding principles:


In the release, NTUC said that when retrenchments are inevitable, companies should “implement fair selection criteria to ensure that the Singaporean core is safeguarded”.

This means that Singaporeans would be able to keep their jobs through job protection and redeployment, while “due considerations are given to foreign workers”.

Companies should also have a set of selection criteria for “managing excess manpower based on business needs and reasonableness”, said NTUC. 

This may include reviewing the ability, experience, skills and occupational qualification of employees required to meet future business needs.

READ: Some companies still hiring even as retrenchments rise by about 10% amid COVID-19 pandemic

NTUC added that companies should also ensure an "ageless workplace".

“This takes into account keeping older employees who may possess skills, experience, knowledge, maturity and reliability; and evaluating them based on equal basis." 

With foreigners intended to “augment Singaporeans in the workforce”, NTUC said companies may consider keeping foreigners if they have special or critical skills for business continuity.

“Companies should also ensure that these skills are transferred to Singaporeans in the longer terms,” it added. 


NTUC stressed in the release that retrenchments should be the “last resort” for companies.

“Before considering retrenchments, as an early intervention, companies should work with unions and workers to find ways to preserve as many jobs as possible,” said NTUC.

READ: GE2020: Employers need to ensure enough jobs for Singaporeans to help economy recover, says Ong Ye Kung

Companies should also aim to minimise downtime so that they have the manpower capacity to seize business opportunities when the economy recovers. 

Such measures may include implementing collective pay reductions, providing secondment opportunities for workers, or placing workers on shorter work weeks or no pay leave or furlough.

Companies could also allow workers to switch to part-time contracts, consider job-share arrangements for workers, as well as tap on government assistance schemes to mitigate manpower costs.


Finally, if retrenchments are inevitable, NTUC called on companies to provide fair retrenchment packages and processes so that workers would be treated fairly and with dignity.

It added that companies should use the NTUC Job Security Council to provide support to retrenched workers who are looking for new jobs or skills required for a new job.

The Job Security Council involves a network of unions, companies and organisations. The aim is to allow employers to share or redeploy manpower, matching displaced or retrenched workers to new jobs. 


Manpower Minister Josephine Teo on Friday said "fairness" was an important principle when retrenchments could no longer be avoided. 

"We made clear retrenchment should be a last resort, after all possible measures have been tried and proven inadequate for business survival," she wrote on Facebook in response to NTUC’s call for fair protection of the Singaporean core amid rising retrenchments.  

"To stave off retrenchment, most companies will also do their best to redeploy the staff to other business units or functions.  When the inevitable happens and retrenchment can no longer be avoided, fairness is an important principle."

She added: "Employers must be fair to all workers – fair in selecting who to let go, fair in compensating affected workers, fair in giving advance notice and help to transition.  It is important that employees are treated with dignity and respect, especially during a retrenchment. 

"If the company is unionised, the relevant union should be consulted as early as possible. Workers and unions, too, need to be fair to employers – hearing them out and understanding the situation, accepting redeployments, negotiating for a package in good faith. 

"To employers, I hope you keep in mind another key consideration, that it is in your own interest to preserve your Singaporean core, even as you retrench. While being fair to all affected workers, keep in mind how the local workers have contributed to your presence and past successes in Singapore."

Source: CNA/ad(rw)


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