Update on NTUC's Proposal and Enhanced Measures towards Worker Protections against Retrenchment Exercises

Mr Yip Hon Weng asked the Minister for Manpower (a) whether there is an update on NTUC's proposal on mandating pre-retrenchment notifications; (b) whether the Ministry will amend the Insolvency, Restructuring and Dissolution Act 2018 to prioritise employee salary claims alongside secured creditors during a retrenchment exercise; and (c) whether the Ministry will consider establishing a wage guarantee fund to cover unpaid salaries of those affected by a retrenchment exercise.

The Government recognises that retrenchment is a challenging period for workers as it affects their livelihoods and takes an emotional toll. We have therefore put in place measures to support employees and ensure responsible business practices.

We agree that employees' claims on salaries are important in the event of company liquidation. In the Insolvency, Restructuring and Dissolution Act, employees' claims are already ranked first and above all other unsecured debts, and are behind only the costs and expenses of winding up administration which are necessary for the winding up to proceed smoothly.

If employers cannot pay salary arrears due to business failure, the Short-Term Relief Fund is available to provide financial assistance to eligible local lower-income workers. The Ministry of Manpower (MOM) will also investigate and take action against employers who breach employment legislation when winding down, including those who wilfully do not pay salaries despite having the means to do so.

We will continue to review our measures to ensure that workers are supported during retrenchment, including in cases of company liquidation. MOM is currently reviewing NTUC's proposal on mandating pre-retrenchment notifications with the tripartite partners and will update on this in due course.