Protocols and Enforcement Measures for Oversight of Retrenchments

Mr Yip Hon Weng asked the Minister for Manpower in light of the recent retrenchment exercise by a multinational technology company with its headquarters in Singapore (a) whether the Ministry will review and strengthen current protocols to better manage future retrenchments, including ensuring that unions are given more timely notice beyond just one day; and (b) what steps is the Ministry taking to enhance pro-worker guidelines that can simultaneously encourage multinational companies to maintain their presence in Singapore while safeguarding the welfare of workers.

Mr Patrick Tay Teck Guan asked the Minister for Manpower in light of recent retrenchments by MNCs which involve professionals, managers and executives (PMEs) being laid off (a) whether the Ministry can take tougher enforcement action against companies that fail to comply with the tripartite advisories and guidelines on retrenchment of workers including PMEs; and (b) whether the Ministry can look into ensuring that companies notify the unions early in advance of impending retrenchments to allow for discussions, negotiations and pre-emptive assistance for affected workers and members.

Mr Patrick Tay Teck Guan asked the Minister for Manpower (a) for each year from 2019 to date in 2024, what is the number of companies that failed to file a mandatory retrenchment notification (MRN) within the requisite period; (b) whether the Ministry will consider reviewing the existing exemptions from MRN; and (c) whether the Ministry will consider reviewing the MRN period to require MRNs to be submitted prior to retrenchment instead of post-retrenchment.

Members have filed these PQs likely in response to Dyson’s recent retrenchment exercise and I am taking these PQs together to provide a more holistic response.

To recap, Dyson conducted a retrenchment exercise earlier this month. Subsequently, the United Workers of Electronics and Electrical Industries (UWEEI) expressed their concern that they were only notified a day before Dyson informed the affected employees. The Ministry of Manpower (MOM) has been actively involved in this issue and has engaged both parties, who have agreed to work together in the spirit of tripartism.

Members have raised questions on five key issues. First, early notification to the union; two, retrenchment benefits; three, mandatory retrenchment notifications; four, action that can be taken against non-compliant companies; and five, how Singapore balances being both pro-business and pro-worker. I will address each of these issues in the rest of my reply.

First, Members asked whether the one-day notice in Dyson’s case was sufficient. Based on the Tripartite Advisory on Managing Excess Manpower or TAMEM, if the company is unionised, it should provide advance notice to the unions. Where it is provided in the collective agreement, the norm is to notify the union a month before notifying the employees. We understand that all the retrenched employees from Dyson are professionals, managers or executives (PMEs) who are not unionised. Thus, they are not within the scope of the union’s collective representation and the period of notice is therefore negotiable. Hence, Dyson handled the recent retrenchment exercise in accordance with our laws and tripartite advisories, as the PMEs are not under the collective agreement.

At the same time, the spirit of tripartite engagements is built on trust and a shared understanding between the employer and the union. It is good practice for companies to do so, as this builds trust between the employer and the union. Dyson has explained to UWEEI the reasons for not being able to give more advance notice to the union. Communications are key to managing the concerns of the affected employees, while also being cognisant of the constraints of businesses. In this respect, both parties have committed to continue working together in the tripartite spirit to support both the needs of workers and businesses.

To work together effectively, trust between the union and employer is key. This trust cannot be taken for granted and it needs to be built up over time. Companies should value Singapore’s tripartite culture and work closely with the unions. At the same time, the unions also need to do their part to manage the concerns of employees, while recognising business needs. This is the delicate balance that has made our model of tripartism work well over the years. Ultimately, it is also important that all tripartite partners focus on the welfare of the affected workers, so that we can work together to help them during this difficult period of disruption.

Second, Members asked about the compensation for the retrenched workers. Retrenchment benefits are payments made by a company to provide some financial support to help the affected workers through the period of disruption. Based on the Tripartite Advisory, the amount of retrenchment benefits depends on what is provided in the collective agreement, otherwise it will be negotiated. The prevailing norm is between two weeks to one month salary per year of service, and the retrenchment payments depend on the financial position of the company and industry norms. Based on our tripartite guidelines, the retrenchment benefits for PMEs can be calculated differently from that for a rank-and-file employee.

While there is no requirement to do so and the affected workers are not covered by collective agreement, Dyson provided a retrenchment benefit quantum for its PMEs that is in line with our Tripartite Advisory. In addition, only employees that have served the company for at least two years are eligible for retrenchment benefits, but Dyson provided affected employees who have served for less than two years a payment as well. So, that goes beyond what they are obliged to do. In addition, Dyson will also provide after-care support, outplacement assistance and access to career coaching and counselling to the affected employees.

Separately, Members have asked about the salaries of the affected employees. As a policy, we do not disclose salary details as these remain confidential to the employee and company.

Third, Members asked about Dyson’s submission of the mandatory retrenchment notification (MRN). Dyson submitted its MRN to MOM on time, within five working days of notifying the affected employees. This has enabled the Taskforce for Responsible Retrenchment and Employment Facilitation (RTF) to work with Dyson to provide career facilitation services and information kits to the affected employees.

Members also had questions about the MRN requirement more generally. In response to the question from a Member on the MRNs submitted from 2019 to March 2024, about 30% of MRNs were submitted late, after five working days of notifying the affected employees. Among the late submissions, around half were submitted before the retrenchment date of the affected employees. This means that the RTF is still able to offer employment assistance to affected employees in a timely manner.

Currently, employers with less than 10 employees are exempted from submitting MRNs. This is an agreed tripartite position, given that it may place too much administrative burden to make smaller companies submit MRNs. Nonetheless, we encourage all employers to notify MOM of any retrenchment exercise early, so that we can extend support to the affected employees.

On whether MRNs should be submitted earlier, we need to strike a balance between allowing employers sufficient time to finalise their decisions, while enabling the prompt provision of career facilitation services and programmes to affected employees. Employers may need more time to decide on how they want to restructure and transform their business and at the same time, collate details required on the affected workers for MRN submission.

Nonetheless, employers can provide early notification to MOM, if they are considering an upcoming retrenchment exercise and rest assured, we will treat the information that we receive sensitively. Employers can access this early notification channel on the MOM website, to obtain more assistance on how to conduct a responsible retrenchment exercise and provide earlier employment assistance to the affected workers.

Fourth, Members asked about the action that can be taken towards non-compliant companies. Today, Mr Speaker, most employers follow our retrenchment regulations. If an employer does not follow the tripartite advisory, the Tripartite Alliance for Fair and Progressive Employment Practices, or TAFEP, will engage the employer to adhere to it.

Workers, including PMEs, who are not covered by a collective agreement with the union, can still seek the union’s assistance to be represented individually. They may also approach the Tripartite Alliance for Dispute Management (TADM) who can assist if there are contractual or salary disputes, TAFEP if unfair or discriminatory practices were conducted, as well as Workforce Singapore and the National Trades Union Congress's (NTUC's) Employment and Employability Institute (e2i) for employment assistance.

MOM will also investigate unfair employment practices and take enforcement action as needed. Most employers are cooperative when approached by TAFEP or MOM. This shows that our tripartite guidelines and advisories are working well without the need for additional penalties, which may negatively affect the wider business environment in Singapore.

Fifth, Members have asked how Singapore can continue to be pro-business, while safeguarding the welfare of workers. Businesses need flexibility to make decisions, which will allow them to adapt to market conditions and transform their business models. Singapore is currently ranked first in the 2024 IMD World Competitiveness Ranking. We need to constantly maintain a fine and delicate balance in preserving our economic competitiveness, which in turn results in more job opportunities and good wages for our workers. This is how we keep our long-term unemployment rate low. Real wages have also consistently improved over the past decade.

There are other countries where the labour market is more rigid or where there is a more confrontational relationship between the unions and the employers. This makes a country less attractive for companies to invest in. So, we have to strike a balance between protecting workers and providing flexibility for businesses. If we do not get this balance right, we may think that we are protecting our workers in the short term. But in the longer term, the good jobs for our workers may be reduced as we become a less attractive place for companies to invest in and firms may choose to site their operations or even outsource jobs elsewhere.

At the same time, what I can assure Members is this: we do not wait for retrenchments to happen before we help workers. The Government has worked closely with our tripartite partners, the unions, the employers, to develop an ecosystem that supports workers on every step of their career journey, even during disruptions. Together with our tripartite partners, we work upstream to help companies and their workforce upskill, transform and even redesign jobs to improve talent retention, workforce productivity and wages.

We will continue to help workers to build career resilience through picking up industry-relevant skillsets. This enables our workers to find new and better opportunities, even in the event of a retrenchment. Workers affected by retrenchment are assisted through employment facilitation and career coaching. In the second quarter of 2024, more than half of all retrenched residents were able to find and secure jobs within six months of being retrenched. From 2025, the SkillsFuture Jobseeker Support Scheme will further help involuntarily unemployed persons to bounce back.

Mr Speaker and Members, to conclude, it is not easy to manage retrenchment issues. We need to continue achieving the right balance between the interests of the businesses while ensuring that our workers remain protected and well supported during this difficult period of disruption.

Trust and a shared understanding among our tripartite partners is key for Singapore to manage this balance well, so that Singapore remains pro-worker and pro-business at the same time. Our strong tripartite spirit will enable Singapore to remain exceptional and achieve continued economic success. This will in turn ensure that our workers get good jobs and wages for many decades to come.

Mr Speaker, I thank the Senior Minister of State for his answer. Can I declare that I have Clementi residents, some of whom are NTUC brothers and sisters, who feel disquiet at how some recent retrenchments have been conducted. Can I ask the Senior Minister of State two sets of supplementary questions?

Firstly, the Senior Minister of State would be aware that Dyson's new global headquarters was opened in Singapore two years ago. It was a high signature opening, with the then-Prime Minister of Singapore Mr Lee Hsien Loong in attendance. Can I ask the Senior Minister of State, firstly, given that it was a high-profile company accorded highest recognition, should there be some consideration as to whether such a firm should be benchmarked against the minimum legal standard of what is acceptable? Or whether such firms can have a higher level of ambition in a situation of retrenchments, so as to better support workers to notify the union earlier and thereby, strengthen tripartism and strengthen the firm's reputation as well as a good employer?

Secondly, does MOM also agree that our tripartism and labour relations in Singapore, which many brothers and sisters over generations spent their whole lives building up, over 60 years, that such tripartism and labour relations, that spirit of mutual respect and collaboration between Government, unions and employers – does MOM agree that this is precious and underpinned by norms of behaviour and practices as well? And, if so, has MOM considered how such norms might be eroded when companies do not fully respect tripartite best practices during a retrenchment? And would MOM agree that the next company with retrenchment plans will be watching how this is conducted and that there is a potential risk that such norms can be eroded gradually and then suddenly, and we have to reinforce tripartism at every step?

I thank the Member for his supplementary question and certainly, as I have shared in my speech earlier tripartism is the cornerstone for how we keep Singapore special, to balance the needs of the businesses so that they continue to invest here, and at the same time we will protect our workers. We see that the unions are at the forefront in negotiating collective agreements and ensuring that our workers are protected.

We also have existing regulations, laws, rules and advisories of which there are multiple layers. As I have shared, on the Dyson case, for example, they have provided retrenchment benefits to all affected workers, even though they are not covered by collective agreement. They have also covered workers with less than two years' experience, even though the advisories do not require it. They have also provided counselling as well as outplacement assistance. And these are, I think, areas in which good employers also try to help those affected.

But certainly, I know the unions want to do more for their workers. They want to ensure that all workers are protected, they want to ensure that the PMEs are also protected and therefore, the alarms were raised.

Therein lies tripartism here in Singapore. Because here, we are fortunate. MOM stepped in, had the two parties discuss and at the end of the day, tripartism prevailed. And that is why, we are unlike other countries where you have lawsuits, you have strikes and you erode the confidence of the business community. In terms of how we handle things here in Singapore, I think that is the difference between our approach and that of most parts of the world. I think there are very few countries that you find the government stepping in, and unions and employers coming to a consensus. Certainly, I have to thank UWEEI for also holding that ground and Dyson for stepping forward and doing more for workers too. So, I think what we want is a win-win outcome on both sides.

But there are areas that we can improve. If there is one thing, we also find that the norm is for many companies to work with the unions and inform them a month early, hence, for example, this is potentially one area. The union raised concerns that they were only given a one-day notice, although Dyson has also informed them why this particular situation had certain considerations.

We understand that businesses in general have other considerations, especially listed companies. In giving too early a notice, they have to tell the shareholders, to give market notice and it is very odd that one already informed the unions before informing the market. So, there are different considerations. I am not saying that these are specific to Dyson, but generally, there are different considerations on why companies do that.

Therefore, in my reply, trust between employers, unions and the Government is ultimately very important. That we will be able to support them despite their commercial or business constraints or considerations while at the same time still maintaining tripartism at its best. I think this is one area in which I agree with the Member that certainly, we have to preserve this spirit of tripartism to make Singapore work.

Thank you, Mr Speaker. I thank the Senior Minister of State for his reply. Given the recent retrenchment exercise, how does the Ministry measure the effectiveness of current protocols in terms of protecting workers interests? And beyond just the timing of notifications, how does the Ministry encourage companies to communicate more transparently with employees and unions during retrenchment processes? And could more structured dialogues between companies, employees and unions be considered part of the tripartite guidelines and best practices?

Certainly, we try to do our best in terms of managing the business constraints and business needs, as I have shared. And I think today, we are fortunate enough that the economy is doing okay, in the sense that when you look at the unemployment rates, they are low. If you look at the retrenchment numbers, they are not far off, they are about the same as non-recession cycles. So, we are in a good space at this moment in time. Therefore, you find that most of the workers who have been retrenched do find job opportunities within six months. I think that is one way in which we look at the macro picture.

But, of course, on the ground, that is where the rubber hits the road, and where you find many of our schemes and layers of protections that we have for our workers. One of the reasons why we hope to have early notification is so that we can mobilise the retrenchment task force, get the NTUC moving, get the Workforce Singapore teams moving to facilitate that.

Having said that, as I have shared in my earlier reply, you also have TAFEP. Should workers feel that there are discriminatory practices, you can come to us and we will look into these cases. There is TADM, if there are contractual disputes, including on retrenchment benefits, we will deal with them through TADM. And of course, upstream, we focus on career facilitation, in terms of job matching and career counselling.

And let us not forget, we can work with employers better too, in terms of some of the restructuring and job redesign efforts, in which there are programmes such as Career Conversion Programmes, through which we can help employers place workers and help redesign jobs so that they do not get retrenched, they can get redeployed into other roles. And you can also try out workers in various new functions too and all are subsidised and supported by the Government and the unions through the company training committees.

So, we do have multiple means of support for workers, both downstream and upstream, to ensure that our workers are not just protected, but also supported. We hope that we maintain the economy in a good space, on an even keel, so that we can always ensure that workers have good opportunities and good jobs.

Sir, I would like to declare my conflict of interest as Executive Secretary of UWEEI and Dyson is one of our unionised companies. I thank the Senior Minister of State for his reply. Just one supplementary question and a point of clarification.

My supplementary question is, in light of these latest development of retrenchments in Singapore, which will impact workers including PMEs, can MOM work with tripartite partners to seriously review the various Tripartite Advisories, guidelines, regulations, employment and industrial relations laws, so that some of these ambiguities and lacunae can be addressed well before the next major retrenchment happens in Singapore?

And just a point clarification on his earlier comment that sometimes this is market-sensitive information, but in my many years with the Labour Movement and handling numerous retrenchments, there are many listed companies that, because of the very strong labour management relationship, do keep unions informed, sometimes even three months or six months in advance, although they are listed companies, whether locally or globally.

Mr Speaker, the Member is right that the tripartite partners regularly discuss issues like these to ensure that our laws and guidelines are updated based on the prevailing environment. I think it is important that we continuously look at our practices and guidelines to make sure that they are relevant and, from time to time, issues like this crop up. For example, what is an appropriate notification period and businesses will say that they have commercial sensitivities. And yes, there are some who will give early notice and some less so.

But ultimately, the Member is right. It is down to trust that you have to build and manage over time. Some of these are new firms that have just invested into Singapore and therefore need time versus others who have been here for much longer.

So, we have the perspectives from MOM, from the Labour Movement and employers. We need to balance both sides. But in this case, I do agree that there is always room for improvement and tripartism has to be built based on trust and confidence; and certainly, both the workers and the employers want win-win outcomes. This is something that we both want.

Whether it is the laws, regulations or advisories, I think we are certainly open to have those conversations. And as tripartite partners, we need to also open up constant communications between all parties, where both may find certain parts of our regulations or advisories to be outdated over time and need to be updated to deal with new or current issues. I think we need to just continue those conversations and dialogues. So, we are certainly open.