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Companies that retrench workers have to ensure proportion of local staff not eroded: SBF

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SINGAPORE – Employers that retrench workers as a last resort should ensure that the proportion of local staff in the companies are not eroded, said Singapore’s apex business federation.

However, this has to be done in a fair and transparent manner, the Singapore Business Federation (SBF) stressed in an advisory to member companies on responsible retrenchment practices on Friday (Aug 7).

“Companies should not discriminate against any particular group based on age, race, gender, religion, marital status or disability. They should retain employees, both local and foreign, based on their key skills and experiences needed to enable the company to emerge stronger and create new job opportunities for Singaporeans in the future,” said the advisory.

This is one of four key considerations the federation hopes employers would observe, should they need to manage their excess manpower as layoffs are expected to rise in the coming months amid the Covid-19 pandemic.

The other things to consider, said the SBF, are ensuring retrenchment is the last resort, working closely with government agencies and unions and conducting layoffs in a sensitive manner.

Noting that retrenchments should be the last resort in managing manpower costs, it called on companies to consider other cost-cutting measures first, such as sending workers for training to upgrade their skills, redeploying them to other roles within the firm, implementing flexible work schedules, and having wage adjustments with management leading by example.

Companies considering retrenchments should work closely with government agencies and the National Trades Union Congress (NTUC) to find ways of preserving as many jobs as possible, and to offer assistance to affected workers, said SBF. Companies planning retrenchments must also inform the Ministry of Manpower (MOM) in advance.

SBF chairman Lim Ming Yan urged companies to take a longer-term view of their manpower needs “so as to retain and upgrade important capabilities, and to transform their businesses for the eventual recovery”.

“Companies should view retrenchments as a last resort, only after having exhausted all other cost-saving options. If companies need to retrench, they should have in place fair criteria that protect their Singaporean core and yet retain talent necessary for growth,” noted Mr Lim, adding that companies should work closely with the unions and government agencies to help workers find new jobs.

Companies can also tap into SBF-managed resources, such as the SGUnited Jobs Initiative, SGUnited Mid-Career Pathways Programme, Professional Conversion Programme – Southeast Asia Ready Talents and SBF Foundation Industry-led Compassion Fund.

The advisory comes a day after MOM said that foreigners bore the brunt of last month’s retrenchment exercise at Resorts World Sentosa (RWS), with the integrated resort making efforts to cut costs and management salaries before it laid off workers.

Before the retrenchment, local workers formed about 66 per cent of the staff. After the layoffs, the proportion increased to 75 per cent.

“Overall, after the retrenchment exercise, RWS has a stronger Singaporean core ,” said the ministry, responding to queries on the laying off of about 2,000 RWS employees.

In a Facebook post on Friday, Mr Desmond Choo, assistant secretary-general of the NTUC, said he met affected workers last week, along with members of the Attractions, Resorts and Entertainment Union (AREU).

“Many were mindful about their future jobs and living expenses. Some of them also asked if the retrenchment was conducted as a last resort, if the retrenchment package was fair and if the Singaporean core was upheld,” added Mr Choo, who is an advisor to the union.

He assured the affected employees that NTUC and AREU will work together to resolve their concerns and hardships by also highlighting their cases to the relevant authorities.

The labour movement last month asked firms to ensure that workers affected by retrenchments were treated fairly and the Singaporean core of the workforce kept intact.

When retrenchment is inevitable, companies should observe the tripartite advisory on managing excess manpower and responsible retrenchment, which encourages employers to communicate with workers early and explain why a retrenchment exercise is needed, how it will be carried out, what factors will be considered, and what assistance they will get to find another job.

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