29 October 2020

On 17 October 2020, the Ministry of Manpower (MOM), National Trades Union Congress (“NTUC”), and Singapore National Employers Federation (SNEF) announced that they have jointly updated the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment (“Advisory”) to provide employers with clearer guidance on carrying out a retrenchment exercise responsibly, if retrenchment is inevitable. The tripartite partners have also urged companies to adopt the recommendations in the Advisory.

By way of background, the Advisory was last updated in March 2020 in view of the evolving Covid-19 situation which has affected businesses. Even with the support schemes rolled out by the Government, retrenchments may still be inevitable for some employers. In this context, the Advisory was further updated to emphasise the key desired outcomes in any retrenchment exercise.

Key changes to the Advisory

Maintain a strong Singaporean core

The key principles of the NTUC Fair Retrenchment Framework (FRF) have been included in the Advisory, in particular the need to maintain a strong Singaporean core. The Advisory reminds employers to take a long-term view of their manpower needs even as retrenchment is carried out. The Advisory also maintains its call for employers to use objective criteria when selecting employees to be retrenched.

Conduct retrenchments responsibly, provide support sensitively

The updated Advisory sets out the following good practices which employers should consider in notifying and providing support to employees affected by a retrenchment exercise:

  • Provide a longer notice period beyond contractual or statutory requirements where possible, so employees can be mentally prepared earlier; 
  • Brief/prepare managers on notifying employees about retrenchment in a sensitive manner, such as notifying employees in person unless it is impractical to do so; 
  • Have human resource personnel and union representatives onsite to address queries from retrenched employees and maintain an open communication channel with affected employees;
  •  Give affected employees the time and space to adjust to the news, before requesting them to vacate their workplaces; and 
  • Be sensitive to emotional needs of affected employees, including offering counselling support.

The updated Advisory also states that employers should consider providing training assistance to retrenched local employees post-retrenchment to help them maintain or build up relevant skills. Further, for employers that had carried out retrenchment exercises but subsequently experienced a pick-up in business activities, such employers should make a deliberate effort to strengthen their local workforce by hiring locals when they are able to do so.

The tripartite partners have also added a new “Responsible Retrenchment Practices” checklist to the Advisory as a quick guide to help employers manage retrenchments responsibly.

Reference materials

The following materials are available on the MOM website www.mom.gov.sg: