Most eligible employees received retrenchment payouts

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Manpower Minister says 84 per cent of eligible employees were given at least two weeks' salary per year of service

More than eight in 10 eligible employees received a payout when they lost their jobs, based on Ministry of Manpower (MOM) data for the last six months.

This is despite such compensation not being mandated by law.

Manpower Minister Josephine Teo told Parliament yesterday that about 84 per cent of this group were given at least two weeks' salary per year of service. The figures are based on retrenchment notifications received by her ministry between April and September, she said.

Mrs Teo said that Parliament had debated in the past the question of whether a baseline retrenchment benefit should be legislated, but the consensus among the Government, unions and employers is that it does not guarantee better outcomes for retrenched employees.

"Even when employers can afford to pay more, they would be unlikely to do so. On the other hand, setting a high baseline retrenchment benefit would strain the financial health of businesses that are already struggling, and potentially jeopardise their viability and the jobs of the remaining employees," she said, responding to Workers' Party MP Louis Chua (Sengkang GRC).

She added that if a retrenchment benefit was legislated, employers would be less likely to offer long-term or permanent contracts to employees, and resort more to hiring employees on short-term contracts.


Ms Sylvia Lim (Aljunied GRC) asked how the tripartite advisory on managing excess manpower and responsible retrenchment and government policies ensure Singaporeans are better off than permanent residents and non-Singaporeans in terms of job and income security.

In reply, Mrs Teo said that based on her ministry's investigation of retrenchment cases, firms have generally made serious efforts to retain Singaporeans in their workforce.

She said the tripartite advisory emphasises layoffs as a last resort, and calls on employers to maintain a strong Singaporean core even as they adjust their headcount. Where layoffs are unavoidable, Workforce Singapore and the National Trades Union Congress offer job assistance.

"Where retrenchments cannot be avoided, we will watch out for Singaporeans, give full support to employers' efforts to retain them or to help them move into new jobs as quickly as possible," she said.

Addressing concerns raised by Mr Yip Hon Weng (Yio Chu Kang) about ageism, especially in the current slack job market, Mrs Teo said that Singapore's employment laws protect employees against discriminatory employment practices, including wrongful dismissal on grounds of age.

She added that despite the current economic uncertainty, the unemployment rate for locals aged 60 and over remains comparable to that of the overall workforce.