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SINGAPORE: Legislation on downsizing benefits does not guarantee better outcomes for employees who were laid off, Human Resources Minister Josephine Teo said in Parliament on Monday (October 6).
Responding to a question from Member of Parliament Louis Chua on whether a benchmark cost reduction benefit can be legislated, Ms Teo said the suggestion is not new and has its drawbacks.
She argued that a legislated baseline would likely become the default, so even when employers can pay more, they are unlikely to do so.
“On the other hand, setting a high baseline downsizing benefit would strain the financial health of already struggling companies and potentially jeopardize their survival and the jobs of remaining employees,” he said.
Ms Teo added that employers would also be less likely to offer long-term or permanent contracts, and would resort more to hiring employees on short-term contracts.
A more useful strategy would be to help laid off workers find another job, the minister said.
“While we recognize the usefulness of the downsizing benefit and encourage employers to pay in accordance with current regulations, we are even more focused on helping laid off workers return to the workforce,” Ms. Teo said.
“In addition to strong subsidies for skills programs, we provide substantial training and salary support to employers while their new hires undergo conversion programs,” he added, pointing to schemes such as the Job Growth Incentive that provides salary subsidies for employees. new local employees, and the SGUnited training programs.
WHO RECEIVED RETRENTION BENEFITS?
A total of 11,350 people were laid off in the first half of 2020, beyond the 10,120 recorded during the SARS period, but lower than other recessive peaks, according to the latest labor market figures.
LEE: Layoffs in Singapore increase in the first half of the year, surpassing the peak of SARS: MOM
Companies that have registered businesses in Singapore, at least 10 employees, and have notified at least five employees of their dismissal within a six-month period, must notify the Ministry of Manpower (MOM) of any dismissal exercise. .
Ms. Teo said that this rule covers about 90 percent of the workforce and is therefore “broadly representative.”
According to notifications received between April and September, about two-thirds of the employees who were laid off had at least two years of service with their employers and were eligible for a downsizing benefit, he said.
About nine out of 10 of them received some downsizing benefit, of which about 84 percent received at least two weeks of salary per year of service, it added.
Under tripartite advice on managing excess workforce and responsible downsizing, companies should offer a downsizing benefit of between two weeks and one month’s salary per year of service, depending on the financial situation of company and industry practices.
LAUNCHES INVOLVING OLDER WORKERS
Ms Teo also responded to MP Yip Hon Weng’s question about age discrimination and the number of Singaporeans aged 60 and over who lost their jobs or whose contracts were not renewed due to the COVID-19 recession.
She said this group of workers was laid off at roughly the same rate as the general public.
The incidence of local layoffs was 4.9 per 1,000 local employees in the first half of 2020. Among workers aged 60 and over, the proportion was 5.2 per 1,000 local employees.
Employees on fixed-term contracts accounted for about 8 percent of all employees in Singapore, and the number of non-renewed contracts in the first half of the year is “stable” compared to the second half of 2019, he said, adding that the Ministry does not have data on non-renewal of contracts by age group.
According to MOM’s second quarter labor market report released in September, 1,070 hired employees were laid off in the first quarter of this year. That’s up from 470 in the second quarter of last year and 880 for all of 2019. These are contract workers who were laid off early due to a layoff.
On the issue of age discrimination, Ms. Teo said that MOM recognizes Mr. Yip’s concern, especially amid a weak labor market.
READ: Stronger penalties for companies whose hiring practices discriminate against Singaporeans
In addition to monetary grants to encourage companies to hire older people, Ms Teo said Singapore’s labor laws protect employees against discriminatory work practices, including unfair dismissal on the basis of age.
Sanctions under the Fair Consideration Framework were also raised earlier this year to create greater deterrence against all forms of discrimination in the workplace, he added.
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