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SINGAPORE – Objective reasons like merit should be the basis for layoffs, but employers should also lean in favor of retaining Singaporeans and permanent residents in their workforce.
The Tripartite Notice on Managing Surplus Manpower and Responsible Downsizing was updated for the second time this year to incorporate the key principles of the Fair Reduction Framework of the National Trade Union Congress (NTUC).
The updates, released on Saturday (October 17), were made jointly by the Ministry of Manpower (MOM), the National Trade Union Congress (NTUC) and the National Federation of Singapore Employers (SNEF).
The notice goes on to state that layoffs should be a last resort, after exhausting all other cost-cutting measures based on the latest guidelines from the National Wage Council.
In the event that layoffs are unavoidable, employers must select employees for firing based on objective criteria such as merit and retaining those with skills to ensure business sustainability.
At the same time, they should also take a long-term view of their manpower needs, including the need to maintain a “strong core of Singapore”.
“Layoffs generally should not result in a reduced proportion of local employees. This can be achieved by retaining proportionally more premises during a layoff exercise,” the guidelines state.
When business activities recover later, employers must make a “deliberate effort” to strengthen their local workforce by hiring locals when they can.
Singapore will remain open and welcoming to foreigners who can help grow the country’s economy and create good jobs for locals, the guidelines add.
Local employees are also encouraged to acquire new skills from foreign employees with specialized skills, while companies must strive so that these skills can be transferred to local employees in the long term.
The updated guidelines also detail how employers can conduct a downsizing exercise in a responsible and sensitive manner.
These include notifying affected employees earlier than is required by contract or legally to employers, and informing them of the reduction in person to the extent possible.
Responsible employers must also ensure that human resources personnel and union representatives from unionized companies are on site to receive comments and answer questions from terminated employees.
Affected employees must also have time and space to adjust to news of layoffs, before they are asked to leave the workplace.
If necessary, counseling support should also be offered to laid off employees to support their emotional needs.
In response to media inquiries, a MOM spokesperson said the ministry expects employers to follow the notice when making cuts.
“If companies act irresponsibly in savings or layoff measures, the government will consider denying them future government support or suspending their work pass privileges. So far, the authorities have not had to do so,” the spokesperson added.
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