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SINGAPORE – About nine out of 10 eligible employees received a pay upon termination, according to data from the Ministry of Manpower (MOM) for the past six months.
This is so even though the law does not require such compensation.
Labor Minister Josephine Teo told Parliament on Tuesday (October 6) that about 84 percent of workers in this group received at least two weeks’ pay per year of service.
The figures are based on staff reduction notifications received by his ministry between April and September, he said.
About two in three of the employees who lost their jobs were eligible for downsizing benefits, he added. Personnel who have worked for a company for at least two years are eligible.
Ms. Teo noted that even among employees who were not eligible, nearly half received some severance pay.
The prevailing norm is a payment of between two weeks and one month of salary per year of service, depending on the financial position of the company and the practices of the industry, according to the tripartite advice on the management of excess labor and the responsible reduction.
The norm among unionized companies in which the amount of the personnel reduction benefit is in the collective agreement is the salary of one month per year of service.
Ms Teo said that Parliament has debated in the past the question of whether a benchmark downsizing benefit should be legislated, but the consensus among government, unions and employers is that it does not guarantee better results for employees. laid off.
“The legislated baseline would likely become the default. Even when employers can pay more, they are unlikely to do so.
“On the other hand, setting a high baseline downsizing benefit would challenge the financial health of already struggling companies and potentially jeopardize their viability and the jobs of remaining employees,” he said, in response. the MP for the Workers’ Party, Louis Chua (Sengkang GRC).
The minister added that if a downsizing benefit were enacted, employers would also be less likely to offer long-term or permanent contracts to employees, and would resort more to hiring employees on short-term contracts.
“So while we recognize the usefulness of downsizing benefits and encourage employers to pay in accordance with current regulations, we are even more focused on helping laid off workers return to the workforce,” he said , citing the government’s provision of heavy subsidies for skills programs, as well as training and salary support to employers while new hires undergo conversion programs.
Ms. Teo also said that about 90 percent of the workforce is covered by the layoff notification requirement, under which employers must notify MOM within five business days of informing staff of their layoff, if they have at least 10 employees and lay off at least five of them within any six-month period.
Workers’ Party Chair Sylvia Lim (Aljunied GRC) asked how tripartite advice on managing excess manpower and responsible downsizing, and government policies, ensures that Singaporeans are better off compared to permanent residents and non-Singaporean in terms of job security and income.
In response, Ms Teo said that based on her ministry’s investigation into downsizing cases, companies in general have made serious efforts to retain Singaporeans in their workforce.
Where layoffs are unavoidable, Workforce Singapore and the National Trade Union Congress offer job assistance, he added.
“Beyond efforts to help them stay in work … Singaporeans also receive extra help, extra support in social policies like education, training and health care. Schemes like Workfare and Silver Support are in place, helping to increase income during work and retirement. only for citizens, “he said.
He added that tripartite advice emphasizes layoffs as a last resort and calls on employers to keep a strong Singapore core even as they adjust their workforce.
“Until the economy recovers more fully, we will maintain the most vigilant posture on the labor situation,” he said.
“Where downsizing can be avoided through cost-cutting measures, we will be vigilant in cases where wage cuts cause undue hardship for workers … Where downsizing cannot be avoided, we will be vigilant about Singaporeans, we will provide full support to employers “efforts to retain them or help them get new jobs as quickly as possible”.
Ms Teo noted that in the first half of this year, the incidence of downsizing among local staff, ie Singaporeans and permanent residents, was 4.9 per 1,000 employees.
The incidence among those aged 60 and over was generally comparable, 5.2 per 1,000 local employees.
Regarding contract workers, Ms Teo said that the number of non-renewed contracts in the first half of 2020 has remained stable compared to the second half of 2019. She said that her ministry does not have the data broken down by age groups.
Fixed-term staff represent approximately 8 percent of all employees.
Addressing concerns raised by Mr. Yip Hon Weng (Yio Chu Kang) about age discrimination, especially in today’s job market, Ms. Teo said Singapore’s labor laws protect employees against discriminatory labor practices. , including unjustified dismissal for reasons of age.
In January this year, MOM also raised administrative penalties under the Fair Consideration Framework to increase deterrence against all forms of discrimination in the workplace.
He added that despite the current period of economic uncertainty, the unemployment rate for locals 60 and older remains comparable to that of the overall workforce.
The employment rate for Singaporeans and permanent residents aged 60 and over has increased over the past decade to 38.5 percent last year, up from 27.2 percent in 2009, he said.
Ms Teo highlighted measures introduced over the years to boost employment for older people.
These include the Special Employment Credit, which offsets the salaries of Singaporeans 55 and older, and a new part-time reemployment grant launched this year, which provides up to $ 125,000 to companies that commit to offering reemployment on time. biased in company policy.
“Our seniors are important and valued members of our workforce. We will continue to care for them and support their employers’ efforts to retain them,” he said.
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