MOM to review suggestions to make advance retrenchment notifications mandatory

Manpower Minister Tan See Leng said his ministry will review suggestions by MPs to make advance retrenchment notifications mandatory, as part of a broader look at the Employment Act.

He was responding to MPs during the debate on the Ministry of Manpower’s (MOM) budget on March 3.

During the debate, labour chief Ng Chee Meng (Jalan Kayu) and National Trades Union Congress assistant secretary-general Patrick Tay (Pioneer) asked if firms could give mandatory advance retrenchment notifications earlier so workers can get help.

Mr Tay said: “I propose that the notice be done prior to retrenchment so that early support can be activated, such as career coaching, job-matching, redeployment and, where possible, alternatives to retrenchment itself.

“Early notification enables early intervention, and early intervention saves jobs.”

Dr Tan responded in his speech that mandating such a requirement poses challenges, as retrenchment is a difficult process and is often a last resort for companies.

“If we mandate advance notifications, this may inadvertently push companies to finalise the retrenchments faster,” he said.

He also noted that businesses have expressed concerns over the potential leakage of confidential market-sensitive information.

He added, however, that MOM is not ruling out any option, but is engaging in a comprehensive review. He said tripartite partners are being consulted, and there will be updates in due course.

“The short answer to the mandatory retrenchment advance notice – as we are undertaking the review of the Employment Act, we will comprehensively look at all that,” said Dr Tan.

While MOM will be reviewing making advance retrenchment notifications mandatory, it said legislating the payment of retrenchment benefits may put more jobs at risk.

During the debate on the ministry’s budget, Workers’ Party chief Pritam Singh (Aljunied GRC) said the time has come for retrenchment benefits guidelines to be legislated as a norm. He also suggested that larger companies with more than 25 workers should be expected to pay more, such as a minimum of one month’s pay for every year of service.

In response, Dr Tan said: “Legislation is not a panacea. We adopt a balanced approach. We protect our workers, but, at the same time, we need to give businesses some flexibility to adjust in different situations.”

He added that retrenchments occur for a variety of reasons, and company size may not be an indicator of the company’s ability to afford retrenchment benefits.

“For example, if you mandate retrenchment benefits in larger companies facing financial difficulties, I think we may inadvertently put even more jobs at risk,” he said.

Source: The Straits Times © SPH Media Limited. Permission required for reproduction.

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