In Thailand, employees must be informed at least one month before they are retrenched; and in South Korea, at least 30 days before. In the United States, employees must be notified 60 days before in the case of mass layoffs.
In Singapore, a day’s notice is required for workers with less than 26 weeks of service, and four weeks’ notice for those who have worked five years or more.
Thailand and South Korea also have severance pay laws. Singapore does not, and retrenchment benefits are backed only by guidelines in the tripartite advisory issued by the MOM, NTUC and the Singapore National Employers Federation (SNEF).
Should severance pay be written into law, “there could be a negative impact on the employees that the company can retain”, said SNEF executive director Sim Gim Guan.
“If (the company is) already in financial difficulty, and you’re demanding that they have to pay a certain amount of retrenchment, then they won’t have enough to keep the business going, which means they may have to even retrench more.”
While companies are expected to follow the tripartite advisory, “not all employers may be familiar with (it)”, he acknowledged. “It’s not surprising that in many companies, especially the smaller companies, they don’t have a full-time HR function.
“One individual may be dealing with many different issues. And depending on the priority of the day, they may not be focused on … the legislation and guidelines that are issued.”
These guidelines can still be referred to in court, said Goh, citing disputes over unfair dismissal.
The “most important thing” for SNEF is to look into preventing retrenchment in the first place, said Sim.
“What you don’t see are all the companies that have done all the right things, so that retrenchment doesn’t happen, even when they’re facing difficulties or … having to transform.
“Because they’re helping to bring their workers along — upskilling, reskilling them so that the workers continue to … contribute to the success of the company.”