TRIPARTITE GUIDELINES FOR MANAGING EXCESS MANPOWER

TRIPARTITE GUIDELINES FOR MANAGING EXCESS MANPOWER:

(Severance coverage): 9.

Ms Eunice Elizabeth Olsen asked the Acting Minister for Manpower (a) what

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guidelines are there with regard to severance for those who are not covered by the Employment Act as this does not seem to be included in the Tripartite Guidelines for Managing Excess Manpower; and (b) whether the Ministry has plans to be more proactive on the issue of severance.

The Senior Parliamentary Secretary to the Acting Minister for Manpower (Mr Hawazi Daipi) (for the Minister for Manpower): Sir, under the Employment Act, employees with at least three years of service are eligible to claim for retrenchment benefits. The Act does not stipulate the quantum of severance pay or retrenchment benefit for any group of employees. The amount of benefit to be paid may vary according to the industry norms, company's financial position, or the quantum stipulated in the employment contract or collective agreement signed between the company and the union if the company is unionised.

In most situations, payment would range from two weeks to one month's salary for each year of service. For employees with less than three years of service, it has been a practice for companies to grant them an ex-gratia payment to help them tide over a period of time before they secure alternate employment.

Although the Employment Act does not cover managers and executives for retrenchment benefits, companies in Singapore generally do pay retrenchment benefits to them. It is important to provide some flexibility especially for the managers and executives who are generally more able to negotiate the terms and conditions for themselves or already have employment and termination terms spelt out in their employment contracts.

If a retrenched employee encounters problems relating to retrenchment,

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including payment of retrenchment benefit, he or she could approach the Ministry for advice and assistance. Those who need assistance to find a job can also visit any of the Career Centres set up by the Singapore Workforce Development Agency (WDA), at the Community Development Councils (CDCs) and NTUC's e2i. The list of Career Centres can be found at the WDA website.

Efforts to help employees affected by retrenchment cannot be just by the Ministry alone. Instead, it is a tripartite effort. The tripartite partners – the Singapore National Employers Federation (SNEF), National Trades Union Congress (NTUC) and the Ministry of Manpower (MOM) – have been working together proactively with companies in the retrenchment process to help affected employees, including managers and executives, with various programmes such as the Skills Programme for Upgrading and Resilience (SPUR).

I would like to urge companies faced with excess manpower to adopt the Tripartite Guidelines for Managing Excess Manpower and consider retrenchment only as a last resort. If retrenchment becomes unavoidable, companies should conduct retrenchment exercises in a responsible and sensitive manner, and tap on the assistance available from our tripartite partners.

Ms Eunice Elizabeth Olsen: I thank the Senior Parliamentary Secretary for the clarifications. I have two supplementary questions.

We are seeing more retrenchment cases involving PMETs. I would like to ask where can this group seek redress if their company is neither paying a severance nor paying them on a period of time stipulated, or if a company winds up.

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I know of a case where the employer only paid up when the employee threatened legal action. Unfortunately, not everyone can afford legal fees, so where can this group of people seek redress?

Also, will the Ministry consider including a maximum time period as to when a company has to pay severance to former employees in the Tripartite Guidelines on Managing Excess Manpower?

Mr Hawazi Daipi: Sir, on the first question, employees, including managers and executives, can seek assistance from MOM. As I have said earlier, our officers will help them through conciliation. They would not have access to the labour courts, but our officers will advise them on the way forward for them to get redress. Of course, they would be in a position too to seek legal advice if they would like to do that.

On maximum time period for payment of severance pay, I think it is something that we can consider.