ADOPTION OF ALTERNATIVES TO RETRENCHMENT

Ms Braema Mathiaparanam asked the Acting Minister for Manpower what steps his Ministry has in place to (i) ensure that employers use retrenchments as a last resort to save costs and (ii) encourage employers to use other strategies such as job-sharing, part-time work or cutting back on frills such as company cars as cost-saving measures.

Dr Ng Eng Hen: Sir, MOM has been providing retrenchment advisory services to help companies explore feasible alternatives to retrenchment, as Ms Braema Mathi has suggested. We have asked them to carry out retrenchment only as a last resort.

Following the recommendations of the Tripartite Panel on Retrenchments in June 1998, a special Retrenchment Advisory Unit under the Labour Relations Department of the Ministry was set up. This Unit monitors retrenchment trend, advises companies on how retrenchments can be carried out smoothly and fairly to the extent possible, provides conciliatory assistance to resolve disputes, disseminates information relating to retrenchment through brochures and leaflets. The Unit also manages a Retrenchment Assistance Hotline to enable employers facing excess manpower to seek timely advice and assistance on retrenchment issues. Companies are urged to retrench workers as a last resort and are advised to consider the following alternatives if they have excess manpower.

One, take the opportunity to train and upgrade their workers' skills under the Skills Redevelopment Programme (SRP), which is exactly what we did in terms of our assistance schemes during the SARS crisis for tourism and hospitality-related sectors. The Government issued a $57 million budget for training and for some sectors, as you might have read, the uptake was significant and did allay further retrenchments.

Two, look for alternative areas of work within the company to deploy the surplus workers, including implementing job-sharing and part-time work, as well as other cost-cutting measures.

Three, implement shorter work week or temporary lay-offs.

Four, if it has a flexible wage system in place, use it to adjust its wage cost.

To help promote the adoption of the above-mentioned alternatives to retrenchment, the Ministry proactively visited companies with excess manpower. In other words, we do not wait for them to call us. We monitor the trends and then we go down to the ground and try to manage it. Between March and October 2002, MOM visited 110 companies ranging from SMEs to large firms employing over 500 staff.

With the implementation of the various alternatives to retrenchments, many jobs have been saved as companies could avoid retrenchments and where retrenchment is unavoidable, the number of workers affected could be minimised.