Workforce retrenchment in Singapore is expected to hit record numbers as a result of economic disruption from the coronavirus (COVID-19) pandemic. Here is a brief guide for employers in Singapore as they consider retrenchment as an option.
In the wake of the coronavirus (COVID-19) pandemic that continues to disrupt the global economy, many employers worldwide are left with no choice but to reduce staff to cut costs and survive. Singapore, as one of the world’s most open economies, is not immune to this. It has been estimated by local economists that retrenchments in Singapore in 2020 could be between 45,000 to 200,000, which would be a record. Morgan Lewis has previously released other LawFlashes dealing with the impact of the pandemic on other business aspects, such as the conduct of shareholder meetings, control measures for telecommuting and safe distancing in workplaces.
In response to this predicted wave of retrenchments, Singapore’s Ministry of Manpower (MOM) has been issuing a number of employment law advisories to guide the implementation of retrenchment during this period. These guidelines seek to strike a balance between allowing employers to fairly retrench their employees where necessary, and to protect employees as far as possible where retrenchment is not strictly required. These advisories complement the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment guidelines (Tripartite Guidelines), which are similarly promulgated by the MOM (together with the National Trades Union Congress and Singapore National Employers Federation) to set out standards for employers to follow when retrenching employees.
Against this backdrop, Morgan Lewis Stamford has been receiving an increased number of requests for legal advice on how to effect retrenchments while complying with these MOM advisories and the Tripartite Guidelines.
The following is a brief guide on some of the considerations that employers in Singapore should keep in mind when determining if retrenchment is an option:
The Tripartite Guidelines and advisories from the Ministry of Manpower and its partners provide a detailed and prescriptive framework for how employers in Singapore should consider and effect retrenchments. Employers in Singapore are encouraged to observe and adhere to these guidelines, which may become a potential minefield for foreign and local employers unfamiliar with Singapore employment laws. As such, it would be prudent for all employers to obtain legal advice on their rights and obligations before embarking on any retrenchment exercises.
We have also discussed issues relating to employment law and workplace measures in Singapore in our February 20, 2020, LawFlash: Responding to the 2019 Novel Coronavirus: Guidance for Singapore Employers.
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If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers, who are directors of Morgan Lewis Stamford LLC, a Singapore law corporation affiliated with Morgan, Lewis & Bockius LLP:
Wai Ming Yap