Oral Answer to PQ on Dyson's Retrenchment Excercise

Notice Paper No. 3127 OF 2024 FOR SITTING ON 14 OCTOBER 2024

QUESTION NO. 6653 FOR ORAL ANSWER

MP: Dr Tan Wu Meng:

To ask the Minister for Manpower in respect of a recent retrenchment exercise by a multinational technology company with a global headquarters in Singapore (a) whether the Ministry will look into how the relevant union was informed only a day in advance; (b) when was the Ministry notified of the retrenchment; (c) whether the retrenched workers' incomes are within the broad middle-income range in Singapore; and (d) how can Singapore continue to be pro-enterprise and attract investment while maintaining tripartite best practices.

QUESTION NO. 6655 FOR ORAL ANSWER

MP: Mr Yip Hon Weng:

To ask the Minister for Manpower in light of the recent retrenchment exercise by a multinational technology company with its headquarters in Singapore (a) whether the Ministry will review and strengthen current protocols to better manage future retrenchments, including ensuring that unions are given more timely notice beyond just one day; and (b) what steps is the Ministry taking to enhance pro-worker guidelines that can simultaneously encourage multinational companies to maintain their presence in Singapore while safeguarding the welfare of workers.

Notice Paper No. 3131 OF 2024 FOR SITTING ON OR AFTER 17 OCTOBER 2024

QUESTION NO. 6688 FOR ORAL ANSWER

MP: Mr Gan Thiam Poh:

To ask the Minister for Manpower (a) whether the one-day retrenchment notice period given by a multinational technology company to the union complies with tripartite advisories and, if not, what actions will be taken to address non-compliance; (b) what measures will be taken to ensure that the company maintains a fair and responsible retrenchment process; (c) whether the Ministry is aware if the compensation for the retrenched is in line with industry standards; and (d) how can future instances of retrenchment exercises with short notice periods be prevented.

Notice Paper No. 3136 OF 2024 FOR SITTING ON OR AFTER 15 OCTOBER 2024

QUESTION NO. 6717 FOR ORAL ANSWER

MP: Mr Patrick Tay Teck Guan:

To ask the Minister for Manpower in light of recent retrenchments by MNCs which involve professionals, managers and executives (PMEs) being laid off (a) whether the Ministry can take tougher enforcement action against companies that fail to comply with the tripartite advisories and guidelines on retrenchment of workers including PMEs; and (b) whether the Ministry can look into ensuring that companies notify the unions early in advance of impending retrenchments to allow for discussions, negotiations and preemptive assistance for affected workers and members.

QUESTION NO. 6718 FOR ORAL ANSWER

Mr Patrick Tay Teck Guan:

To ask the Minister for Manpower (a) for each year from 2019 to date in 2024, what is the number of companies that failed to file a mandatory retrenchment notification (MRN) within the requisite period; (b) whether the Ministry will consider reviewing the existing exemptions from MRN; and (c) whether the Ministry will consider reviewing the MRN period to require MRNs to be submitted prior to retrenchment instead of post-retrenchment.

Answer:

1. Mr Speaker, may I have your permission to address PQs No. 2 to 5 for this sitting on 15 October 2024. This reply also addresses another PQ scheduled for subsequent sitting on 17 October. Members have filed these PQs likely in response to Dyson’s recent retrenchment case, and I am taking these PQs together to provide a more holistic response. 

Dyson’s retrenchment exercise

2.          To recap, Dyson conducted a retrenchment exercise earlier this month. Subsequently, the United Workers of Electronics & Electrical Industries (UWEEI) expressed their concern that they were only notified a day before Dyson informed the affected employees.  The Ministry of Manpower (MOM) has been actively involved in this issue and has engaged both parties, who have agreed to work together in the spirit of tripartism.

3.          Members have raised questions on five key issues: (i) early notification to the union, (ii) retrenchment benefits, (iii) mandatory retrenchment notification, (iv) action that can be taken against non-compliant companies, and (v) how Singapore balances being both pro-business and pro-worker. I will address each of these issues in the rest of my reply.

(i) Early notification to the union

4.          First, members asked whether the one day notice in Dyson’s case was sufficient. Based on the Tripartite Advisory on Managing Excess Manpower or TAMEM, if the company is unionised, it should provide advance notice to the unions. Where it is provided in the collective agreement, the norm is to notify the union a month before notifying the employees. We understand that all the retrenched employees from Dyson are PMEs - professionals, managers or executives - who are not unionised. Thus, they are not within the scope of the union’s collective representation and the period of notice is therefore negotiable. Hence, Dyson handled the recent retrenchment exercise in accordance with our laws and tripartite advisories as the PMEs were not under the collective agreement.

5.          At the same time, the spirit of tripartite engagements is built on trust and a shared understanding between the employer and the union. It is good practice for companies to do so, as this builds trust between the employer and the union. Dyson has explained to UWEEI the reasons for not being able to give more advance notice to the union. Communications are key to managing the concerns of the affected employees, while also being cognisant of the constraints of the business. In this respect, both parties have committed to continue working together in the tripartite spirit to support both the needs of the workers and businesses.

6.       To work together effectively, trust between the union and employer is key. This cannot be taken for granted, and it needs to be built over time. Companies should value Singapore’s tripartite culture and work closely with the unions. At the same time, the unions also need to do their part to manage the concerns of employees, while recognising business needs. This is the delicate balance that has made our model of tripartism work well over the years. Ultimately, it is also important that all tripartite partners focus on the welfare of the affected workers, so that we can all work together to help them during this difficult period of disruption.

(ii)        Retrenchment benefits

7.       Second, members asked about the compensation for the retrenched workers. Retrenchment benefits are payments made by a company to provide some financial support to help the affected workers through the period of disruption. Based on the Tripartite Advisory, the amount of retrenchment benefits depends on what is provided for in the collective agreement, otherwise it will be negotiated. The prevailing norm is between two weeks to one month salary per year of service, and the retrenchment payments depend on the financial position of the company and industry norms. Based on our tripartite guidelines¹, the retrenchment benefits for PMEs can be calculated differently from that of a rank and file employee.

8.          While there is no requirement to do so and the affected workers are not covered by collective agreement, Dyson provided a retrenchment benefit quantum for its PMEs that is in line with our tripartite advisory. In addition, only employees that have served the company for at least 2 years are eligible for retrenchment benefits, but Dyson provided affected employees who have served for less than 2 years a payment as well. That goes beyond what they are obliged to do. Dyson will also provide after-care support, outplacement assistance, and access to career coaching and counselling to the affected employees.

9.          Separately, members have asked about the salaries of the affected employees. As a policy, we do not disclose salary details as it remains confidential to the employee and company.

(iii)    Mandatory Retrenchment Notification (MRN)

10.       Third, members asked about Dyson’s submission of its mandatory retrenchment notification (MRN). Dyson submitted its MRN to MOM on time, within 5 working days of notifying the affected employees. This has enabled the Taskforce for Responsible Retrenchment and Employment Facilitation or RTF to work with Dyson to provide career facilitation services and information kits to the affected employees.

11.       Members also had questions about the MRN requirement more generally.  

1. In response to the question from a member on the MRNs submitted from 2019 to March 2024, about 30% of MRNs were submitted late after 5 working days of notifying the affected employees. Among the late submissions, around half were submitted before the retrenchment date of the affected employees. This means that the RTF is still able to offer employment assistance to affected employees in a timely manner.
2. Currently, employers with less than 10 employees are exempted from submitting MRNs. This is an agreed tripartite position, given that it may place too much administrative burden to make smaller companies with less than 10 employees to submit MRNs.  Nonetheless, we encourage all employers to notify MOM of any retrenchment exercise early, so that we can extend support to the affected employees.
3. On whether MRNs should be submitted earlier, we need to strike a balance between allowing employers sufficient time to finalise their decisions, while enabling the prompt provision of career facilitation services and programmes to affected employees. Employers may need more time to decide on how they want to restructure and transform their business and collate details required on the affected workers for MRN submission.
4. Nonetheless, employers can provide early notification to MOM, if they are considering an upcoming retrenchment exercise and rest assured, we will treat the information that we receive sensitively. Employers can access this early notification channel on the MOM website, to obtain more assistance on how to conduct a responsible retrenchment exercise and provide earlier employment assistance to the affected workers.

(iv)     Action towards non-compliant companies

12.       Fourth, members asked about the action that can be taken towards non-compliant companies. Today Mr Speaker, most employers follow our retrenchment regulations. If an employer does not follow the tripartite advisory, the Tripartite Alliance for Fair and Progressive Employment Practices, or TAFEP, will engage the employer to adhere to it.

13.       Workers, including PMEs, who are not covered by a collective agreement with the union, can still seek the union’s assistance to be represented individually. They may also approach TADM who can assist if there are contractual or salary disputes, TAFEP if unfair or discriminatory practices were conducted, as well as WSG and E2I for employment assistance.

14.     MOM will also investigate unfair employment practices and take enforcement action if needed. Most employers are cooperative when approached by TAFEP or MOM. This shows that our tripartite guidelines and advisories are working well without the need for additional penalties, which may negatively affect the wider business environment in Singapore.

(v)      Ensuring that Singapore is pro-worker and pro-business

15.       Fifth, members have asked how Singapore can continue to be pro-business, while safeguarding the welfare of our workers. Businesses need flexibility to make decisions, which will allow them to adapt to market conditions and transform their business models. Singapore is currently ranked first in the 2024 IMD World Competitiveness Ranking. We need to constantly maintain a fine and delicate balance in preserving our economic competitiveness, which in turn results in more job opportunities and good wages for our workers. This is how we keep our long-term unemployment rate low. Real wages have also consistently improved over the past decade.

16.       There are other countries where the labour market is more rigid, or where there is a more confrontational relationship between the unions and the employers. This makes a country less attractive for companies to invest in. So we have to strike a balance – between protecting workers and providing flexibility for businesses. If we do not get this balance right, we may think that we are protecting our workers in the short term. But in the longer term, the good jobs for our workers may be reduced as we become a less attractive place for companies to invest in and firms may choose to site the operations or outsource jobs elsewhere.

17.       At the same time, what I can assure members is this. We do not wait for retrenchments to happen before we help workers. The government has worked closely with our tripartite partners, the unions, the employers, to develop an ecosystem that supports workers on every step of their career journey, even during disruptions. Together with our tripartite partners, we will work upstream to help companies and their workforce upskill, transform and even redesign jobs to improve talent retention, workforce productivity and wages.

18.     We will continue to help workers to build career resilience through picking up industry-relevant skillsets. This enables our workers to find new and better opportunities, even in the event of a retrenchment. Workers affected by retrenchment are assisted through employment facilitation such as career coaching. In Q2 2024, more than half of all retrenched residents were able to secure jobs within 6 months of being retrenched. From 2025, the SkillsFuture Jobseeker Support Scheme will further help involuntarily unemployed persons to bounce back.

Conclusion

19.       Mr Speaker and Members, to conclude, it is not easy to manage retrenchment issues. We need to continue achieving the right balance between the interests of the businesses, while ensuring that our workers remain protected and well supported during this difficult period of disruption. Trust and a shared understanding among our tripartite partners is key for Singapore to manage this balance well, so that Singapore remains pro-worker and pro-business at the same time. Our strong tripartite spirit will enable Singapore to remain exceptional and achieve continued economic success. This will in turn ensure that our workers get good jobs and wages for many more decades to come.