Singapore Startup’s Guide on Retrenching Responsibly
This article was first published by Coach2Nurture.
During this period, Singapore start-ups may face certain challenges in managing resources including headcounts. While you are contemplating retrenchment, we would like to share some TAFEP guidelines on alternatives
Alternatives to Retrenchment
- Send employees for training to upgrade their skills and employability
- Redeploy employees to alternative areas of work within the company
- Implement flexible work schedule, flexible work arrangements, shorter work-week, or temporary layoff
- Adjust wages in line with tripartite norms e.g. monthly variable component of up 10%, freeze increment and annual wage supplement
- Implement no-pay leave (as a last resort)
If retrenchment is inevitable, guidelines on how to manage it responsibly.
How to Retrench Responsibly
- Fair and Objective Criteria of Selection in relation to the business downturn and organization re-structuring and job roles are no longer required
- Communicate to Employees by communicating the rationale and explain how the exercise would be carried out and be sensitive to the emotions of employees
- Provide Retrenchment Notice Period to affected Employees. Start-ups are encouraged to provide notices above the MOM Employment Act termination notice period.
- Provide Retrenchment Benefit in line with the advisories.
- Employees with 2 years’ service or more are eligible for retrenchment benefit.
- Those with less than 2 years’ service could be granted an ex-gratia payment.
- The prevailing norm is to pay a retrenchment benefit varying between 2 weeks to one- month salary per year of service, depending on the financial position of the company and the industry norm.
- Facilitate Employment Options through helping affected employees look for alternative jobs in associate companies, in other companies or through outplacement assistance programmes. Start-ups could also provide supporting documentation such as referral letters, service records and past training certificates to facilitate the job search of affected employees
- File Manpower Retrenchment Notice (MRN) to MOM, If you have decided and will be going through a retrenchment exercise, you are strongly encouraged to submit a notice of retrenchment
- It is mandatory for Employers with at least 10 employees who have retrenched 5 or more employees within any 6-month period to notify MOM of the retrenchment exercise.
- Employers must notify MOM of retrenchments within 5 working days after they notify their employees.
Long Term Effects of Retrenching Responsibly
- Employee will appreciate
- Employee will always remember how it was managed
- Employer Reputation and Branding
- To upkeep the morale of existing staff
- To attract Talents when the business recovers
- Not run into compliance issues with MOM & TAFEP
For specific guidelines as well as advisory support. please visit https://www.coach2nurture.com/resources
or contact Karen Lur, Founder at 9842 4939 or email: firstname.lastname@example.org
Coach2Nurture offers a range of HR advisory, consulting and coaching services with the necessary tools and expertise to help you grow your business. If you are at a start-up phase, we will support you in the initial set-up to build your HR capabilities. If you are at a growth stage, we will support you to develop your talents through coaching and mentoring. If your business is at a transition stage, we will extend organisation right-sizing, career transition coaching and support to help your business or your Employees for the next phase.