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SBF Issues Advisory on Responsible Retrenchment Practices


Friday, 7 August 2020 [Singapore] Amid the economic impact due to COVID-19 and with layoffs expected to rise in the coming months, the Singapore Business Federation (SBF) is issuing an advisory to all its member companies on responsible retrenchment practices. In line with the updated Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment and NTUC’s Fair Retrenchment Framework, SBF calls on businesses to adopt the following key considerations when managing excess manpower:
  1. Retrenchment should always be the last resort
  2. Protect the Singaporean Core and retain talent to grow business opportunities
  3. Work closely with Government agencies and unions
  4. Conduct retrenchment in a responsible and sensitive manner
Retrenchments should be the last resort for companies to manage their manpower costs. Companies should always consider alternatives such as sending employees for training to upgrade their skills, redeploying employees to alternative areas of work within the company, implementing flexible work schedules, and wage adjustments with management leading by example, before considering any retrenchment. Companies can tap on to the many programmes and assistance schemes offered by our Government agencies, NTUC, Singapore National Employers Federation (SNEF) and trade associations and chambers (for example, the Enhanced Training Support Package under SkillsFuture, and the redeployment programmes under the Adapt and Grow initiative).

If retrenchments are inevitable, the selection of employees for retrenchment should be conducted in a fair and transparent manner, based on objective and non-discriminatory criteria that protects the Singaporean Core and gives due consideration to employees, both local and foreign, based on the key skills and experiences needed to enable the company to emerge stronger and create new job opportunities for Singaporeans. Companies should not discriminate against any particular group based on age, race, gender, religion, marital status or disability. Companies considering retrenchments should also work closely with Government agencies and NTUC to find ways of preserving as many jobs as possible, and to provide assistance to affected employees. Companies planning retrenchments must inform the Ministry of Manpower (MOM) in advance.

Mr Lim Ming Yan, Chairman of SBF, said “We encourage companies to take a longer-term view of their manpower needs so as to retain and upgrade important capabilities, and to transform their businesses for the eventual recovery. Companies should view retrenchments as a last resort, only after having exhausted all other cost-saving options. If companies need to retrench, they should have in place fair criteria that protect their Singaporean Core and yet retain talent necessary for growth. In retrenchment, just as for hiring, companies should be fair and responsible and work closely with the unions and Government agencies to support the employees in seeking new employment opportunities.”

Besides the various assistance schemes mentioned, companies can also tap onto SBF-managed programmes and resources such as the SGUnited Jobs Initiative, SGUnited Mid-Career Pathways Programme, Professional Conversion Programme – Southeast Asia Ready Talents and SBF Foundation Industry-led Compassion Fund. SBF stands ready to help businesses emerge stronger from the COVID-19 pandemic.

Please refer to Annex A for the full advisory.

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