Getting Retrenched In SG: Knowing Your Rights, Compensations, And What To Do To Protect Yourself

Two years ago, my dad was laid off from his job at an investment firm in a rather unceremonious fashion.

My dad, who never troubled us with anything, naturally kept mum about the news. It was not until the inevitable happened- when he’d pack his belongings in a small, cardboard box, that he told the family about his retrenchment.

Retrenchment is a painful and personal process for the employee, especially on an emotional and psychological front.

While Singapore’s retrenchment numbers in recent years remain relatively low, looming recession, as well as high-profile retrenchment cases are unsettling. Singapore Press Holdings (SPH) recently laid off 5% of its staff, and travel retailer DFS Group has retrenched 60 of its workers.

While layoffs are part and parcel of businesses, not all firms let workers go with dignity.

TODAY reported how travel retailer DFS Group told workers on the spot that they were retrenched immediately. The company also had security guards follow the retrenched workers out of the premise, and offered retrenched employees a mere one week’s pay for each year of service (capped at 13 years)- way below MOM’s guidelines on minimum compensation.

For my dad, it was fortunate that he took time off to upgrade himself, get certified on capital markets and financial advisory courses, and promptly landed himself in another job. Others, however, may not be so lucky.

What I recalled most poignantly at that time was how lost we were at the news of his retrenchment. Was he getting any form of compensation? (No.) Did he deserve any? (For the number of years he’s been there, I thought he deserved something.) How are we going to pay for our expenses?

For older workers who are at risk of facing retrenchment, I hope this article serves as a guide for you to seek the help that you need.

TL;DR: Everything You Need To Know When You Get Retrenched From Your Job

What To Do When You Get Retrenched 

1. Be familiar with the existing laws and guidelines
2. Retrenchment Benefits Available
3. Protecting your rights during retrenchment:
   • Be part of a trade union
   • Get help from NTUC Work Security Task Force
   • Employment Assistance For Retrenched Workers: SkillsFuture SG and Workfare Singapore
4. Budgeting Tips And Financial Planning For Retrenched Workers.

What Kind Of Compensations Am I Entitled To?

Existing Laws and Guidelines

Notice Period To Be Given Before Retrenchment

According to the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment, you have to give the following notice periods for termination of employment:

Under the Employment Act, companies are usually required to notify MOM within five working days of notifying the retrenched employees. This allows them to provide retrenched employees with employment facilitation assistance.

Retrenchment Benefits

Am I Eligible For Retrenchment Benefits?

Employees with 2 years’ service or more are eligible for retrenchment benefits.

According to the Ministry Of Manpower, the prevailing norm is to pay a retrenchment benefit varying between 2 weeks to 1-month salary per year of service, depending on the financial position of the company and the industry’s practices.

In companies that are part of a trade union, retrenchment benefit is usually stipulated in a collective agreement. The norm is one month’s salary for each year of service.

Workers aged 62 and above are also entitled to a one-off Employment Assistance Payment. While there is no compulsory minimum sum, the Tripartite Guidelines for Re-employment of Older Workers recommends that they are paid at least $5,500 or 3.5 months’ worth of salary.

Protecting Your Rights During Retrenchment

1. Be Part Of A Trade Union

By joining a union, the union is able to negotiate for your rights, as well as offer training and re-employment services when you lose your job. Below are some examples of the benefits you may receive in a trade union.

You can also tap on the Union Training Assistance Programme (UTAP), capped at $250 every year, to improve your skillset. The $250 a year UTAP training fund also comes from the NTUC Education Training Fund.

Unions can also provide financial assistance to union members in various forms such as bursaries and study awards.

2. NTUC Work Security TaskForce (NEW)

With workers in their 40s and 50s increasingly worried about losing their jobs amid economic uncertainties, the National Trades Union Congress (NTUC) will also be setting up a new work security taskforce to offer older workers better protection.

The taskforce will look at stepping in at the ‘pre-retrenchment’ phase by partnering with employers to ensure that workers have the necessary technical skills so that these workers remain relevant in their companies.

As this is a new initiative by NTUC, not all details are rolled out. Do keep a lookout on this space as we will be updating it when more details of the taskforce are revealed.

3. Employment Assistance For Retrenched Workers: SkillsFuture SG and Workfare Singapore 

4. Budgeting Tips And Financial Planning For Retrenched Workers

Leave on a good note

Getting retrenched sucks, and it may leave you with a ton of resentment and frustration. While it is justified for you to feel this way, it is not wise to burn bridges, especially if you will be looking for another job. Rather, leave a good last impression. If you have clients, you can drop hints and let them know in advance that you will be leaving your job.

Maximise company benefits

Still have annual leaves left to clear? Take a break and clear your leave while you can, especially if you’re serving a notice period. Some companies also give free health screenings or dental plans, as well as employee discounts on certain products or services. If there’s anything that interests you, get it

Start Budgeting And Prioritizing Your Expenses

If you’ve followed Seedly’s money framework, you should have 6 months worth of expenses saved in your emergency fund. Now will be the time to put this to good use.

Prioritise the important things you have to pay off, such as housing loans, health insurance, food etc, and cut back on unnecessary expenditure.

For example, I have a monthly household expenditure of $1,000 a month. If I have been saving for an emergency fund, that leaves me with $6,000 worth of savings that will act as a buffer while I find another job.

Conservatively, if I reduced my household expenditure to $600/month, I should have ~10 months to work on finding another job.

Set Yourself A Timeline 

Getting retrenched doesn’t mean you should grab the first job you could find in the market. It’s not worth working as a grab driver, or a pizza delivery person just to make ends meet.

Illustrating from the above example, it is important to set yourself a timeline to find a job. Knowing that my funds will run out in 10 months, I should target getting re-employed after 5 months so that I will not run out of my savings.

Getting Retrenched In Singapore

Getting retrenched is difficult, especially when you start questioning your self-worth, and your place in the workforce. Don’t fall into a negative cycle of self-doubt and inferiority, and don’t assume that retrenchment is a reflection of your lack of skill or worth.

Take some time off to upgrade yourself and do the things you like, and when you’re ready, take the next few strategic steps to rejoin the workforce.

If you’re still unsure of where to start, you can always direct your questions to our Seedly QnA community. Here’s a relevant discussion you can engage in below:

Seedly QnA: What Courses Should I Join To Upgrade Myself When I Get Retrenched?