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Retrenchments hit 4.9 per 1,000 local employees in H1: MOM

The number of contracts not renewed in the first half of 2020 has remained stable compared to the second half of 2019.

THE incidence of local retrenchment in Singapore was 4.9 per 1,000 local employees in the first half of 2020, said Manpower Minister Josephine Teo in Parliament on Tuesday in response to questions put up by members of Parliament.

For senior workers aged 60 and above, the incidence of local retrenchment was 5.2 per 1,000 local employees.

Half of the locals retrenched were women.

Separately, employees on fixed-term contracts constitute about 8 per cent of all employees in the workforce. The number of contracts not renewed in the first half of 2020 has remained stable compared to the second half of 2019. The Ministry of Manpower (MOM) does not keep data on non-renewals of contracts by age groups, she said.

Mrs Teo also noted that the requirement to submit retrenchment notifications to MOM covers about 90 per cent of the workforce and provides a broadly representative view. Based on notifications received between April and September this year, about two-thirds of the employees affected by retrenchment had at least two years of service with their employers and were thus eligible for retrenchment benefits.

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About nine in 10 of these eligible employees received some retrenchment benefit, of which about 84 per cent received at least two weeks' salary per year of service.

Mrs Teo said businesses have generally taken heed of the advice put up by the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment to take retrenchment as a last resort, based on MOM's investigation of retrenchment cases.

Where retrenchments cannot be avoided, Workforce Singapore will reach out to offer job assistance. In unionised companies, NTUC has sought to minimise their period of unemployment through "lift and place" efforts, partnering the government, she said.

Mrs Teo noted that the question of whether a baseline retrenchment benefit should be legislated is not new and has been debated in Parliament.

"The tripartite consensus, after extensive deliberation, is that it does not guarantee better outcomes for retrenched employees," she said.

"The legislated baseline would likely become the default. Even when employers can afford to pay more, they would be unlikely to do so. On the other hand, setting a high baseline retrenchment benefit would strain the financial health of businesses that are already struggling."

This in turn would jeopardise their survival and the jobs of the remaining employees. With legislated retrenchment benefit, employers would also be less likely to offer long term or permanent contracts to employees and resort more to hiring employees on short-term contracts, she said.

"While recognising the usefulness of retrenchment benefit and encouraging employers to pay according to the prevailing norms, we are more focused on helping retrenched workers return to the workforce," she said.

Some of the programmes introduced during this period include the Job Growth Incentive to spur employers to expand local hiring, with double the support for new hires aged 40 and above; the SGUnited Mid-Career Pathways Programme to help mid-career locals gain relevant work experience through local attachments; and the Part-time Re-employment Grant that will provide up to S$125,000 to companies that commit to a part-time re-employment policy.

"Through these measures, we have made good gains in senior employment. Our employment rate for residents aged 60 and above has increased from 27.2 per cent in 2009 to 38.5 per cent in 2019. During this period of economic uncertainty, the unemployment rate for locals aged 60 and over remains comparable to that of the overall workforce," said Mrs Teo, adding that until the economy recovers, MOM will maintain the stance of "heightened vigilance".

Amendment note: An earlier headline of this article stated that locals made up fewer than five in 1,000 employees retrenched in H1, when in fact it should state that fewer than five in 1,000 local employees were retrenched. The article has been amended to reflect this.

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