Starting from November 1st, every company with at least 10 employees must inform the Ministry of Manpower (MOM) of any retrenchments.
The main reason companies need to inform MOM of employee retrenchment is so that the Workforce Singapore (WSG), the tripartite partners which are the Ministry of Manpower, the National Trades Union Congress (NTUC), and the Singapore National Employers Federation (SNEF), and other relevant agencies can help the affected employees. In other words, it is to ensure that the retrenched employees receive the necessary assistance and support.
Here’s what you need to know about Singapore’s mandatory retrenchment notification
1) Who must notify MOM?
Employers who have businesses registered in Singapore must inform MOM of any employee retrenchment if they have at least 10 employees. They should notify at least five employees of their retrenchment within six months. Company representatives can notify MOM too.
2) When to notify MOM?
After the affected employees are notified of their retrenchment, the employer or company representative must notify MOM within five working days.
3) How to notify MOM?
As mentioned before, notification can be done by the employer or the company representative. The process takes up no more than 10 to 15 minutes. Here are more details about how to notify MOM:
- What information should you provide MOM?
- Company name and UEN.
- Company contact person details.
- Name of union (if the company is unionised), and whether the union was consulted.
- The number of employees on the date of submission of the retrenchment notification to MOM. This includes all employees—Singaporeans, PRs and foreigners.
- Details of employees to be retrenched such as name, NRIC or FIN, residential status, job title, date of effective retrenchment, and date of notification of retrenchment to employees.
- Payment of retrenchment benefits and quantum.
- Provision of employment facilitation assistance.
- What do you need to do before you notify MOM?
- Apply for a Corppass account if you don’t have one.
- Your Corppass admin or sub-admin must assign your Corppass account.
4) What is the penalty for non-compliance?
Administrative penalties shall be imposed if the company fails to comply with the requirements on the mandatory retrenchment notifications under the Employment Act. The notification must be filed within five working days after they provide notice of retrenchment to the affected employees. Failure to do so can result in a fine of up to S$2,000.
Due to the COVID-19 pandemic, retrenchment cases in 2020 have increased, affecting about 26,110 workers. This was significantly higher than 2019’s 10,690 retrenchment cases. However, we saw a decline in the number of retrenchment cases towards the end of 2020 and the first quarter of 2021.
With this new mandatory retrenchment notification, MOM hopes that employers learn to manage any retrenchment exercises responsibly and fairly. They can do so by ensuring that everything is in line with the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment.
Are you planning to expand your reach and start a career in Singapore? Share your questions or comments with us and we’ll see how we can help!