Lazada retrenchment controversy – RDU calls for government support for workers

SINGAPORE – Red Dot United (RDU), in a statement on 8 January, has taken a firm stand in the wake of Lazada’s recent retrenchment exercise, urging the government to stand with workers and uphold fair labor practices.

The retrenchment of nearly 100 workers in Singapore has sparked concern and calls for transparency in the wake of the company’s potential public listing in the United States of America (USA).

The controversy came to light when several media reports highlighted the ongoing retrenchment process early this month.

NTUC and FDAWU express dissatisfaction over Lazada’s retrenchment decision; RDU raises questions on union consultation and fair labor practices

On 5 January, a joint statement from the NTUC and the Food, Drinks, and Allied Workers Union (FDAWU) expressed dissatisfaction with Lazada’s retrenchment decision, highlighting the absence of union consultation.

In response, FDAWU communicated their disapproval to Lazada, escalating the matter to the Manpower Ministry for review.

In a subsequent joint statement issued the following day, both unions noted progress in negotiations with Lazada regarding the retrenchment.

Lazada, a subsidiary of Alibaba group, apologized for the lack of prior consultation, and both NTUC and FDAWU accepted the apology.

However, RDU raised concerns, stating that questions remain about the Collective Agreement (CA) and the unionization status of Lazada’s workers.

RDU emphasized the need for the Union to clarify these aspects, particularly amid common retrenchments in uncertain times.

“So, were the workers at Lazada unionised? If they were unionised, was there a breach of the CA? If they had a CA, were retrenchment benefits mentioned in it?

“It is important for the Union to clarify this, especially in these uncertain times when retrenchments seem to be commonplace,” RDU said.

Amid speculation linking Lazada’s retrenchment to a potential IPO in the USA, RDU criticized the practice of sacrificing employees for short-term gains, deeming it inhumane and unsustainable.

RDU also highlighted a parliamentary inquiry regarding registered trade unions’ consent to refrain from initiating CA negotiations, raising questions about Lazada’s unionized workforce and the implications for the existing CA.

Additionally, RDU pointed out that Lazada’s downsizing contradicts NTUC’s Fair Retrenchment Framework (FRF), which mandates clear communication and support for affected employees.

The party emphasized the importance of providing clarity on the notification process and subsequent support for those impacted by retrenchment.

RDU raises ethical concerns over Lazada’s retrenchments amid NTUC grant, calls for accountability

Furthermore, the team raises ethical concerns regarding Lazada’s retrenchments, labeling the action as “egregious,” especially considering the company is a recipient of the NTUC’s $70 million Company Training Committee (CTC) Grant in July 2022.

RDU asserts that as a beneficiary of public funds, Lazada bears an increased responsibility for accountability in its actions. The grant, designed for workforce transformation, also permits businesses to acquire equipment, OEM software, and consultancy for enterprise transformation.

“The juxtaposition of receiving public funds for enhancing workforce capabilities and the subsequent retrenchment raises significant questions about the ethical and responsible use of these resources,” RDU said.

The party emphasizes the need for accountability in utilizing public funds, calling on the Minister of Manpower to ensure fair treatment for affected workers and uphold the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment.

RDU emphasizes the need for fairness and transparency, especially during the festive season, as the lives and livelihoods of workers hang in the balance.

Moreover, the party warns that failure to address unfair retrenchment practices may lead to a widespread perception among workers that the government prioritizes capital over their well-being, potentially impacting its ability to govern effectively.

“Unfair retrenchment practices, if not addressed in a fair and transparent manner by authorities, may lead to a widespread perception among workers that the government prioritises capital over their well-being, thereby affecting its ability to govern effectively and meet the needs of its citizens,” RDU said.

The team believes that setting a precedent is crucial, considering the significant number of un-unionized workers, including gig workers, who contribute substantially to the workforce landscape.