Tan See Leng: 2/3 retrenched workers “bounce back quickly”, re-employed within 6 months

SINGAPORE: Addressing the growing concerns surrounding recent trends in retrenchment, Manpower Minister Dr Tan See Leng reassured the public that the majority of retrenched workers are able to “bounce back quickly”.

He cited MOM data indicating that approximately two-thirds of retrenched workers successfully secure new employment within six months.

Acknowledging the heightened apprehension among residents due to notable retrenchment exercises in Singapore, Dr Tan emphasized that the long-term unemployment rate for residents remains notably low at 0.7%.

Nevertheless, he disclosed MOM’s forthcoming initiative—an empowering support scheme designed to aid involuntarily unemployed jobseekers in their swift return to employment.

He said MOM is close to finalising the scheme parameters, and more information will be announced later this year.

He added that the upcoming Workplace Fairness Legislation (WFL), which is slated to be passed in the second half of 2024, will provide additional protections against age discrimination in the workplace.

Dr Tan: Onus on employers to be fair and responsible when conducting retrenchment

Dr Tan was responding to a Parliamentary Question filed by Mr Yip Hon Weng, the PAP MP for Yio Chu Kang SMC on Thursday (29 February).

Mr Yip asked the Minister in light of public concerns about increased retrenchments in 2023, whether he can elaborate on the Government’s approach to address anxieties over job security, economic stability and impact on families, especially considering high living costs and global challenges.

He also sought clarification on what government measures are in place to address ongoing re-employment challenges faced by retrenched senior workers over age discrimination and job disruption from rapid technological advancement.

In response, Dr Tan acknowledged workers’ concerns and empathised with their anxieties.

He stressed that the onus is on employers to be fair and responsible when conducting retrenchment, and referred to his earlier Parliamentary address, assured that MOM set out our tripartite approach to ensuring that retrenchment is carried out responsibly.

He emphasized the government’s tripartite approach to ensure responsible retrenchment, education of employers through TAMEM, and referral of non-compliant employers to TAFEP.

He further elucidated MOM’s initiatives, which encompass skills development via the education system and SkillsFuture, as well as maintaining a robust labour market through foreign workforce policies.

“By and large, most retrenched workers are able to bounce back quickly. Our data shows that about two-thirds of retrenched workers re-enter into employment within six months.”

Dr Tan acknowledged that some retrenched workers do face greater difficulties finding a new job.

For those facing difficulties, he said a Taskforce for Responsible Retrenchment and Employment Facilitation provides support, including employment facilitation services and information kits.

According to Dr Tan, the task force is led by Workforce Singapore, and includes representatives from the MOM, the National Trades Union Congress (NTUC), NTUC’s Employment and Employability Institute (e2i) and Enterprise Singapore (ESG).

He added that retrenched workers can use Workforce Singapore’s programs for job switches and reskilling.

Dr Tan recognized the financial impact of retrenchment and announced the upcoming introduction of a support scheme to empower involuntarily unemployed jobseekers to bounce back into employment.

Regarding support for senior workers, Dr Tan reiterated the application of the mentioned measures for equipping workers, keeping the labour market tight, and providing employment facilitation support.

He reiterated measures announced in Budget 2024 including SkillsFuture Singapore and Workforce Singapore for mature workers, along with government support through the Senior Employment Credit and upcoming Workplace Fairness Legislation to protect against age discrimination.

Mr Yip further asked about specific industries experiencing high retrenchments and sought information on the targeted government support for these sectors.

He also asked about the government’s approach to encouraging businesses to prioritize retraining and redeployment of existing employees before resorting to retrenchments.

In response, Dr Tan mentioned that the sectors experiencing significant global headwinds, and therefore high retrenchments, are typically outward-oriented sectors such as electronics, manufacturing, wholesale trade, and some parts of the ICT sector.

He noted that although retrenchment numbers have increased from the low of 2022, they have not reached the same high levels as during the pandemic, returning to pre-pandemic levels.

He explained that the government encourages businesses to prioritize retraining and redeployment. They have rolled out significant initiatives in collaboration with Tripartite partners to promote the reskilling of workers.

“We recognize that these initiatives can be costly for businesses. We provide support to co-share costs with employers to reskill existing workers for new or enhanced job rules.”

Dr Tan: Upcoming support for retrenched workers is not “unemployment insurance”

Pritam Singh, Leader of Opposition also sought clarification from the Minister about the upcoming support for involuntarily unemployed workers.

He asked whether the benefits or the program the government is considering will be in addition to the current policy on retrenchment benefits.

“Even though those are not legislated, are they going to supersede the government’s position on retrenchment benefits? Or are they still two separate matters?”

In response, Dr Tan insisted that the upcoming support is not unemployment insurance, and retrenchment benefits will continue as they are legislated.

“What we intend to do, is to provide this support so that the involuntarily unemployed workers can find time and can take a little bit more time in finding the right fit for the jobs that would come their way, rather than rushing into any job that they can find.”

Dr Tan mentioned that the parameters of the new support scheme are close to finalization, and while he didn’t provide specific details, he assured that retrenchment benefits would continue unchanged.

PAP government finally unveiled its “temporary safety net” scheme last year, despite reluctance to label it as “unemployment insurance”

The Workers’ Party has been calling for a redundancy insurance scheme, most recently at the Budget 2023 debate. The Workers’ Party published a policy paper on Redundancy Insurance in 2016.

In 2023 WP May Day Message, WP Chief Mr Singh also emphasized the party’s conviction that a redundancy insurance scheme can alleviate immediate financial strain for retrenched workers and act as an automatic stabilizer for the economy. This includes sustaining consumer spending and mortgage payments until individuals secure new employment.

Interestingly, after prolonged advocacy by the WP for redundancy insurance for retrenched workers, Singapore’s Prime Minister Lee Hsien Loong finally addressed the issue during the National Day Rally in August 2023.

He announced a government initiative to provide interim financial support to individuals facing retrenchment, emphasizing the aim to allow them to concentrate on skill enhancement for more promising long-term employment opportunities.

The new scheme, deemed as a “temporary safety net” by PM Lee, seeks to empower those laid off to participate in skills courses, steering away from hastily accepting any available job in times of desperation.

On 24 August last year, the Manpower Minister Dr Tan See Leng further revealed that much of the upcoming temporary financial support for retrenched workers will be tied to training and career counselling and guidance.

However, he noted that targeted support for retrenched workers should not be seen as “unemployment insurance”.