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Employers that ‘disguise retrenchments’ may face penalties: Josephine Teo

04 Jun 2020 < 1 min read

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Companies found to have “disguised their retrenchments” might have their Jobs Support Scheme wage subsidies and work pass privileges revoked, Minister for Manpower Josephine Teo said.

Retrenchments are guided by manpower laws, and employers are obliged to pay the retrenchment benefits spelt out in employment contracts or collective agreement, she added. 

Responding to questions on fair treatment of workers when they are retrenched or have their wages reduced, Mrs Teo told Parliament that even during the Covid-19 period, whatever the termination of employment is called, an employee is presumed to have been retrenched if the employer cannot show a plan to fill the vacancy any time soon. 

As for employers who have financial difficulty and may not have the means to pay retrenchment benefits, Mrs Teo said that the tripartite partners have agreed that in genuine instances, retrenchment benefits may be re-negotiated or moderated.

However, she emphasised that retrenchments should only be the last resort, and companies should first try to adjust their costs. Separately, she indicated that there are no plans to reduce Central Provident Fund (CPF) contribution rates amid the Covid-19 outbreak.

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