Dyson and Other Companies in Singapore Making Headlines with Layoffs
In a surprising turn of events on Oct 1, Dyson, the consumer electronics giant, announced staff retrenchments, sparking discussions on the topic of layoffs once again. The United Workers of Electronics and Electrical Industries, a union Dyson signed a collective agreement with, expressed disappointment at the short notice given for the exercise, leaving little time for meaningful discussions.
Other well-known companies in Singapore have also recently laid off staff, including logistics start-up Ninja Van, e-commerce retailer Shein, fintech firm MoneyHero, and electronics maker Epson. Reports on Oct 2 suggest that Samsung Electronics is also planning layoffs globally, including in Singapore.
Rights of Retrenched Workers in Singapore
Q: Was I retrenched or terminated?
According to the Employment Act, retrenchment is defined as "dismissal on the ground of redundancy or by reason of any re-organisation of the employer’s profession, business, trade, or work." This means that an employer can only be said to have retrenched workers under specific conditions, such as company restructuring or job elimination due to business decline, and not simply when terminating a contract of service.
An employer is presumed to have retrenched workers if unable to demonstrate plans to hire replacements, even if attempting to avoid paying retrenchment benefits by using alternative terminology.
Q: Is there a minimum notice period?
The Employment Act mandates minimum notice periods employers must provide when terminating employment. Notice periods range from one day for those employed less than 26 weeks to four weeks for those with five or more years of service. Employers have the option to pay a quantum equivalent to the worker’s pay for the notice period in lieu of notice.
Q: Are workers entitled to retrenchment payouts?
Only workers with two years or more of service, with payouts stipulated in a union’s collective agreement or individual contracts, are entitled to retrenchment payouts. Those with less than two years of service are not entitled to payouts, although companies may choose to offer goodwill payments.
Pregnant retrenched workers who have worked for at least three months before job loss are entitled to maternity benefits. It is common practice for employers to provide a retrenchment benefit of two weeks to a month’s salary for each year of service, as advised by a tripartite advisory on responsible retrenchment practices.
While this advisory is not legally binding, it is customary for employers to outline retrenchment benefits in internal policies rather than employment contracts, which typically do not grant employees rights to retrenchment benefits.