Borneo Motors lays off workers amid restructuring exercise

[SINGAPORE] Car dealer Borneo Motors, which distributes Toyota and Lexus cars in Singapore, laid off a number of workers on Jul 30 as part of a restructuring exercise.

A Borneo Motors spokesperson declined to confirm the number of staff affected because discussions were ongoing. The motor dealer is a unit of global automotive distributor Inchcape.

“Inchcape has reviewed its organisation in Singapore to ensure the business remains well-positioned to deliver for customers and brand partners,” said its spokesperson.

“As a result, we are making targeted changes to streamline our operations and better align with current needs and future priorities”.

Borneo Motors is a unionised company, falling under the Singapore Manual and Mercantile Workers’ Union (SMMWU).

SMMWU secretary-general Andy Lim said that the company had notified the union ahead of the restructuring exercise. It is believed the affected workers were informed on Jul 30, which was also their last working day.

The union also worked with Borneo Motors to make sure the severance package was fair and in line with the collective agreement.

Lim added that employers undertaking restructuring or retrenchment exercises need to engage and communicate with affected workers as early as possible.

Early communication allows the National Trades Union Congress (NTUC) and unions to work with the employer to engage with affected workers before their last working day, and help support them sooner, he added.

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Workers who are affected also have more time to prepare for the transition and get help if needed, he said.

Under the terms of the collective agreement between SMMWU and Borneo Motors, the union must be given one month’s notice of plans to lay off staff. Affected employees are to get two months’ notice of retrenchment or payment in place of notice.

As for the severance package, affected employees are entitled to a month’s basic salary for every year of service up to a maximum of 25 years. Those in sales get S$4,000 for each completed year of service, capped at 25 years.

After the affected employees were informed, Borneo Motors held a town hall meeting in the afternoon of Jul 30 to confirm that there was a restructuring exercise, although no details were provided about how many people were let go.

On Jul 31, three Borneo Motors employees who declined to be named said there was still no word on how their work would change, whether they would take on more responsibilities, or who they would be reporting to, among other things. 

But the workers said being invited to the town hall likely meant that their jobs were safe for now.

One of the employees said he would know who was laid off “based on which company e-mail addresses bounce” in the coming weeks.

A spokesperson for the Taskforce for Responsible Retrenchment and Employment Facilitation said that it was working with Borneo Motors and SMMWU to support the affected workers.

He added that Borneo Motors had pledged to provide a retrenchment package aligned with the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment.

The task force – which was set up in March 2016 – comprises officers from the Manpower Ministry, the Skills and Workforce Development Agency, NTUC and its Employment and Employability Institute.

The Borneo Motors restructuring exercise comes after a string of leadership-level changes at Inchcape Singapore over the last six months. Inchcape’s managing director Ng Khee Siong quit on Jul 21, after the departure of the finance and marketing directors.

Inchcape Singapore is one of the largest multi-brand motor franchises in Singapore, along with Cycle & Carriage and Wearnes Automotive.

Like other legacy brands, Toyota is facing intense competition from Chinese car brands, whose electric vehicle models are better aligned with Singapore’s move to decarbonise transport and capture market share. THE STRAITS TIMES