IN MANAGING retrenchments, Singapore must preserve flexibility for businesses even while protecting workers, said Minister for Manpower Tan See Leng in Parliament on Monday (Feb 5).

He acknowledged calls “for stronger action to protect workers” who are retrenched, but noted that even without retrenchment benefits being legally mandated, around nine in 10 eligible employees received such benefits, according to data from 2019 to 2023.

Dr Tan defended Singapore’s current approach to managing retrenchment practices, in response to 14 questions filed by Members of Parliament in the wake of retrenchments by e-commerce giant Lazada.

In early January, Lazada retrenched an undisclosed number of employees without consulting the Food, Drinks and Allied Workers Union (FDAWU).

But how this played out "clearly demonstrates the success of Singapore’s unique model of tripartism”, said Dr Tan. After Lazada’s “initial lapse” of failing to notify FDAWU, the Ministry of Manpower (MOM) stepped in to facilitate discussions between Lazada and the union to reach an “amicable and fair resolution”, he said.

“In many other countries, the unions and companies would have approached similar issues in perhaps a more confrontational manner,” he said. These could result in more conflicts with longer-term negative implications, he added.

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Dr Tan also fielded broader questions on ensuring retrenchment exercises are conducted in a fair and responsible manner, such as whether companies should be penalised if they do not notify and consult unions about a retrenchment exercise.

To that, he said: “Singapore’s approach has always been one that is balanced, that protects workers while giving businesses flexibility.”

He noted that MOM engages and educates employees to act responsibly, and employers are legally required to notify MOM within five days of carrying out a retrenchment exercise.

While Singapore protects workers, it must “preserve the flexibility for businesses to adjust to market conditions, because this will ultimately create, and can sustain, more good jobs for Singaporeans”, he said.

Separately, replying to MP Gan Thiam Poh’s question of whether collective agreements should be made compulsory for unionised companies, Dr Tan said MOM’s approach has been to let the employer and union decide whether or not to have such an agreement.

Any disagreements, including whether to have a collective agreement, can be raised to MOM for conciliation, he added. Should conciliation be unsuccessful, these matters can be raised to the Industrial Arbitration Court for arbitration.