When companies shut down abruptly

Image Source: ChannelNewsAsia
Image Source: ChannelNewsAsia

California Fitness is not the first company to shut down suddenly and neither will it be the last.

The number of complaints from consumers left in the lurch by sudden business closures has shot up from 73 just two years ago to 417 in the first 10 months of 2015.

In 2015, the closure of established bridal salon Sophia Wedding Collection affected more than 70 couples.

Also in October, reports were lodged against well-known hair salon The Scissorshands. Other instances this year include renovation firm D’Concept Design, Sadhana Sanctuary spa, Sky Fitness gym and travel agent Asia-Euro Holidays.

In 2014 the travel firm Five Stars Tour agency merely posted up a notice at its doors leaving customers and staff non the wiser about what’s going on.

Earlier this year, Bych Hot Yoga formerly known as Bikram Yoga City Hall, closed after its last class at Regency House. In the yoga studio’s case, the employer was reported to have been responsible enough to seek out a buyer to take over the business.

Customers are not the only ones that will suffer. Also to suffer are the staff that may not be paid. These are the people who have invested their time and energy to build the company and when the leadership disappears, they will most likely be the ones to bear the brunt of abuse from the public.

When Five Stars Tours shut, the workers affected received help from unions. Workers who lost their jobs because of the sudden closure of Five Stars Tours travel agency can get help, including immediate financial assistance, if they are union members.


The Singapore Manual and Mercantile Workers’ Union (SMMWU) and the National Trades Union Congress (NTUC) U Care will jointly provide $600 worth of vouchers to each of the affected union members to help them with the purchase of daily necessities, especially with the festive season approaching.

As for the staff of California Fitness, they could learn from precedence set by the closure of Five Stars Travel and go to their unions for assistance. That’s another reason for union membership – they can be assured that there is an organisation by their side no matter how bleak the circumstance.

Economic outlook is still uncertain and with a harder business landscape, perhaps compulsory retrenchment benefits may be in order. Businesses must be held to account and be responsible for compensating workers who have lost their jobs.



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