Why retrenchment benefits should be more than just money…

Let’s face it.

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The global economy isn’t doing very well now. In Singapore, we’re seeing more and more companies conducting retrenchment exercises because of restructuring and other factors.

But being retrenched in the current economic backdrop can be rather daunting.

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When retrenchment happens, there is one thing important on every affected employee’s mind – what is my retrenchment package?

Most companies will offer a retrenchment benefits in monetary terms.

Under the Employment Act, only workers who have worked for more than two years can negotiate for retrenchment benefits.

But in this day and age, retrenchment packages should also look towards including training grants to help enhance the employability of the affected employees.

An example of how an employer provided retrenchment packages which went above the industrial norm is Jurong Country Club.

 

In May last year, it was announced that the land on which Jurong Country Club (JCC) now occupies would be acquired by the government to make way for the terminus of the new high-speed rail connecting Singapore and Malaysia.

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This meant that all 112 employees will be retrenched as a result of the closure of the club.

But JCC went over and above the Employment Act to provide a fair and equitable compensation for the workers. This is made possible with the negotiations between the employer and the Attractions, Resorts & Entertainment Union (AREU).

No Collective Agreement

When news of the retrenchment came in May 2015, there was no Collective Agreement (CA) between the union and JCC. This meant that drafting one would be a priority to ensure a fair compensation for the workers.

But after countless meetings, the management and the union finally came to an agreement on 9 June 2016.

The retrenchment clause in the CA stated that all staff would minimally receive half month’s salary per year of service, together with a $1,500 training grant and a union membership fee subsidy of 1 year.

Last week, JCC and the union had a briefing to inform the workers about the retrenchment benefits which they would be getting.

In addition, the union will also engage the help of NTUC’s e2i (Employment and Employability Institute) to provide job matching and placement services to affected workers.

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AREU’s Executive Secretary Desmond Choo shared that the while a fair compensation is important, “the crux is being able to continue to have a meaningful career,” which is why the union will help members to identify and bridge skill gaps and tap on the union network so that union members can start work again as promptly as possible.

Fortunately, JCC was unionised. Had they not been unionised, there would have been employees who could have possibly not receive any retrenchment benefit, let alone training grants and job placement services.

 

 

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Arthur Lee

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