The Pros And Cons Of Retrenchment

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Business The business should at any point of time, prepare for plant closing and retrenchment of the employee, even if they are doing well. They can start by having a clearly defined policy about retrenchment, including being transparent and stating its benefits. Under the Employment Act, employees who have worked with the company for at least two years can request for the retrenchment benefits. The amount that is to be paid to the employee is not fixed and the employer is not compelled to do so, therefore, it would be left for the employer and employee to negotiate. However, the practice in Singapore is that for every year of service by the employee, the employer would pay one month of salary. This would reduce the possibility of the retrenched employee, bringing the case to the ministry. As per Ministry of Manpower guidelines, the employer must give notice and offer the retrenchment benefits to those employees that are eligible (Ministry Of Manpower 2015). The union would also need to be inform and if the notice period is not stated in the…show more content…
The main reason for companies to retrench workers is likely to be because of cost cutting measures due to financial difficulties and up till the extent of plant closing. The respective union role would need to first advise and remind them on the alternatives to retrenchments such as temporary layoffs or a shorter work week. However, retrenchment still takes place, in employment assistance to the retrenched employees, the union can first help to negotiate the quantum payments, the retrenchment and/or additional benefits for affected workers (Today Online 2013). For example, the retrenched workers of HGST Singapore, received extended insurance coverage and was paid an additional three months of union membership fees so that they can continue to enjoy the benefits (Today Online

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