17 February, 2017
From 1 January 2017, employers must notify the Ministry of Manpower (“MOM”) of retrenchments within 5 working days after notifying the affected employees.
- employers who employ at least 10 employees are required to notify MOM if 5 or more employees are retrenched within any 6 month period beginning 1 January 2017
- retrenchments are defined as dismissal on the ground of redundancy or by reason of any reorganisation of the employer’s profession, business, trade or work. This applies to permanent employees, as well as contract workers with full contract terms of at least 6 months
- the notification must be submitted within 5 working days after the employee is notified of his or her retrenchment. For the first four employees to be retrenched, the notification must be submitted within 5 working days after the 5th employee is notified. Thereafter, the notification must be submitted within 5 working days after each employee is notified
- failure to notify within the required timeline is an offence liable on conviction to penalties, including a fine not exceeding $5,000
The notification can be submitted via the online notification system. The following information is to be submitted:
- company UEN
- company contact person details
- size of workforce before retrenchment (Singaporean / PR / Foreigner)
- details of workers to be retrenched / who have been retrenched:
- NRIC/FIN
- residential status
- date of retrenchment
- job title
Retirement and Re-employment (Amendment) Bill 2016 and Revised Tripartite Guidelines on the re-employment of older employees
The Retirement and Re-employment (Amendment) Bill 2016 (the “Amendment Bill”) was passed on 9 January 2017 and amends the Retirement and Re-employment Act to effect the following changes from 1 July 2017:
a) raise the re-employment age to 67. The Amendment Bill specifies that the new re-employment age will be raised from 65 to 67 with effect from 1 July 2017. The new re-employment age of 67 will apply to locals who turn 65 on or after 1 July 2017, i.e. those born on or after 1 July 1952.
b) introduce an option to allow eligible employees to be re-employed by another employer to increase labour market flexibility. Presently employers cannot transfer their re-employment obligations to another employer. The change in the Amendment Bill allows an employer who is unable to offer a suitable position in his own organisation, to transfer his re-employment obligations to another employer, provided this is done with the older employee’s consent and that the second employer agrees to take over all applicable re-employment obligations. If either condition is not met, the original employer still has to fulfil its re-employment obligations i.e. offer an Employment Assistance Payment if the employer cannot find a job in its organisation for the older employee.
c) remove option of employers cutting employees’ wages at age 60. This option was originally intended to help employers with seniority-based wage systems manage costs. Over the years, employers have moved away from seniority-based wage systems and hence, the option has been removed in the Amendment Bill.
Sze-Hui Goh, Director, Eversheds
sze-huigoh@eversheds.com
