NTUC concerned about employers presenting retrenchments as ‘new opportunities’ by asking workers to reapply for roles abroad
The Swedish fashion retailer H&. M has initiated a restructuring process across East Asia, including Singapore, requiring employees to reapply for 178 available roles within the region. Staff members can nominate themselves for up to two positions, though many of these roles have been relocated from Singapore to other countries.
The Reapplication Process and Employment Risks
To secure a position, employees must undergo a series of interviews and evaluations. Those who are unsuccessful in this process face “mutual separation” in accordance with local labour laws.
On Tuesday (Jun 2), the Ministry of Manpower (MOM) confirmed it received a mandatory retrenchment notification from the company. This notification was submitted within the required five-working-day window following the notification of affected staff.
Restructuring or Retrenchment?
Industry experts suggest that some employers use terms like “restructuring” or “calibration” to avoid the negative optics associated with “retrenchment.” This practise has reportedly been seen in recent years at other organizations, including the BBC and HSBC.
Manpower experts warn that such framing could potentially disadvantage displaced workers during severance package negotiations. While the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment (TAMEM) recommends a norm of two weeks to one month’s salary per year of service, these guidelines have no legal force.
Macroeconomic Pressures and Corporate Strategy
Archana Srinivasan, founder and director of Alchemy People Partners, states that companies are gravitating toward these exercises to optimize costs and remain competitive in the current macroeconomic climate. These changes may be necessitated by automation or regionalisation.
HR practitioner Ian Liew suggests that the material difference between these methods often comes down to branding. He notes that the genuineness of the exercise depends on whether employees receive fair interview opportunities and proper relocation support.
Potential Future Implications
Depending on the outcome of the evaluations, a significant number of employees in Singapore could face displacement if roles continue to move to other countries. The company may continue to face scrutiny over whether “mutual separation” agreements are being used to bypass standard retrenchment protocols.
Further adjustments to regional staffing may occur as the company seeks to optimize costs, which could lead to more “calibration” exercises across its East Asian operations.
Frequently Asked Questions
How many jobs are available for employees to reapply for?
There are 178 jobs available across the East Asia region.
What happens to employees who do not secure a role?
Employees who are unsuccessful face “mutual separation” in line with local labour laws.
What is the recommended severance pay according to TAMEM?
TAMEM recommends a norm of two weeks to one month’s salary per year of service, although this is not required by law.
How should companies balance the need for cost optimization with the welfare of their long-term employees?