Retrenchment Exercise


What is the general workflow for carrying out a retrenchment exercise in Singapore?


Carrying out a retrenchment exercise involves a series of structured steps to ensure it is conducted fairly, transparently, and in compliance with legal and ethical standards.

Here’s a general workflow for executing a retrenchment exercise in Singapore

1. Pre-Retrenchment Planning

Assess Business Needs: Determine the necessity for retrenchment based on business performance, restructuring, or other operational requirements.

Consult HR Advisors: Seek advice to understand legal obligations, rights, and best practices.

Develop Criteria: Establish fair and objective criteria for selecting employees for retrenchment.

2. Consultation

Engage Stakeholders: If applicable, consult with unions or employee representatives early in the process.

Communicate with Employees: Inform employees of potential retrenchment plans and the reasons behind them.

3. Implementation Planning

Finalise List of Affected Employees: Based on the established criteria, finalise the list of employees to be retrenched.

Calculate Retrenchment Benefits: Determine the retrenchment benefits for affected employees, adhering to the Employment Act or contractual terms.

Prepare Support Measures: Plan for outplacement services, counseling, and other support measures for affected employees.

4. Notification

Prepare Notification Letters: Draft letters to inform affected employees about their retrenchment, details of their retrenchment benefits, and support available.

Conduct Briefings: Hold individual or small group meetings to personally inform affected employees, providing an opportunity for questions.

5. Execution

Issue Notification Letters: Provide affected employees with their formal retrenchment letters.

Process Benefits: Ensure prompt payment of retrenchment benefits and any other dues.

Provide Support: Offer outplacement services and counseling as planned.

6. Post-Retrenchment

Notify MOM: Submit a notification to the Ministry of Manpower regarding the retrenchment exercise.

Communicate with Remaining Employees: Address the impact of the retrenchment on the remaining workforce, reassuring and re-engaging them.

Review and Reflect: Evaluate the retrenchment process for lessons learned and potential improvements in future exercises.

7. Documentation and Record-Keeping

Maintain Records: Keep detailed records of the retrenchment process, including criteria used for selection, communications, and payments made, to ensure transparency and accountability.

This workflow is a general guide and may need to be tailored to the specific context and requirements of the organisation, including adherence to any industry-specific regulations.


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