Retrenchment

How to manage retrenchments responsibly and sensitively.

What Is Responsible Retrenchment

Retrenchment is a reduction of an organisation's workforce, usually due to business or economic reasons. As an employer, you should refer to the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment (PDF) to avoid or minimise the need for retrenchments. Where retrenchments are necessary, you should carry out the exercise responsibly in consultation with your union (if your organisation is unionised) or affected employees (if your organisation is not unionised).

Why Responsible Retrenchment Matters

When retrenchments happen, it could create feelings of anger, resentment, mistrust and uncertainty. Being objective and compassionate in such situations will help you to reduce distress and keep staff morale.

Note: Employees who have been retrenched may report unfair or discriminatory retrenchment practices to TAFEP.

What You Must Do to Be Fair

Before you start any retrenchment exercise, refer to the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment (PDF) for alternative solutions.

Where retrenchments are necessary, ensure that you:

  • Always consult the unions (if your organisation is unionised).
  • Consider alternative solutions (e.g. job redesign or upskilling).
  • Use objective criteria to select employees for retrenchment, and be empathetic.
  • Provide retrenched employees with support (e.g. financial assistance or job opportunities with other organisations).
  • Submit a retrenchment notification to MOM within 5 working working days after notifying affected employees.
 

Tripartite Guidelines

Refer to the Tripartite Guidelines on Fair Employment Practices to ensure that you abide by the guidelines on all the relevant practices.