Tan Kin Lian's Blog: Restructuring of company

Thursday, May 20, 2010

Restructuring of company

I know of a manager who recently lost his job (after 11 years) due to a change in top management. The new management wanted to resctructure the company (which is an excuse for bringing in his buddies) and asked him to leave. He was offered only 3 months of salary for 11 years of service. The retrenched manager had no option, but to accept this poor package. His termination was not due to poor performance, as he had received a good testimonial from the previous CEO (who has since retired) for his 11 years of service.

This is a need for better protection of workers (including managers) in Singapore from unfair employment practice. The law should provide a fair rate of retrenchment benefit for termination due to reasons other than poor performance.

Tan Kin Lian

29 comments:

Anonymous said...: Office politics might be behind the termination and also to create a vacancy for his buddies.; May 20, 2010 8:51 AM
C H Yak said...: I agree with Mr Tan that there is still a lack of statutory protection for PMEs against "unfair" retrenchment.

I had quite similar experience when I worked for a Korean MNC contractor. I was retrenched in 2005 and paid a meagre compensation for my 13-year employment service, only after raising the issue with the NTUC and MOM. Luckily, I was hunted by another company, whom I had business contact, for a difficult project then.

Those years of wage re-structuring during the economic downturn had allowed employers to put forth and stretch unfair practices; while many middle income earners (PME) were forced to sacrfice with wage cut, CPF cut and CPF income ceiling cap, etc. but at the end, they suffered from a lack of statutory protection for retrenchment.

I had wrote in my blog :-

http://de-leviathan.blogspot.com/2010/02/speedier-mediation-for-pmes.html; May 20, 2010 9:12 AM
Anonymous said...: I once worked in a local SME for 6 years. When they decide to let me go, they expect me to submit a resignation letter myself so as to avoid compensation. Only my dept mgr was 'human' enough to pay me one mth notice pay & bonus that were due for me as the company has just conducted their year-end closing.; May 20, 2010 9:30 AM
Anonymous said...: There's no job security in the 21st century. Everybody shall train themselves to be ready to get retrenched and able to start up own business. Loyalty in work and permanent career is history.

Apart of it, for SG being so open for any hungry people, more retrenchments for buddies placement are on the road. Be prepared.; May 20, 2010 9:57 AM
Anonymous said...: PMETs. Please open your eyes "big" "big".

In your letter of appointment which you sign when you join any company in Singapore, the terms are very clear ... it's usually one month's notice (resignation or termination) either way. No reasons need to be given.

Retrenchment benefits are at the employers' discretion.

As a PMET, you can be fired for failing to meet your KPIs. If you disagree with your KPIs during the goal setting session at the start of the year, you can still be marked down as an "attitude" problem.

Bottom-line, you have no legal protection.

The PMETs in Singapore are just like the migrant workers in China.

Once you are over 40 years old, you are at the mercy of your boss.

Who is going to believe a 40 year old PMET (who has young children and old parents to look after) can work faster, cheaper and better than a fresh graduate?

So when you reach 40 years old, be prepared for a life as a corporate gypsy. You will be wandering from one company to another. One job or contract away from unemployment and financial destitution for you and your children.

For your own sake, please don't have children until you emigrate to more family-friendly countries overseas.

We have a selective hearing loss problem here in Singapore. So don't expect any help.; May 20, 2010 10:42 AM
Anonymous said...: The employment act is quite comprehensive and covers a number of scenarios such as retrenchments,termination,regsignation and leave.

We may be able to tweak it further but more "protection" may cause employers to create tasks that simply push the employee to resign instead, savings that the employer would be happy to enjoy.

I propose a body such as NTUC or even better still a non-profit organisation that has the authority ( independantly) to review retrenchements and termination. There are contraints of course: such as authority to see documents that may be sensitive to the employer's business.

These issues or employability and conditions of termination, retrenchments will always be with us. It exists because of captalism, and the freedom to work,
and do business for a profit.

Remember that there is no such thing as loyalty in the business world. Never has been. If you thought that it did matter, you were fooled.

The only emotion that one needs is for the family and your God. Even Mr Tan's blog is business. Loyalty to his blog or to him is misplaced emotion and will only bring more depression.; May 20, 2010 12:16 PM
Anonymous said...: ""Apart of it, for SG being so open for any hungry people, more retrenchments for buddies placement are on the road. Be prepared.""

Yr children's future is also in yr hand. Be prepared.; May 20, 2010 12:34 PM
Anonymous said...: I worked for an MNC for 27 yrs. at the highest scale in the Bargainable Staff category.
When my Dept. was swollowed by a competitor, the Union gave me the option of the amount that I was supposed to receive and NOT one MNC official or it's Rep. came to my aid.
In my bewilderment and disappointment.....I wonder who
owns the company in an MNC outfit ?

Lessons learnt: Forget about Company Loyalty.........it doesn't exist anymore!
We are merely like "Slave Drivers"
under EMPLOYMENT OR EMPLOYABILITY!

My sympathY goes to PMETs who are not Unionised and their fate lies between the DEVIL & the DEEP BLUE SEA.(Facts of Life); May 20, 2010 1:02 PM
Anonymous said...: For 40 years, PAP govt has indoctrinated us to just follow orders, be loyal, put your nose to the grind and accept things as they come along. Even as primary and secondary school kids in the 1970s and 1980s, you can hear adults saying that we must work hard and be loyal to your superiors, don't jump ship and job-hop. Even in the 1990s, job-hoppers were viewed with disdain and suspicion. 3 generations of singaporeans were basically hamstrung and castrated from the ability to protect & defend against changing business norms and practices.

Singapore's law does not automatically protect employees, especially so-called white-collar workers. Just read the Employment Act online at AGC website. You need either sympathetic MOM senior civil servants or big money to fight for you.

Read the below interesting account of Singapore high court ordering Standard Chartered to pay a banker at least $40K for firing him on his first day at work. Actually that new ex-staff also seems rather greedy and full of entitlement-attitude. But basically it shows the sad state of affairs that it requires you to have lots of money and be lao-lan in the first place to get some justice.

23 April 2010 Bloomberg article; May 20, 2010 1:37 PM
Anonymous said...: Yes,

I agree. Once you reach 40, you are treated as old.

It doesn't matter whether you can work faster, cheaper or better anymore.

Just pray hard that you are not retrenched. Keep your visibility low. Don't get involved in office politics.

Work just enough so that your performance is passable. Work too hard, if you are being retrenched you will feel sore and angry for sacrificing your working life.

You may, I only say may be able to work until retirement. Hahaha!; May 20, 2010 1:51 PM
Anonymous said...: Anon 12:16PM,

Much of employment act especially those portions regarding termination, retrenchment, leave, staff benefits, working hours etc DO NOT apply to ANY white-collar workers.

EVEN for blue-collar workers, there is only a very specific list of blue-collar jobs as spelled out in the Act's Annex. And this is only for those SPECIFIED blue-collar workers who earn below $4K/month gross.

If you believe that employment act can protect against unfair job practices used against you, you have been fooled.

For 99.9% of employees in Singapore, you can only use contract law to fight -- but in the first place, the employment contract or letter you signed is already protecting the company NOT you. Hence 99.9% of the time, you will lose just base on the employment letter you sign.

In the 2nd place, most companies can straightaway throw $100K-$200K on the table to fight you in Court. Can you?

IS IT ANY WONDER THAT S'PORE JUST SURPASSED US & HK AS THE BEST PLACE TO DO BUSINESS??; May 20, 2010 1:58 PM
Anonymous said...: Is the new CEO a foreigner? Is the retrenched manager a Singaporean? It is the same story all over again if they are. Singaporeans have voted for a government who unwittingly let in foreign sharks to cannabilise Singaporeans and still thinking Singaporeans have been replaced because they are lazy and choosy, based on the feedback from the real lazy Singaporeans who feedback this BS to the ministers after hearing them from the foreign sharks.; May 20, 2010 2:42 PM
Anonymous said...: What makes you think a govt linked company will be any better? I once worked for a govt linked co-operative, set up to protect retrenched workers but instead of protecting them, they took in highly qualified professionals at half the pay, the govt pay the other half and promptly ask them to leave after 6 months when the co-payment stop. Of course, they covered their tracks well by asking the employee to resign instead, so the statistics will show that the employees are the ones who wants to leave, and justify the reasoning that Singapores are lazy and choosy. Any self-respecting Singaporean will choose to resign rather than be terminated as it will be a black mark in their resume.; May 20, 2010 2:53 PM
Anonymous said...: For the PMETs, things are made worst with cheap Foreign talents and Foreign Workers. If PMET cannot be cheaper than them, then End of the Road. Now, our millionairs ministers selling KO-YOK on cheaper/Faster/Better and productivity drive. But part of the problem is that PMETs are neither protected or can do anything once they hit 40s i.e. at the mercy of companies cheap labour drive....

I am one of them. Hope after the election, some of the ministers can join me in the unemployment pool....; May 20, 2010 3:28 PM
Anonymous said...: ST.......May 20, 2010
Foreign talent, local package

Does this guarantee local PMETs
survival? or more JOB battle looming on home turf???; May 20, 2010 4:56 PM
Anonymous said...: I received an email and a call later from a head hunting company. They are interested in me because of my working experience. We talked for quite a while on the phone about the job and my experience. Suddenly, the head hunter asked about my age and I told her my age. She said "oh". Then she backed off by saying that she has to discuss my case with her coleagues, blah, blah..... An email from her the next day confirmed that I am an old man. :)); May 20, 2010 5:26 PM
Anonymous said...: For PMETS, Life begins after 40?
either with new ventures or emigration....Life is a struggle?

For RETIREES at 55, with good financial planning, Life is a Blessing to spend time with family and travels......Time well spent!

For RETIREES at 62 or intend to work at 65 or longer......LIFE is Aging Gracefully with more money and wasted TIME!.....as TIME & TIDE waits for NO MAN.; May 20, 2010 6:29 PM
Anonymous said...: Our government has failed to provide minimum employment protection for its citizens. Look around, Singapore, probably Hong Kong as well, has one of worst retrenchment protection for PMETs. Many MNCs are exploiting this loop hole to threaten or terminate its long service employees with normal notice. Appeal to MOM, NTUC Union or MPs are fruitless ......Sigh....; May 20, 2010 8:27 PM
Dumper said...: Leave before you are told.

Prepare an exit strategy and do not rely on unions, gov or the law to protect you.

Always leave when you can.. keep searching for better pay and better conditions.. do not stay for more than 5 years max.. learn & do as much as you can during each 5 year cycle.

Do not wait till you are booted out
Its very much like being dumped in a relationship.. its depressing if you are the one thats dropped.

THERE IS NO SUCH THING AS LOYALTY IN THE BUSINESS WORLD!!!; May 20, 2010 9:31 PM
Anonymous said...: Remember in the Corporate World,
the motto: HIRE & FIRE! is being kept alive and the word "Loyalty" is alien to them.
If they cannot hire, then they will OUTSOURCE to low paying countries for Big Fat Profits!!!

The danger of getting a Job promotion fast,is another way to the chopping blog, if you are deemed inefficient or not up to expectation.......then you are Fired too! alternatively, being stressed or burnt out,you may quit under Natural Attrition.; May 21, 2010 12:01 AM
Anonymous said...: In Malaysia, there are ample laws to protect the workers. There are laws against unfair dismissal, there are laws that govern retrenchment benefits.

In the event the employer gets creative, there are also laws against constructive dismissal (eg make manager guard the warehouse and so force you to resign)

To fire a staff for poor performance, you are required by Law to do 3 things
(1) Inform the Staff
(2) Give him time to improve
(3) Render Help

Items (2) and (3) are subjective and the staff can make an appeal to the industrial court of he feels he is unfairly treated.

Remedy for unfair dismissal would typically be backwages from the date of dismissal to the date of industrial court award (usually 2 years) and 1 month for each year worked in the company; May 21, 2010 11:18 AM
Anonymous said...: No such things called loyalty to one's employer any more.
Why should we be loyal, you would be dumped once you reach 40s.
So change our mindset, job hop once you gained experience, and make as much money as possible.
Job hop, even Govt hop, if you don't live for youselves, heaven would destroy the land. Learn to be selfish, because your Company would not care about your interersts. Our Govt would not care either.; May 21, 2010 11:55 AM
Anonymous said...: When you hear about Company Restructuring and one thing should come to mind, is to have an EXIT STRATEGY!

Again, Kenny Rogers has a song for making an exit on your terms…

Let’s go out in a blaze of glory
All good things must end
Like two heroes in a story
Let’s go out like we came in
In a blaze of glory.; May 21, 2010 12:41 PM
C H Yak said...: In Singapore, HR practitioners continue to support and capitalise on a blurred line between the following :-

(a) definition and contractual provisions for "termination" of employment contract

(b) definition and contractual entitlement for "retrenchment" compensation or severance pay under the employment contract

(c) statutory provisions under the Employment Acts

The NTUC capitalise on it (grey matter) to attract membership, and talk too much on "ex-gratia" entitlement rather than push for statutory protection.

The MOM now convene a tripartite mediation process, which will be in place next year to help junior and mid-level professionals, managers and executives (PMEs) earning up to $4,500 a month to address common employment issues with their employers, except issues on "retrenchment benefits".

Note there is still a blur line between "workmen" and "employee" as far as HR practices are concerned, as opposed to the Employment Acts.

Reference Employment Act (Cap 91)

PART IV
REST DAYS, HOURS OF WORK AND OTHER CONDITIONS OF SERVICE

Application of this Part to certain workmen and other employees
35. The provisions of this Part shall apply —

(a) to workmen who are in receipt of a salary not exceeding $4,500 a month (excluding overtime payments, bonus payments, annual wage supplements, productivity incentive payments and any allowance however described) or such other amount as may be prescribed by the Minister; and

(b) to employees (other than workmen) who are in receipt of a salary not exceeding $2,000 a month (excluding overtime payments, bonus payments, annual wage supplements, productivity incentive payments and any allowance however described) or such other amount as may be prescribed by the Minister.; May 21, 2010 1:48 PM
Anonymous said...: When I was in Australia some yrs. ago someone there asked me where I worked and for how long?

I told them that I work for a company for 25 at that point in time!
Guess what was their comments:
"Unproductive and boring"

I asked why?.........see in Australia, the more you switch jobs or job hob, you are recognised as being productive and good.

So PMETs need no fear! Job hop as the going is attractive and conducive!

Moral of the story:
smart people leave and stupid ones stay, only to get dumped when the going is rough.; May 21, 2010 5:47 PM
Anonymous said...: The older and "useless" people must united together and pool their resources to prove to "the world that had forgotten them" that they are not that "useless" afterall.; May 22, 2010 6:23 AM
Anonymous said...: The young are restless, and the old are useless these days!

The old benefitted from the Old Economy with full employment and achieved almost complete Life's Mission, whereas the young are highly educated, choosy and as a result suffer from limited Job opportunities in this Globalised World, So you can say that Life is all about timing.; May 22, 2010 5:47 PM
Anonymous said...: The older and "jobless" PMETs must united together to show the younger ones who look down on them that they are not that "useless" afterall. Among them there are many masters and even Phd holders. They can show to others that they are not that "useless" afterall.; May 22, 2010 9:56 PM
Anonymous said...: When you have youngsters nowadays toting branded bags and goods but take up space in busus and trains. Since they can afford branded bags, go buy a car or take taxis so our public transport wil be less crowded.; May 24, 2010 9:18 AM

Thursday, May 20, 2010

Restructuring of company

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