Wednesday, December 14, 2016

Insurance scheme to cover modest payout to retrenched workers

Redundancies in Singapore hit a high, due to the economic recession. Article.

The Workers Party have recommended a compulsory insurance scheme to provide a modest payout of 40% of earnings for a period of six months to retrenched workers. I agree with this approach.

There is some fear that this could lead to abuse. One step to reduce the abuse is to make this available only to the retrenched workers who have in the same company for more than two years. I don't know if this safeguard is already in the proposed scheme.

Another safeguard is the deterrent. Any abuse will be investigated and the employer and worker can be charged for "cheating" the system.

After the potential abuses are addressed, we should proceed with the system.

The insurance premium can be set at a rate that can vary according to the actual losses, subject to a cap of 1% of wages.

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