Employment Relations in Asia
How Should Business, Labour and The Government Deal with Plant Closings and Layoff of Employees and
Should Government Be Involved
Lecturer: Salman Ali Hyder
Unit Coordinator: Susan Barrera
By: Ang Xiu Jun
Student ID: 33247794
Class Code: FT-A
TABLE OF CONTENTS
Plant Closure and Employee Layoff Issues in Singapore………………………..4
Role of Business to Deal with Plant Closure and Employee’s Layoffs……….5
Role of Labour to Deal with Plant Closure and Employee’s Layoffs………….6
Role of Government and Government Involvement in Dealing with Plant
Closure and Employee’s Layoffs………………………………………………………………7
With a slowdown in economy and restructuring of economic faced in Singapore currently, have caused an increasing number of plants from closings. Thus, this has led to the highest number of employees being layoffs since the global financial crisis in 2009 (Seow, 2017). Due to this situation faced currently, industry such as the manufacturing, service and the construction industry have been affected most by it. As the economic situation is starting to face a slowdown, many organisations have attempted to reduce the workforce by either laying off their employees or closing their plant.
Having plant closing has tremendously affected those employees working in that organisations and not only these, the business, individuals, communities and the government has also been affected as well (Stern, 1997). Furthermore, closing of the plant will lead to factors such as fewer job opportunities will be available for those who are looking for a job and those retrenched employees those retrenched employees will face difficulties in finding jobs especially those employees who are old in age, process fewer skills and knowledge which does not meet the requirement of the job (Chapain and Murie, 2008). It is very important that the issues of the plant closing and employee’s layoffs must be handled well and appropriately or else it will negatively affect the workers and their family, the business, communities and even the government.
This essay will aim to address the issues of plant closings and employee’s layoffs which is happening currently in Singapore and I will also present the ways of how business, labour and the government should deal with these issues.
Plant Closure and Employee Layoffs Issues in Singapore
Due to a slowdown in economic, a large amount of cost is required to ensure the operation of the organisation to continue operating its business smoothly. Due to this situation, many organisations have decided to close their plant and retrench their employees in order to save cost as they were unable to overcome these issues (Yap 2016).
According to Siew (2009), one of the major cases of plant closure which has happened back a few years ago in Singapore was the manufacturing organisation Seagate. As they were facing financial issues and their product has started to become less attractive to the public have caused them to lose with its competitors and eventually as time passes, they have lost their position in the competitive market (Reuters, 2009). In the end, Seagate has decided to end its operation in Singapore and moves its manufacturing operations to low-cost countries such as Malaysia, Thailand and China which results in 2000 jobs being lost (Mellor 2009).
Another case which has happened recently was the International Business Machines (IBM). IBM has decided to restructure its Global Technology Services division by planning to retrench up to 10,000 staffs globally with approximately 200 workers to retrench in Singapore and more may be expected in the future (Hakeem, 2018).
Role of Business to Deal with Plant Closure and Employee’s Layoffs
Having a well-planned strategic planning by the management team in an organisation is a very crucial step which an organisation must have to prevent the organisation’s decision to end their business and able to have the ability to obtain a competitive advantage over its competitors (Rezvani et al., 2011). It is very important that the management of the organisations should communicate well with its employee’s example by explaining clearly to its employee on the reasons for the organisation’s decision to end its business (Freeman, 2009).
There are several ways and strategies which businesses can deal with during the process of plant closing and the layoffs of employees. Firstly, if the organisation is planning to end its operations, the employers should notify the Ministry of Manpower (MOM) as soon as possible so that those affected employees will be able to receive help immediately from MOM to assist them by helping them to search if there is any new job opportunity available for them (Wong and Ho, 2016).
Secondly, employers should make an effort to inform its employees individually about the organisation’s decision to end its business. The reasons, challenges and the difficulties the organisations are facing currently are the following important things which the employers need to inform to its employees (Lotich, 2017). By informing all these to them, will be able to help the employees to be mentally prepared and slowly adapt to this change and the organisation’s decision to end its business.
Lastly, according to Soon (2016), the National Trade Union Congress (NTUC) in Singapore has stated that the organisation should not only give advance notice to its employees, they should also provide certain help to its employee such as helping them by assisting in job placement, providing career counselling and giving them retrenchment benefits example severance payments should be compensated to them for their loss of employment.
Role of Labour to Deal with Plant Closure and Employee’s Layoffs
Having a good labour management is very important especially during the process of plant closure and laying off employees. During this process, it can negatively affect the mental health of these employees as they will feel a sense of fear, anxiety, anger and stress as they are going to be unemployed soon and needs to look for a new job as soon as possible in order to support themselves and their family (Ramlall et al., 2014). In addition, it is very important that those laid off employees should understand the reasons and situation on why the organisations have decided to close its plant and laying off its employees. With a better and clear understanding of all these will be able to help them feel less fear and pressure from being layoff by their employers.
Apart from this, the employers should try to put itself into its employee’s position and think and understand in the position of its employee’s perspective, so they can help them to cope with their feelings better by providing the relevant support and motivation to them to help them recover. As stated by Robbins (2009), as different people have different reactions so by having the employee’s manager meeting its employees individually is the best way to convey the message to them and help them cope and accept the current situation the employees are facing.
Furthermore, once the employees have received the layoff notice from its employers, the first thing they should do is to check with their company to see if they are entitled to any retrenchment benefits example severance payments and they should also be informed about their legal rights (Nidirect, 2018). In the meantime, while preparing to be layoff, it is recommended to employees that the best way which they can help themselves to recover faster is to take some time off to make sure that their own emotional wellbeing is in a good form then start think about their future life example if there a need to upgrade or learn new skills to prepare themselves for a career change and start to look for new job opportunities (Armstrong, 1994).
Role of Government and Government Involvement in Dealing with Plant
Closure and Employee’s Layoffs
Government is the most important role and they must be involved when dealing with the issues of plant closure and layoff of employees. In Singapore, the government have treated these issues seriously as rules and laws have been set up by the Ministry of Manpower (MOM) and the Singapore Legal System which the employers must follow and offer when retrenching their employees. As stated by the Singapore Legal Advice (2018), before closing its business, employers should give a few weeks of advance notice to its employees to allow them to prepare and look for further employment elsewhere.
According to MOM (2018), employers must notify retrenchment of its employees to MOM within 5 working days after they have informed retrenching its employee. According to Wong and Ho (2016), giving advance notice to MOM and its employees have been proven to be useful to them. As in the case of Resorts World Sentosa, they have given advance notice to those affected employees. With these notifications received, MOM has partnered with the Singapore Workforce Agency to help those affected employees to look for new job opportunities which are available for them.
Furthermore, the government can also help by providing monetary aid and try to attract foreign companies to make an investment in (Yeoh et al., 2003). By doing this will not only be able to help these companies to prevent the closure of its plant and it will also help them to offer better compensations to its employees and thus, creating more job opportunities and minimizing the number of layoffs.
In conclusion, the issues of plants closure and employee’s layoffs is a serious issue which the role of business, labour and the government in Singapore must take the right measures and the required assistance must be provided to those affected employees to help them overcome their fear of losing their job and recover their loss of employment. Most importantly, the government must be involved in dealing with these issues so that they can not only help those affected employees to look for a new job and they also can provide monetary support and attract foreign companies to make an investment in these organisations to prevent these organisations from having the need to end their operations.
Ultimately, by doing this can help the organisation to continue operating its business and Hence, eliminating the number of employees from being layoffs from plant closure.
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