The Swedish fashion retailer asked its employees across East Asia, which includes Singapore, to reapply for 178 jobs around the region as part of the restructuring, according to several staff members who spoke to CNA.
Employees can nominate themselves for up to two roles, many of which have moved from Singapore to other countries. They must pass interviews and evaluations to secure the positions.
Those who are unsuccessful face “mutual separation” in line with local labour laws, according to staff members.
On Tuesday (Jun 2), MOM confirmed that it had received a mandatory retrenchment notification from H&M, and that it was within the required window of five working days after affected employees are informed of their retrenchment.
H&M, which is not unionised in Singapore, did not confirm if there were layoffs or relocations when earlier approached by CNA.
When H&M was asked for its response to the concerns raised by NTUC, a representative said: “As previously stated, we are fully committed to supporting all of our colleagues in any organisational changes and will continue to fulfil our obligations according to local labour law requirements.”
RESTRUCTURING OR RETRENCHMENT?
In recent years, the BBC and HSBC have reportedly also asked employees to reapply for roles during restructuring exercises.
Some employers want to avoid the optics of using the term “retrenchment” while seeking to restructure operations and relocate jobs, said several manpower experts.
Speaking in general terms, they said companies could adopt similar wordings in their communication to affected staff to disguise an impending retrenchment.
Ultimately, these displaced workers could lose out in retrenchment negotiations and the amounts they receive through severance packages, said experts.
Tripartite partners define retrenchment as dismissal on the grounds of redundancy or due to any reorganisation of the employer’s profession, business, trade or work.
An employer who terminates an employment contract and does not plan to fill the vacancy any time soon is presumed to have retrenched the employee.
While retrenchment benefits are not required by law, the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment (TAMEM) – which has no legal force – recommends a norm of two weeks to one month’s salary per year of service.
Under pressure to optimise costs and stay competitive, some companies are gravitating towards restructuring or “calibration” exercises instead of overt retrenchments, said Ms Archana Srinivasan, founder and director of human resources consultancy Alchemy People Partners.
This pattern is becoming more common in the current macroeconomic climate, said the senior HR professional, who is accredited by the Institute for Human Resource Professionals (IHRP).
Some of these calibration exercises could be genuine, necessitated by regionalisation or automation, and still result in job losses, she said.
“But in other cases, the framing could be meant to soften the optics of what is, in substance, a workforce reduction,” she added.
Companies that reduce headcount through restructuring or “calibration” instead of retrenching employees directly may be sensitive to the optics of the exercise, said Mr Ian Liew, an HR practitioner with more than 10 years of experience.
“It doesn’t make any material difference other than branding and communications,” he said.
He pointed to a few factors that can determine whether a company is using mutual separation agreements or job redeployments to disguise retrenchments.
These include how genuine the company is in redeployment, whether employees are given fair opportunities to interview for alternative roles, and if the company provides proper compensation and relocation support for these roles.
