SINGAPORE: She had performed well at work and was promised an increment, yet Grace Gumala, 35, did not escape retrenchment last July.
Lazada figured prominently in this when the China-backed technology company’s sudden retrenchment exercise this year, and poor compensation to affected employees, led the National Trades Union Congress and its affiliated Food, Drinks and Allied Workers Union to step in.gets industry insiders to share what really goes on behind closed doors when companies decide to boot out workers — so that you can prepare yourself should you be next.
“A decision is made about the business — which are the businesses that they need to downsize, … that they need to shut down,” said John*. “Whether you’re old or young, everybody in that department or team gets impacted.” “Not every has an in-house legal counsel or HR team, and so these decisions aren’t necessarily always professional nor … well-executed. Nor is it the best outcome in the long term.”Once a company decides to retrench, the planning can take anywhere from a week to a month, said John.
“You’re leaving the employee without any support the weekend. … Some of feel too ashamed … to even tell their family members because it may be a stigma.” Indeed, employees are not typically informed in advance about a retrenchment, said John. “Companies keep very, very quiet … because they don’t want to actually rattle the rest of the company or affect their reputation.”In Thailand, employees must be informed at least one month before they are retrenched; and in South Korea, at least 30 days before. In the United States, employees must be notified 60 days before in the case of mass layoffs.
“If already in financial difficulty, and you’re demanding that they have to pay a certain amount of retrenchment, then they won’t have enough to keep the business going, which means they may have to even retrench more.” “Because they’re helping to bring their workers along — upskilling, reskilling them so that the workers continue to … contribute to the success of the company.”Perhaps what matters more than retrenchment itself is what is said to employees when letting them go. In the meeting with her manager, Karen felt “there was really no compassion”.
“, if the company has brought on a reputation of being a bad employer, then how would it be expected, when the storm is over, to bring on the next wave of talent?” Besides this, retrenched employees have been asked to sign NDAs, leaving some like Karen feeling “silenced”. Sometimes what’s at stake are ex-gratia payments, … retrenchment benefits as well. So all these would be up in the air if the employee chooses not to sign.”With interest rates likely to remain high for the foreseeable future, “technology as a sector will continue to be highly impacted”, warned Au.
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