When Singaporeans are retrenched, they are left out in the cold with no financial protection. Through no fault of theirs, retrenched workers suddenly find themselves in uncertainty and hardship.$CUT$
Low-wage workers are especially vulnerable as they have no say in company restructuring or the factors that cause MNCs to relocate their operations. This affects even middle-income professionals in the fields of life sciences and hospitality.
Unexpected lay-offs cause severe strain on the entire family with serious social repercussions. Even though income stops, the bills don't. The family still needs to eat, children still need to go to school, and electricity bills still need to be paid.
On the other end, when CEOs and top managers are let go, they are given golden handshakes, sometimes worth millions of dollars.
To remedy such an imbalance, the SDP proposes a retrenchment insurance scheme called RESTART (Re-Employment Scheme and Temporary Assistance for the ReTrenched) for our workers who find themselves laid-off from work.
Here's how it works:
If a worker is retrenched, RESTART pays him/her 75% of last drawn salary for 1st 6 months, 50% for 2nd 6 months, and 25% for final 6 months.
The payout stops once the individual is re-employed or 18 months after retrenchment.
The payout capped at the prevailing median wage (which is $3,770 as of 2014). This means that a retrenched employee earning $3,200/month would be paid $2,400 for the first 6 months and so on whereas an employee earning $5,000/month would get paid 75% of $3,770 for the first 6 months.
MOM will assist the retrenched individual to seek re-employment and help match his/her skill- and salary-level to new job where possible.
The individual can reject only up to 3 job offers.
Based on a 5% unemployment rate, we estimate RESTART's budget to be $2 billion a year. This budget will come from
the state (80%), employers (10%) and workers (10%)
employees’ contributions are made on a sliding scale with the higher-income groups paying more
employers would match their employees’ contributions dollar for dollar
Such a hybrid system of financing would spread out the fiscal responsibility to all stakeholders.
To prevent abuse of the programme, those relieved of their work due to misconduct, resign from their jobs or worked with the company for less than a year will not be eligible for RESTART.
As the name, suggests, RESTART is meant to provide temporary assistance to retrenched workers and to help them get back on their feet to contribute to the economy. It will help to reduce tension and hardship for families, keeping our social fabric secure and strong.
EconomyTuesday, 10 February 2015SingaporeDemocratsPrint