Employment Relations in Asia: Issues of Plant Layoff and Unemployment

This article discusses the issues of plant layoff and unemployment in Asia, with a focus on the role of employers and the government. It also highlights the importance of effective communication and proper compensation for terminated employees.

Running head: EMPLOYMENT RELATIONS IN ASIA
Employment Relations in Asia
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Author Notes

EMPLOYMENT RELATIONS IN ASIA
The issue of plant layoff and unemployment are few of the major issues that are faced by
the modern economy in all the major developed nations. According to the latest report, rate of
employment within Singapore has shirked to 3.5% in the last financial quarter, where there has
been more than 3500 employee layoff cases (SEOW, 2018).
In the given context it is essential to discuss the issues plants closing an employee layoff.
It is also important to focus upon the role of function in the given context. It is important to
mention that after every period of economic and financial crisis situation in the global scenario,
the companies often have to cut down their cost in order to reduce the margin of financial loss.
This is believed to have a direct impact upon the employee turnover rate. The company is
therefore not able to provide proper workplace condition for the employees and has results in
Employee layoff.
Terminating employees has been one of the major area of controversy, in the context of
today's business scenario. In most of the cases it has been seen that the employer do not follow
the ethical guidelines that are needed before terminating an employee (Solove et al., 2015).
Every employee in a private business organisation are hired on contract basis. Hence, the
employer has the legal authority to terminate or end the relationship with an employee once the
official contract period is over. Nevertheless, every employment contract needs to have certain
legal obligations that are implemented by agreement between employer and employee. As per
The Straits Times, Singapore Press Holdings (SPH) had been reported to resort to retrenching
130 of its employees in October 2017 as the media giant considered cost cutting and
restructuring of its work processes. The layoffs were a representation of around 3 percent of the
manpower (Seow 2017).

EMPLOYMENT RELATIONS IN ASIA
The case of Nestle can be given in the context, where the company reached nearly 3% of
the total employees in Singapore. Nearly 1400 staffs in the local area have been affected due to
the management decision of Nestle. This was mainly done to compensate the rapidly changing
business environment in Singapore, where the cost of labour was rising rapidly. The entire
workforce of the company has been affected due to the retrenchment activity. In Order to deal
with the given situation, the management of Nestle in Singapore has arranged personalized
meeting sessions with all the employees, who are being terminated. They have helped in the
personalised counselling session of each terminated employee, which will help them in
rebuilding up their career in other job profile. They have even provided outplacement support to
the terminated employees, which have help them to deal with the immediate after effect of job
loss. The company even directly contacted the Ministry of Manpower in the Government of
Singapore to give them advance notice of terminating employees (Nestle retrenches dozens of
employees in Singapore, 2018).
From the above mentioned case scenario, it is clear that the Nestle Company has strictly
followed all the ethical and legal principles before laying off the Employees. Nevertheless, in
many cases, when a company is shutting down completely there are no forms of advanced notice
that are given to the Employees. This issues is more evident in case of start-ups, which do not
have any base to provide proper assistance for building up the career of the Employees.
In the year 2009, the Seagate Company has closed completely closed and manufacturing
unit in Singapore, thereby resulting in loss of jobs for 4000 Employees. This was done to shift
the manufacturing unit in different location, where the company will be spending additional 80
million dollar for restructuring. Unlike the case of Nestle, Seagate Company is not providing any
form of compensation packages for the terminated employees. This had led to huge controversy

EMPLOYMENT RELATIONS IN ASIA
as most of the Employees have been working for more than 10yr with the company. The
company shifted the manufacturing unit in Thailand, where they recruited 2000 new employees.
According to the management this step was taken to deal with the rising manufacturing cost and
crisis in the supply of raw material within the Singapore market (Seagate closing Singapore
plant, 2018).
From the example of Nestle and Seagate, it can be concluded that it is important to deal
with the issue of employee layoff and plants being closing off. According to, Jung (2015) the
employers, who are terminating the employee plays the most important role dealing with the
immediate action. The proper mode of communication is believed to be the key element, which
will allow the employees to get proper information with in proper timely process. It will be
possible for the management to convey the exact position of the company during any crisis
situation. With proper discussion with the employees it will be possible for the management to
ethically implement their decision. It is also possible to deal with the information gap that is
believed to be one of the major issue during the phase of employee layoff. It is important for the
employees to understand the importance of laying off activity, which is done mainly to sustain in
the competitive environment of modern day business. For example, during the period of
economic and financial crisis, the company faces major loss that has to be compensated with
reducing the salary of the employee or by terminating them (Durfee, 2015).
Human Resource Department of a company plays the most important role in deciding
upon the exact compensation that need to be provided to the terminated employee. In the context
of economic and political environment of Singapore, the Employees are able to get proper job
opportunity is they are given advance notice. It is also important for the Human Resource
Department to maintain high level of confidentiality with the employee, which can help them to

EMPLOYMENT RELATIONS IN ASIA
deal with the immediate after effect of termination. Proper compensation can be provided in the
form of outplacement support, which is given by adequate information support to the Employee
(Marchington et al., 2016). Additional mental support is also required from the management,
which will help the employees to easily adopt with the new work-life environment. This can be
given by treating the employees with proper respect and provide them with proper time to make
use of the situation (Probst & Jiang, 2016).
In most of the cases, the employees are recruited on the basis of an official contract that
usually ends within a definite time period. During the ending period of the contract, it is essential
for the employers to remain prudent to the action as it can help to deal with the direct effects of
employee turnover (Cascio, 2018).
The government in Singapore has indeed a huge role to play in the overall process of
employee layoffs as it has direct impact on to the economic and GDP growth of the nation. The
government is said to be having the most crucial role in the cases of the layoffs and the plant
closing. One very important example is the Motorola layoff that occurred in the year 2008. The
company took the decision to layoff approximately 700 workers from the Singapore plant. The
government did not play an active role in the initial stage. However, when the judicial system
made an intervention, the government started taking interest. The Singapore government stopped
the liquidation process through the international judicial system (Steiber & Alänge, 2016). The
Ministry of Manpower, is playing the most important role by implementing the Employment act.
According to the guidelines of the act it is important for an employer to provide correct and
timely information to the workers, which will help to protect the interest in the given business.
During the time of employee layoff it is essential to provide proper timing and compensation
depending upon the past record of the respective employee. The Human Resource Department of

EMPLOYMENT RELATIONS IN ASIA
every company need to sync up their strategies with the Singapore Employment act. The
importance of having a proper legal employee contract is also included within the act that help to
ensure that every employees are given proper respect in the form of salary compensation and
other beneficiaries depending upon their performance level and position within an organisation
(About the Employment Act, 2018).
The positive effect of government intervention in the matter of employee layoff is evident
from the case of Nestle. Here, the company was bound to follow the protocols of implemented
by the government by providing proper support package to all the terminated employees. The
management also provided moral support to the Employees, which ensured that there is
minimum loss done in the career of the terminated employees. This step by the government
ensures that the rate of unemployment is not increased in spite of the action of employee layoff.
Hence, in order to conclude it can be said that the employers need to maintain effective
form of communication to provide the latest information to the Employees. This can help them to
deal with the crisis situation that can ultimately lead to employee layoff. It is also essential for
the employer to provide proper compensation, which can vary depending upon the situation.
Government intervention in the given matter is highly essential in order to monitor the entire
process of employee layoff. This will help to ensure that there are no unethical or illegal
activities executed by private business organisation to make their own benefit. The workplace
reputation of the company can also be improved by following the standard protocols of
employment implemented by the Ministry of Manpower.

EMPLOYMENT RELATIONS IN ASIA
Reference
About the Employment Act. (2018). Ministry of Manpower Singapore. Retrieved 16 February
2018, from http://www.mom.gov.sg/employment-practices/employment-act
Durfee, M. (2015). The Job Search Navigator: An Expert's Guide to Getting Hired, Surviving
Layoffs, and Building Your Career. Agate Publishing.
Jung, J. (2015). Labor unions’ decline since the 1980s has given corporate management a free
hand to make massive, permanent layoffs. USApp-American Politics and Policy Blog.
Nestle retrenches dozens of employees in Singapore. (2018). Channel NewsAsia. Retrieved 16
February 2018, from https://www.channelnewsasia.com/news/business/nestle-retrenches-
dozens-of-employees-in-singapore-9028414
Probst, T. M., & Jiang, L. (2016). Mitigating physiological responses to layoff threat: An
experimental test of the efficacy of two coping interventions. International journal of
environmental research and public health, 13(3), 338.
Seagate closing Singapore plant. (2018). Theregister.co.uk. Retrieved 16 February 2018, from
https://www.theregister.co.uk/2009/08/04/seagate_closing_singapore_plant/
Seow, J. (2017). SPH starts retrenching staff. The Straits Times. Retrieved 19 February 2018,
from http://www.straitstimes.com/singapore/sph-starts-retrenching-staff
Seow, J. (2018). Unemployment and layoffs down in Q2 2017; total employment continues to
fall: MOM. The Straits Times. Retrieved 16 February 2018, from
http://www.straitstimes.com/singapore/manpower/unemployment-and-layoffs-down-in-
q2-2017-total-employment-continues-to-fall-mom

EMPLOYMENT RELATIONS IN ASIA
Solove, E., Fisher, G. G., & Kraiger, K. (2015). Coping with job loss and reemployment: A two-
wave study. Journal of business and psychology, 30(3), 529-541.
Steiber, A., & Alänge, S. (2016). The World Is Changing. In The Silicon Valley Model (pp. 1-
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Cascio, W. (2018). Managing human resources. McGraw-Hill Education.
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