Unions, employers to be consulted on legislating retrenchment benefits: Dinesh

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SINGAPORE - The trade unions and employers will be consulted on retrenchment benefits before any decision is taken on making it into law, said Minister of State for Manpower Dinesh Vasu Dash.

Speaking in Parliament on Aug 5 during a Workers’ Party motion on the future economy of Singapore, Dinesh said: “We’ve considered it in the past. It wasn’t very appropriate then.”

He added that the idea was studied periodically, but circumstances have changed now.

The recommendations made by the Economic Strategy Review (ESR) touched on stronger support for workers, and the authorities are looking at whether “we can go above 90 per cent”, he said.

Tripartite guidelines ensure that nine in 10 retrenched eligible workers receive retrenchment benefits, he added.

Dinesh was responding to a question from Nominated MP Mark Lee, who asked if the Manpower Ministry has studied how mandatory retrenchment benefits will impact employers and if such a policy could have unintended cost or behavioural changes in hiring, especially for smaller local businesses.

Dinesh, who is also Minister of State for Culture, Community and Youth, said the Singapore National Employers Federation and unions will be consulted, and then the Government will make a decision.

Earlier in the debate, Dinesh said Singapore’s economic model is not failing, and it is navigating a structural transition from a position of strength.

Although there have been high-profile retrenchments in some companies, employment in Singapore expanded for the 19th straight quarter in the first quarter of 2026, he said.

“Resident employment continued to grow, unemployment remained low, and firms continued to hire. These outcomes are the result of deliberate policy choices,” he added.

Singapore’s success, he said, has never come from choosing between protecting workers and keeping the country’s economy competitive.

On the WP’s assertion – that a greater reliance on local champions in industrialised economies produced better productivity models and outcomes for workers – Dinesh said Singapore’s wage outcomes are higher.

For instance, from 2021 to 2024, real value-added per worker – a way to measure productivity – increased by about 1.8 per cent a year, he added.

“This did not happen by accident, but through sound growth policies and strategies, and tripartite efforts like the progressive wage model,” he said.

Dinesh said he was glad there was broad agreement on how Singapore’s prosperity is based on its ability to compete successfully in global markets while ensuring that Singaporeans benefit from that success.

To this end, the ESR provides a blueprint to address the challenges faced by the economy, and puts workers at the heart of its strategies, such as by establishing clearer pathways from skills to jobs and guiding them into the workforce, he said.

He disagreed with the WP argument that entry pathways for young people are “broken”. The current situation, Dinesh said, is “more resilient than suggested”.

In 2025, vacancies outnumbered jobseekers, he added. In the first quarter of 2026, there are about 32,800 entry-level jobs – more than the number of graduates looking for jobs.

Dinesh signalled support for NCMP Andre Low’s suggestion on expanding pathways like apprenticeships, and said the Government is helping more Singaporeans gain industry-level skills while working.

As for a universal redundancy insurance scheme suggested by WP MP Fadli Fawzi (Aljunied GRC), Dinesh said it is similar to the Job Support Scheme (JSS), which places more emphasis on reemployment.

“Instead of coming up with a new mechanism, the ESR has recommended that we strengthen schemes like the JSS,” he added.

On more skills trades support mooted by Gerald Giam (Aljunied GRC), Dinesh said he shared the aspiration for such trades to offer better wages, stronger professional standing and clearer career progressions.

The Government is already working on this, he said. For instance, a partnership formed with the Specialists Trade Alliance of Singapore is working on developing more structured pathways into good jobs in the skills trades.

Ultimately, enterprise transformation and workforce transformation must work together, he said.

“We support enterprises because their success creates opportunities for Singaporeans.” He added that it is especially important for SMEs, which employ about two-thirds of Singapore’s workforce.

Tripartite partnership is also important as it brings the Government, businesses and workers together to expand the economic pie.

Dinesh said: “That is what turns inclusive growth from an aspiration into practical outcomes – investment, better jobs and rising wages.”