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MOM notes 'good progress' in Jan 5 talks between Lazada Singapore and union

Samantha Chiew, Jovi Ho and Nicole Lim
Samantha Chiew, Jovi Ho and Nicole Lim • 3 min read
MOM notes 'good progress' in Jan 5 talks between Lazada Singapore and union
Some affected staff say they were offered a severance package of two weeks per year of employment, less than the norm for unionised companies. Photo: Samuel Isaac Chua/The Edge Singapore
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Following Lazada's shock retrenchment exercise at its Singapore office this week, the Ministry of Manpower (MOM) says it facilitated discussions between Lazada Singapore and the Food, Drinks and Allied Workers Union (FDAWU) on Jan 5.

In a Jan 6 statement to The Edge Singapore, the ministry says it “saw good progress” in the talks, without disclosing details. MOM says it is working to ensure that the restructuring exercise is held in a “fair and responsible manner”.  

This includes offering affected employees “adequate support and appropriate retrenchment benefits in line with industry standards”, the statement notes.

MOM's Jan 6 statement follows one issued by the National Trades Union Congress (NTUC) on Jan 5, which stated it is “deeply disappointed that Lazada has initiated a retrenchment exercise without notifying and consulting FDAWU”. Lazada Singapore staff are unionised under the FDAWU, an affiliated union of NTUC. 

Meanwhile, NTUC in a separate statement on Jan 6 says Lazada has since apologised to the FDAWU, which has accepted the apology. Both FDAWU and Lazada Singapore have "made some progress with regard to the recent retrenchment exercise at Lazada between Jan 3 to 5 that affected mainly professionals, managers and executives (PME) employees".

Both parties have agreed to work closely together and to put workers’ interests at the forefront of their negotiations. Lazada has also assured FDAWU that they will be consulted in advance for any future exercises.

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Staff who were laid off by Lazada Singapore this week were offered a severance package lesser than what unionised companies should offer, The Edge Singapore understands. 

Ex-employees were offered two weeks' pay for each year that they were employed, when “the norm is one month’s salary for each year of service”, according to MOM.

However, MOM’s guidelines are not mandated by law. Instead, its website for “responsible retrenchment” states that it “strongly encourages all unionised and non-unionised employers to adhere to the advisories”. 

See also: No net zero without the help of SMEs

According to NTUC's Jan 6 statement, FDAWU "do not find this satisfactory and are negotiating for additional benefits for affected eligible workers". MOM will continue to facilitate these negotiations.

The Edge Singapore first reported on layoffs at Lazada’s Singapore office on Jan 3, which affected junior and senior employees from multiple departments, including the commercial and marketing teams.

On Jan 5, The Edge Singapore reported that regional C-suite executives were among those affected by the layoffs at Lazada, which include Singapore-based chief customer care officer Brigitte Daubry, chief marketing officers in various countries, and Malaysia chief executive officer and chief logistics officer.

Lazada has also shut down LazMall in Vietnam. Launched in 2018, LazMall hosts “recognisable international brands” selected for shoppers on the platform.

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