Agoda layoffs: Clauses that stop staff from reporting dismissals not legally binding, say lawyers

Key Concepts:

• Severance agreements
• Restrictive clauses (non-reporting, confidentiality, non-compete)
• Employee rights
• Tripartite framework (government, employers, unions)
• Fair and progressive HR practices
• Psychological safety
• Transparency and empathy in retrenchment
• Career transition support
• Employment Claims Tribunal Act (ECT)

1. Legality of Non-Reporting Clauses in Severance Agreements

• Lawyers consulted by CNA stated that clauses in severance agreements preventing employees from reporting layoffs to authorities are not legally binding in Singapore.
• Such clauses are deemed unlawful as they limit an employee's rights.
• An Agoda severance agreement seen by CNA included a clause stating employees should not report layoffs to government agencies, unions, or statutory boards.
• One lawyer noted that such clauses are uncommon, citing laws like the Employment Claims Tribunal Act (ECT) that protect employees.
• The inclusion of such clauses might be "out of an abundance of caution," especially when the severance package is generous, to prevent future legal recourse by the employee.
• However, Mr. Ding adds that the clause is effective in preventing employees from pursuing a civil court case because that cause of action is a private right that the employee has and that's not covered by the ECT.

2. HR Perspective on Restrictive Clauses

• Tracy Tan from the Singapore Human Resources Institute (SHRI) finds such clauses unusual within Singapore's tripartite framework.
• SHRI encourages companies to approach retrenchment with empathy and transparency.
• Such measures are unnecessary and not in line with fair and progressive HR practices.

3. Employee Actions When Faced with Restrictive Agreements

• Employees should pause and carefully consider the terms before signing.
• If clauses are contrary to guidelines, employees should seek consultation with the Ministry of Manpower (MOM) and unions for guidance.
• Employers are often open to clarifying terms when raised by employees.

4. Protection for Employees Who Have Already Signed

• The tripartite system in Singapore is designed to protect employees from unfair terms.
• Employees should understand their rights and available support.
• There isn't a one-size-fits-all answer, but employees should weigh their options and seek consultation before proceeding.
• Rushing into signing agreements can make corrective action difficult.

5. Other Clauses to Be Mindful Of

• Confidentiality clauses and non-compete clauses can restrict career pathways.
• Employees should be aware of the impact of these clauses, especially when considering switching sectors or companies.

6. Impact on Employee Trust

• Less restrictive clauses, coupled with transparency and empathy, foster a safe, respected, and supported environment.
• Overly restrictive clauses create an adverse effect on psychological safety, leading to decreased morale and loyalty.

7. HR Standards in Singapore

• The Singapore HR Awards showcase outstanding HR initiatives and policies from SMEs and MNCs.
• SHRI, along with partners like HCLI, HRP, and SNF, endeavors to strengthen and uplift HR practices in Singapore.

8. HR Support During Retrenchment

• Companies should consider retrenchment as a last resort.
• Explore job redesign, reskilling, and upskilling opportunities.
• Consider reducing expenses in other areas.
• HR can provide career transition support, job placement assistance, and connect employees with support networks.

9. Tips for Employees Facing Restrictive Clauses

• Be aware of available support from MOM, unions, and SHRI.
• Understand relevant legislation.
• Maintain curiosity and learning abilities.
• Adopt a longitudinal view, recognizing that new opportunities will arise.

10. Notable Quotes

• Lawyer: "The clause will be effective to prevent the employee from otherwise bringing a claim before the courts, for example, because that cause of action is a private right that the employee has and that's not covered by the ect."
• Tracy Tan (SHRI): "We encourage all companies to approach retrenchment exercises like these with a lot of empathy and a lot of transparency."
• Tracy Tan (SHRI): "Always know that a lot of the support within our HR ecosystem is here."

Synthesis/Conclusion:

The discussion highlights the legal and ethical concerns surrounding restrictive clauses in severance agreements, particularly those preventing employees from reporting layoffs. While such clauses may not be legally binding in Singapore, they can create a climate of fear and distrust. The importance of transparency, empathy, and adherence to fair HR practices is emphasized, along with the availability of support for employees facing difficult situations. Employees are encouraged to carefully review agreements, seek consultation when needed, and be aware of their rights and available resources. The Singapore HR landscape, while generally strong, continues to strive for improvement in supporting both businesses and workers during challenging times like retrenchment.