After facing significant public backlash and scrutiny over its abrupt layoffs affecting nearly a hundred employees this week, e-commerce giant Lazada has apologised for not consulting with the union before proceeding with its retrenchment exercise.
On Wednesday (3 January 2024), news reports emerged stating that Lazada was conducting an ongoing retrenchment exercise.
The layoffs reportedly surprised many employees as they were informed about their job losses at the last minute.
The retrenchment exercise at Lazada started on 3 January 2024, affecting an undisclosed number of Singaporean staff members.
According to The Edge Singapore, employees were summoned to one-on-one meetings with the human resources department. The meetings were scheduled just a day before.
Some employees even had to cancel their planned leaves and return to work early for these last-minute meetings, only to receive news of their retrenchment.
In interviews conducted by Channel NewsAsia with several Lazada employees, it was revealed that almost a hundred employees from various departments within the company had been notified of their retrenchment.
Some departments saw substantial reductions, dropping from approximately 20 to 30 employees to just four or five.
NTUC and FDAWU Brought Up the Matter to MOM
Following the retrenchment news, the National Trade Union Congress (NTUC) and its affiliated union, the Food Drinks and Allied Workers Union (FDAWU), have brought up the issue to the Ministry of Manpower (MOM), emphasising that Lazada had not engaged in prior consultations.
Both NTUC and FDAWU expressed “deep disappointment” with Lazada’s retrenchment exercise as the company failed to consult with them before proceeding with the layoffs.
Lazada Apologises for Failing to Consult Union Before Retrenchment Exercise
In a joint statement released on Saturday (6 January 2024), the NTUC and FDAWU announced that FDAWU had accepted Lazada’s apology.
The joint statement read: “Both parties have agreed to work closely together and to put workers’ interests at the forefront of their negotiations.
“Lazada have also assured FDAWU that they will be consulted in advance for any future exercises.”
Negotiations for More Satisfactory Retrenchment Benefits
The recent retrenchment exercise at Lazada, which occurred from 3 to 5 January 2024, mainly impacted professional, managerial, and executive (PME) employees.
These retrenched Lazada workers were informed that they would receive a severance package equivalent to two weeks’ salary for each year of service with the company.
“FDAWU does not find this satisfactory,” the statement said, adding that MOM will continue to facilitate these negotiations.
“Lazada has assured FDAWU that they will fully cooperate and provide any necessary information to FDAWU to ensure that the retrenchment exercise was carried out fairly.”
According to CNA, a spokesperson from the MOM stated that they witnessed positive developments during discussions between Lazada and FDAWU on Friday.
The spokesperson emphasised that Lazada is actively collaborating with MOM and FDAWU to ensure that the restructuring exercise is conducted fairly and responsibly.
This includes providing adequate support and appropriate retrenchment benefits to affected employees in accordance with industry standards, as per the Manpower Ministry’s guidance.
MOM further stressed the importance of responsible action by employers when considering cost-cutting measures.
In particular, unionised companies like Lazada are encouraged to initiate discussions with their unions to protect the interests of employees affected by such measures.