Redeployment or retrenchment: How to tell when restructuring crosses the line

• Redeployment should keep workers employed, with training and support where needed.

• If a job is genuinely redundant, employers should be upfront and explain what options are available to the worker.

• Ask questions if your employer cannot clearly explain what happened to your original job.

• Workers who suspect unfair treatment should seek help from their union, NTUC or TADM.

It’s been almost two decades since tripartite partners first issued the Tripartite Guidelines on Managing Excess Manpower in November 2008.

After several revisions over the years, one principle has remained constant: Retrenchments should always be a last resort.

The concept is simple. By not letting go of workers during challenging times, employers get to retain valuable talent, show their workforce that they are committed to their people, and put themselves in a better position to seize new opportunities when conditions improve.

One alternative to retrenchment stipulated within the guidelines is redeployment.

The idea is that if a particular role becomes redundant, employers should first explore whether the affected employee can be transferred, retrained or reskilled for another suitable role within the company.

In the past, there have been talk of companies using redeployment as a cover for “disguised retrenchment” to get out of paying retrenchment benefits.

Is this even possible and if so, how can you as a worker know if your employer is genuinely redeploying you, or using restructuring to avoid the obligations that come with retrenchment?

When redeployment works the way it should

The whole point of redeployment is simple: save the worker, even if the job cannot be saved.

Instead of cutting headcount immediately, employers can move employees to other parts of the business, provide training, or redesign jobs to match changing operational needs.

This is in fact one of the key alternatives to retrenchment encouraged under the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment.

According to NTUC Deputy Secretary-General Cham Hui Fong, proper redeployment is rarely a last-minute decision.

“When we have ample time to prepare, we know what functions are likely to become obsolete. Then we look at the profile of the workers and ask: can they be trained to do something else?” she said.

The process is not just about shifting workers from Point A to Point B. Employers should provide adequate training, sufficient transition time and a role that is a reasonable fit for the worker’s skills and experience.

At its heart, good redeployment opportunities should keep the employment relationship intact. The worker remains employed, their years of service continue to count, with the employer investing in the worker to help them succeed in the new role.

The grey areas

Not every restructuring exercise falls definitively into the category of redeployment or retrenchment.

A role may become redundant in Singapore, but opportunities could still exist elsewhere locally or internationally within the same organisation. A company may offer employees the chance to move into another local function or relocate to an overseas office.

These situations can understandably leave workers wondering if they are being redeployed or if they are losing their job.

Ms Cham points to a key distinction. If the company is upfront that the original role has become redundant and offers alternative opportunities transparently, it is an actual retrenchment and not a disguised one.

For workers who choose not to consider the opportunities presented to them, the company should carry out the retrenchment in a proper manner.

She did stress, however, that workers should not be left worse off simply because they choose to stay with the organisation.

Ms Cham said that workers who stay on with the company through redeployment must retain their continuity of service, existing employment terms and accrued benefits. Their employment contract remains in force.

If employees are required to start over on new terms and conditions, it may raise questions about whether the arrangement is truly intended to preserve jobs or simply reduce the employer's obligations.

NTUC’s Legal Department noted that any changes to an employee’s existing employment contract would generally require the employee’s consent. 

When redeployment may become disguised retrenchment

While the term “disguised retrenchment” is often used, Ms Cham views the issue through a slightly different lens.

“It’s actually a disguised dismissal due to redundancy,” she said.

Ms Cham shared that some companies may avoid describing a redundancy exercise as a retrenchment and instead rely on contractual termination to end workers' employment.

In these cases, the jobs are no longer required. But rather than retrenching the workers, they are let go through the termination of their contracts.

These are disguised dismissals.

If a business employing 10 workers terminates five due to a sustained drop in orders and simply informs the five workers that their services are no longer required, this is effectively a redundancy case even though it is not explicitly stated.

In such cases, the absence of a clear redundancy explanation can lead to confusion over whether the termination has been properly identified and managed as a retrenchment.

Another scenario is where a company encourages employees to resign and reapply for a similar role elsewhere in the group, but without recognising their existing years of service or preserving their employment benefits.

“What they [employers] should not do is terminate them contractually or ask them to resign and then offer them a job there and claim that this is fair,” said Ms Cham. 

Where workers are being let go due to redundancy, employers ought to compensate workers in accordance to prevailing tripartite guidelines and company policies, including retrenchment benefits where applicable.

However, she stresses that not every restructuring exercise should be viewed with suspicion.

When redundancy occurs, companies need to adapt, adopt new technology and reorganise operations to stay competitive. In many cases, AI and automation may change the nature of work rather than eliminate it entirely.

“What we are doing now is to encourage companies to expand the business,” she said. “If you intend to grow, then you have to see how you can reallocate your resources to do something else. This is where training and retraining comes in.”

In many cases, AI and automation may change the nature of work rather than eliminate it entirely.

Red flags workers should watch for

While there is no official checklist for identifying disguised dismissals, there are several warning signs workers should pay attention to.

A lack of clarity on what happened to the original role

“When it comes to transfer or redeployment, the question one must know how to ask is: ‘What happened to my job?’” shared Ms Cham.

If it is because management has decided that the worker is a better fit elsewhere, the company must be transparent about it.

Likewise, if the role has disappeared due to redundancy, the worker should be informed.

When employers are unable or unwilling to explain what happened to the original position, workers may have reason to question whether the exercise is a genuine redeployment or a redundancy that has not been properly acknowledged.

Group-scale transfers or terminations linked to restructuring

One-off transfers happen all the time. But if there are batches of employees being let go or moved around at the same time, particularly alongside cost-cutting or restructuring announcements, that could be a sign of disguised retrenchments.

Companies with at least 10 employees must notify the Ministry of Manpower (MOM) of any retrenchment within 5 working days after notifying the affected employees.

This requirement is mandatory under the Employment Act, and failure to comply can result in fines up to $2,000.

Being moved into a role without a reasonable chance of success

A redeployment should not set workers up for failure.

Ms Cham shared that a technician cannot simply be expected to become a salesperson overnight without adequate support, just as an office worker should not be moved into a completely unrelated role without training.

“There must be a reasonable fit, and then we have every right to ask for training,” she said.

If a worker is transferred into a role that bears little relation to their experience and is not provided with the necessary training or support, the redeployment may be difficult to justify. Where a worker is placed in an unsuitable position only to be terminated shortly afterwards, it could be a form of disguised dismissal.

The good news is that workers do not have to navigate these questions alone.

Union members who are unsure about their situation can reach out to their union representatives, who can help clarify their rights, engage the employer, and assess whether the exercise is being carried out fairly.

Non-union members can file a claim for mediation with the Tripartite Alliance for Dispute Management (TADM) if they believe they have been wrongfully dismissed or unfairly retrenched.

The bottom line

The distinction between redeployment and retrenchment ultimately comes down to intent.

A genuine redeployment exercise seeks to preserve jobs by helping workers move into new opportunities. A retrenchment acknowledges that a role is no longer needed and, where applicable, provides a fair package to help the worker transition.

Problems arise when the line between the two becomes blurred.

For workers, the key is not to panic, but not to stay silent either. Ask questions. Understand what has happened to your role. Clarify whether your years of service and benefits are protected. And if something does not feel right, seek advice.

As Ms Cham puts it: “If workers suspect that they have been involuntarily retrenched without a fair package, then they should raise it.”

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