Dyson did not break Singapore laws in layoffs but may have damaged its reputation, experts say

SINGAPORE: When Dyson conducted “surprise” layoffs in Singapore last week, it received a rebuke from the union representing its workers about the one-day notice it gave to inform the union of the retrenchment.

Although the consumer appliances firm abided by the law, the way the layoffs were done may have affected its reputation, business analysts told CNA.

Professor Lawrence Loh of the National University of Singapore (NUS) Business School said: “It is not just about the letter of the law, but the spirit of being a good employer. The company needs to upkeep its broader reputation.” 

Employees were likely caught off guard because Dyson said in July that the Singapore office would not be directly impacted by job cuts in Britain.

“What the company says at that point in time is accurate, it had no plans,” Prof Loh said. “But when (the announcement) comes — 24 hours, one email, one meeting — you’re out.”

With only one day's notice, the union had no time to engage the parties for discussions or to find a better way to handle the layoffs.

Dyson should not have "skimped on this last mile", Prof Loh said, especially since the company moved its headquarters to Singapore from the United Kingdom "with such fanfare" in 2022.

Singapore's Ministry of Manpower (MOM) said that the period of notice given to the United Workers of Electronics & Electrical Industries was negotiable because the retrenched employees were not unionised.

The union, which represents workers in the electronics industry, said last week that the staff members who were laid off are believed to have received a compensation package of one month’s pay for every year worked, which is the norm for the union.

However, it said that it was unsure whether there was a cap on the package and remained concerned that it had not received more information from Dyson on who the affected workers were.

The company said that it had “respectfully informed” the union in advance and that it was following all prevailing guidelines from MOM.

In Singapore, the optics are not good for Dyson, Prof Loh said, noting that its “overall branding” — as a company with many consumer products for sale — may be affected.

Assistant Professor Jared Nai, who teaches organisational behaviour and human resources at the Singapore Management University (SMU), said that Dyson probably chose not to give a longer notice period or more information to the union “for business reasons that only the company can answer”.

“These actions harm the morale of its current employees and the reputation of the company with future potential employees, but presumably, it determines the tradeoff to be beneficial for its purposes,” he added, noting that the compensation is similar to the recommended norm.

Dr Chew Soon Beng, a senior associate at the Nanyang Technological University (NTU), said that the National Trades Union Congress (NTUC) wants to be informed by firms before they retrench workers not because it wants to intervene in a management decision, but because it wants to help affected workers find new jobs or provide assistance in other ways.

Dr Chew, who has written books about labour policy and unionism in Singapore, added that the Singapore National Employers Federation could play a role in this area as well, because companies should feel closer to the federation compared with NTUC and MOM.

LAYOFFS IN FOREIGN COMPANIES

The electronics workers' union said that it had escalated Dyson's case to MOM, making Dyson the second foreign company this year to have a retrenchment matter flagged to the ministry. 

In January, the Food Drinks and Allied Workers Union escalated Lazada’s case to MOM after the e-commerce company retrenched workers without notifying or consulting the union.

However, analysts said it is not that foreign companies do not understand or have trouble going along with the spirit of tripartism in Singapore — where unions, employers and the government work together.

“I don’t think it’s a systemic problem, as of now,” Prof Loh said. “It’s case by case.”

Domestic companies have also gotten themselves into trouble with unions for mishandling retrenchments, Asst Prof Nai of SMU said.

He pointed to an incident in 2017 where Surbana Jurong — which is wholly owned by state investment firm Temasek Holdings — dismissed 54 workers and labelled them as “poor performers”.

Singapore’s system of tripartism may be unique, but foreign companies know and understand that they have to operate in a way that is acceptable in whatever country they are based, the analysts said.

In other countries, the relationship between labour unions and the government, as well as company management and the union is adversarial, Dr Chew from NTU said.

“But in Singapore, NTUC is not a traditional union,” he added. It works with the government and employers to make the Singapore economy competitive."

Asst Prof Nai noted that employment laws in other countries can make it difficult to terminate the employment of resident employees, and unions may engage in frequent industrial action or strikes. 

He also said that there is a need to engage foreign companies on tripartism when they start operations in Singapore, though firms typically conduct their own due diligence to understand employment laws and norms. 

Prof Loh of NUS Business School said he is sure that companies are made aware of the policies and laws when they set up shop in Singapore, but that the firms should be able to navigate this independently.

“It’s not rocket science. All this information is available on the web,” he added. “You don’t need somebody to hand-hold you to say, 'My dear, this is tripartism'.”