Lazada Allegedly Lays Off Nearly 100 Employees in Early January Without Union Notification
Lazada’s recent workforce reductions, conducted without prior notification to the Food, Drinks and Allied Workers Union (FDAWU), have sparked debates about corporate obligations during significant layoffs.
While there is no legal mandate for companies to involve unions in retrenchment decisions, the situation changes if the company is unionized, as highlighted by Ian Lim, head of Employment and Labour at TSMP Law Corporation.
For unionized firms like Lazada, adherence to the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment is crucial. This advisory mandates that the relevant union must be informed before the affected employees.
The National Trades Union Congress (NTUC) voiced disappointment with Lazada’s actions, stressing the necessity of collaboration with unions to ensure a fair process that protects the interests of all workers.
Although the Tripartite Advisory is not legally binding, failure to comply can result in administrative sanctions from authorities such as the Ministry of Manpower (MOM). These sanctions could include restrictions on work pass privileges, which could significantly impact large employers like Lazada.
The FDAWU has escalated the matter to the MOM, indicating a potential labor dispute that may be brought before the Industrial Arbitration Court (IAC).
Even for non-unionized companies, compliance with MOM regulations is mandatory. The Employment (Retrenchment Reporting) Notification 2019 mandates that companies with at least 10 employees must notify MOM of any retrenchments.
Lim stressed the importance of fairness in industrial relations, noting that decisions by the IAC are often based on equitable principles rather than strict contractual obligations.
Regarding potential revisions to the Tripartite Advisory, Lim suggested the possibility of legislative adjustments in the future. However, as of now, there have been no indications of such amendments.
Ongoing Negotiations Between Lazada and FDAWU
Lazada has taken proactive steps to address the aftermath of its January retrenchment, extending apologies to the National Trades Union Congress (NTUC) and the Food, Drinks and Allied Workers Union (FDAWU) for its failure to adhere to notification protocols.
The company has pledged cooperation with the union to ensure optimal outcomes for affected employees, committing to consult with them in advance for any future workforce reduction exercises.
Negotiations between Lazada and the FDAWU are already underway, focusing on addressing the concerns raised by the union. A key point of contention is the adequacy of the retrenchment package provided to affected workers.
According to the FDAWU, the current package falls short of expectations, prompting calls for additional benefits to be extended to retrenched employees.
Lazada’s willingness to engage in negotiations reflects its commitment to resolve the situation amicably and in a manner that upholds the interests of all parties involved.
By acknowledging its oversight and expressing a readiness to collaborate with the union, Lazada aims to find mutually acceptable solutions that address the concerns raised by the FDAWU.
The ongoing negotiations underscore the importance of effective communication and collaboration between employers and unions in managing workforce reductions.
By involving relevant stakeholders in the decision-making process and considering their feedback and concerns, companies like Lazada can minimize friction and mitigate potential conflicts arising from retrenchment exercises.
Moving forward, Lazada and the FDAWU will continue their dialogue to reach consensus on key issues such as compensation, benefits, and support measures for affected workers.
Through constructive engagement and a commitment to fair and transparent negotiations, both parties seek to achieve outcomes that uphold the welfare and rights of employees while ensuring the sustainability of business operations.
Ultimately, the resolution of the dispute between Lazada and the FDAWU will serve as a testament to the effectiveness of collective bargaining and dispute resolution mechanisms in safeguarding the interests of workers and promoting harmonious industrial relations.
As negotiations progress, stakeholders will closely monitor developments to ensure that the final outcome reflects the principles of fairness, equity, and respect for labor rights.
