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DFS Doubles Severance Package After Being Called Out For Poorly-Handled Retrenchment

Last Saturday (Sept 28), Hong Kong-based DFS Group laid off workers from its shops at T Galleria and Changi Airport, as well as its shared services centre in Chai Chee in a bid to “rebalance its workforce in Singapore”.

About 60 workers at T Galleria and Chai Chee was retrenched with immediate effect, while others will be exiting over the next several months.

DFS did not reveal how many employees have been affected by this retrenchment, but shared that it continues to employ “almost 1,000” workers in Singapore.

DFS also said its employees working in the liquor and tobacco concession operations at Changi Airport have been given formal notice of their termination of employment.

It will be closing all its liquor and tobacco shops in Changi Airport in June 2020, and about 500 staff will be affected by this move.

The company blamed the layoffs on the tough travel retail market, a situation made worse by the steep losses suffered by its liquor and tobacco concession operations at the airport.

DFS Should Handle Retrenchment “Responsibly And Sensitively”

Following this retrenchment news, Manpower Minister Josephine Teo posted on Facebook that companies should handle retrenchment “responsibly and sensitively”.

“I think DFS could have better handled their recent retrenchment exercise, particularly in the way they communicated with their employees and how they offered the severance packages.”

In response, DFS said in a later media statement that the Group is “committed to carrying out (the retrenchment) exercise in a fair and sensitive manner” and that it has in place a “series of measures” to assist affected staff.

In the next few months, DFS said it will work with relevant agencies to offer support such as personalised one-on-one career coaching, job matching, careers and job fairs, retraining and re-skilling, and employability skills workshops.

These support programmes and services have been communicated face-to-face to affected staff by DFS yesterday (October 2).

Better Severance Packages For Affected Staff

Affected workers were also initially offered to serve notice or payment in lieu of notice period, and a severance package capped at 13 weeks of pay.

However, DFS informed them yesterday of an improved severance package: retrenched workers would receive two weeks’ salary for each year of service, capped at 13 years or the equivalent of 26 weeks’ pay.

They could also either serve out their notice period or be paid in lieu of notice.

However, some employees CNA spoke to said they were still shocked by the sudden retrenchment and felt that the enhanced severance package still fell short.

Even with the new terms capped at 13 years, it’s less than half of the time some long-serving workers have dedicated to the company. They have worked at DFS for over 15 to 30 years.

CNA reported that those who were retrenched last Thursday were made to sign and return the retrenchment package agreement by noon the next day. They were also given a bag into which they were to pack their belongings and asked to leave. 

It showed off such an uncaring side of the company, and many felt that this isn’t the “right way” to treat their employees.

In previous retrenchment exercises, affected staff were informed in advance so they could make the necessary preparations.

Featured Image Credit: Food on Fork

 

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