International Business & Economy Introduce redundancy insurance to better protect workers,

Introduce redundancy insurance to better protect workers, Sylvia Lim

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In her Speech in Parliament yesterday, the Workers’ Party chairman, , suggested that a redundancy insurance should be introduced by the government to better protect workers whose job may become redundant.
In her speech she said:

In this economic transition, there are hardworking Singaporeans and their families being pushed into limbo. As a society, we should devise some safety nets to give them some peace of mind.

To this end, the government should look into the feasibility of introducing redundancy insurance. One model could involve requiring workers resident in Singapore and their employers, to each contribute a very small % of the employee’s monthly salaries towards a fund. The fund should be geared towards helping workers who undergo involuntary unemployment, meaning those who were made redundant including those terminated with notice.

The fund could gear towards giving a 6-month payout at a fraction of the worker’s last drawn salary (say 40%), subject to a cap, say based on the median wage. Such a modest scheme, of limited payouts which end after six months, will send a clear signal that only a temporary buffer is being provided, incentivising the worker to actively prepare to earn his own income again.

Such redundancy insurance has benefits for both the individual and society. For the individual, he will seamlessly have recourse to this buffer which he contributed to; he may not need to queue up at a social assistance agency and tap on public monies.

He also need not grab the first job opportunity that comes along, but be able to take a bit of time to hold out for a suitable job, enabling a better employee to job fit and sustainability.


Read her full speech here: http://bit.ly/1q2uzWY

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