SINGAPORE: The recent Lazada job cuts have prompted questions on responsible retrenchment practices.

The sweeping layoffs by the e-commerce player on 3 Jan is drawing attention to concerns about employee rights and labour union involvement, The Business Times reports. The move is not unprecedented in the tech sector, which has witnessed numerous job cuts since 2022.

Of particular interest is the timing of Lazada’s layoffs, occurring at the start of the new year. The company’s human resource practices during the retrenchment, coupled with a lack of communication with the Food, Drinks and Allied Workers Union (FDAWU), have raised questions about responsible retrenchment.

Established in 2012, Lazada Singapore serves as Alibaba’s regional headquarters for e-commerce ventures in Southeast Asia. Despite its established presence and resources, this is not the first time Lazada has implemented layoffs within the past year.

Lazada’s decision not to involve FDAWU, an affiliate of the National Trades Union Congress (NTUC), means the company determined retrenchment terms, including payouts, without union consultation. The offered severance package is two weeks’ salary for each year of service, lower than what some competitors like Grab and Shopee have provided.

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In response, a joint statement by NTUC and FDAWU on Jan 6 expressed dissatisfaction with the payout, leading to ongoing negotiations for additional benefits for affected workers. Lazada has since apologised for failing to notify FDAWU but questions remain.

The feasibility of securing additional benefits through legal means is uncertain, as retrenchment payouts typically hinge on agreements outlined in either a union’s collective agreement (CA) or workers’ individual contracts. It is unclear whether the axed Lazada workers were unionised and whether there was a CA in place to protect these workers.