By Ian Tan Hanhonn
On 25 June 2020, news of Wirecard AG, headquartered in Munich, Germany, made waves in the financial world when it announced that it would be filing for insolvency.
The company’s collapse came after multiple allegations of accounting malpractice. At the time of the insolvency filing, Wirecard owed close to US$4 billion to its creditors.
Just a year before, the payment processor and financial services provider had some 26 offices globally, with over 300 of its 5,300 global employees hired here in Singapore under two separate companies – Wirecard Singapore and Wirecard Asia Holdings.
Neither one of the two entities were unionised. This meant that retrenchment benefits, if any, would have been left solely to what was stipulated in each employee’s own employment contract.
Not knowing what was to become of them, the employees reached out to the Banking and Financial Services Union (BFSU) to inform them of their plight.
Had the employees not done so, things may have turned out very differently today.
BFSU needed the management of the Wirecard entities to give it recognition as the union that represented the employees before it could begin negotiations.
Concurrently, the union began reaching out to the rest of the Wirecard employees in Singapore, urging them to sign up as union members.
BFSU General Secretary Christine Lee recalled the challenges faced then.
“At that point in time, we were still in the middle of the restrictions brought about by COVID-19, and many employees were working from home. It was not easy trying to reach out to them,” she shared.
Fortunately, Wirecard Regional Managing Director Jeffry Ho agreed that it was important to bestow the employees with the appropriate protection and assurance during the companies’ difficult time.
“They [employees] would have the best outcome because the union would look after their interests,” he said.
On 1 July 2020, Wirecard Singapore and Wirecard Asia Holdings acknowledged the union’s recognition claim.
Employees’ Retrenchment Packages
At the time of the first batch of retrenchment on 25 January 2021, BFSU and Wirecard’s management had already worked out the affected employees’ retrenchment packages.
The package for full-time locally employed workers included salary in lieu of notice, annual leave encashment and a retrenchment benefit of a month’s salary for every year of service (capped at 25 years), just to name a few.
By late November 2021, the union had assisted some 114 retrenched individuals.
Ms Lee could not specify what the employees would have received if not for the collective agreement signed between Wirecard and BFSU, but she believed that the amount would have been far lower.
“It may have been one to three months’ worth of salary. If Wirecard in Singapore filed for bankruptcy, it may have been nothing,” she said.
Beyond the retrenchment packages, BFSU also helped the affected workers to link up with career coaches from NTUC’s e2i (Employment and Employability Institute) and the Institute of Banking and Finance (IBF).
As for Mr Ho, he believed that working with the union encouraged employees to stay on to sustain operations long enough for management to work with the potential buyers on the sale of the Wirecard entities.
He said: “The retrenchments [packages] were key to the success of the sales of the other entities because they [the employees] were all regional, and we needed them to stay on to a certain point till the sale had gone through for the other countries. I think having their retrenchment packages, assured by the union and the management, provided the comfort for them to stay on.”