The story of the Wirecard Collapse

TLDR; The role of unions in Singapore and how they work have evolved, but one thing stays firm – unions exist to represent and protect workers. 

Wirecard AG – an international payment processor and financial services provider headquartered in Munich, German –  shook the financial world when the company announced on 25 June 2020 that it would be filing for insolvency. 

The company owed close to US$4 billion to its creditors, and its collapse came after multiple allegations of accounting malpractice. 

This came as a shock to many around the world; just a year before, Wirecard had 26 offices globally – with over 300 employees in Singapore hired under Wirecard Singapore and Wirecard Asia Holdings. Neither companies were unionised. 

What did this mean for their workers? This meant that retrenchment benefits, if any, would have been solely what was stipulated in each employee’s own employment contract. 

Employees reached out to the Banking and Financial Services Union (BFSU) for help 

BFSU needed the management of the Wirecard companies in Singapore to give it recognition before they could begin negotiations. The union also concurrently began reaching out to the rest of the Wirecard employees to urge them to sign up as a union member. 

Wirecard Regional Marketing Director Jeffry Ho was cooperative and deemed it important for Wirecard employees to receive appropriate protection and assurance from the union, especially at the height of the pandemic, and during the company’s impending downfall. 

Mr Ho also said,

They [employees] would have the best outcome because the union would look after their interests.

What of their retrenchment packages? 

Fast forward to 25 January 2021, Wirecard conducted the first batch of retrenchment; with the affected employees’ retrenchment packages already worked out by then. 

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.

General Secretary of BFSU, Christine Lee said, 

It may have been one to three months’ worth of salary. If Wirecard in Singapore filed for bankruptcy, it may have been nothing.

Beyond retrenchment packages, BFSU also helped workers find alternative opportunities to secure jobs post retrenchment, such as helping career coaches from NTUC’s e2i (Employment and Employability Institute) and the Institute of Banking and Finance (IBF). 

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