The Wirecard Collapse

By February 16, 2022Current
Wirecard Scandal

TLDR; Union ensures fair compensation for Singapore employees and helped them with new job opportunities.

The Wirecard financial scandal is now considered one of Germany’s most dramatic post-war fraud scandals. The Munich-based payments processor and financial services provider first announced filing for insolvency on 25 June 2020.

 At the time of the insolvency filing, Wirecard owed close to US$4 billion to its creditors. It also had 26 offices globally, with over 300 of its 5,300 global employees in Singapore under two separate companies – Wirecard Singapore and Wirecard Asia Holdings.

These two entities were not unionized, which meant retrenchment benefits, if any, would only be based solely on the stipulations in the employees’ employment contracts.

Upon the realization of bearing the brunt of the lay-offs with the possibility of little support, employees reached out to the Banking and Financial Services Union (BFSU), seeking intervention and assistance.

Getting Unionised

 Before it could begin negotiations, the union needed Singapore Wirecard’s management to recognize BFSU as the union to represent the employees. At the same time, the union also reached out to the rest of the employees in Singapore, urging them to sign up as union members.

BFSU General Secretary Christine Lee recalled the challenges they faced back then.

“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.

On 1 July 2020, Wirecard Singapore and Wirecard Asia Holdings acknowledged the union’s recognition claim and signed a collective agreement with BFSU.

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The Retrenchment Package

The retrenchment 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), to name a few.

Beyond the retrenchment packages, BFSU also linked affected workers with career coaches from NTUC’s Employment and Employability Institute and the Institute of Banking and Finance.

By late November 2021, the union had assisted some 114 retrenched individuals.

While Ms. Lee could not specify what the employees would have received if not for the collective agreement, 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.

Wirecard Regional Managing Director Jeffry Ho 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.”

 

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Zahra

Author Zahra

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