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Labour crunch takes a bite of Lei Garden

CLOSED: Lei Garden's Orchard Road outlet, which opened in 1989, ceased operations yesterday because it could not find enough workers to run it.


    Jul 02, 2014

    Labour crunch takes a bite of Lei Garden

    WELL-KNOWN fine dining restaurant Lei Garden has closed its outlet in Orchard Road as it could not find enough workers to run it.

    The move comes amid a labour crunch. Starting yesterday, companies in the services sector have had to further cut down their quota of foreign workers. The move could put a squeeze on more fine dining restaurants, experts said, though there was no suggestion that Lei Garden's woes were linked to the quota.

    Lei Garden ran an advertisement in Chinese daily Lianhe Zaobao yesterday, saying that its outlet in Orchard Shopping Centre had ceased operations from yesterday. It also ran a similar advertisement in The Straits Times.

    The outlet, which opened in 1989, was unable to find "qualified and experienced" staff. Lei Garden will now focus on its outlet at Chijmes, the notice stated.

    Until last year, up to 50 per cent of the staff of a company in the services sector could be foreigners. Starting yesterday, this Dependency Ratio Ceiling was cut to 45 per cent. Come July next year, this will fall further to 40 per cent.

    Kurt Wee, president of the Association of Small and Medium Enterprises, told My Paper yesterday: "We expect 2014 to be a year of attrition. Costs are rising and (while) businesses are responding, we had projected that a lot of businesses wouldn't be able to sustain themselves."

    He added that the restaurants are feeling the pinch, not just from a "more demanding compliance environment", but also from a combination of factors, including rising rental costs.

    Unlike fast dining restaurants, fine dining restaurants may find it hard to cope with rising costs as the concept may not leave much room for the use of "in-built fast-moving services", such as self-service counters.

    Andrew Tjioe, president of the Restaurant Association of Singapore, said he regrets to see an outlet from the "strong brand" go but added that the situation as of now is not "full-blown".

    Things are expected to get worse next year when the ceiling is further reduced, he added.

    "I think we have been given enough time to react. Some are prepared, some are not... It is a challenging time for all," he said.

    Lee Yi Shyan, Senior Minister of State for Trade and Industry & National Development, posted Lei Garden's closure ad on his Facebook page yesterday.

    He added in Chinese: "Small and medium-sized enterprises which close down because they cannot find enough workers (is an issue) worthy of our concern and support."