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Termination of Employment Contracts in Singapore

1. Individual dismissals

There are several ways in which a contract may be terminated. These include:

  • Notice being given by either the employer or the employee.
  • Mutual agreement.
  • Expiry of a fixed-term contract. A fixed-term contract automatically terminates at the end of the fixed-term without the need for notice.

Termination by the employer for cause (such as for embezzlement or fraud).

2. Dispute resolution

EA Employees and employers may approach the Ministry of Manpower for mediation or conciliation services in respect of employment disputes, at no cost. They may also be referred to the Commissioner of Labor under the Labor Court for a nominal fee.

Non-EA Employees can still refer a matter to the Commissioner of Labor for disputes relating to matters such as salary payments. Employees who are union members may also seek assistance from their unions in resolving disputes.

Finally, disputes between unions and the employer may seek conciliation with the Ministry of Manpower or bring the matter to the Industrial Arbitration Court (very rare).

3. Redundancy / retrenchment payments

Under the Act, only those employees who are Part IV EA Employees, and are employed in the continuous service of an employer for more than 3 years, will be entitled to retrenchment (redundancy) benefits. However, the actual amount of any such benefit is subject to contractual or collective agreements.

In relation to Non-EA Employees, redundancy/retrenchment benefits will depend on contractual provisions found in their contracts of employment.

4. Retirement

The minimum age of retirement has been increased to 62 years, and employers are now required to offer re-employment to eligible employees who turn 62, up to the age of 65. Where a retirement age is not specified in an employment contract, the employer should give the employee advance notice of retirement as stipulated in the contract.

The Act does not require an employer to pay retirement benefits to an employee, unless it is stated in the employment contract.

5. Discrimination claims

While the aggrieved person may be able to get a declaration that the discriminatory act in question is unlawful if the Constitution has been breached, it is currently unclear if the person can also get damages.

For more information, please contact L&E Global.
This information was contributed by Clasis LLC in association with Clyde & Co.
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