Grounds for Termination
Singapore is an at-will employment jurisdiction and employers and employees may terminate the employment relationship in accordance with the employment contract and applicable notice period (and payment in lieu of such notice). In addition, valid grounds for dismissal include misconduct, poor performance and redundancy.
Employers who go through a retrenchment exercise are required to notify the Ministry of Manpower of the retrenchment, if they have at least 10 employees and have retrenched 5 or more employees within any 6-month period. Employers should also abide by the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment issued by the TAFEP. Each employee should be terminated in accordance with the termination provisions in their respective employment agreements (including the termination notice period or payment in lieu of such notice).
Employees should be terminated in accordance with the termination provisions in their respective employment agreements (including the termination notice period or payment in lieu of such notice).
Is Severance Pay Required?
Employees who have served the company for at least 2 years are eligible for retrenchment benefits. Those with less than 2 years’ service may be granted an ex-gratia payment out of goodwill. The MOM generally recommends that employees be paid a retrenchment benefit of 2 weeks’ to 1 month’s salary per year of service, subject the prevailing norm of the industry and financial position of the company.
A separation agreement is not generally required for terminations under Singapore law, but would be considered best practice. Such practice would be more common for senior employees.
Remedies for Employee Seeking to Challenge Wrongful Termination
If the dismissal is deemed to be wrongful, the employer may be ordered to reinstate the employee to the employee’s former job and pay the employee for any loss of income due to the wrongful dismissal or pay the employee monetary compensation.
Singapore law does not expressly provide for specific statutory protection for whistleblowers in the context of employment. However, certain laws of general application may apply to protect whistleblowers. For instance, under the Prevention of Corruption Act of Singapore, witnesses in civil or criminal proceedings are generally not obliged or permitted to reveal an informer’s identity.