Singapore — Termination & Severance

Singapore's Employment Act 1968 establishes the statutory floor for termination protections, notice requirements, and wrongful-dismissal recourse. As amended effective 1 April 2019, the Act's core provisions — including dismissal protections under section 14 — apply to all employees under a contract of service, regardless of salary level, with three narrow exceptions: seafarers, domestic workers, and statutory board employees or civil servants.

This 2019 expansion brought managers and executives earning above S$4,500 per month under the Act's termination regime for the first time. Prior to April 2019, only employees earning below specified thresholds were covered; the reform extended core protections (timely payment of salary, paid leave, public holidays, sick leave, and dismissal safeguards) to substantially all private-sector employees.

Part IV of the Employment Act — governing hours of work, overtime, and rest days — remains subject to a salary cap and applies only to (i) workmen (manual labour) earning up to S$4,500 per month in basic salary, and (ii) non-workmen earning up to S$2,600 per month (increased from S$2,500 on 1 April 2019). Managers and executives above these thresholds are covered for termination protections but not for Part IV working-time rules.

## Notice requirements — section 10

Section 10 establishes statutory minimum notice periods that scale with length of service:

• Less than 26 weeks of service: 1 day's notice
• 26 weeks to less than 2 years: 1 week's notice
• 2 years to less than 5 years: 2 weeks' notice
• 5 years or more: 4 weeks' notice

The Act requires that notice periods must be the same for employer and employee; any contractual term setting a longer notice period for the employee than the employer is void. Either party may pay salary in lieu of notice (at the gross rate of pay that would have accrued during the notice period). Notice must be in writing, and the day notice is given counts toward the notice period.

## Wrongful dismissal — section 14

Section 14, as amended in 2019, defines dismissal to include termination with or without notice, payment in lieu of notice, and constructive dismissal (resignation that the employee can show, on the balance of probabilities, was not voluntary but forced by the employer's conduct or omission). Wrongful dismissal is dismissal without just cause or excuse.

For managers and executives, a wrongful-dismissal claim may be lodged with the Tripartite Alliance for Dispute Management (TADM) only if the employee has worked for at least six months. Non-managers and non-executives have no minimum service requirement. Claims must be filed within one month of the last day of employment. If mediation at TADM does not resolve the dispute, the claim is referred to the Employment Claims Tribunals (ECT), which can order reinstatement or compensation (capped at S$20,000).

The Tripartite Guidelines on Wrongful Dismissal (published 1 April 2019) set out circumstances in which even dismissal with notice is wrongful:

• Discrimination on grounds of age, race, gender, religion, marital status, family responsibilities, or disability
• Victimization for exercising employment rights (e.g., refusing illegal overtime, filing a TADM claim)
• Dismissal to deprive benefits (e.g., terminating a pregnant employee without lawful reason to avoid maternity leave)
• Providing a false reason for dismissal (e.g., claiming redundancy then hiring a replacement)

Dismissal for misconduct (theft, dishonesty, disorderly conduct, insubordination) is the only ground for summary dismissal (termination without notice). The employer must conduct a formal inquiry giving the employee an opportunity to respond, and bears the burden of proving the misconduct. Dismissal for poor performance without notice is wrongful; performance-based terminations must be with notice and substantiated by documentation.

If the employer dismisses with notice and gives no reason, the dismissal is presumed lawful unless the employee can substantiate a wrongful motive. If the employer gives a reason that is later proven false, the dismissal is wrongful.

## Severance pay

Singapore has no statutory severance or redundancy pay requirement. Severance is a matter for the employment contract or collective agreement. Employers conducting retrenchment are encouraged to follow the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment, which recommends (but does not mandate) severance based on length of service.

Source: Employment Act 1968, sections 10, 11, 14 Source: Tripartite Guidelines on Wrongful Dismissal (PDF) Source: MOM — Termination of employment Source: MOM — Guide to Employment Act changes (1 April 2019)

Singapore has no statutory severance or redundancy pay requirement. Retrenchment benefits are governed by the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment (updated 20 January 2023), which establishes widely-followed industry norms and procedural expectations that operate as de facto standards in practice.

## Eligibility: the 2-year threshold

Under Annex C of the Tripartite Advisory, employees with 2 years' service or more are eligible for retrenchment benefit. Those with less than 2 years' service could be granted an ex-gratia payment out of goodwill. The 2-year eligibility threshold replaced the prior 3-year threshold in 2017.

Retrenchment is defined as the termination of employment by reason of redundancy or any reorganization of the employer's profession, business, trade, or work, with no plan to fill the vacancy soon. Termination for misconduct or poor performance is not retrenchment; only genuine redundancy or restructuring triggers the benefit expectation.

## Quantum: the market norm

The quantum of retrenchment benefit depends on what is provided for in the employment contract, collective agreement, or memorandum of understanding. Where no contractual provision exists, the quantum is to be negotiated between the employer and the employee (or their union, if the company is unionized).

The Tripartite Advisory states that the prevailing market norm is to pay a retrenchment benefit varying between 2 weeks' to 1 month's salary per year of service, depending on the company's financial position and the industry. In practice, the most common payout structure is one month's salary per year of service. The Ministry of Manpower's 2017 Retrenchment Benefits Survey found that 90% of establishments paid retrenchment benefits to eligible local employees, and 85% of retrenched locals were paid benefits based on tenure, with one month of salary per year of service being the common rate.

While retrenchment benefit is not mandated by law, MOM strongly encourages all employers (unionized and non-unionized) to adhere to the advisory. MOM can intervene where employers ignore contractual obligations or tripartite guidelines, especially in larger retrenchment exercises. Non-compliance can affect work-pass privileges and may trigger enforcement action, including public scrutiny and union engagement.

## Mandatory retrenchment notification: 5 working days

Employers must comply with the Mandatory Retrenchment Notifications requirement under the Employment Act. The notification must be submitted to MOM within 5 working days after the employer notifies the employee of their retrenchment, if:

• The employer has at least 10 employees, and
• The employer has retrenched at least 5 employees within any 6-month period.

Smaller employers (fewer than 10 employees) or employers retrenching fewer than 5 employees in a six-month window are not subject to the mandatory notification requirement, but MOM encourages early notification to enable employment facilitation assistance for affected employees.

Failure to comply with the mandatory retrenchment notification requirement is a civil contravention under the Employment Act, for which administrative penalties can be imposed. Strong enforcement action may be taken against employers who willfully disregard the requirement. The notification must include details on whether retrenchment benefits have been paid, the quantum, and whether employment facilitation assistance has been provided.

Notification enables the tripartite partners — MOM, the National Trades Union Congress (NTUC), and Workforce Singapore (WSG) — to help affected local employees find alternative employment, identify relevant training to enhance employability, and engage the parties to resolve labour disputes amicably.

## Procedure and fairness

The Tripartite Advisory requires that retrenchment be a last resort. Employers should first consider and implement cost-saving measures such as redeployment, flexible work schedules, wage adjustments, and no-pay leave. If retrenchment is unavoidable, selection criteria must be objective and non-discriminatory — employers cannot select employees for retrenchment based on nationality, age, gender, race, religion, or other protected characteristics. The Last In, First Out (LIFO) principle is common but not mandatory; the overriding requirement is that selection be based on merit, skills critical to business sustainability, and the need to maintain a strong Singaporean core. Retrenchments should generally not result in a reduced proportion of local employees.

Employers are expected to communicate decisions face-to-face and with empathy, provide advance notice where possible (beyond the statutory minimum under section 10), offer retrenchment benefits aligned with market norms, and provide employment facilitation assistance or career-transition support through WSG, NTUC's Employment and Employability Institute (e2i), or other agencies.

Source: Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment (PDF, updated 20 January 2023) Source: MOM — Mandatory Retrenchment Notifications Source: MOM — Responsible retrenchment Source: Tripartite Guidelines on Mandatory Retrenchment Notifications (PDF)

Employers in Singapore must comply with strict statutory deadlines for paying final salary and accrued entitlements on termination. The Employment Act 1968 establishes different timelines depending on whether the employee resigned with notice, resigned without notice, or was dismissed. Missing these deadlines exposes the employer to claims at the Tripartite Alliance for Dispute Management (TADM) and potential penalties for salary-payment contraventions.

## Payment deadline when employee resigns and serves notice

When an employee resigns and serves the required notice period (either the contractual notice period or the statutory minimum under section 10), the employer must pay the employee's final salary on the last day of employment. This includes basic salary, allowances, accrued unused annual leave (if applicable under the employment contract or company policy; the Employment Act does not mandate payment in lieu of unused leave but most contracts do), and any other salary components earned up to the termination date.

The last-day-of-employment deadline applies even if the employer accelerates the termination during the employee's notice period (e.g., the employee submits one month's notice but the employer asks them to leave after two weeks). In that scenario, the employer must pay salary in lieu of notice for the unserved portion of the notice period, and the final salary payment — including the in-lieu amount — is due on the accelerated last day of work.

## Payment deadline when employee resigns without notice

If an employee resigns without notice (and does not serve the contractual or statutory notice period), the employer must pay the final salary within 7 days of the last day of employment. The employee who resigns without notice is liable to pay the employer salary in lieu of notice (a debt equal to the gross salary the employer would have paid during the unserved notice period, which the employer may deduct from final salary under section 27 of the Employment Act if the employee consents in writing or a court orders it). However, the employer's obligation to pay the earned salary component within 7 days remains absolute; the employer cannot withhold payment beyond the 7-day deadline even if the employee owes in-lieu salary.

## Payment deadline on dismissal for misconduct or employer-initiated termination

When an employer dismisses an employee for misconduct (summary dismissal without notice under section 14) or terminates the contract without notice for any other reason (paying salary in lieu of notice under section 11), the employer must pay the final salary on the last day of employment. If same-day payment is not possible, the employer must pay the final salary within 3 working days from the date of dismissal.

This 3-working-day extension is an administrative accommodation for operational constraints (e.g., payroll already closed, termination occurs mid-pay-period). It does not permit the employer to wait until the next regular pay date; the deadline is absolute. The final payment must include all salary earned up to the dismissal date, any contractual payments (e.g., pro-rated 13th-month or annual bonus if the contract so provides), and unused annual leave if payable under the contract.

## Payment of accrued annual leave

The Employment Act does not mandate payment in lieu of accrued but unused annual leave on termination; it is silent on the point. However, market practice in Singapore and most employment contracts provide for payment of accrued unused leave at the gross daily rate on termination. Employers should check the employment contract and company policy. Where payment in lieu is contractual or customary, it must be included in the final salary payment and is subject to the same deadline (last day of employment for resignations with notice, 7 days for resignations without notice, last day or 3 working days for dismissals).

## Penalty for late or non-payment

Failure to pay salary on time, including final salary on termination, is a contravention of the Employment Act. An employee who is not paid on time may file a claim with TADM (claims must be filed within one month of the salary due date or the last day of employment). The Ministry of Manpower can issue composition fines or prosecute employers for salary-payment violations. Employers may also face late-payment interest claims and reputational damage affecting work-pass applications and public standing.

Employers should prepare payroll systems and termination workflows to ensure final salary can be calculated and disbursed on the last day of employment (or within 3 working days for dismissals). Best practice is to process the final payment on the last day and issue an itemized payslip showing all components (basic salary, allowances, accrued leave payment, deductions, salary in lieu of notice if applicable), as required by the Employment Act for all salary payments.

Source: Ministry of Manpower — Paying salary Source: MOM FAQ — I resigned but employer asked me to leave earlier; am I entitled to notice pay and when will I receive my final salary? Source: MOM FAQ — Can an employer ask an employee to leave without serving their notice period? Source: MOM FAQ — If I resign without serving required notice, when must my employer pay my final salary? Source: Employment Act 1968, sections 10, 11, 21–23