Employment Termination
Termination with notice
Either the employer or the employee can end the employment contract by giving notice. The notice period should be stated in the contract. If it isn't, the minimum notice periods under the Employment Act apply:
Length of service | Notice period |
Less than 26 weeks | 1 day |
26 weeks to less than 2 years | 1 week |
2 years to less than 5 years | 2 weeks |
5 years or more | 4 weeks |
Either party can end the contract without serving notice by paying salary in lieu of notice. With the employer's agreement, the employee can also use annual leave to offset the notice period.
Dismissal for misconduct
An employer can dismiss an employee for misconduct without notice, but only after a due inquiry. Instead of dismissing, the employer may downgrade the employee, or suspend them for up to one week without pay.
Retrenchment
Retrenchment is dismissal due to redundancy or business reorganisation.
- Retrenchment benefits. Under the Tripartite Guidelines, employees with at least 2 years of service should generally receive retrenchment benefits. The prevailing norm is 2 weeks' to 1 month's salary for each year of service.
- Mandatory Retrenchment Notification. Employers with at least 10 employees must notify MOM within 5 working days after informing the affected employees of their retrenchment.
Final salary
- Employee resigns and serves notice: final salary is paid on the last day of employment.
- Employee resigns without serving notice: final salary is paid within 7 days of the last day.
- Employee is dismissed for misconduct, or the employer terminates without notice: final salary is paid on the last day, or if not possible, within 3 working days.
Unused annual leave must also be paid out, unless the employee is dismissed for misconduct.
Foreign employees
When a foreign employee leaves, the employer must also:
- Tax clearance. File Form IR21 with IRAS at least one month before the employee's last day, and withhold all monies due to the employee until IRAS gives clearance.
- Work pass. Cancel the work pass within 1 week after the last day of employment.
- Repatriation. For EP and S Pass holders, pay for the employee's repatriation to their home country.
Wrongful dismissal
Employees who believe they were dismissed without just cause can file a claim with the Tripartite Alliance for Dispute Management (TADM). A claim must be filed within 1 month of the last day of employment.
