What counts as retrenchment
Retrenchment means dismissal because a role is redundant or the employer reorganises its business or work. It covers permanent employees and contract workers whose full contract term is at least 6 months. Terminating a contract with no plan to fill the vacancy in the near future is presumed to be retrenchment.
Before and during retrenchment
Consider alternatives first, assess long-term staffing needs and maintain a strong Singaporean core. Consult the union in a unionised company. Select employees by their contribution to future business requirements, without discrimination, and treat them with dignity. Consider a longer notice period than the contractual minimum.
Give employees the termination notice required by their contract. All outstanding salary, unused annual leave and notice pay must be settled on the last working day. Help affected employees find positions in related or other companies, or obtain outplacement support. An early alert to MOM can connect local employees with SWDA or e2i support.
Notification deadline
A Singapore-registered employer with at least 10 employees must notify MOM whenever it retrenches an employee, within 5 working days after informing that employee. Employers with fewer than 10 staff are strongly encouraged to notify, although notification is not mandatory for them. An early alert does not replace this notification.
Retrenchment benefit
Employees with at least 2 years of service are eligible for retrenchment benefit; shorter-service staff may receive a goodwill ex-gratia payment. The amount follows the employment contract or collective agreement. If neither specifies it, the employee or union and employer must negotiate.
The prevailing norm is 2 weeks to 1 month of salary for each year of service, depending on industry and financial position. In unionised companies with a specified collective-agreement benefit, the norm is 1 month for each year. If retrenchment follows a wage cut, use the salary before the cut. Neither party pays CPF contributions on the retrenchment benefit.
Employment-support contacts
Unions, SNEF and employment-support agencies can assist with alternative employment.
| Agency | Telephone |
|---|---|
| SNEF | 6290 7633 |
| SWDA | 6669 7932 |
| U PME Centre | 6213 8008 |
| e2i | 6474 0606 |
Related topics and services
Documents and references
- Read article → · Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment ↗ PDF
- Submit early alert to get help ↗ Government source
- Singapore National Employers Federation ↗ Reference
- Skills and Workforce Development Agency ↗ Government source
- U PME Centre ↗ Reference
- Employment and Employability Institute ↗ Reference