SINGAPORE Law and Practice Contributed by: Azmul Haque, Ashley Chew, Hu Yutong and Aaron Leong, Collyer Law LLC
Termination by Written Notice or Payment in Lieu of Notice The length of the notice must be the same for both employer and employee, and is to be determined by any provision made for the notice in the terms of the contract of service; in the absence of such provision, it must be determined in accordance with the EA, depending on the length of service by the employee. Either party to a contract of service may terminate the contract of service without notice or, if notice has already been given in accordance with Section 10, without waiting for the expiry of that notice, by paying to the other party a sum equal to the amount of sal - ary at the gross rate of pay that would have accrued to the employee during the period of the notice – ie, payment in lieu of notice. Termination by Cause An employer is deemed to have broken the employer’s contract of service with the employee if the employer fails to pay salary in accordance with the EA. An employee is deemed to have broken the employee’s contract of service with the employer if the employee is absent from work for more than two days continu - ously without prior leave from the employer and the employee has no reasonable excuse for the absence or does not inform or attempt to inform the employer of the excuse for the absence. Either party to a contract of service may terminate the contract of service without notice in the event of any wilful breach by the other party of a condition of the contract of service. Termination by cause on the grounds of misconduct inconsistent with the fulfilment of the express or implied conditions of the employee’s service is permit - ted only after due inquiry. The Tripartite Guidelines on Wrongful Dismissal provide non-exhaustive examples of misconduct, which include theft, dishonest or dis - orderly conduct at work, insubordination, and bringing the organisation into disrepute. It is common to find other terms in the employment contract or employ - ment handbook upon which the employer may termi - nate the employee’s employment for cause.
In addition to civil claims before the courts, employees may bring a wrongful dismissal claim (ie, dismissal without just cause or excuse) under the Employment Claims Act 2016 for reinstatement in the employee’s former employment or compensation. Payment on Termination The total salary and any sum due to an employee who has been dismissed by the employer must be paid on the day of dismissal or, if this is not possible, within three days thereafter, not being a rest day or public holiday or other holiday. The total salary due to an employee who terminates his or her contract of service with his or her employer by paying in lieu of notice, or after giving due notice to the employer as required, must be paid to the employee on the day on which the contract of service Employers may also dismiss an employee with notice on the grounds of retrenchment or redundancy. Employers with ten or more employees that retrench any employee must submit a Mandatory Retrench - ment Notification to MOM within five working days of the employee being informed of their retrench - ment. Employers must notify their employees of their retrenchment according to their terms for termination in their employment contract. MOM states that employees who have served the company for at least two years are eligible for retrench - ment benefit. Those with less than two years’ service could be granted an ex-gratia payment out of goodwill. The amount of retrenchment benefit depends on what is provided for in the employment contract or collec - tive agreement (for unionised companies). If there is no provision, it will have to be negotiated between the employees (or their union) and the employer. MOM recommends that the prevailing norm is to pay a retrenchment benefit of between two weeks to one month salary per year of service, depending on the employer’s financial position and the industry. MOM has published the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment for employers to carry out a fair and responsible retrench - ment. is terminated. Retrenchment
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