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Retrenched in Singapore? What the law requires, what's expected, and what you can claim

Singapore law doesn't require a retrenchment payout, but if you've worked two years or more, the expected norm is two weeks to one month's salary per year of service. Here's how it works and where to get help.

By Kindoo teamPublished 3 min read

"Natanggal ka sa work, tapos bigla kang sasabihan na wala kang matatanggap na benefits?" You've lost your job, and then you're suddenly told you won't get any benefits? It happens, and much of the confusion comes from one fact: Singapore law doesn't fix a retrenchment payout. That doesn't mean you have no rights.

What the law says

  • Under Singapore's Employment Act, employees with less than two years of service aren't entitled to a retrenchment benefit.
  • For employees with two years or more, the law doesn't set an amount. What you get depends on your employment contract or a collective agreement if you're in a union.
  • Employers with 10 or more employees must notify the Ministry of Manpower (MOM) within five working days of telling you you've been retrenched. This is mandatory.

What's expected: the tripartite norm

MOM, the unions (NTUC) and employers (SNEF) have agreed a Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment. MOM strongly encourages employers to follow it. It says:

  • If you have two or more years of service, the norm is two weeks' to one month's salary for every year you've worked, depending on the company's finances and the industry.
  • If you have less than two years, your employer can still give you an ex gratia payment out of goodwill.
  • Retrenchment should be a last resort, and selection should be fair.

An example: say you earn S$3,000 a month and have worked for 5 years. The norm works out to between S$7,500 (two weeks a year) and S$15,000 (one month a year).

What a retrenchment benefit could look like For someone earning S\$3,000 a month with 5 years of service, the tripartite norm of two weeks to one month’s salary per year of service gives a retrenchment benefit of S\$7,500 to S\$15,000. Employees with under two years’ service have no legal entitlement but may get an ex gratia payment. Example: S$3,000 a month, 5 years of service Two weeks a year: S$7,500 One month a year: S$15,000 S$0 S$5,000 S$10,000 S$15,000 Under 2 years’ service: no legal entitlement, though an ex gratia payment is possible. The norm comes from the Tripartite Advisory, not the law. Check your contract. What a retrenchment benefit could look like For someone earning S\$3,000 a month with 5 years of service, the tripartite norm of two weeks to one month’s salary per year of service gives a retrenchment benefit of S\$7,500 to S\$15,000. Employees with under two years’ service have no legal entitlement but may get an ex gratia payment. Example: S$3,000 a month, 5 years of service Two weeks a year One month a year S$7,500 S$15,000 S$0 S$5,000 S$10,000 S$15,000 Under 2 years’ service: no legal entitlement, though an ex gratia payment is possible. The norm comes from the Tripartite Advisory, not the law. Check your contract.
What the tripartite norm gives in one worked example.

Most companies follow it. MOM figures show that around 9 in 10 eligible retrenched employees received some form of retrenchment benefit.

What you're owed whatever happens

Whether or not you get a retrenchment benefit, your employer still has to pay what's due under your contract and the Employment Act:

  • your salary up to your last day
  • notice pay, if you're let go without the notice your contract requires
  • payment for unused annual leave, as your contract allows

What to do if you've been retrenched

  1. Check your contract. Look for clauses on retrenchment, notice periods and leave.
  2. Get everything in writing: your retrenchment letter, final payslip and a breakdown of what you're being paid.
  3. Ask about your work pass. Your employer has to cancel it, and you'll need to know how long you can stay to look for another job.
  4. If something's missing or wrong, you can get help with salary and employment disputes from TADM, the Tripartite Alliance for Dispute Management, and claims can go to the Employment Claims Tribunals. The Migrant Workers Office (MWO) in Singapore also advises Filipino workers for free.

Plan for it, just in case

Retrenchment often comes without warning. A few months' savings set aside for yourself, before the padala, gives you time to find your next job without panic. See our guide to saving for yourself first.

This article is general information, not legal advice. Check mom.gov.sg for current rules.

Sources

This article is general information, not financial, tax or legal advice. Government rules and rates change; confirm current figures with the official agency before acting.

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