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    • Aug 3
    • 6 min read

Termination of Employment in Singapore: A Brief Overview



Termination of Employment in Singapore: A Brief Overview


The Ministry of Manpower (MOM) in Singapore provides comprehensive guidelines on employment termination. This involves both the rights and responsibilities of both employers and employees.   


Key Points About Termination


  • Notice Period: Both employers and employees must typically give a certain amount of notice before termination. This period varies based on the length of employment.   

  • Salary in Lieu of Notice: Instead of serving the notice period, either party can opt to pay the equivalent amount as salary in lieu of notice.  

  • Termination Without Notice: In specific circumstances, such as misconduct or breach of contract, termination without notice may be possible.   

  • Probationary Period: Employees on probation may be terminated with shorter notice periods.

  • Fixed-Term Contracts: These contracts end automatically at the specified date, unless renewed.   

  • Unfair Dismissal: Employees have the right to appeal against unfair dismissal.   


MOM's Role


The MOM plays a crucial role in regulating employment practices. They provide:


  • Clear guidelines on termination procedures.   

  • Dispute resolution services for employment-related conflicts.   

  • Enforcement of employment laws to protect both employers and employees.


Important Considerations


  • Fairness: Employers should always act fairly and consistently when terminating employment, regardless of the reason.

  • Documentation: Proper documentation is crucial for both employers and employees.

  • MOM Guidelines: Adhering to the Ministry of Manpower's guidelines is essential to avoid disputes.

  • Employee Rights: Employees have rights, and employers must respect these rights during the termination process.


Termination of Employment in Singapore: Specific Scenarios


Termination Due to Misconduct


  • Definition: This occurs when an employee violates company policies or engages in behavior that is detrimental to the business.


Process


  • Investigation: The employer usually conducts a thorough investigation to gather evidence.

  • Disciplinary Action: If the misconduct is severe, immediate dismissal without notice might be possible. For less severe cases, warnings or other disciplinary actions may be taken first.

  • Notice Period: In most cases, employees are entitled to a notice period, even for misconduct, unless the offense is serious enough to warrant immediate dismissal.


Resignation


  • Definition: A voluntary termination of employment by the employee.

  • Notice Period: Employees typically need to give a certain amount of notice to their employer, as specified in the employment contract or according to statutory requirements.

  • Payment in Lieu of Notice: Instead of serving the notice period, the employee can offer to pay the equivalent amount as salary in lieu of notice.


Retrenchment


  • Definition: Termination of employment due to economic reasons, such as business restructuring or redundancy.


Process:


  • Selection Criteria: Employers should have fair and objective criteria for selecting employees for retrenchment.

  • Notice Period: Employers must give employees reasonable notice of retrenchment.

  • Retrenchment Benefits: Depending on the company's policy and the employee's length of service, retrenched employees may be entitled to certain benefits, such as severance pay.


Valid Reasons for Dismissing an Employee for Misconduct


Misconduct, when severe enough, can warrant dismissal. Here are some common examples:


Serious Misconduct


  • Theft or fraud: Stealing company property or funds, or committing fraudulent acts.

  • Violence or threats: Physical violence or threats of violence against colleagues, customers, or company property.

  • Gross negligence: Actions that result in significant harm to the company or others.

  • Serious breaches of company policy: Violating critical company policies, such as those related to confidentiality, safety, or harassment.

  • Criminal offenses: Committing a crime related to the job or that reflects negatively on the company.

  • Serious insubordination: Refusing to follow lawful and reasonable orders from a supervisor.


Less Severe Misconduct (May lead to warnings or termination after repeated offenses)


  • Absenteeism or tardiness: Excessive absences or frequent late arrivals without valid reasons.

  • Disrespectful behavior: Insulting or abusive language towards colleagues or customers.

  • Poor performance: Consistent failure to meet job expectations despite warnings and training.

  • Substance abuse: Being under the influence of drugs or alcohol at work.

  • Harassment or discrimination: Creating a hostile work environment for colleagues.


Important Considerations:


  • Fairness: Employers must treat all employees fairly and consistently.

  • Documentation: Clear documentation of misconduct is essential.

  • Progressive discipline: Usually, warnings or other disciplinary actions should precede termination.

  • Local employment laws: Adherence to local employment regulations is crucial.


Even in cases of serious misconduct, employers should follow proper procedures and documentation to protect themselves from potential legal challenges.


Procedures for Dismissing an Employee Due to Misconduct in Singapore


Singapore law allows for the termination of employment without notice in cases of serious misconduct. However, the process must be fair and just.


Key Steps:


1. nvestigation:


  • Conduct a thorough investigation to gather evidence.

  • Interview witnesses and collect relevant documents.

  • Ensure confidentiality throughout the process.


2. Inform the Employee:


  • Clearly communicate the allegations against the employee.

  • Provide details of the misconduct, including date, time, and witnesses.


3. Conduct a Disciplinary Inquiry:


  • Offer the employee an opportunity to explain their side of the story.

  • Allow the employee to be accompanied by a union representative or colleague.

  • Document the proceedings.


4. Decide on Disciplinary Action:


  • Based on the evidence and the employee's explanation, decide on appropriate action.

  • Options include warnings, suspension, or termination.

  • For serious misconduct, termination without notice may be justified.


5. Communicate the Decision:


  • Inform the employee of the decision in writing.

  • Clearly state the reasons for the decision.

  • Outline any appeal process.


6. Documentation:


  • Maintain detailed records of the entire process, including investigation findings, disciplinary inquiry minutes, and the termination letter.


Important Considerations:


  • Serious Misconduct: The misconduct must be severe enough to warrant immediate dismissal without notice. Examples include theft, fraud, violence, or gross negligence.

  • Fairness: The process must be fair and impartial. The employee should have a clear opportunity to defend themselves.

  • Consistency: Similar cases of misconduct should be treated consistently.

Additional Tips:


  • Progressive Discipline: For less serious misconduct, consider implementing a progressive disciplinary process with warnings before termination.

  • Witness Protection: If there's a risk of retaliation, protect the identity of witnesses.

  • Appeal Process: Provide a clear appeal process to demonstrate fairness.


While Singapore law allows for termination without notice in cases of serious misconduct, employers should carefully consider the potential consequences of such action, including the risk of wrongful dismissal claims.


Entitlements for a Retrenched Employee in Singapore


Retrenchment benefits are not legally mandated in Singapore. However, it's a common practice for companies to offer them as a gesture of goodwill.


Common Retrenchment Benefits


The amount and type of benefits typically depend on:


  • Company policy: Some companies have specific guidelines for retrenchment benefits.

  • Employment contract: If your contract outlines retrenchment benefits, you're entitled to them.

  • Collective agreement: For unionized companies, the collective agreement might specify benefits.

  • Industry norms: Certain industries have standard practices for retrenchment benefits.


Common benefits include:


  • Notice pay: This is the salary you would have earned during the notice period.

  • Retrenchment pay: This is an additional amount, often calculated based on your length of service. The usual range is 2 to 4 weeks' salary per year of service.

  • Pro-rated annual leave pay: You're entitled to payment for any unused annual leave.

  • Other benefits: Some companies might offer additional assistance like outplacement services or medical benefits for a certain period.


Important Considerations


  • CPF contributions: Neither the employer nor the employee needs to make CPF contributions for retrenchment benefits.

  • Negotiation: In the absence of a clear policy or contract, you might need to negotiate the benefits with your employer.

  • MOM guidelines: While not mandatory, the Ministry of Manpower (MOM) provides guidelines on responsible retrenchment to encourage fair practices.


Want to Know More?


For a detailed understanding of termination procedures, including specific timelines, payment entitlements, and circumstances for termination without notice, visit the official MOM website:



For more detailed information, you can refer to these resources:



How Bestar Can Help in Dismissal Cases

Termination of Employment in Singapore: A Brief Overview


Bestar plays a role in navigating the complex terrain of employment law, especially when dealing with dismissals due to misconduct. Our expertise can help protect the company's interests and minimize the risk of legal challenges.


Here's how Bestar can assist:


Pre-Dismissal Stage


  • Investigation: Assisting in conducting a thorough and impartial investigation to gather evidence.

  • Policy Review: Ensuring company policies align with employment laws and are consistently applied.

  • Procedural Guidance: Advising on the correct procedures to follow, such as informing the employee of allegations, conducting disciplinary hearings, and documenting the process.

  • Risk Assessment: Evaluating the potential legal risks associated with the dismissal and suggesting mitigation strategies.


Dismissal Stage


  • Drafting Termination Letters: Preparing clear and legally sound termination letters.

  • Negotiating Severance Packages: Providing guidance on severance pay and other benefits.

  • Managing Employee Relations: Offering advice on communicating the dismissal to the employee and other staff.


Post-Dismissal Stage


  • Compliance: Ensuring compliance with employment laws and regulations.

  • Preventive Measures: Implementing measures to reduce the likelihood of future employment disputes.


Specific benefits of seeking Bestar include:


  • Expertise: Bestar has in-depth knowledge of employment law and can provide expert advice.

  • Objectivity: We can offer an unbiased perspective on the situation.

  • Risk Mitigation: We can help identify and manage potential legal risks.

  • Cost-Effective: Preventing legal disputes can save the company significant costs in the long run.


By engaging Bestar, companies can increase their chances of a smooth and legally sound dismissal process.






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