Retrenchment is the termination of employees due to redundancy or reorganisation of the employer’s profession, business, trade or work. This includes situations where companies undergo liquidation, receivership or judicial management.
An employer who terminates an employment contract with no plan to fill the vacancy any time soon is presumed to have retrenched the employee.
The requirement to notify MOM of retrenchment applies to permanent employees, as well as contract employees with full contract terms of at least 6 months.
If you are planning a retrenchment in your company, please refer to the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment to find out what your company needs to consider.
Employers with businesses registered in Singapore and have at least 10 employees are required to notify MOM when any employee is notified of retrenchment.
You are encouraged to notify MOM of your company’s retrenchment even if your company has fewer than 10 employees. This will allow WSG and the tripartite partners to help affected employees find alternative employment or identify relevant training to enhance employability.
The notification must be submitted within 5 working days after your employee is notified about their retrenchment.
You notify your employee on 3 July 2023 of their retrenchment. Your company must notify MOM by 10 July 2023 with the details of the employees.
Note:
- A working day is a day other than a Saturday, a Sunday and a public holiday.
To submit a retrenchment notification to MOM, you need to first prepare the following information:
- Company name and UEN
- Company contact person details
- Name of union (if company is unionised), and whether the union was consulted
- Number of employees on the date you submit the retrenchment notification to MOM. This includes all employees, i.e. Singaporeans, PRs and foreigners.
- Details of employees to be retrenched (i.e. name, NRIC or FIN, residential status, job title, date of effective retrenchment, date of notification of retrenchment to employees)
- Payment of retrenchment benefit and quantum
- Provision of employment facilitation assistance
With the information prepared, you can submit a notification to MOM. You need Singpass to log in.
Failure to comply with the mandatory retrenchment requirements under the Employment Act is a civil contravention, for which administrative penalties of up to $2,000 per contravention can be imposed.
For assistance on employment facilitation services, companies can contact the following:
Workforce Singapore (WSG)
www.wsg.gov.sg
Phone: 6883 5885
Employment and Employability Institute (e2i)
www.e2i.com.sg
Phone: 6474 0606
Email: followup@e2i.com.sg
For further clarification on the mandatory retrenchment notifications, companies may approach MOM.
Phone: 6438 5122