Employees with 2 years’ service or more are eligible for retrenchment benefit. Those with less than 2 years’ service could be granted an ex-gratia payment, out of goodwill.
While retrenchment benefit is not mandated by law, MOM strongly encourages employers to adhere to the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment (TAMEM), including to provide retrenchment benefit to help affected employees while they search for employment.
Employers should also refer to the TAMEM for other options to manage excess manpower. If retrenchment is inevitable, employers should implement retrenchment responsibly and fairly in line with the advisory.