Support Site for The Unemployed & Underemployed
Tuesday January 16th 2018

Comment: Retrenchment benefits – meant for angmos in MNCs only?

Singapore has absolutely no legal requirement for any company (including civil service) to provide for any retrenchment benefits.

The Employment Act only states that workers are allowed to “request” for retrenchment benefits IF they have worked for at least 2 years at the company (previously was 3 years).

BTW, even the above “retrenchment request” is not for managers or executives (irrespective whether your salary is = $4.5K)

Managers & executives are also not protected under Employment Act for matters pertaining to working hours, rest days, annual leave, retirement benefits, and of course retrenchment benefits.

Previously even sick leave was not protected for managers /executives under Employment Act, but this has been abolished in 2008.

Nowadays, only Civil Service, MNCs or large companies with unionised employees (through legal collective agreements) will pay retrenchment benefits.

Before 2003, the “recommended guidelines” were 1 month’s basic pay for every year of service, capped at 25 years.

From 2003, the unofficial guidelines are now 1/2 month’s basic pay for each year of service, capped at 25 years. This is what Civil Service (including stat boards & agencies) will pay. And most MNCs and large corporations in Singapore will just follow government civil service.

Smaller companies or organisations in financial trouble will usually not bother with paying retrenchment, or just pay a small pittance “ang pao”. This is legal in Singapore.

In Singapore, the only professions where I see explicit generous retrenchment / termination benefits in their employment contracts are for highly-paid bank staff. This is because of the large numbers of angmohs, where back in their western countries, such black-and-white benefits are common to be spelled out in their contracts, or already provided for in their legal system.

That’s why even when such bank staff gets fired or terminated for poor performance, they still get big termination benefits.

Even in Singapore. so-called platinum parachutes.


Editor’s note: This article is retrieved from a commented posted on the site.

There is no compulsory payment of benefits for retrenchment here in Singapore – regardless of the number of years you have work in the company.

However, some of our readers have approached MOM for arbitration and some companies do pay up but the amount is negotiated among the company, employees and MOM in the labour court.

There is strength in numbers though and if you are retrenched amass without the payment of benefits, do approach MOM together as a group.

If you need legal assistance for your case, please let us know.

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