From time to time, businesses may fall on hard times and need to do the painful inevitable\u00a0after exhausting all other options\u00a0\u2013 retrench staff. In the first half of 2025, 7,130 employees have been retrenched, with layoffs coming from companies like Jetstar, Ninja Van, MediaCorp, Agoda and more.<\/p>\n\n\n\n
In particular, Agoda’s retrenchment of 50 Singapore-based employees has come under scrutiny. First of all, because the retrenched staff were directed to not report it to the authorities. If they did, their retrenchment benefits would be cancelled or clawed back.<\/p>\n\n\n\n
While businesses that retrench employee may be dealing with a difficult operational environment, the employees they retrench may be equally – if not even more – distressed. It\u2019s not going to be comfortable for any party and, with livelihoods at risk, emotions can run high during a retrenchment announcement. <\/p>\n\n\n\n
Businesses must uphold decent and fair practices while carrying out any retrenchment exercise.<\/p>\n\n\n\n
Read Also: Agoda Retrenchment: Not How Companies Are Supposed To Do It<\/a><\/em><\/strong><\/p>\n\n\n\n Under the Employment Act, it is mandatory for Singapore-registered employers with at least 10 employees, who have retrenched 5 or more employees within any 6-month period to notify MOM of a retrenchment exercise. This must be done within 5 working days after affected employees are notified of their retrenchments.<\/p>\n\n\n\n Employers or company representatives can\u00a0inform MOM of their retrenchment exercise<\/a>\u00a0via\u00a0CorpPass.\u00a0<\/p>\n\n\n\n In unionised companies, management is required to consult the union before undertaking your retrenchment exercise. MOM\u2019s advisory also states that companies should consider having HR personnel and union representatives onsite to address queries from retrenched employees.<\/p>\n\n\n\n If not already clear, MOM also reminds employers to treat their retrenched employees with empathy and dignity. As the business owner, try to control your emotions and empathise with employees facing the uncertainties of retrenchment.<\/p>\n\n\n\n MOM\u2019s advisory also calls for managers to notify employees of retrenchment in a sensitive manner, such as in person, unless it is impractical. Businesses should also give employees time and space to absorb the news before requesting them to vacate their workplace.<\/p>\n\n\n\n Where necessary, counselling support should be offered. If counselling support cannot be offered, referrals for such support could be given instead.<\/p>\n\n\n\n The advisory also incorporates NTUC\u2019s Fair Retrenchment Framework (FRF) for companies to maintain a strong Singapore core, reminding employers to take a long-term view of their manpower needs.<\/p>\n\n\n\n Read Also: Most Sought After Jobs In 2025: 5 Roles That Are Still Hiring Strongly In Singapore<\/a><\/em><\/strong><\/p>\n\n\n\n In an article contributed to DollarsAndSense by Patrick Tay, a Member of Parliament and Assistant Secretary General of NTUC<\/a>, he noted that an \u201cemployee is considered to be retrenched if the company cannot show a plan to fill the vacancy any time soon regardless of what the termination of employment is called\u201d. This also means that the company may be perceived as trying to evade retrenchment guidelines and providing retrenchment benefits.<\/p>\n\n\n\n In the same manner, companies should not retrench employees only to fill the role with another hire.<\/p>\n\n\n\n Make an effort to ensure that your employees receive these payments on time. Give them the details of a contact person if there is any delay or dispute.<\/p>\n\n\n\n Read Also: <\/em><\/strong>Complete Guide To Employer CPF Contributions In Singapore<\/em><\/strong><\/a><\/p>\n\n\n\n While retrenchment benefits are not mandated by law, MOM \u201cstrongly encourages employers to adhere to the advisories, including to provide retrenchment benefit to help affected employees while they search for employment\u201d.<\/p>\n\n\n\n MOM also states that companies should be \u201cprepared to provide relevant information\u201d to show that your retrenchment practices adhere to the tripartite advisories. <\/p>\n\n\n\n Under the advisory, employees with 2 years of service or more are eligible for retrenchment benefits. The amount of retrenchment benefits depends on what is provided for in the employment contract, memoranda of understanding or collective agreement (for unionised companies). In the situation that there is no contractual provision, it is to be negotiated between employees (or their unions) and employers.<\/p>\n\n\n\n The advisory also states that the prevailing norm is to pay retrenchment benefit varying between 2 weeks to one month salary per year of service, depending on the financial position of the company and taking industry norms into consideration.<\/p>\n\n\n\n For retrenchment that happen after a recent pay cut, the salary prior to the cut should be used to compute the retrenchment benefit, to protect employees.<\/p>\n\n\n\n Read Also: Singapore Employment Act: 10 Statutory Requirements To Pay Employees<\/a><\/em><\/strong><\/p>\n\n\n\n As a minimum requirement, the Employment Act provides a schedule of notice period for the termination of employment. <\/p>\n\n\n\n The latest advisory urges businesses to give employees more than the contractual or statutory minimum notice period.\u00a0This will help with their psychological distress as well as give them more time to look for a new job while still being employed.<\/p>\n\n\n\n You can also work with unions, the Singapore National Employers Federation (SNEF), agencies such as Workforce Singapore (WSG), NTUC\u2019s U PME Centre and the Employment and Employability Institute (e2i) to help affected employees find alternative employment.<\/p>\n\n\n\n The communication could:<\/p>\n\n\n\n By making these documents available to your employees, you reinforce the point that you are committed to helping them continue to earn a living, even though you are unable to provide them with a job at this time.<\/p>\n\n\n\n Retrenchments are not easy business decisions to arrive at. Nevertheless, they don\u2019t have to be nasty affairs. By handling retrenchments well, the current difficult period could offer you a new way to build up your company\u2019s reputation, even when your business\u2019 profitability is in question. <\/p>\n\n\n\n Businesses can also refer to this checklist in the latest advisory for responsible retrenchment practices.<\/p>\n\n\n\nResponsible Retrenchment Guidelines<\/strong><\/h3>\n\n\n\n
#1 Inform MOM before carrying out any retrenchment exercise.<\/strong><\/h4>\n\n\n\n
#2 Consult with the union if your company is unionised.<\/strong><\/h4>\n\n\n\n
#3 When issuing the retrenchment notice, employers should pay attention to the emotional needs of affected employees. <\/strong><\/h4>\n\n\n\n
#4 Do not mask retrenchments as dismissals OR firings as retrenchment exercise<\/strong><\/h4>\n\n\n\n
#5 Pay all salaries, including unused annual leave, notice pay, CPF, retrenchment benefits etc., to your employees on their last day of work. <\/strong><\/h4>\n\n\n\n
#6 Pay Retrenchment Benefits<\/strong><\/h4>\n\n\n\n
#7 Consider having a longer retrenchment notice period for all your affected employees. <\/strong><\/h4>\n\n\n\n
Length Of Service<\/strong><\/td> Notice Period<\/strong><\/td><\/tr> Less than 26 weeks<\/td> 1 day<\/td><\/tr> 26 weeks to less than 2 years<\/td> 1 week<\/td><\/tr> 2 years to less than 5 years<\/td> 2 weeks<\/td><\/tr> 5 years and above<\/td> 4 weeks<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n #8 Help your affected employees look for new jobs in associate companies, other companies or through job fairs.<\/strong><\/h4>\n\n\n\n
Singapore National Employers Federation (SNEF)<\/td> http:\/\/www.snef.org.sg\/<\/a><\/td> 6290 7633<\/td><\/tr> Workforce Singapore (WSG)<\/td> http:\/\/www.wsg.gov.sg\/<\/a> <\/td> 6883 5885<\/td><\/tr> U PME Centre<\/td> http:\/\/www.ntuc.org.sg\/pme<\/a><\/td> 6213 8008<\/td><\/tr> Employment and Employability Institute (e2i)<\/td> http:\/\/www.e2i.com.sg\/<\/a> <\/td> 6474 0606<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n #9 Employers should communicate early, the intention to retrench staff and before public notice of retrenchment is given. <\/strong><\/h4>\n\n\n\n
#10 To facilitate the job search of affected employees, supporting documents such as referral letters, service records and past training certificates, should be provided.<\/strong><\/h4>\n\n\n\n
Responsible Retrenchment Guidelines \u2013 Checklist<\/strong><\/h3>\n\n\n\n
1<\/td> Does the business situation warrant a retrenchment?<\/td> <\/td><\/tr> 2<\/td> Did the company tap on government support, put in effort to reskills and deploy employees where possible, before embarking on a retrenchment exercise?<\/td> <\/td><\/tr> 3<\/td> Did the com company implement other alternatives before embarking on a retrenchment exercise? Examples include, but are not limited to: flexible work schedule, shorter work-week, no-pay leave.<\/td> <\/td><\/tr> 4<\/td> Did the company use objective criteria to identify employees to be retrenched and that the criteria used do not discriminate against any employee on the basis of age, race, gender, religion, marital status and family responsibility, or disability?<\/td> <\/td><\/tr> 5<\/td> Did the company ensure that the proportion of local employees is not lower, after retrenchment?<\/td> <\/td><\/tr> 6<\/td> If company is unionised, were the selection criteria and retrenchment benefit discussed and agreed to with the union?<\/td> <\/td><\/tr> 7<\/td> Did the company communication its business situation and retrenchment plans clearly and in a sensitive manner with compassion to employees?<\/td> <\/td><\/tr> 8<\/td> Did the company adhere to the notice period for retrenchment in accordance with the employment contract, collective agreement, or the Employment Act?<\/td> <\/td><\/tr> 9<\/td> Did the company provide retrenchment benefit in accordance with Tripartite Advisory on managing Excess manpower and Responsible Retrenchment?<\/td> <\/td><\/tr> 10<\/td> Did the company put in place measures to support the affected employees to move on to new jobs, e.g. engaging WSG or e2i for employment facilitation?<\/td> <\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n