Singapore Employment Guide

Navigating Employment Termination in Singapore: A Guide for Global Employers

Terminating an employment contract in Singapore requires careful adherence to a structured legal framework. Unlike jurisdictions with at-will employment, employers cannot dismiss staff without valid cause. The process must be handled collaboratively with key stakeholders and often involves specific procedures, potential costs, and mandatory steps depending on the termination scenario.

Legally Compliant Grounds for Termination

To ensure compliance, termination should fall under one of the following categories:

• Voluntary resignation initiated by the employee
• Mutual agreement between both parties
• Expiry of a fixed-term contract
• Employer-initiated termination based on:
  • Unsatisfactory performance during the probation period
  • Objective grounds such as redundancy or business restructuring
  • Dismissal due to serious misconduct following disciplinary procedures
  • Performance-related issues rendering the employee unsuitable for the role

Understanding Statutory Notice Periods

Singapore's Employment Act mandates minimum notice periods, which vary by length of service:

For example, a company like SailGlobal, when restructuring its APAC operations, must provide a four-week notice to employees with over five years of service to avoid legal disputes.

Severance Pay and Final Settlements

Unlike many Western countries, Singapore does not legally require severance pay for retrenchment or dismissal. However, employers often provide ex-gratia payments as part of company policy or collective agreements. Final payments must include any outstanding salary, accrued annual leave, and bonuses, as seen in cases handled by SailGlobal’s HR advisory team for clients in the tech sector.