Employment Termination in Singapore

Termination Process in Singapore

Both employer and employee have the power to terminate a contract of service. The termination can take place due to:

• Employee resignation
• Employer dismissal
• Contract expiration (such as when a project or contract period has been completed)

Both parties must follow the terms and conditions for termination as stated in the contract of service. It is an offence for employers to disallow employees to leave their job. Employees have the right to resign at any time, serving the required notice or by paying compensation to the employer in lieu of notice.

Termination with Notice:

• The length of notice period must be the same for the employer and the employee and as agreed according to the employment contract.
• The notice can be waived by mutual consent between employee and employer.
• If employment contract didn’t specify the notice period, the notice period required will depend on employee’s length of service.
• A termination letter is mandatory.

Termination without Notice:

• Termination without notice can happen in situations such as breaking the terms of the contract, failure to pay salary and absence without cause.
• Either employee or employer may terminate a contract without waiting for the notice period to end.
• Either party can do so by paying the other party compensation in lieu of notice (“notice pay”). This is money equivalent to the salary that employee would have earned during the required notice period.

Retrenchment in Singapore

• The amount of retrenchment benefit will depend on the employment contract or collective agreement (for unionised companies). If there is no provision, it will have to be negotiated between the employees (or their union) and the employer.
• The prevailing norm in Singapore is to pay a retrenchment benefit of between 2 weeks to 1 month salary per year of service, depending on the company’s financials.
• If the retrenchment comes shortly after a salary cut, the salary before the cut should be used to determine the amount of compensation.
• Both employee and employer don’t have to pay CPF contributions for retrenchment benefits.

Reasons for Termination

Employers must have valid reasons for termination, such as misconduct or redundancy. It is essential to document these reasons and provide the employee with an opportunity for improvement before proceeding with termination.

Employee Rights During Termination

Employees have certain rights that must be respected during the termination process. These include the right to notice, fair treatment, and compensation where applicable.

Please note that all the information listed below are to be used as a general guideline. For more detailed accounts of Singapore employment laws and regulations, please visit the official governmental websites.

Updated on: May 2026