Retrenchment is the Singapore term for redundancy. Unlike many jurisdictions, there is no general statutory formula setting the amount of retrenchment benefit for all employees; the position is shaped by the employment contract, any collective agreement, and tripartite guidance on what is considered fair.
What the guidelines expect
The tripartite advisory sets out expectations rather than hard rules: that retrenchment should be a last resort, that selection should be fair and not discriminatory, that employees should be given adequate notice and consulted, and that a benefit in a customary range should be paid where the employer is able. Employers who ignore the guidance can face reputational and regulatory consequences even where no statute is breached.
- Employers above a size threshold must notify the authorities of retrenchments
- Selection based on nationality rather than merit attracts particular scrutiny
- Employees with a qualifying period of service under the Employment Act have a statutory entitlement in some circumstances
Why it matters when hiring internationally
The absence of a rigid formula is not an absence of obligation. Because expectations are set by guidance and by what is customary, the practical answer to "what do we owe" depends on local norms rather than a calculation, which makes it a poor area for assumption. Mandatory notification also means retrenchments are visible to the authorities.