Retrenchment Benefits
Written in plain language for general understanding. This is educational content, not legal advice. Based on Singapore Acts of Parliament, subsidiary legislation, and official government guidance.
Singapore National Law
What is this right?
When an employer makes roles redundant, retrenched employees may be entitled to retrenchment benefits:
- Eligibility: Employees who have served for at least 2 years are eligible under the Employment Act (s45). Employees with less than 2 years may still be eligible if their contract or company policy provides for it.
- Benchmark: The tripartite norm is 2 weeks to 1 month of salary per year of service, depending on the company's financial position.
- No statutory amount: Singapore law does not prescribe a fixed quantum — it depends on your contract, collective agreement, or company practice.
- Notification: Employers must notify MOM of retrenchments affecting 5 or more employees within any 6-month period.
The Tripartite Advisory strongly encourages employers to provide retrenchment benefits even for employees with less than 2 years of service, on a goodwill basis.
When does it apply?
- You are an employee covered by the Employment Act and your role is made redundant (not dismissed for misconduct or performance).
- You have at least 2 years of continuous service for statutory eligibility.
- If your contract specifies retrenchment benefits, those terms apply regardless of service length.
What should you do?
- Check your employment contract and company handbook for retrenchment benefit clauses.
- If your employer offers no benefits, negotiate — reference the Tripartite Advisory and the 2 weeks–1 month norm.
- If you are a union member, your union can negotiate on your behalf.
- Register with Workforce Singapore (WSG) for career transition support and training subsidies.
- If your employer disguises a retrenchment as a performance dismissal, file a wrongful dismissal claim with TADM.
What should you NOT do?
- Don't accept retrenchment without checking your contract — you may be entitled to more than what is offered.
- Don't sign a release or waiver immediately — take time to review it and seek advice if needed.
- Don't forget your other entitlements — unused annual leave, notice pay, and pro-rated bonuses (if contractually provided) should be paid out on top of retrenchment benefits.
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