Retrenchment Benefits in Singapore
Reviewed by the Commoner Law Editorial Team. Sourced from Singapore Acts of Parliament, subsidiary legislation, and official government guidance. Written in plain language for general understanding — this is educational content, not legal advice. Our editorial standards
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. Worked example: a worker on S$5,000/month with 6 years' service paid at the 2-week benchmark gets ~S$2,500 × 2 × 6 = S$30,000; at the 1-month benchmark, S$30,000 doubles to S$60,000.
- No statutory amount: Singapore law does not prescribe a fixed quantum — it depends on your contract, collective agreement, or company practice.
- Mandatory MOM notification (effective 1 September 2024): Employers with at least 10 employees who retrench 5 or more employees within any 6-month period must notify MOM within 5 working days of giving notice to the first affected employee. This is a statutory duty under the Employment (Retrenchment Notification) (Amendment) Notification 2024 — failure attracts MOM enforcement action.
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 to Do If You Are Being Retrenched or Your Role Is Made Redundant in Singapore
- 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.
Common Questions
Am I entitled to retrenchment benefits in Singapore?
Under s45 of the Employment Act, employees with at least 2 years of continuous service are eligible for statutory retrenchment benefits. Those with less than 2 years may still be eligible if their contract or company policy provides for it. Singapore law does not prescribe a fixed amount — it depends on your contract, collective agreement, or company practice.
What is the standard retrenchment benefit in Singapore?
The tripartite norm — from MOM, NTUC, and SNEF's advisory — is 2 weeks to 1 month of salary per year of service, depending on the company's financial position. The Tripartite Advisory also encourages employers to provide benefits to employees with less than 2 years of service on a goodwill basis.
What should I do if I am retrenched in Singapore?
Check your contract and handbook for retrenchment benefit clauses, and negotiate by reference to the tripartite 2-weeks-to-1-month norm. Register with Workforce Singapore for career transition support and training subsidies. If your employer disguises a retrenchment as a performance dismissal, file a wrongful dismissal claim with TADM. Do not forget unused annual leave, notice pay, and pro-rated bonuses on top.
When does it apply — retrenchment benefits?
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 I do if my employer has retrenched me or told me my position is being made redundant in Singapore?
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 — retrenchment benefits?
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.