From April 1, 2015, an employee who has been employed in a
company for at least two years may request retrenchment benefits if
he or she is retrenched. Prior to April 1, 2015, the requisite
period of employment before a request for retrenchment benefits
could be made was three years. The relevant provisions of the
Employment Act apply only to employees earning a salary not
exceeding S$2,500 per month, or workmen earning a salary not
exceeding S$4,500 per month.
Following the amendments, employees in Singapore covered by the
Employment Act now have the right to request retrenchment benefits
after two years. However, the general view is that, in the absence
of contractual provisions in any employment contract or collective
bargaining agreement to the contrary, there is no right to receive
such benefits. Instead, such benefits remain payable at the
discretion of the employer. This is because section 45 of the
Employment Act simply states that no employee who has been in
continuous employment with an employer for less than two years
(previously three) is entitled to retrenchment benefits. However,
the section does not provide that employees who have been employed
for two or more years are entitled to retrenchment benefits.
The view in Singapore is that such rights cannot be specified in
this negative way and would instead need to be set out in the
Employment Act using positive language to create an actual right to
employment benefits after two years. As such, the amendments
operate only to give employees the right to request
retrenchment benefits after two years, and not the right to
receive them.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.