Sources of regulation
The central pieces of legislation in Singapore governing
the termination of employment are:
- the
Employment Act, adopted in 1968 and lastly amended in 1995 (EA), and
- the Industrial
Relations Act, adopted in 1960 and lastly amended in 2002 (IRA).
In addition, collective agreements or individual
contracts of employment may contain provisions governing the termination
of employment. The Tripartite Guidelines On Managing Excess Manpower are aimed at improving corporate
practice and industrial relations in case of retrenchment.
Scope of legislation
The EA covers all the employees, regardless
of nationality, and contains a wide definition of “employee”, which includes
all persons who have entered into work under a contract of service with an
employer (sec. 2, EA), but excludes seafarers, domestic workers, security guards,
any employees in managerial, executive or confidential positions, and people
employed by a Statutory Board or the Government.
Contracts of employment
The EA defines the contract of employment as
“contract of service”, which means any agreement, whether in writing or oral,
express or implied, whereby one person agrees to employ another as an employee
and that other agrees to serve his/her employer as an employee, and includes
an apprenticeship contract (sec. 2, EA).
The EA provides that a contract for a specified
piece of work or for a specified period of time is to terminate when the
work is completed or the period expires (sec. 9(1), EA).
Termination of employment
Indefinite contracts of employment may terminate
upon either party giving notice (sec. 10(1), EA).
In addition, an employee may terminate employment
immediately if salary is not paid (sec. 13(1), EA), or if the employee or
his or her dependants are threatened by violence or disease (sec. 15, EA).
Dismissal
Either party to a contract of employment may
at any time give to the other party notice of his/her intention to terminate
the contract of employment (sec. 10(1), EA).
Summary dismissal by the employer is possible
when:
- the
employee wilfully breaches a condition of the employment contract (sec.
11(2), EA);
- the
employee is continuously absent from work, without leave or reasonable
excuse, for more than two days (sec. 13(2), EA); or
- the employee
is found, after due inquiry, to be guilty of misconduct (sec. 14, EA).
If an employee is found, after due inquiry,
to be guilty of misconduct, the employer may, instead of dismissing the employee,
downgrade or suspend him or her for up to a week (sec. 14(1), EA).
An employer may not dismiss or discipline an
employee on the grounds of trade union activities (sec. 82, IRA).
There is a statutory prohibition to dismiss a
female employee during pregnancy and maternity leaves (secs. 81, 84, EA).
Notice and prior procedural safeguards
Notice periods are governed by the terms of
the contract, and it is only in the absence of such a stipulation that the
statutory notice periods apply (sec. 10, EA). Either the employer or employee
may make a payment in lieu of notice (sec. 11, EA). The contractual notice
periods for both employer and employee are required to be equal (sec. 10(2),
EA). The statutory periods of notice are at least as follows:
- for
less than 26 weeks’ service, one day;
- for
26 weeks to two years’ service, one week;
- for
two to five years’ service, two weeks; and
- for more
than five years’ service, four weeks (sec. 10(3), EA).
Either party to a contract of employment may
terminate it without notice in the event of any wilful breach by the other
party of a condition of the contract of service (sec. 11(2), EA).
Employers are required to make “due inquiry”
before dismissing an employee for misconduct, which includes an obligation
to comply with the dictates of natural justice (sec. 14, EA). As a general
rule, it means that no person can be a judge in his/her own cause and no
employee can be condemned without having the opportunity to present his/her
case.
There is no statutory procedure for collective
and individual dismissals on economic grounds. However, the Ministry of Manpower
has published a study on “Managing Excess Manpower” whose aim is to preserve
a favourable corporate image and to improve staff relations and morale. Under
the Tripartite Guidelines On Managing Excess Manpower, the employer is encouraged, in
case of retrenchment, to consult with the trade union if the company is unionised.
In addition, the employer should notify the Labour Relations Department and
the Manpower Deployment Department of the Ministry of Manpower to help the
affected workers find alternative employment expeditiously (see the Web-site
of the Ministry of Manpower).
Severance pay
In case of redundancies, employees with more
than three years’ service can claim retrenchment benefits. As the law does
not stipulate the quantum to be paid, the amount of severance pay is subject
to negotiation between the employee and employer. The level of these benefits
can also be set by collective agreements (if any).
The employees who have worked less than three
years in a company are not entitled to retrenchment benefits under the EA.
However, the employer may pay an ex gratia payment at his/her discretion.
The prevailing norm in practice is to pay a
retrenchment benefit varying between 2 weeks’ to one month’s salary per year
of service.
Avenues for redress
A dismissed employee who considers that he or
she has been dismissed without just cause may, within one month of the dismissal
and in writing, seek reinstatement (and/or compensation) from the Minister
of Labour, who may delegate the investigation on the circumstances of the
dismissal to the Labour Commissioner (Sec. 14, EA, and sec. 35(2), IRA (for
unionized employees)). A Commissioner appointed by the Minister will establish
the facts of the matter and attempt to conciliate the dispute. If no agreement
is possible, the Minister may order reinstatement or damages. The decision
of the Minister, after receiving the report from the Commissioner, is final
and cannot be challenged in any court (sec. 14(5), EA).
For claims not of unfair dismissal but simply
breach of contract at common law, the employee retains the right to sue in
the civil courts.
Further Information
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