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The cessation of an employment relationship or termination of a job may be done by the employer or employee by terminating the employment contract mutually signed between them. However, the termination of employment implies some legal obligations on the part of both the employer and the employee. Any termination must comply with the terms and conditions set out in the employment contract. Before either party decides to terminate the employment relationship, it is important to take into account the following considerations:
This guide will help you understand Singapore's basic rules and regulations governing termination and retrenchment of employees. The guide is only for general information and is not intended to replace professional advice.
Singapore's Employment Act is the principal statute governing job termination. Every employment contract must contain a termination clause setting out the rights, duties, obligations and responsibilities regarding the termination of employment of both employers and employees.
Guidelines on termination of employment as stipulated in the Employment Act apply to those employees who are protected by the Act. Please note that all employees except Public servants, Seafarers, and Domestic workers are protected by the Employment Act. For employees not covered by the Employment Act, their employment termination guidelines will be drawn up according to company policy and what is mutually agreed upon at the time of employment between both parties. These guidelines, as common practice in Singapore, generally correspond to the stipulations in the Employment Act.
An employer or employee may terminate an employment contract by giving notice or salary in lieu of notice; or by giving neither of them, as the case may be. In some cases, employment contracts automatically come to an end or terminate naturally; therefore, the notice periods do not apply.
The following table illustrates the circumstances under which a contract might be terminated.
Employer initiated termination |
Employee initiated termination |
Natural Termination |
In Singapore, most employees begin their work on a probationary period (usually 3-6 months) and are appointed as permanent employees when the probation is successfully completed. However, the employer is legally allowed to terminate the job by giving notice (usually 1-2 weeks or as is mentioned in the employment contract) or by agreeing to pay salary in lieu of notice before the probationary period ends.
The employment act is not applicable to the following as they are covered by other regulations:
The employment act is not applicable to the following as they are covered by other regulations:
The employment act is not applicable to the following as they are covered by other regulations:
In Singapore, the age for retirement is 62 years. Employees who are close to the retirement age and who plan to resign from a company's services will initiate their termination the day before their 62nd birthday. Under the new legislation on retirement and re-employment, employers are now required to offer re-employment to eligible employees who are 62 years of age till they reach 65 years.
The following shall apply in the absence of a notice period agreed beforehand:
Employment Period |
Notice Period |
Less than two weeks | One day |
26 Weeks – 2 Years | One week |
2 – 5 Years | Two weeks |
Five Years and Above | Four weeks |
Contributions from the Central Provident Fund (CPF) do not apply to salaries that are paid in lieu of notification by either party.
When an employee serves the notice period, both parties are still bound by the contract of employment and have to fulfil their responsibilities properly until the end of the notice period. The employee cannot begin to work with his new employer until the termination from the current job is completed.
The employee does reserve the right to use the annual leave that he is entitled to offset the period of notice. If an employee exercises the above right and brings forward his last working day, he will only be paid until this last working day. The employer is not liable to pay for the annual leave, which was used to offset the remaining notice period.
Offsetting the notice period with annual leave is different from proceeding on an approved annual leave during the period of the notice. An employee can decide to make use of his annual leave during the notice period, in which case he may earn his paycheck for the entire notice period. However, in such case, there is no instance of the last day of work being brought forward, and until the last day of the notice period, he is considered to be an employee of the Singapore Company. Only after the last day of the notice period can he join the new company. Employees can encash any unused annual leave. Please note that, during the notice period, the employee cannot be forced to go on annual leave.
During the notice period, any paid or unpaid sick leave taken should be considered as part and parcel of the notice period.
In order to offset the time for the notice period, an employee cannot use the childcare / infant care leave to which he / she is entitled.