Being retrenched is stressful — and it's made worse when you don't know what you're actually owed. The good news is that Singapore law sets clear minimums for retrenchment benefits, and the Ministry of Manpower (MOM) actively enforces them. This guide explains everything in plain English: who qualifies, how much you should receive, and what to do if your employer tries to short-change you.
Under the Employment Act, you are entitled to retrenchment benefits if you have been employed by the same company for at least 2 years. This applies to all employees covered by the Employment Act — which, since 2019, includes managers and executives earning any salary, not just those below the old $4,500 cap.
If you've worked for less than 2 years, you are not legally entitled to retrenchment benefits. However, MOM strongly encourages employers to offer an ex-gratia payment as goodwill — and many companies do, especially larger firms with HR policies.
Important: Contract workers, daily-rated workers, and part-time employees are also covered if they've served 2 years or more. The type of employment doesn't matter — the duration does.
The Employment Act does not specify a fixed amount for retrenchment benefits — it says the amount should be negotiated between you and your employer, or follow your employment contract or collective agreement.
In practice, however, the prevailing norm in Singapore is between 2 weeks to 1 month of salary per year of service. MOM uses this as the standard benchmark. Most companies follow it.
Your retrenchment package should also include several other payments on top of the retrenchment benefit:
MOM requires employers to follow a proper process. If your company is retrenching 5 or more employees within 6 months, it must notify MOM by filing mandatory retrenchment notifications. This is not optional — it's a legal requirement under the Employment Act.
Your employer must also give you proper notice based on your length of service (unless your contract specifies otherwise):
If the employer does not give you the required notice, they must pay you salary in lieu for the notice period. For example, if you're entitled to 4 weeks' notice and they tell you to leave immediately, they owe you 1 month's salary on top of your retrenchment benefit.
Unfortunately, some employers — especially smaller companies — try to avoid paying retrenchment benefits. They might disguise a retrenchment as a "performance termination," claim the company can't afford it, or simply ghost you. Here's what you should do:
Can my employer retrench me and then hire someone else for my role?
If your employer replaces you with a new hire shortly after retrenching you, that's a red flag. MOM may investigate whether the retrenchment was genuine or whether it was a disguised termination. A genuine retrenchment means the role itself is being removed — not the person.
Do I get retrenchment benefits if I'm on a fixed-term contract?
If your contract is terminated early due to redundancy, you are entitled to retrenchment benefits (assuming 2+ years of service). If your contract simply expires and is not renewed, that's generally not a retrenchment — but if the non-renewal is due to redundancy, you may still have a claim.
Are foreign workers entitled to retrenchment benefits?
Yes. The Employment Act covers all employees in Singapore regardless of nationality. Work permit holders, S Pass holders, and Employment Pass holders are all entitled to retrenchment benefits if they meet the 2-year service requirement.
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General legal information only — not legal advice. For specific situations, consult MOM or a qualified employment lawyer.