Employment Act Changes For Retrenchment Benefits

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