The rules on severance pay in detail

There is no statutory obligation to pay severance.

If an employee is terminated by reason of redundancy, the guidelines issued by the Tripartite Alliance (a body comprising the Ministry of Manpower, the National Trade Unions Congress and the Singapore National Employers’ Federation) recommend a certain amount of redundancy pay to be given to employees depending on how long they have worked with the company. However, these are guidelines and have no force of law. 

Under s45 of the Employment Act (which will apply to all categories of employees with effect from 1 April 2019), it is expressly stated that employees who have worked for less than two years with the employer are not entitled to any retrenchment benefit (redundancy pay).

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Author: Rajah & Tann

Date: December 2019