What is the difference between retrenchment and termination

For employees that are not covered by the Employment Act, their employment termination guidelines will be drafted as per company policy and what is mutually agreed upon between both parties at the time of employment. As a common practice in Singapore, these guidelines generally correspond to the stipulations in the Employment Act.

An employment contract can be terminated by either the employer or employee by giving notice or salary in lieu of notice; or without giving any notice nor salary in lieu of notice. In certain cases, employment contracts come to a natural termination and notice periods are not applicable.

The table below illustrates the circumstances under which a contract can be terminated. Termination by paying salary in-lieu of notice Central Provident Fund CPF contributions are not applicable for salary that is paid in lieu of notice by either party.

Employment during notice period When an employee is serving the notice period, both parties are still bound by the employment contract, and must discharge their responsibilities duly, until the end of the notice period. The employee cannot commence work with his new employer until the date of termination.

Offsetting notice period with annual leave The employee has every right to use his annual leave to offset the notice period. If an employee does exercise this right and brings forward his last day of work, he will only be paid until this last day of work. The annual leave which has been used to offset the remaining notice period will not be paid for by the employer. Annual leave taken during notice period There is a difference between offsetting notice period with annual leave and going on approved annual leave during notice period.

An employee can decide to use his annual leave during the notice period, in which case he will receive his salary for the full notice period. In this case, there is no instance of bringing forward the last day of work and he is considered to be an employee of the company until the last day of the notice period.

He can join the new company only after the last day of his notice period. Any unused annual leave can be encashed by the employe. Please note, that the employee cannot be forced to go on annual leave during the notice period. Sick leave during notice period Any paid or unpaid sick leave taken during the notice period, should be treated as part of the notice period.

Maternity Leave and termination. Appeals against dismissals An employee who considers his dismissal to be unfair, can make a written appeal within one month of his dismissal, to the Minister for Manpower. If the dismissal is proved to be unfair, the Minister may either order the employer to reinstate the employee and pay him for the period he was dismissed or to pay a compensation.

Termination and foreign employees. Hawksford will help you determine final payment upon termination of services of an employee and arrange settlement. You can also access a cloud-based service to manage payment arrangements, expense reimbursement and employee benefits computation.

A full suite of support services for your business As your firm grows, Hawksford can provide assistance for your start-up or business's legal, marketing, operational, financial and project management needs. You may find these Singapore business guides useful in helping you make your decision:. Online Guide to hiring staff in Singapore including Employment Act, key labour legislation, common practices and hiring local as well as foreign employees.

Discover what funding options are available to Singapore companies to improve the work-life balance of employees.

Find out your industry information here. Back to Guides to managing business. Guide To Terminating Employees In Singapore An employer or employee who wishes to end the employment relationship may do so by terminating the employment contract. Before either party takes the decision of terminating the employment relationship, it is important to take the following points of consideration into account: the conditions under which employment can be terminated including who can terminate employment, when can a termination be initiated, what types of termination require notice, termination payments etc.

Legislation Governing Employment Termination The Employment Act of Singapore is the principal statute governing termination of employment. Scope of the legislation Employment termination guidelines as stipulated in the Employment Act is applicable to those employees protected under the Act.

Terminating Employment Contracts An employment contract can be terminated by either the employer or employee by giving notice or salary in lieu of notice; or without giving any notice nor salary in lieu of notice. Employer initiated termination Employee initiated termination Natural Termination Unsatisfactory Probation Breach of contract by employee Employee dismissal on grounds of misconduct Employee dismissal on grounds other than misconduct Employee transfer Employee retirement Employee retrenchment Resignation Breach of contract by employer Retirement Expiry of fixed term contract End of probationary period Death of either party Employer initiated termination Unsatisfactory Probation In Singapore, most employees commence their employment on a probationary period usually months , and are appointed as permanent employees upon successful completion of the probation.

However, the employer is entitled to terminate the employment before the probationary period ends, by providing notice usually weeks or as stated in the contract or by paying salary in lieu of notice. Breach of contract by employee An employer may choose to terminate the employment contract if the contract has been breached by his employee.

A contract is breached when the employee absents himself from work for more than two consecutive working days without employer approval or without informing the employer of such absence. Situation where my date of joining and last date of working is conflicting. Leave without pay rules for the employees who dont seem to care?

Using personal laptop in office to do official work severe indiscipline. Industrial Disputes Want to change the payroll cycle from 1st to 30th to 25th to 24th - points to take care of? Gratuity Eligibility - they are not including weekly off holidays and leave. Enlighten on section of id act pertaining to action taken against protected workmen.

What is the time limit for challenging the termination in an Indian private sector bank? Public sector bank approached commercial court for recovery of remaining staff housing loan. Wage Settlement Process - what will be the next steps taken by the union for the settlement? Payment of Gratuity to a retired Government employee who was recruited as professor in our educational institution.

Termination Policy No official designation was given to him nor any agreement. As he is related with the owner. Involuntary terminations can be further divided into two broad categories namely Layoffs and Retrenchment. Layoffs are a part of business terminations that are volatile in nature. This means that once the lean period for the organization is over, the employed might be called back to work. Retrenchment is another form of termination, which is not dependent on the actions of the employee.

Retrenchment, however, is non-volatile which means once terminated, the employees will never be called back. Layoffs are a common business practice that companies adopt to deal with economic downturns.

During times of recession within the economy or the company, management decides to lay off staff and reduce the workforce to avoid absolute shut down of the business. Layoffs can be temporary in nature that is employees can be asked to join back once the company has recovered and can afford to hire more work workforce.

A laid-off employ does not provide services to the company or collect wages. Companies may state multiple reasons for laying off employs. Some common reasons for lay-offs include;. However, it does have an overall socio-economic impact on ex-employees. It also affects the overall environment of the workspace for a brief period.