In Singapore, employers must adhere to specific rules and regulations when ending an employment contract, ensuring both compliance and fairness.
For example, for contract work in Singapore, the terms of termination should be clearly defined in the employment agreement.
When an employee’s work contract ends, what happens next is typically dictated by what is outlined in the contract. For fixed-term contracts, the employment automatically ends when the contract expires, without the need for notice unless otherwise specified.
To navigate the complexities of contract termination, businesses may benefit from expert guidance, such as advice from experienced workforce solution providers like CXC. This ensures that all legal requirements are met and that the end of employment is handled professionally, minimising potential risks.
In this guide, we will discuss everything you need to know about end of employment practices in Singapore, including notice period, termination process, post-termination restraints, waivers, and more.
Employers in Singapore must ensure their notice period policies align with both legal requirements and industry standards. Understanding the rules and nuances ensures compliance with local laws while maintaining positive relationships with employees.
The standard resignation notice period is governed by the Employment Act. This notice period depends on the length of an employee's service, unless otherwise stipulated in the employment contract:
Employers and employees may mutually agree on different terms, provided they meet the legal minimum notice period in Singapore. For instance, some businesses may specify longer periods to align with operational needs or industry norms.
If an employee resigns or is terminated, the calculation of the notice period starts the day after notice is given. It is also worth noting that unused annual leave can often be offset during the notice period.
The average notice period in Singapore can vary depending on the type of worker and the terms of the employment agreement:
Employers should ensure that all agreements are clearly documented to avoid potential disputes when workers resign or are terminated.
During probation, the rules around notice periods are slightly different. The probation period in Singapore typically lasts between three to six months, as specified in the employment contract. During this period:
Probationary employees are still entitled to fair treatment, including the proper calculation of their resignation notice period, as per the law.
Ending an employment relationship is never an easy decision. For employers, it is crucial to ensure that the process aligns with legal requirements and maintains fairness.
When an employer terminates a contract in Singapore, all employment agreements must follow the Employment Act to facilitate smooth transitions.
Employers or employees can end the employment relationship by providing the legally required notice, as outlined in the employment contract. However, the termination must not be based on illegal grounds such as discrimination against a legally protected group. Employers should ensure the process complies with the Employment Act, which governs the termination of contracts in Singapore.
There are several valid reasons for terminating employment, including poor performance, misconduct, redundancy, or operational restructuring. Employers must communicate the reason for termination clearly to the employee to ensure transparency and avoid potential disputes. Misconduct cases require proper investigation and documentation to substantiate the termination. Redundancy, on the other hand, may necessitate retrenchment benefits if the employee has served for at least two years.
When ending a contract, employers are required to:
Employees in Singapore may resign by providing notice as per their employment contract. This notice period allows both parties to plan for a smooth transition, ensuring minimal disruption to business operations. Employees should submit their resignation in writing, stating their last working day, to avoid misunderstandings.
If an employee serves the full notice period, final payments should be made on their last working day or within three days if immediate settlement is not feasible. However, if an employee resigns without notice and does not serve the notice period, payment must be made within seven days of their last day of employment. In cases where notice is not provided, employers may deduct compensation from the employee’s final salary for the unserved notice period, as specified in the employment contract.
Employers must also:
In cases of retrenchment or redundancy, severance pay may be applicable. While not mandated by law, it is common practice for employers to provide such benefits based on the employment contract or collective agreements. Typically, severance pay ranges from two to four weeks of salary per year of service.
Key considerations include:
Restrictive covenants, also known as post-termination restraints, are a common inclusion in employment contracts in Singapore. These clauses aim to protect a company’s legitimate interests but must be carefully drafted to ensure enforceability.
Non-compete clauses restrict an employee from engaging in competing business activities within a specific geographic area and time frame after leaving an employer. While these clauses are designed to protect a company’s market position and trade secrets, they are not automatically enforceable in Singapore.
Under Singapore law, covenants in restraint of trade, such as non-competes, are “prima facie” or “based on first impression” void unless the employer can prove they are reasonable. To be enforceable, a non-compete clause must:
Courts in Singapore assess the reasonableness of non-compete clauses by examining factors such as the seniority of the employee, the type of industry, and the potential impact on the employee’s livelihood. For instance, restrictions on a senior executive with access to sensitive information may be more justifiable than for a junior staff member. Additionally, the duration of the restriction should not exceed what is necessary to safeguard the employer’s interests, with most enforceable clauses ranging between six to 12 months.
Employers are advised to define the scope and geographic limitations clearly to avoid ambiguity. Broad or vague terms may render the clause unenforceable.
Non-solicitation clauses prohibit an employee from soliciting a company’s clients, suppliers, or other employees after leaving the organisation. These clauses are generally seen as less restrictive than non-competes and are more likely to be enforced if they are reasonable and necessary to protect the employer’s interests.
To be valid, a non-solicitation clause must:
For example, preventing a former employee from poaching clients or employees for a year may be deemed reasonable, provided it does not overly limit the individual’s professional opportunities. Courts consider whether the clients or employees being protected have been directly nurtured by the departing employee. This ensures the clause is genuinely aimed at protecting the employer’s trade connections rather than unfairly restricting competition.
Employers should regularly review and update their non-solicitation clauses to reflect the evolving nature of their business relationships. Additionally, clear definitions of what constitutes “”solicitation”” can help prevent disputes.
Employers in Singapore may also include other post-termination clauses, such as:
As with all restrictive covenants, these clauses must be reasonable and tailored to the specific circumstances of the employment relationship. Courts will assess whether the restraint is proportionate to the employer’s legitimate interests and does not unfairly disadvantage the employee. For example, confidentiality obligations that cover general industry knowledge, rather than proprietary information, may be deemed overly broad and unenforceable.
Employment waivers can help employers in Singapore manage disputes and contractual complexities. However, they must be clear, fair, and supported by consideration. Employers should stay informed about the common elements of waivers in Singapore and work with legal experts to craft enforceable agreements that align with statutory requirements.
A waiver in an employment contract refers to an agreement where one party voluntarily gives up a legal right. In Singapore, a waiver of privilege can address disputes or manage obligations but must meet certain conditions to be valid and enforceable.
A waiver must be clear, though it can be oral, written, or inferred from actions. For example, if an employer repeatedly overlooks a contractual breach without action, it might imply a waiver of that obligation. Courts carefully assess the circumstances to ensure fairness and absence of coercion. To avoid ambiguity, waivers should be documented and precise, especially for significant rights like non-compete clauses or termination notice periods.
Waivers play a key role in settling disputes or ensuring smooth exits. In termination cases, settlement agreements may include a waiver clause where the employee gives up claims against the employer in exchange for benefits like severance pay or extra compensation.
For a waiver in a settlement to be enforceable, it must:
Statutory protections under Singapore’s Employment Act cannot be waived. For instance, salary and leave entitlements, or protections against discrimination, remain enforceable despite agreements.
Employers should seek expert advice when including waivers in settlement agreements to ensure compliance and avoid unintended consequences.
The transfer of undertakings in Singapore requires employers to prioritise compliance, clear communication, and fair negotiations. Following EA internal employee policies ensures employee rights are protected, fostering trust and business continuity.
Under the Employment Act (EA), the transfer of undertakings occurs when a business, or part of it, is transferred as a going concern. During such transfers, EA Employees (those covered under the EA) are automatically transferred to the new employer with their existing terms and conditions intact. Employers must comply with EA internal employee policies, including mandatory notification and consultation to minimise disruptions.
Non-EA Employees are not automatically transferred. Their contracts must be terminated by the outgoing employer (transferor), after which the incoming employer (transferee) may rehire them under new terms or novate existing contracts. Employers should plan carefully to ensure smooth transitions for all employees.
To prepare, employers must update documentation, such as EA forms and the EA employee directory, to reflect the changes.
The EA safeguards employee rights during business transfers. For EA Employees, the new employer must honour existing employment terms, including salary and leave entitlements. Any changes require mutual agreement.
Employers are also required to notify employees in advance and consult them to address concerns and provide job security assurances. Non-compliance may lead to disputes or penalties.
For Non-EA Employees, while rights are not automatically preserved, fair rehiring terms help maintain morale and minimise attrition. Employers must also address outstanding payments, CPF contributions, and accrued leave entitlements to ensure compliance with employee rights in Singapore.
There are many different ways an employment contract can come to an end. But whatever the situation, you need to understand the rules that cover the end of employment in Singapore — or you could end up facing legal issues.
Our solutions ensure your business is protected from risk when a relationship with a worker comes to an end — whatever the reason. We can also help you to avoid missed opportunities by re-deploying talent where possible.
Employment can end in Singapore through resignation, dismissal, mutual agreement, redundancy, the expiry of a fixed-term contract or cessation following an employee’s death. Employment may also end through retirement, a transfer of employment or another contractual or legal event, depending on the circumstances.
The process for termination of employment in Singapore depends on the reason for ending the employment relationship and the terms of the employment contract. Some situations require notice, while others, such as dismissal for misconduct after due inquiry, may allow employment to end without notice.
The table below summarises the most common ways employment ends in Singapore.
Type of termination | What it means |
Resignation | The employee ends the employment relationship by giving the required notice or payment in lieu of notice. |
Employer termination | The employer ends the employment relationship by giving notice or payment in lieu of notice. |
Dismissal for misconduct | Employment ends without notice after the employer has conducted a due inquiry and established misconduct. |
Agreement | Both employer and employee agree to end the employment relationship on agreed terms. |
Retrenchment or redundancy | Employment ends because the role is no longer required or the business is restructuring. |
End of fixed-term contract | Employment ends when the agreed contract period expires, unless the contract is renewed. |
Each type of termination in Singapore has different legal and payroll obligations. Employers should review the employment contract before ending employment to ensure the correct process, notice period, and final payments are applied. Any termination notice must be in writing and should state the termination date, last day of employment and applicable notice period.
In summary, the correct termination process depends on why employment is ending. Employers should ensure the reason for termination aligns with the employment contract and Singapore employment law.
Employers must follow the employment contract and the Employment Act when carrying out the termination of employment in Singapore. This includes giving the correct written notice, paying all final employment entitlements and following a fair process where required.
Before terminating employment, employers in Singapore should:
For a misconduct inquiry, the employee should be informed of the allegation, given an opportunity to respond and heard by an unbiased decision-maker. During an inquiry, suspension generally cannot exceed one week without approval from the Commissioner for Labour, and the employee must receive at least half salary. If misconduct is not established, the withheld salary must be restored.
Poor performance is not misconduct. If poor performance is cited, the employer should have evidence supporting that reason and ordinarily terminate with notice or salary in lieu rather than summarily dismissing the employee.
If the termination in Singapore is due to redundancy or retrenchment, employers should also consider the Ministry of Manpower’s guidance on fair retrenchment practices, communicate openly with affected employees and determine whether retrenchment benefits are payable under the employment contract, collective agreement or company policy.
Employers registered in Singapore with at least 10 employees must notify MOM of any retrenchment within five working days after notifying the affected employee. Employers should also apply fair and objective selection criteria, consider alternatives to retrenchment and provide employment-assistance support where practicable.
Following a consistent termination process helps reduce disputes and demonstrates that employment decisions were made fairly and in accordance with Singapore employment requirements.
The notice period in Singapore depends on the employment contract. If the contract specifies a notice period, both the employer and employee must follow it. If no notice period has been agreed, the Employment Act sets the minimum notice based on the employee’s length of service.
The statutory minimum notice periods in Singapore are:
Length of service | Minimum notice period |
Less than 26 weeks | 1 day |
26 weeks to less than 2 years | 1 week |
2 years to less than 5 years | 2 weeks |
5 years or more | 4 weeks |
The notice period applies equally to employers and employees unless both parties have agreed otherwise in the employment contract. During the notice period, the employee normally continues working and receives their usual salary and benefits.
Instead of serving notice, either party may make payment in lieu of notice. The Employment Act permits termination by paying salary in lieu of the unserved notice period. The payment should reflect the gross salary the employee would have earned during that period. The employment relationship then ends immediately once the payment is made.
The parties may mutually agree in writing to waive all or part of the notice period. CPF contributions are payable on salary earned while serving notice but are not payable on salary in lieu of notice.
Annual leave may be taken during notice with the employer’s approval. Using annual leave to bring forward the last day of employment is different and requires the employer’s agreement.
In summary, the applicable notice period in Singapore is usually the one stated in the employment contract. If there is no contractual notice period, the Employment Act minimum notice periods apply based on the employee’s length of service.
Singapore does not require a universal severance payment whenever employment ends. However, retrenchment benefits may apply when employment ends because of redundancy or restructuring. Retrenchment benefits should be distinguished from notice pay, final salary, accrued leave and other contractual entitlements. Whether an employee receives severance pay in Singapore depends on the reason employment ends and what is provided in the employment contract, collective agreement or company policy.
Where employment ends because of retrenchment or redundancy, employers in Singapore should consider the Ministry of Manpower’s retrenchment guidelines. Employees with at least two years of service are generally expected to receive retrenchment benefits, although the amount is usually determined by the employment contract, collective agreement or company policy rather than legislation.
If no amount is specified, it should be negotiated with the employee or union. The prevailing norm is between two weeks’ and one month’s salary for each year of service, depending on the employer’s financial position and industry. For unionised employees, collective agreements commonly provide one month’s salary for each year of service.
Employees with less than two years’ service may be given an ex-gratia payment. If retrenchment follows a salary reduction, MOM guidance states that the pre-reduction salary should be used to calculate the retrenchment benefit. CPF contributions are not payable on genuine retrenchment benefits.
Employees in Singapore dismissed for misconduct or who resign voluntarily are generally not entitled to severance or retrenchment benefits unless their employment terms provide otherwise.
When determining whether severance or retrenchment benefits apply, employers in Singapore should consider:
In short, there is no statutory severance pay entitlement for every employee in Singapore. The obligation usually depends on the employment contract, company policy or retrenchment arrangements.
When employment ends in Singapore, employers must pay all outstanding employment entitlements owed to the employee, including final salary and any contractual or statutory payments that remain due.
Depending on the circumstances, final payments may include:
Payment | When it applies |
Final salary | Salary earned up to the employee’s last working day. |
Payment for unused annual leave | Accrued unused annual leave must generally be paid at the employee’s gross rate of pay where employment is terminated, except where the employee is dismissed for misconduct after due inquiry. Contractual leave exceeding the statutory entitlement should be treated according to the contract or policy. |
Payment in lieu of notice | Payable to the employee where the employer ends employment without requiring the employee to serve the applicable notice period. If the employee resigns without serving notice, the employee may instead owe salary in lieu of the employer. |
Bonuses or commissions | Where the employee has become contractually entitled to receive them under the contract, bonus plan, commission scheme or established policy. The employer should check any conditions relating to payment dates, active employment, performance and discretion. |
Retrenchment benefits | Where provided under the employment contract, collective agreement or company policy. |
Expense reimbursements | Approved business expenses that have not yet been reimbursed. |
Only deductions permitted by the Employment Act or another applicable law may be made from final salary. An employer should not withhold final salary merely because an employee has not completed a handover, returned information or signed a release. Separate lawful remedies may be available for property loss, confidentiality breaches or other claims.
For non-Singapore-citizen employees, including Singapore permanent residents , employers in Singapore may also need to complete Form IR21 and obtain tax clearance from the Inland Revenue Authority of Singapore (IRAS) before making the final salary payment, where the tax clearance rules apply.
Where tax clearance is required, the employer must generally notify IRAS at least one month before the employee ceases employment, starts an overseas posting or leaves Singapore for more than three months. The employer must withhold all monies due from the time it becomes aware of the cessation or departure until IRAS issues its clearance directive, subject to applicable exceptions.
The Employment Act also sets deadlines for paying final salary. Employees who serve their notice period in Singapore should generally receive their final salary on the last day of employment, while different deadlines apply where employment ends without notice.
Keep in mind that before completing the termination of employment in Singapore, employers should confirm all outstanding salary, leave, contractual payments and tax obligations have been properly settled.
A fixed-term employment contract in Singapore usually ends automatically on the agreed end date without either party having to give notice, unless the contract says otherwise.
Unlike permanent employment, a fixed-term contract is intended to end after a specific period or when a particular project is completed. Once the agreed term expires, the employment relationship normally ends without the employer having to issue a termination notice.
However, employers in Singapore should review the employment contract carefully before assuming notice is not required. Some fixed-term contracts include clauses that:
If an employer ends the contract before its agreed expiry date, they may need to comply with the contractual notice period or compensate the employee, depending on the contract terms.
MOM confirms that if either party ends a fixed-term contract before its final day, written notice is required. The terminating party must serve the contractual or statutory notice period or pay salary in lieu, unless lawful summary termination or another exception applies.
Where a fixed-term employee continues working after the contract expires and both parties continue the employment relationship without signing a new agreement, the employment may become an implied ongoing contract. Employers should therefore renew, extend or formally end the contract before the expiry date.
Under the Tripartite Advisory on the Employment of Term Contract Employees, employers are encouraged to treat contracts of at least 14 days that are renewed within one month as continuous service for relevant statutory leave benefits. Repeated artificial short-term renewals should not be used to avoid service-based entitlements.
In summary, most end of contract in Singapore arrangements occur automatically on the agreed end date, but employers should check whether the contract includes renewal, notice or early termination provisions.
Potentially, but non-compete clauses in employment contracts are prima facie restraints of trade and are scrutinised strictly by Singapore courts. The employer bears the burden of showing that the clause protects a legitimate proprietary interest and is reasonable between the parties and in the public interest. A clause that is too broad or restrictive is unlikely to be upheld by the courts.
Singapore courts do not automatically enforce non-compete clauses simply because they appear in an employment contract. Employers must show that the restriction is necessary to protect interests such as:
Where confidentiality or trade connections are already adequately protected by separate confidentiality, non-solicitation or non-dealing provisions, the employer may need to establish an additional legitimate interest justifying the non-compete clause. Preventing ordinary competition or retaining an employee is not, by itself, a legitimate proprietary interest. The courts also consider whether the restriction is reasonable in its:
Factor | What the courts consider |
Duration | Is the restriction longer than necessary? |
Geographic scope | Is it limited to locations in which the employee’s work created a genuine protectable risk? Merely operating in a market does not necessarily justify restricting the employee there. |
Activities restricted | Does it prevent only competing work or stop the employee from earning a living altogether? |
This example should be removed because enforceability cannot be predicted from duration and geography alone. Even a six-month Singapore-only restriction may be unenforceable if no legitimate proprietary interest exists or a narrower covenant would provide adequate protection.Employers often rely on confidentiality, non-solicitation and non-dealing clauses because these are generally easier to justify than broad non-compete restrictions.
Singapore courts will not normally rewrite an excessively broad covenant merely to make it reasonable. Severance may be possible only in limited circumstances where invalid wording can be removed without changing the clause’s fundamental meaning.
In summary, a non-compete clause is not automatically enforceable. It must be reasonable and no wider than necessary to protect the employer’s legitimate business interests.
Wrongful dismissal in Singapore occurs when an employer terminates an employee for an unlawful reason or fails to follow Singapore’s employment laws or the employment contract.
A breach of contractual notice or payment obligations may create a salary or breach-of-contract claim without necessarily making the reason for dismissal “wrongful”. The concepts should be distinguished.
Examples of wrongful dismissal may include terminating an employee because they:
Simply terminating an employee with notice does not automatically amount to wrongful dismissal. Employers in Singapore can generally terminate employment with notice provided the dismissal is not based on an unlawful reason and the contractual and statutory requirements have been met.
If an employer gives a reason such as misconduct, poor performance or redundancy, that reason should be genuine and substantiated. A false stated reason may support a wrongful-dismissal claim.
Employees who believe they have been wrongfully dismissed can first attempt to resolve the matter internally. If the dispute remains unresolved, they may file a wrongful dismissal claim through the Tripartite Alliance for Dispute Management (TADM). If mediation is unsuccessful, eligible claims may be referred to the Employment Claims Tribunals (ECT) for determination.
Employers in Singapore should document the reasons for termination, performance discussions and disciplinary processes before ending employment. Good documentation is often one of the strongest safeguards if a dismissal is later challenged.
Before dismissing an employee for misconduct without notice, employers in Singapore must conduct a due inquiry into the alleged misconduct. This is a requirement under the Employment Act and helps ensure the dismissal is based on established facts rather than assumptions.
MOM describes this as a formal inquiry before disciplinary action is taken for misconduct. Misconduct must be distinguished from poor performance, incapacity, redundancy or ordinary workplace disagreements.
The Employment Act does not prescribe one fixed investigation process. Instead, employers in Singapore are expected to carry out an inquiry that is fair and appropriate for the circumstances.
A due inquiry will usually involve:
The complexity of the inquiry should reflect the seriousness of the allegation. A simple attendance issue may require a relatively short investigation, while allegations of fraud, theft or harassment will often require a more detailed process.
If misconduct is established after the due inquiry, the employer in Singapore may dismiss the employee without notice. If the employer cannot substantiate the allegation, dismissal without notice may expose the business to a wrongful dismissal claim.
In summary, an employer in Singapore cannot simply dismiss an employee for misconduct without notice. A fair and properly documented due inquiry should be completed before making that decision.
CXC helps employers manage the termination of employment in Singapore by coordinating the legal, payroll and administrative requirements that arise when an employee leaves the business.
CXC supports employers in Singapore throughout the offboarding process by managing:
For businesses using CXC’s Employer of Record (EOR) service, we also manage the employment relationship throughout the termination process. This helps employers apply consistent local employment practices while reducing administrative workload and compliance risk.
Whether you’re ending one employment relationship or managing a larger workforce restructure, CXC provides local employment expertise to help businesses complete employee exits accurately and in line with Singapore employment requirements.
With our EoR solution, you can engage workers anywhere in the world, without putting your business at risk. No more worrying about local labour laws, tax legislation or payroll customs — we’ve got you covered.
DISCLAIMER: The information contained on this website is provided for general informational purposes only and should not be construed as legal, tax, or other professional advice on any subject matter. While we endeavor to ensure that the content is accurate and up to date, we make no warranties or representations of any kind regarding the completeness, accuracy, reliability, suitability, or availability of the information contained herein. The content on this site is not intended to be a substitute for professional advice. Users should not act or refrain from acting based on any information on this website without seeking the appropriate legal, tax, or other professional advice tailored to their specific circumstances from qualified professionals. We expressly disclaim all liability in respect to actions taken or not taken based on any or all of the contents of this website. Use of the information on this site does not create an attorney-client, tax advisor-client, or any other professional-client relationship between the user and the website or its authors.
