The Ministry of Manpower’s new requirement for mandatory retrenchment notifications applies to employers with 10 or more employees.
Beginning 1 January 2017, Singapore employers that employ at least 10 employees and retrench five or more employees within a six-month period are obliged to notify the Ministry of Manpower (MOM) of the retrenchments. For the first four retrenched employees, employers must submit the notification within five working days after the fifth employee is notified of retrenchment. For subsequent retrenched employees, employers must submit notification to MOM within five working days after each employee is notified.
Prior to the above mandatory retrenchment notification that MOM announced, the Tripartite Guidelines on Managing Excess Manpower and Responsible Retrenchment had merely encouraged employers to notify MOM of an impending retrenchment exercise. The obligation to notify MOM is now compulsory, as outlined above.
Employers should notify MOM by submitting a Retrenchment Notification Form.
What is Considered Retrenchment?
For the purposes of the retrenchment notifications, MOM considers “retrenchment” to be defined as “dismissal on the ground of redundancy or by reason of any reorganisation of the employer’s profession, business, trade or work.” This applies to permanent employees as well as contract workers with full contract terms of at least six months.
Consequences of Noncompliance
Failure to notify MOM within the mandated timelines is an offence, and employers may face penalties that include a fine of up to S$5,000 if convicted.