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Termination

Notice

Are employers required to give notice of termination?

The Employment Act requires that a minimum notice period be given by employers and employees depending on the length of service. The minimum notice period requirements under the Employment Act are as follows:

Length of service

Minimum notice period

Less than 26 weeks

One day

Between 26 weeks and two years

One week

Between two and five years

Two weeks

Five or more years

Four weeks

 

It is common for an employment contract to provide for longer notice periods. An employment contract cannot provide for a notice period, which is shorter than the statutory minimum period and notice periods for employers and employees must be the same.

There are no statutory minimum notice periods for employees not covered under the Employment Act. This is determined by the individual employment contract. In the absence of notice periods being specified in an employment contract, the court will imply a notice period of reasonable duration.

Redundancies

What are the rules that govern redundancy procedures?

Employees covered under the Employment Act with two years or more of service are entitled to claim retrenchment benefits under the Employment Act. However, as the act does not specify what these benefits must be, it is a matter of negotiation between employers and employees. 

Employees not covered under the Employment Act are unentitled to redundancy protection, except as provided by their individual employment contract.

There is no statutory process for implementing individual redundancies or retrenchment. However, the Tripartite Guidelines on Managing Excess Manpower and Responsible Retrenchment state that the process should be fair and treat affected employees with respect and dignity.

The Ministry of Manpower recommends that employers should give a longer period of notice than their contractual obligations to enable employees to adjust to their redundancy and look for other work. No specific timescale is recommended, as each redundancy is likely to be different. 

The Tripartite Guidelines on Managing Excess Manpower and Responsible Retrenchment and the Ministry of Manpower recommend that employers should examine alternatives to retrenchment, including:

  • shorter working weeks;
  • temporary layoffs;
  • flexible working arrangements; and
  • redeployment.

There is no statutory requirement for employers to consult or negotiate with trade unions (whether or not they are recognised) in respect of retrenchment proposals. Although recognised trade unions have the right to serve notice on an employer to engage in collective bargaining under Section 17 of the Industrial Relations Act, terminations on the grounds of redundancy are expressly excluded. 

Are there particular rules for collective redundancies/mass layoffs?

Employers with at least 10 employees must notify the Ministry of Manpower if five or more employees are to be retrenched within a six-month period. The notification must be submitted within five working days after an employee is notified of his or her retrenchment. For the first four employees to be made redundant, notification must be submitted within five working days from when the fifth employee has been notified. Thereafter, notification must be submitted within five working days after each employee has been notified.

There are no additional statutory requirements on employers to consult or negotiate with trade unions (whether recognised or not) in respect of retrenchment proposals. Although recognised trade unions have the right to serve notice on an employer to engage in collective bargaining under Section 17 of the Industrial Relations Act, terminations on the grounds of redundancy are expressly excluded. However, the Tripartite Guidelines on Managing Excess Manpower and Responsible Retrenchment recommend consultation with recognised trade unions over proposed redundancies, which is also commonly provided for in collective bargaining agreements.

Protections

What protections do employees have on dismissal?

An employer may dismiss an employee without assigning a reason if it is done in accordance with the employment contract. Employees covered under the Employment Act may appeal the dismissal with the Ministry of Manpower if they consider that it was without “just cause or excuse”. The act provides no definition in that regard. However, misconduct and poor performance clearly fall within its remit, depending on the particular circumstances of the case. Such an appeal must be lodged by the employee within one month from the date of dismissal.

If the Ministry of Manpower decides that the dismissal was without just cause or excuse, it can order the employer to:

  • reinstate the employee and pay a sum equivalent to the employee’s lost wages from the date of dismissal until reinstatement; or
  • pay compensation as determined by the Ministry of Manpower. There is no cap on the amount of compensation awardable. 

If the Ministry of Manpower makes such an order, the employee cannot bring claims in the ordinary courts. 

Employees who are not covered under the Employment Act will have to bring civil claims for unjust dismissal, but their damages are limited to contractual entitlements, which would usually be only their notice entitlement and any other rights that they may have in their individual employment contracts (if any).

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