✨Retrenchment benefits are not compulsory

It is a hard pill to swallow when being impacted.

Unfortunately in Singapore, there isn't a comprehensive law directly safeguarding retrenched workers.

Post-retrenchment benefits are determined by the company's severance package policy, retrenchment benefits, and the terms outlined in your employment contract.

You may have heard of large corporations giving out generous packages but more often than not, many firms do not provide such support and are not LEGALLY OBLIGED TO.

💁🏻‍♀️Throughout my career, my employment contracts do not include retrenchment terms. TLDR; The outcome of the severance package is determined by my employer.

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🔖 Retrenchment Benefits are not mandated by law

❌ UNDER THE EMPLOYMENT ACT, IT IS NOT COMPULSORY FOR EMPLOYERS TO PAY RETRENCHMENT BENEFITS

There is always a misconception that all companies are obliged to give at least 1 month worth of pay.

Coming from an Ununionised stance, MOM website states that “Employees with 2 years’ service or more are eligible for retrenchment benefit. Those with less than 2 years’ service could be granted an ex-gratia payment, out of goodwill.”. “The prevailing norm is to pay a retrenchment benefit of between 2 weeks to 1 month salary per year of service, depending on the company’s financial position and the industry.”

Take note of the wordings used. Bear in mind that these are just guidelines & not legally binded. There could be a likelihood that they chose not to compensate at all and more unfortunately if you decide to bring this up, it cannot be heard at the Employment Claims Tribunal because the law doesn't mandate employers to provide retrenchment benefits under the Employment Act.

💁🏻‍♀️My company is ununionised and with no contractual obligation, the room for negotiation for compensation is extremely low as I was with the company just shy of 2 years.

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🔖Terms used interchangeably

Do you know that there is difference in the terms:

1️⃣ “Retrenchment” - permanent termination strategised by the company due to internal/ external factors.

2️⃣ “Redundancy” - role is no longer needed

💁🏻‍♀️This is important as it provides clarity on why this is happening and a better understanding of my circumstances within the organisation. It also creates an opportunity for discussion. Eg, if it’s a role redundancy, can I be shifted to another role with different responsibilities within the same department (didn’t happen for my case LOL!)

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*Disclaimer* : the following information (in Sg context) is shared from my own personal experience & journey through this unexpected fun-employment.

Please share if you have any points to add on to keep the community informed! You are not a failure if you got retrenched, we got this Zesties 🍋

Last but not least, pls don’t sue me. KTHXBYE

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