What To Do When Your Employer in Singapore Gives You a Termination Letter

Living and building a career in Singapore as an expatriate offers a unique blend of professional growth and vibrant lifestyle. However, even in this dynamic environment, the unexpected can occur: receiving a termination letter from your employer. Whilst this moment can be unsettling, understanding your rights, obligations, and the specific procedures under Singapore law is paramount to protecting your rights as an employee.

1. The Immediate Aftermath: Understand Your Termination Letter

Your termination letter is a formal notice signifying the end of your employment. Pay close attention to:

- Effective Date of Termination: Your last day of employment.
- Notice Period: Whether you are required to work through a notice period, or if your employer is paying you a “salary in lieu of notice.”
- Stated Reason for Termination: While an employer is not legally required to provide reasons for termination with notice under the Employment Act, if no reason is given, the termination is presumed lawful unless evidence suggests discrimination or retaliation.
- Final Payments: Any details regarding your final salary, pro-rated bonuses, commissions, payment for unused annual leave, and any mention of severance.

2. Deep Dive into Your Employment Contract

Your employment contract is the primary legal document governing your relationship with your employer. Immediately after reviewing the termination letter, cross-reference it with your contract, and focus on these critical clauses:

- Notice Period: Confirm the agreed-upon notice period for termination. If your contract does not explicitly state one, statutory notice periods under the Employment Act will apply as follows

Length of service	Default notice period (if not in employment contract)
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

These default notice periods apply only if your employment contract does not specify a longer or shorter notice period.

- Termination Clauses: Understand the conditions under which your employer can terminate your contract, with or without cause.
- Payment in Lieu of Notice: Does your contract allow for your employer to pay you your salary for the notice period instead of requiring you to work it?
- Severance or Retrenchment Benefits: While not statutorily mandated, some contracts, or company policies may include provisions for severance pay, particularly in cases of redundancy or retrenchments.
- Restrictive Covenants: Be acutely aware of any non-compete, non-solicitation, or confidentiality clauses, as they can impact your ability to seek new employment in Singapore.

3. Understanding Your Rights Under Singapore Law

The Employment Act governs most employment relationships in Singapore, including many expats, particularly those earning below S$4,500 for non-workmen or S$2,600 for manual workers. However, even if you fall outside these salary thresholds, contractual terms, and specific provisions for wrongful dismissal claims still apply.

Key legal protections include:

- Adequate Notice or Payment in Lieu: Your employer must adhere to the contractual or statutory notice period (unless employer has gone through due process to terminate due to misconduct)
- Timely Payment of Final Dues: All outstanding salary, pro-rated bonuses, commissions, and payment for accrued but untaken annual leave must be paid on your last day of employment (for resignation with notice period served), or within three working days (for termination by employer) or seven days (for resignation without notice period served).
- Protection Against Wrongful Dismissal: Singapore law prohibits termination for:
  - - Discriminatory Reasons: Based on age, race, gender, religion, marital status, family responsibilities, or disability.
    - Retaliation: Such as whistleblowing or exercising employment rights.
    - Without Just Cause or Excuse: Particularly in cases of misconduct where a fair inquiry was not conducted.
    - To Deprive of Benefits: Such as maternity benefits.

4. If You Suspect Wrongful Dismissal: Taking Action

If you believe your termination was unfair, discriminatory, or lacked proper justification, you have avenues for recourse:

- Internal Resolution: Initially, raise your concerns in writing with your employer, clearly stating your grounds.
- Tripartite Alliance for Dispute Management (TADM): This is the first official step for employment disputes. TADM is a mediation platform that provides advisory and mediation services, aiming to resolve disputes amicably. For wrongful dismissal claims, you must file within one month of your last day of employment.
- Employment Claims Tribunals (ECT): If mediation at TADM is unsuccessful, your case may be referred to the ECT, which has the power to make legally binding orders.

Important Note: For wrongful dismissal claims specifically, if you are a manager or executive dismissed with notice (or payment in lieu of notice), or resigned involuntarily, you generally need at least six months of service to be able to file a claim with TADM (or three months if you have been dismissed while pregnant).

5. Immigration and Work Pass Considerations

For expats, the termination of employment directly impacts your immigration status in Singapore. Your Employment Pass (EP) or S Pass is tied to your specific employer.

- Work Pass Cancellation: Your employer is legally required to cancel your EP or S Pass within seven days of your last day of employment. This also automatically cancels any Dependant’s Passes or Long-Term Visit Passes associated with your main pass.
- Short-Term Visit Pass (STVP): Upon cancellation, the Immigration and Checkpoints Authority (ICA) typically grants a 30-day STVP, allowing you time to settle your affairs or seek new employment. It is imperative not to overstay this pass, as it can lead to severe penalties, including fines, detention, and future entry bans.
- Seeking New Employment: If you plan to stay and look for a new job, actively pursue opportunities during your STVP validity. A new employer will need to apply for a new work pass for you.

6. Navigating Tax Clearance

Your employer is legally obliged to notify the Inland Revenue Authority of Singapore (IRAS) via Form IR21 and withhold all monies due to you (including salary, bonuses, and any taxable termination benefits) at least one month before your employment ceases or you leave Singapore permanently, to ensure all your tax obligations are settled before you depart. Do take note of this time lag and plan ahead financially.

Conclusion

Receiving a termination letter in Singapore as an expat is undoubtedly a challenging experience. However, by understanding your rights and acting strategically, you can navigate this transition effectively. From meticulously reviewing your termination letter and employment contract to understanding the workings of tax clearance, each step is crucial. If you are unsure about the legal nuances, do reach out to us at Legal Expat for professional advice.

Do reach out to us at Legal Expat if you require professional advice. We have a team of qualified lawyers that can assist you. Email us at: info@legalexpat.sg or drop us a WhatsApp at: +65 8093 4393 if you require assistance.