Acting Minister for Manpower Jasmin Lau told Parliament on 6 October that the Ministry of Manpower (MOM) is weighing administrative action against employers that can afford retrenchment payouts but refuse them even after repeated warnings, a move that would sharpen teeth on a norm that remains voluntary in law.
Retrenchment benefits are not statutory in Singapore. Tripartite guidelines instead set a prevailing norm of two weeks to one month’s salary per year of service for workers with at least two years on the payroll. MOM’s mandatory notification regime captures larger layoffs, and Lau used fresh 2025 returns to show compliance is high but not universal.
When employers say no
Of companies that skipped payouts, only about a fifth told MOM they could not afford benefits. The rest pointed to other reasons, including the absence of a legal obligation or claims that extended payroll, retraining, or outplacement counted as support. Close to 80 per cent of workers who received nothing in 2025 worked for firms with fewer than 200 employees, Lau said, a detail opposition MPs said explains why unionised multinationals look responsible while smaller subcontractors absorb shocks without buffers.
Lau stressed any administrative route would target egregious cases—firms with balance-sheet capacity that still stonewall after engagement—not every cash-strapped SME. Tripartite partners are also studying whether to pull forward notification deadlines so retrenched staff reach career coaches earlier than the current five working days after workers are told.
Labour market backdrop
The policy review lands as retrenchments climb. MOM data show 4,620 layoffs in the second quarter of 2026, the highest quarterly figure since the pandemic surge, with professional, managerial, executive, and technician (PMET) roles disproportionately hit. Re-employment within six months has slipped to 54.9 per cent, and four in ten who find new jobs take median pay cuts of 25 per cent, intensifying household stress on mortgages, childcare, and daily spending.
Banks and technology firms dominated headlines in the layoff wave, but Lau’s answers also covered mature workers and non-unionised shops where bargaining power is thin. Career Conversion Programmes and Workforce Singapore coaching remain the front-line response; the proposed sanctions would sit behind that, punishing bad corporate citizens rather than replacing income support.
What workers should document
Employees facing retrenchment should secure written notice, check employment contracts and collective agreements for explicit benefit clauses, and file disputes with the Tripartite Alliance for Dispute Management when negotiations stall. Lau said MOM’s Employment Act review continues and an update will come after tripartite talks conclude.
For households, the practical question is whether a retrenchment letter will include a numbered payout or a vague promise of “support.” Lau’s signal suggests MOM will soon be able to name and penalise profitable firms that choose the latter while still clearing headcount targets—without waiting for workers to sue in civil court.