Were your Fired or Retrenched? Know the Difference to Get your Rightful Benefits

The COVID-19 pandemic has definitely changed how businesses conduct their operations, and the impact is felt at every industry level. The employment figures of a company will be a great indicator of how businesses are fairing, and it does not look promising.

Here in Singapore, analysts project that around 45,000 to 200,000 people will likely lose their jobs in the coming years. But, they also warned about the possible disguised retrenchments that some employers would pull off as they try to survive in this uncertain time.

What exactly are retrenchments, and how does it differ from being fired? Here are their differences below, so you know what rights you have when it happens to you:


Retrenchment occurs when an employee is terminated from their permanent service contract due to a company’s reorganization or redundancy. Some situations where retrenchment happens are during company mergers, downsizing, and when a court order transfers management powers to the court.

Under Singaporean law, any business registered with at least 10 employees must inform the Ministry of Manpower (MOM) if at least five employees will be retrenched within six months. This clause also covers permanent and contract employees.

Once the notice is handed out, employers must notify the affected employees and provide them with retrenchment benefits. Retrenchment benefits must be included in contracts or collective agreements of employees, and employers are expected to pay it unless they want to lose their government benefits and permits. The Employment Act ensures that employees who have done at least two years of service qualify for these benefits, and if it is a collective agreement, it is often set at one month of benefits per year of service.

If there are no provisions in the contract for retrenchment benefits, a quantum should be negotiated between the employer and the employee. If the employee only worked for less than two years, the employer should make a retrenchment payout out of their goodwill.

The Tripartite Advisory should also be notified because failure to do so can result in the termination of the company’s business permit.

Fired or Disguised Retrenchment

Meanwhile, disguised retrenchments or being fired from the position is when an employee’s contract is terminated without paying retrenchment benefits. Some companies often order disguised retrenchments because they try to reduce expenses as much as possible despite knowing the risks of not paying these benefits.

If an employee was fired or was included in a disguised retrenchment, they must file a claim with the Tripartite Alliance for Dispute Management and the Employment Claims Tribunal. These two groups will assess the case and ensure employees get the right benefits after being fired from their positions.

Employees can also file a civil suit against their employers and get assistance from various organizations for fired or retrenched workers.

As an employee, you need to know your rights when you sign up with an employer, no matter who they may be. You can never tell when a layoff, retrenchment or other similar actions will occur. Knowing what benefits you have when you get fired or retrenched from your job will give you the support you need to start anew, and know that your worth should be protected at all costs.

If you are retrenched or lost a job, here are some tips for you:
Common Networking Mistakes Job Seekers Often Make
Top Job Sites to Hunt Down Your Dream Job
Different Types of Cover Letters To Help You Get A Job

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4 Comments Add yours

  1. Good infomation, Kally! It sounds to me that the laws of their country are more made for employees.It’s good! Best wishes, Michael


  2. C.A. Post says:

    However, I’ve looked up “retrenchment” on several business sites and still do not see a difference between this and being fired, unless one is using “fired” only as a reference to disciplinary, legal or medical discharge. I have always thought any time an employee is “relieved” of employment, this meant he was fired whether for punishment or downsizing.
    Is there any real difference beyond one’s ability to pursue further employment? E.g., if one is fired for punishment, it may make it difficult, if not impossible, to get similar employment at another company, whereas if one was fired for downsizing, the doors are open to pursue similar employment, possibly even with references from the former employer.


  3. Thanks for sharing. This is good to know. Stay safe. Have a great weekend.


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