Can Companies Terminate Employees Contract During the COVID-19 Pandemic?

Companies have inevitably been losing their finances during the COVID-19 pandemic. Thus, many may be looking forward to letting their employees go.

Employee Contract Termination in Singapore During Coronavirus

Companies should pay their employees a baseline amount which both of the parties agreed to. Baseline refers to the payment that workers receive without being able to work for various reasons.

To get support for this, employees can tap into the Jobs Support Scheme. The scheme provides wage financing between 25% to 75% of the first $4,600 during April, May, July, and October.

Furthermore, if businesses are finding it difficult to pay the baseline amount, they can opt for other measures like a no-pay leave, retraining employees for more skills, deploying employees in other fields of the business, temporary layoff, etc.

Retrenchment in Singapore

If none of this works and the only way out for the employer is to discontinue the services of their employees, they will need to pay the COVID-19 Benefit for Employees. The amount depends on the work contract or can be renegotiated if the company isn’t in a very strong financial situation. The retrenchment benefit depends on the years of service. In dire cases, businesses can also talk with their unions.

Additionally, the government has urged companies to be more helpful to low wage employees. This can be in the form of providing more benefits, referring to the e2i and Work Force Singapore and joining the Job Security Council.

Employees who have just ended their work contracts can still get other finances and support given to Singaporean citizens and Permanent Residents.

Remember, despite all this; companies can still fire workers for misconduct or unsatisfactory work performance

What is the Process of Retrenching Staff in Singapore?

For the Coronavirus pandemic, businesses should first issue a notice period for employees, which depends on the time the worker has worked in the business. After the negotiation for a fair bonus is complete, the employer should contact the MOM given that they terminate the contract of five or more employees within a period of six months. For more information regarding this, you can refer to a Guide to Retrench Staff in Singapore