On 10 March 2022, TSMP Law Corporation head of employment and labour Ian Lim was quoted in a Straits Times article on Genting Hong Kong’s Singapore office letting go more than half its staff, featuring his comments on retrenchment benefits for employees.
He said it is not statutorily required that employers pay retrenchment benefits to their employees, unless it is stated in the employment contract.
Unionised companies here will typically also have a collective agreement with the union, which will make paying retrenchment benefits to the relevant employees a contractual obligation, he added.
Most companies here pay retrenchment benefits to laid-off workers in any event.
He said “It is not universal, but it has actually become quite common, especially since the (Covid-19) pandemic.
He also said “There is a strong encouragement to give retrenchment benefits and employees can complain. Employers can face consequences if retrenchment benefits are not paid.”
The exception is for employees who have been employed for fewer than two years or employers which are in dire financial straits, but even in those cases, the encouragement is to provide an ex-gratia sum, he said.