Pritam Singh calls for stricter retrenchment rules for larger firms; Dr Koh defends current framework
Dr Koh Poh Koon told Parliament that most retrenched workers received benefits in line with tripartite norms, as Pritam Singh questioned whether larger firms should face stricter retrenchment rules.
- Dr Koh said most retrenched workers from 2020 to 2025 received benefits aligned with tripartite guidelines, based on MOM data.
- Pritam Singh highlighted late-2025 retrenchments, raising concerns over poor notification and punitive severance clauses, and called for mandatory reporting and stronger penalties.
- The Government rejected mandatory or tiered retrenchment benefits, saying flexible guidelines balance worker protection with business viability.
SINGAPORE: Senior Minister of State for Manpower Dr Koh Poh Koon said about nine in 10 eligible employees received retrenchment benefits from 2020 to 2025, with around eight in 10 receiving at least two weeks’ salary per year of service.
He was speaking during the Parliamentary sitting on 4 February 2026 in response to a question filed by Aljunied GRC MP Pritam Singh.
Dr Koh said the figures were based on Mandatory Retrenchment Notification data submitted by companies with 10 or more employees.
The payouts were in line with the norms set out in the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment, also known as TAMEM.
Singh highlights “raft of reports” on retrenchments in the second half of 2025
Singh had asked the Ministry of Manpower to provide, for each year from 2020 to 2025, data on how many companies with more than 25 workers paid retrenchment benefits above and below prevailing tripartite guidelines.
In his supplementary questions, Singh pointed to what he described as a “raft of reports” on retrenchments in the second half of 2025.
These involved both foreign and local companies and affected professionals, managers and executives, as well as rank-and-file workers.
Concerns over notification and severance clauses
Singh cited one case where a unionised company did not forewarn the ministry of its retrenchment exercise, leaving workers unprepared.
He also referred to reports of another company including clauses in severance agreements that discouraged retrenched employees from approaching unions, statutory bodies or government agencies.
Singh was referring to Agoda’s retrenchment exercise in September 2025, where the firm apologised and acknowledged such clauses were inappropriate.
Call for mandatory reporting and stronger penalties
Against this backdrop, Singh asked whether the Government would mandate that all retrenchments be reported before they are carried out, regardless of company size.
He further asked whether companies that include punitive or unreasonable clauses in retrenchment agreements could face stronger penalties, including the revocation of work pass privileges.
MOM defends scale-based reporting approach
In response, Dr Koh said there was “no real right or wrong answer” on whether retrenchment notification should be tied to company size.
He explained that current requirements mandate notification to MOM when a company retrenches ten or more workers, regardless of how large the firm is.
The aim, he said, is to allow the ministry to intervene early and extend support to workers affected by sizeable retrenchments.
Requiring notification for every single retrenchment, including cases involving just one worker, would impose excessive administrative burdens on companies, he added.
On the issue of punitive clauses, Dr Koh said the specific case raised had already been addressed in a previous parliamentary reply and he did not elaborate further.
Manpower Minister Dr Tan See Leng in November 2025 said MOM has not received complaints about severance clauses discouraging workers from seeking help, except in Agoda’s recent retrenchment case.
Dr Tan stressed that such clauses are unacceptable but cautioned against over-regulating private contracts. While there are no proactive audits, workers can report issues, and MOM will act where necessary.
Proposal to differentiate benefits by company size
Singh on 4 Feb also pressed the Government on whether retrenchment benefits should be differentiated by company size.
He noted that the recently enacted Workplace Fairness Act adopts a differentiated regime based on whether firms have more than 25 employees.
Larger firms, he said, are deemed to have more resources to comply, while smaller firms are exempt from certain requirements, although they are still expected to follow the spirit of the law.
Singh asked whether a similar approach could be applied to retrenchment benefits, requiring companies with more than 25 workers to provide higher payouts than smaller firms.
Government rejects mandatory or tiered benefits
Dr Koh rejected the idea of mandating retrenchment benefits or legislating minimum payout levels, regardless of company size.
He said tripartite partners had deliberated extensively on whether retrenchment benefits should be made mandatory and whether minimum amounts should be set in law.
"We concluded that a balanced approach to protect workers while at the same time providing business flexibility. would achieve better outcomes for both workers and businesses, " Dr Koh said,
Dr Koh argued that legally mandating retrenchment benefits could worsen financial stress for companies already in difficulty, potentially leading to further job losses.
He added that mandatory minimum payouts could also discourage employers from offering long-term or permanent contracts.
Setting a legal minimum, he warned, could result in that amount becoming the default norm, even for companies capable of paying more.
Review timeline and data limitations
When Singh asked when tripartite partners last reviewed retrenchment benefits, Dr Koh said he did not have the exact date.
However, he said the advisory was likely updated around the COVID-19 period and suggested that the revision date could be checked on the MOM website.
Singh also asked whether MOM had data showing how many companies paid retrenchment benefits above prevailing guidelines, as opposed to merely meeting them.
Dr Koh said MOM does not have a detailed breakdown beyond the minimum threshold captured in notification data.
Unionised firms often provide higher payouts
He noted that unionised companies with collective agreements often provide higher benefits, commonly around one month of salary per year of service.
In some cases, he added, firms provide even more generous payouts for long-serving employees, depending on their financial capacity.
Dr Koh reiterated that flexibility allows companies in stronger financial positions to do more for workers, while firms under stress can still comply with basic norms.
Concerns over multinational practices
Pioneer SMC MP Patrick Tay later raised concerns that some multinational companies cap retrenchment benefits below tripartite benchmarks, particularly for professionals, managers and executives.
Dr Koh said MOM and unions continue to engage such firms, noting that some follow overseas norms, but many gradually move closer to local tripartite standards, especially under collective agreements.
