Singapore will not raise penalties for late retrenchment notices as compliance improves: Dr Tan See Leng

SINGAPORE: There is no need at this point to increase penalties for employers who fail to comply with mandatory retrenchment notification requirements, Manpower Minister Tan See Leng said during a parliamentary sitting on 5 May 2026.

Responding to a supplementary question, Tan emphasised that the majority of employers already meet the requirements.

“The majority of the employers comply with the MRN requirement,” he said, noting that compliance rates have strengthened in recent years.

Data from 2025 showed that 80 per cent of mandatory retrenchment notifications were submitted within the required five working days after employees were informed. This marked an improvement from 70 per cent in 2024.

Late submissions often administrative in nature

Tan attributed most late submissions to administrative oversight rather than deliberate non-compliance.

Companies that submit notifications late are typically issued caution letters, after which “most of these companies have been compliant thereafter”.

Administrative penalties remain in place for repeat offenders. The current framework imposes a penalty of S$1,000 for a first contravention and S$2,000 for subsequent breaches.

“For the recalcitrant employers, we will impose administrative penalties,” Tan said, while reiterating that overall compliance remains high.

Given these trends, he stated that there is no immediate need to raise penalties. “We don’t see a need to raise the penalties at this point in time,” he said, adding that enforcement approaches will continue to be reviewed regularly.

Calls for stricter deterrence raised in Parliament

The issue was raised by Pioneer SMC MP Patrick Tay, who asked whether stricter penalties should be considered to deter non-compliant employers.

Tay pointed out that more than 20 per cent of companies did not meet the notification requirement and suggested that tougher measures could serve as a deterrent.

In response, Tan acknowledged the concern but maintained that current compliance levels did not justify stronger penalties at present. He reiterated that most employers comply and that enforcement measures remain proportionate.

Comparison with international practices

Separately, Mountbatten SMC MP Gho Sze Kee asked for updates on tripartite discussions on advance mandatory retrenchment notification and how Singapore’s framework compares with international practices.

Tan explained that Singapore’s system differs from many jurisdictions.

Firms with 10 or more employees are required to submit mandatory retrenchment notifications within five working days after informing employees of retrenchment.

In contrast, some countries require employers to notify authorities a fixed number of days before an employee’s last working day. “The starting point is different,” Tan said, noting that practices vary across jurisdictions.

Despite this difference, Singapore has achieved comparable outcomes. This is largely because employees are typically informed well in advance of their last working day, allowing employers to notify the Government shortly after.

Dr Tan: 77% of retrenchment notifications submitted at least 7 days in advance

Data from 2025 indicated that a significant proportion of notifications were effectively submitted ahead of employees’ departure dates.

Tan said 77 per cent of retrenchment notifications were submitted at least seven days before the employee’s last working day, while 73 per cent were submitted at least two weeks in advance.

These figures suggest that even without a formal requirement for advance notification, employers are providing early signals in practice.

He added that tripartite partners are currently studying ways to encourage even earlier notification, both to affected employees and to the Government.

“As part of an ongoing review of the Employment Act, tripartite partners are studying how to encourage earlier notification by employers,” he said.

Balancing early notification with business realities

The ministry aims to see notifications submitted before or by the employee’s last working day wherever possible. This would enable more timely support, including employment facilitation and outplacement services.

However, Tan cautioned that mandating earlier notification could have unintended consequences.

He noted that retrenchments are often a “painful process” and that companies typically attempt to preserve jobs through internal negotiations before finalising decisions.

Requiring advance notification in all cases could “push companies to finalise the retrenchments faster” and potentially discourage efforts to retain workers.

“We are conscious and mindful of the potential impact if we want to mandate advance notification,” he said.

Tripartite partners are therefore taking a “careful and balanced approach” in ongoing discussions, considering both worker outcomes and business constraints.

Questions on effectiveness of earlier notification

Nominated MP Mark Lee raised questions about whether earlier notification would materially improve re-employment outcomes.

He noted that many retrenched workers take several months to secure new jobs and asked whether advancing notification by a short period would significantly improve employment prospects beyond providing earlier visibility.

Lee also suggested that greater emphasis could be placed on strengthening post-notification support, such as rapid job matching, industry redeployment, and place-and-train programmes.

In response, Tan said the ministry does not currently have specific data linking earlier notification to improved re-employment outcomes but would review available data.

Support measures for retrenched workers

Tan highlighted existing support mechanisms, noting that for the three-year period from 2022 to 2024, seven in 10 retrenched workers who received career coaching were placed into jobs within six months.

These individuals received support from Workforce Singapore or NTUC’s Employment and Employability Institute career coaches.

The median time to placement was around three months.

He added that the Task Force for Responsible Retrenchment and Employment Facilitation actively reaches out to retrenched local workers with available contact details to provide employment support.

“We will continue with our efforts to support all retrenched locals,” Tan said.

Ongoing review under Employment Act

Discussions on retrenchment notification practices are ongoing as part of a broader review of the Employment Act.

Tan said updates on tripartite discussions will be provided in due course, as policymakers continue to assess how best to balance early notification, employer flexibility, and worker support.

He emphasised that deliberations are continuing alongside parliamentary discussions, reflecting the complexity of the issue.

“We will work closely with our tripartite partners and assess if there is a need to review and raise the penalties,” he said.