MOM: Workers whose Singapore roles move overseas are still considered retrenched if jobs become redundant

Employees whose jobs in Singapore become redundant are considered retrenched even if they successfully secure new positions overseas within the same organisation, according to clarifications issued by the Ministry of Manpower (MOM) and the National Trades Union Congress (NTUC).

The guidance comes amid growing scrutiny of restructuring exercises that require workers to reapply for roles after companies relocate functions outside Singapore.

According to state media CNA, NTUC expressed concern over "practices where workers are asked to reapply for roles locally or for roles that have moved overseas but presented as new opportunities" during corporate restructuring exercises.

The labour movement said such arrangements should be recognised as retrenchments if the original Singapore-based position becomes redundant.

"If the outcome of these practices is that a worker's role in Singapore is made redundant, such arrangements are recognised and treated as retrenchment," NTUC said.

The union further explained that when a worker is employed by a local company and loses that position because it is no longer required, the employment relationship with the local entity effectively ends.

Clarification on overseas roles

MOM echoed the union's position, stating that a worker whose Singapore-based job is eliminated because the role no longer exists locally or has been shifted overseas is considered retrenched.

The ministry said this interpretation applies regardless of whether the employee subsequently applies for an overseas position within the organisation or succeeds in obtaining one.

"This applies regardless of whether the employee has applied for an overseas role and the outcome of that application," MOM said.

The clarification provides greater certainty for employees affected by business restructuring exercises involving cross-border job relocations.

It also addresses concerns that workers may be disadvantaged if companies present overseas opportunities as alternatives to retrenchment while simultaneously eliminating local positions.

H&M restructuring draws attention

The issue gained prominence after Swedish fashion retailer H&M informed employees on 11 May 2026 that it would undertake a restructuring exercise involving the relocation of its Southeast Asia headquarters from Singapore to Malaysia.

According to several employees interviewed by CNA, staff across East Asia were asked to reapply for 178 positions across the region as part of the reorganisation.

Workers were allowed to nominate themselves for up to two roles.

Many of the positions were relocated from Singapore to other countries.

Employees were required to undergo interviews and assessments before being considered for the available roles.

Staff members said employees who failed to secure positions would face "mutual separation" arrangements in accordance with local labour laws.

On 2 June 2026, MOM confirmed that it had received a mandatory retrenchment notification from H&M.

The ministry said the notification was submitted within the required five-working-day period after affected employees had been informed of their retrenchment.

H&M, which does not have a unionised workforce in Singapore, previously declined to confirm whether the restructuring exercise involved layoffs or relocations.

Responding to concerns raised by NTUC, an H&M representative said: "As previously stated, we are fully committed to supporting all of our colleagues in any organisational changes and will continue to fulfil our obligations according to local labour law requirements."

Growing concerns over terminology

The H&M case has reignited debate over how companies describe workforce reductions during restructuring exercises.

Manpower experts said some employers may seek to avoid the negative perceptions associated with the term "retrenchment" while reorganising operations or relocating jobs.

They noted that alternative descriptions such as "restructuring", "calibration" and "mutual separation" may be used in communications with employees even when the practical outcome is the loss of local jobs.

Experts cautioned that workers could be disadvantaged if retrenchments are not clearly identified.

Potential consequences include weaker negotiating positions during severance discussions and uncertainty regarding compensation entitlements.

Lawyers and human resources professionals said changing the terminology does not alter the underlying reality if Singapore-based roles are made redundant.

They stressed that employers should remain transparent about the nature and impact of restructuring exercises.

Retrenchment obligations remain

Singapore's tripartite partners define retrenchment as dismissal arising from redundancy or reorganisation of an employer's business, trade, profession or work.

An employee is generally presumed to have been retrenched when an employer terminates an employment contract and does not intend to fill the position in the foreseeable future.

Although retrenchment benefits are not mandated under Singapore law, the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment (TAMEM) recommends compensation equivalent to between two weeks and one month's salary for every year of service.

The advisory serves as guidance rather than legally binding requirements.

Lawyers and HR professionals noted that mutual separation arrangements do not automatically remove an employer's obligations relating to retrenchment.

They said legal ambiguities may arise in some situations, particularly where workers feel pressured to accept separation agreements.

Legal experts Terence Seah and Nicolas Tang said employers could potentially face legal challenges if employees are encouraged to leave under circumstances that effectively amount to retrenchment.

Importance of responsible retrenchment

Both MOM and NTUC emphasised that retrenchment should be considered only after employers have exhausted alternatives such as redeployment and workforce reskilling.

The ministry said responsible retrenchment practices include informing affected employees early and communicating clearly about how workforce reductions will be carried out.

Such measures give employees time to prepare and make necessary adjustments.

NTUC said employers conducting retrenchments must comply with Singapore employment laws, honour contractual obligations and follow responsible retrenchment principles outlined in TAMEM.

The union added that employers should inform unions in advance where applicable and adopt objective and fair criteria when selecting workers for retrenchment.

Affected employees should also receive sufficient notice, appropriate compensation and support in securing alternative employment opportunities.

HR experts Archana Srinivasan, Ian Liew, Christine Chan and Alvin Aloysius Goh highlighted transparency, fair redeployment opportunities, adequate compensation and clear communication as essential components of responsible restructuring exercises.

They also warned that workers may suffer financial disadvantages, including possible tax implications, when retrenchments are presented as mutual separation arrangements rather than openly acknowledged workforce reductions.

Wider manufacturing restructuring trend

H&M's decision follows a series of restructuring moves by manufacturers and multinational companies operating in Singapore.

In March 2026, beverage manufacturer Yeo Hiap Seng, commonly known as Yeo’s, announced plans to retrench 25 employees at its Senoko facility as it shifted can manufacturing operations to Malaysia.

he company said the move was intended to “optimise capacity utilisation and strengthen overall manufacturing efficiency across its network”.

Yeo’s said Singapore would continue serving as its headquarters, logistics hub and a smaller-scale manufacturing centre.

Separately, Asia Pacific Breweries Singapore announced plans to cut about 130 jobs while relocating parts of its production to regional markets including Malaysia and Vietnam.

Its Tuas facility is expected to be redeveloped over time to focus on logistics and innovation-related functions.

On 20 May, bread manufacturer Gardenia said they will cease production at its Pandan Loop bakery on 30 June and retrench 141 employees as operations shift to Johor Bahru amid restructuring across Singapore’s food manufacturing sector.

Other companies that have recently announced retrenchments or restructuring exercises include DHL Global Forwarding Singapore, JLL Singapore and Amazon Singapore.

The Food, Drinks and Allied Workers Union (FDAWU) said recent closures in the consumer sector highlighted the risks workers face when companies shut operations abruptly.

The union cited the closure of Twelve Cupcakes in October 2025, which reportedly left close to 80 employees unpaid.

While the MOM Labour Market Advance Release for the first quarter of 2026 showed retrenchments holding relatively steady at 3,700, up marginally from 3,690 in the previous quarter, NTUC cautioned that the figures reflect only the early part of the year.

It warned that escalating tensions in the Middle East and broader geopolitical uncertainties could still drive layoffs higher in the months ahead.