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When layoffs or closures are unavoidable, how can employers manage the process responsibly while keeping employees informed, fairly treated, and supported? Umairah Nasir speaks to legal and HR experts on best practices for a humane and compliant offboarding process.
Over the past one to two years, several high-profile business closures and organisational restructuring have highlighted the importance of responsible workforce management. When downsizing becomes unavoidable, companies face both legal obligations and ethical responsibilities to support employees through the transition.
In this special feature, Umairah Nasir speaks to legal and HR experts to explore practical steps employers can take to better manage such situations, ensuring employees are well taken care of during the process and supported afterwards. From transparent communication and fair severance to career transition support and ongoing wellbeing measures, this piece examines how ethical offboarding protects employees, maintains workplace morale, and reflects strong leadership and brand integrity.
Legal perspective
The lawyers interviewed were asked one important question: What are the key legal responsibilities that employers must fulfil when downsizing or closing their business, and how can they ensure the process remains transparent, fair, and compliant with Singapore’s employment laws?
Zhao Yang Ng, Principal, Baker & McKenzie
Key responsibilities include:
- Payment obligations: Employers must provide the relevant duration of notice of termination in order for the termination to be effective. All outstanding salaries and fixed allowances must be paid, and any accrued but unused annual leave would need to be encashed. Typically, retrenchment benefits may be provided on a goodwill basis and conditional upon the employee signing a release. Failure to make the appropriate payments may result in claims for wrongful dismissal or for salary arrears under the Tripartite Alliance for Dispute Management (TADM) framework.
- Treating employees fairly: Employers must ensure that decisions relating to the downsizing are objective and based only on business reasons. If the process is unfair in any way, employers run the risk of the employees complaining to the authorities regarding the unfair treatment and the authorities taking the employer to task as a result.
- Notifications to relevant parties: Employers are required to notify the Ministry of Manpower (MOM) once retrenchments have been notified. If the employer has a collective bargaining agreement with a trade union, it will likely be bound by an obligation to inform the union in advance of any downsizing as per the terms and conditions of the collective bargaining agreement.
Ultimately, employers should adopt clear communication strategies, explaining the business rationale and process to affected employees, and be prepared to extend human courtesy to the impacted employees to help them with the difficult transition.
Documenting decision-making, consulting stakeholders, and adhering to MOM guidelines on responsible retrenchment are critical. Implementing grievance channels and offering fair severance packages further demonstrate good faith and reduce litigation risk.
Desmond Chng, Director, Drew & Napier LLC
Retrenchment should be the last resort and must be done in a responsible and sensitive manner.
This means early communication with unions and employees about managing business challenges and supporting affected employees with transitioning into new employment, including redeployment opportunities and retrenchment benefits for eligible employees, so that they have the time and space to adjust to the news and be prepared for the transition.
The selection of affected employees must be objective and based on merit. Employers should be mindful and manage the risks of decisions that could be perceived as discriminatory in situations that involve the protected characteristics, including age, nationality, sex, marital status, pregnancy, caregiving responsibilities, race, religion, language ability, disability, and mental health condition.
Discriminatory practices will be investigated and subject to enforcement action, such as curtailing work pass privileges of the employer. The Workplace Fairness Act, which will take effect by end 2027, will introduce a statutory tort of discrimination and allow employees to seek monetary compensation.
There is also the requirement for mandatory retrenchment notification to the Ministry of Manpower. Employers should not seek to deter employees from reaching out to unions and the authorities for help and guidance.
David Smail, Partner and Head of Employment, Singapore, DLA Piper
The employer’s first port of call should be the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment. Although it’s not legally binding in the strict sense, MOM can impose administrative penalties for failing to comply, including suspending work pass privileges. The Advisory sets out various steps that should be taken including offering a retrenchment payment to eligible employees, signposting them to local outplacement services, and considering alternatives before making redundancies.
Employers with at least 10 employees must also make the mandatory retrenchment notification to the MOM within five working days after the notice of termination is given. If departures are unavoidable, they should be handled with empathy – and it's important to maintain a paper trail of how decisions were made.
That said, I think employers are best served when they do more than just tick the boxes. The MOM’s guidelines cover the legal and procedural aspects, but the real challenge is in handling the process in a way that’s fair, transparent, and humane. Communication is everything. If people hear about job cuts by email or a mass Zoom call, it sends the wrong message and is more likely to backfire.
Staff deserve to hear it directly from someone who can explain the rationale and answer questions.
Priya Aswani, Senior Counsel, Litigation and Labor & Employment Asia Pacific (APAC), Cargill
Redundancies are never easy, but managing them fairly and responsibly can help protect employee welfare and uphold organisational integrity. In Singapore, whilst there is no statutory criteria for employee selection, the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment sets clear recommendations for employers: decisions should be objective and consistently applied with an emphasis on maintaining a strong Singaporean core and treating every employee with respect and sensitivity. Similarly, whilst there are no statutory severance or retrenchment payment obligations in Singapore, the Advisory recommends retrenchment payments be made, which employers usually adhere to.
Key legal responsibilities include timely final payments in accordance with the Employment Act and (for companies with at least 10 employees) notifying the Ministry of Manpower of any retrenchment within five working days of notifying the employees. In addition, employers must not give termination notices during statutory maternity leave or on any such day (e.g., whilst a female employee is pregnant) that the notice of termination will expire and employment will end during statutory maternity leave.
A common pitfall that should be avoided is the lack of proper communication.
This can often be prevented by designating a leader to verbally deliver the message clearly and respectfully and offer the employee a point of contact for any questions.
From an operational and logistics perspective, relevant documentation should follow as soon as possible after the verbal notification has been made and the employee should ideally be informed of his/her exit conditions, entitlements, and any practical next steps that apply.
Beyond retrenchment payments, employers can support affected employees emotionally and professionally through employee assistance programmes, outplacement services, employment facilitation and providing retraining opportunities either through private organisations or via government agencies such as Workforce Singapore or NTUC’s Employment and Employability Institute. Such additional measures can help uphold workforce morale and protect their wellbeing to support them during difficult transitions.
Ultimately, a redundancy is not just a legal exercise; it is a human one. By combining compliance with empathy, companies can safeguard their reputation and maintain trust during challenging times.
HR's perspective
On the HR front, we looked into how employers can ensure that employees are well taken care of during the transition. Here's what Alan Tan, APAC HR Director, IHI Asia Pacific, had to say.
When layoffs become unavoidable, HR's responsibility goes beyond legal compliance — it's about guiding people through a difficult transition with integrity and care. This starts with honest, face-to-face conversations before any public announcement, sharing real business reasons without jargon, and creating space for genuine questions. These straightforward discussions help preserve dignity and reduce anxiety.
The support shouldn't end at the exit door. Forward-thinking companies provide meaningful career transition assistance through skills training, redeployment opportunities, and resources like Workforce Singapore and SkillsFuture schemes. This practical support includes extending medical coverage, connecting people with quality outplacement services, and maintaining regular check-ins for three to six months post-departure.
These ongoing touchpoints give former employees the breathing room they need to regroup, upskill, and secure their next role with confidence. Beyond helping people stay employable, this approach reflects what responsible employment looks like during challenging times.
Ultimately, HR's role during layoffs is about staying human: remaining present, keeping communication lines open, and offering genuine support through uncertainty.
These seemingly small gestures make a significant difference in how people experience and remember the transition, turning a painful moment into one handled with respect and compassion.
As can be derived from the interviews, one thing that can be affirmed is: When handled responsibly, layoffs do not have to erode trust or morale. By combining legal compliance with genuine care, from honest conversations to real post-exit support, employers can help people move forward with dignity.
Ultimately, ethical offboarding is more than a requirement. It reflects leadership, safeguards reputation, and shows what a values-driven organisation truly stands for. A strategy grounded in purpose and values is not just effective. It is impossible to replicate.
Photos / Provided
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