Facing retrenchment in Singapore? Here’s how the NTUC union membership and collective agreements can protect you

• Retrenchment benefits are not mandatory by law in Singapore, but NTUC union members in unionised companies will receive them through union support.
• For members in unionised companies, retrenchment benefits are usually set out in the collective agreement.

• The unionised norm is one month’s salary for each year of service, capped at 25 years.

• NTUC union members will receive stronger support through collective representation, negotiated benefits, and dispute assistance.

Retrenchment benefits are not automatically guaranteed by law in Singapore.

For workers in unionised companies, however, a collective agreement can provide stronger protection by setting out retrenchment payouts, salary-related payments, and job transition support.

NTUC union members will also receive union representation support if disputes arise.

What’s the retrenchment outlook in Singapore?

The Singapore Ministry of Manpower’s recent Labour Market Advance Release for the first quarter of 2026 painted a relatively modest picture: Retrenchments in Singapore held steady at 3,700, a moderate increase from the 3,690 in the previous quarter.

Yet the ministry’s figures only reflect retrenchment in the early part of this year — there’s no saying ongoing Middle East tensions and geopolitical uncertainty won’t cause numbers to soar in the months to come.

Being prepared with an NTUC union membership can make all the difference between having strong support to tide you over a job loss or being left to figure things out on your own.

Without a law in Singapore to stop companies from laying off workers, having a union by your side during a retrenchment can help you navigate it with less pain and more gain.

What's a Collective Agreement, and how does it protect you in a retrenchment?

Put simply, a collective agreement (CA) is a legally binding agreement between a company and a union that provides union members with working terms, conditions and benefits that are more comprehensive than an employment contract or employee handbook.

The majority of workers, including rank-and-file and PMEs, are typically protected by a CA for a period of two to three years, depending on what’s agreed upon between the management and the union. Senior executives holding confidential positions or roles in conflict with the union, such as the finance director, are usually not covered.

Continued protection for workers throughout employment is guaranteed through regular CA renewals, which usually occur before the agreement expires. Very often, CAs are extended to non-members within the company for administrative convenience.

Most CAs clearly set out retrenchment benefits to provide comprehensive support in the event of a layoff.

NTUC Group Director (Workforce) Cham Hui Fong explained: “The majority of the employment contracts in non-unionised companies do not have a retrenchment benefit clause because they find it taboo.

“The employer can also put in the employment contract that you can encash three days of annual leave. But two years later, they may tell you, ‘Sorry, that’s not the case anymore.’”

She emphasised that a CA’s legally binding nature provides certainty to workers, unlike that of an employment contract or an employee handbook.

The NTUC Deputy Secretary-General added that, unlike employment contract terms that may vary due to evolving economic situations, CA terms are binding for the duration of the agreement.

Does a Collective Agreement support PMEs the same way as rank-and-file workers?

CAs can be drawn up separately for rank-and-file members and PMEs to allow flexibility in protection, but the retrenchment benefits are usually similar.

Retrenching companies must adhere to the unionised norm to pay members one month for every year of service, capped at 25 years, said Ms Cham.

Through CA negotiation, higher-than-unionised-norm retrenchment benefits are also not unheard of within the oil refinery and insurance industries.

Most CAs include a clause that guarantees a fixed payout, which offers added protection if you are worried that your company is unable to pay, she added.

However, severance payouts are simply the tip of the iceberg in a CA. Most agreements also cover other salary payments, including annual increment, annual leave encashment, and bonuses. A training allowance could also have been negotiated for you to upskill for a new job.

What you must know about the retrenchment benefit

NTUC union members covered under a CA could receive a payout, but a non-member could leave with nothing.

Ms Cham explained: “[Companies can say], ‘I’m not unionised, and the non-unionised norm is two weeks. But I cannot afford the payments, so I choose not to pay. They can still get away with it because [paying retrenchment benefits] is not in the law.”

As an NTUC member with a CA, you will walk away with money to move to new employment and new skills to enhance your employability. Unfortunately, the same cannot be said for non-members.

What help can NTUC union members get if their company is not unionised?

NTUC members in non-unionised sectors can still receive help from the unions through individualised representation at the Tripartite Alliance for Dispute Management at NTUC (TADM@NTUC), said Ms Cham.

Payouts of up to $30,000 through TADM@NTUC may seem like a good deal for PMEs not covered with a CA, until you realise it could be far lower than what you’d take back if you’re collectively represented.

For example, if you’re earning $5,000 and have worked in the company for over 25 years, you could leave with at least $125,000 in the bank — and that’s even before the pro-rated bonuses, annual increment, and annual leave encashment. The amount is based on the unionised norm of paying one month of salary for every year served, limited to 25 years.

So, the advice is: Join the union and work for a unionised company to reap the full retrenchment package provided under the CA.

How can you tell if you’re being retrenched or dismissed?

Understanding the difference between retrenchment and dismissal is important because the support available in each case can differ significantly. Retrenchment assistance is typically more comprehensive.

Dismissal itself generally falls into two categories: Dismissal with notice and dismissal without notice.

Ms Cham explained that a dismissal without notice is generally due to misconduct or performance and cannot be treated as a retrenchment.

In such circumstances, the union steps in to protect its members by ensuring the company defends its action by proving the case.

Ms Cham elaborated: “In unionised companies, we typically ask a company to implement the Performance Improvement Plan [for a worker]. If we are satisfied that [the worker] cannot improve, then the company can dismiss the worker and not give notice.”

Unions can also negotiate with the management for a member to resign on their own accord, giving you a paid notice period to secure new employment.

She added that dismissal with notice can also be regarded as a contract termination, which is “tricky because the law does not require the company to give reasons.”

Dismissals are challenging to navigate, especially if you’re on your own, but there are avenues for you to seek help if you need it.

Join us as an NTUC union member to receive stronger and more comprehensive support.