What happens at the termination of employment?

Last updated on March 7, 2018

After working for your employer for a certain period of time, either party may wish to terminate the contract of employment for various reasons. In such a situation, it is important to look at your employment contract, which will likely contain important provisions on the termination of employment.

The Employment Act and who it covers

In the event that the contract does not fully provide for the situation, the Employment Act gives additional protection if you are covered by it.

Termination of employment with notice

Under the Act, either party to the contract of service may give notice of his intention to terminate the contract. This notice must be given within a certain period of time, as stated in your employment contract. However, if such a term is absent from the contract, the Act provides for the following notice periods:

Duration of employment Notice period
Less than 26 weeks 1 day
Between 26 weeks and 2 years 1 week
Between 2 and 5 years 2 weeks
More than 5 years 4 weeks

The notice period will include the day on which notice is first given.

Termination of employment without notice, or before expiry of the notice period

Alternatively, the Act also provides for termination of employment without notice, or before the expiry of the notice period, by paying the other party a pro-rated amount based on the gross rate of pay the employee would have earned during the notice period. For example, if you are paid a monthly salary of $2,400 and choose to leave the company in 1 weeks’ time rather than the contractually-stipulated period of 1 month, you will have to pay your employer $1,800 to terminate the contract. Conversely, your employer will have to pay you that amount if he wishes to terminate your employment before the expiry of the notice period. (This assumes 20 work days in a month and a gross pay rate of $75 a day.)

Your employment may also be terminated without notice if your employer fails to pay your salary within 7 days of the due date of your salary, or if you are absent from work for more than 2 days without first informing or obtaining leave from your employer, or without reasonable excuse.

If you have misconducted yourself at work, your employer is also entitled to terminate your service without notice. However, your employer will have to conduct a due inquiry before doing so.

Employee dismissal

Your employer may choose to dismiss you from service with or without notice. This can occur, for example, in the event of employee misconduct. However, if you are covered by the Employment Act and feel that you have been unfairly dismissed, you may appeal to the Minister for Manpower within 1 month of dismissal. The Minister may then direct your employer to reinstate you to your former employment, or pay you a sum of money as compensation based on what the Minister feels is appropriate.

Persons not covered by the Act cannot make use of such an avenue of appeal; at the moment, their only option is to hire a lawyer to look into their case. However, the Ministry of Manpower is working on the establishment of a Small Claims Employment Tribunal to assist such persons in dispute resolution without having to start a civil suit.

Miscellaneous

Should you choose to terminate your employment, your employer is barred by the Act from, without reasonable excuse, preventing you from leaving. It is a criminal offence to do so, where your employer, if convicted, may be fined up to $5,000 and/or jailed for up to 6 months.