Employment Act - Termination with Notice now subject to MOM intervention for “Unfair Dismissal”


Employers will know that the Employment Act (EA) was amended with effect on 1 January 2009 to “update the EA to ensure that it remains relevant and responsive to the changing labour market conditions”[1] 

The amendments introduced a new definition for the term “dismiss”.  “Dismiss” has now been defined to mean “the termination of the contract of service of an employee by his employer, with or without notice and whether on the grounds of misconduct or otherwise.”[2]

With this definition, all terminations of employment, even with notice, are subject to intervention by the Ministry of Manpower under EA section 14(2) on a complaint by the terminated employee that he has been “dismissed without just cause or excuse by his employer.”

Until this definition of “dismiss” was introduced into the EA, the term “dismiss” in section 14(2) was usually read in context with section 14(1)[3] to apply only to summary dismissals for misconduct. This approach had support from the High Court in the Apollo Case[4], which observed in relation to section 14 of the EA that:

“Under this provision, the employer has the right to dismiss an employee without notice if, after due inquiry, he finds that the employee engaged in misconduct inconsistent with the fulfillment of the express and implied conditions of his service.  There are safeguards in s. 14 against wrongful dismissal. The employee may make written representations to the Minister within one month and the Minister may cause an inquiry to be made as to whether the dismissal was without just cause or excuse.” [5][our emphasis]

Elsewhere in the judgment, the High Court said:

“In the present appeal, there was no dismissal with cause under s.14 of the Employment Act, nor indeed any other form of dismissal at all.  The defendants [the  employer] simply gave the plaintiff [the employee] a letter terminating his employment with one month’s pay in lieu of notice. The difference is significant because had there been a dismissal with cause, this would have obliged the defendants to make due inquiry and entitled the plaintiff to make written representations to the Minster who may order an inquiry.” [6] [our emphasis]

Thus the High Court read the term “dismiss” in EA sections 14(1) and 14(2) to mean dismissal for cause.  Section 14 was not read to apply to terminations with notice.

There is no doubt that the new definition of “dismiss” is intended to have the effect of allowing MOM to intervene in any termination of employment, including terminations with contractual notice. In the Acting Minister of Manpower’s speech to Parliament on 8 November 2008 when introducing the EA bill, the Acting Minister said:

“The Employment Act currently allows employees to seek redress for unfair dismissal. To remove ambiguities on interpretation, the term “dismiss” is defined under clause 2(b) as a termination of employment by the employer, with or without notice, and whether on the grounds of misconduct or otherwise. This clarification on the application of the Act is important as an overly narrow interpretation of the term  dismissal” defeats the redress mechanism for unfair dismissal."

Madam Halimah Yacob is reported to have said in support of the EA Bill:

“… I welcome the new definition of what constitutes dismissal which now covers a termination of service with or without notice whether for misconduct or otherwise.  This is an improvement as it will provide workers with better protection against unfair dismissal as it is linked to section 14(2) of the Employment Act which provides an  venue for workers to appeal against unfair dismissals.” [7]

In summary, employers’ legal obligations under the EA when terminating an employee with notice, and the effect of section 14(2) are these:

  • The employer can still terminate the employment with contractual notice (or salary in lieu) under sections 10 and 11 of the EA.

  • The EA does not require the employer to give reasons for the termination (although from a HR management viewpoint, it often helps if an employee understands the employer’s reasons for terminating his services).

  • However, an employee who has been terminated with notice can make representations to MOM within 1 month of his termination, seeking reinstatement, on the grounds that the employee has been dismissed without just cause or excuse.

  • The onus is on the employee to prove that he has been terminated without just cause and excuse, where the employer has terminated him with notice.

  • If MOM decides to reinstate the employee, or more likely, to direct the employer to pay wages by way of compensation to the employee, the employer must comply with the Minister’s direction.

  • The termination nevertheless remains effective and is not rendered null and void on account only of having been found by MOM to have been made without just cause and excuse.

It is not yet clear what MOM’s practice and policy will be in implementing its statutory powers under Section 14(2).  In the meantime, employers should, at a minimum, document the reason(s) leading to termination, and consider introducing performance management procedures before effecting terminations with notice.

[1] Acting Minister of Manpower, Mr Gan KimYong’s speech on 18 November 2008

[2] Section 2(1) of the EA

[3] Section 14(1) allows the employers to dismiss an employee without notice on grounds of misconduct, after due inquiry.

[4] Noor Mohamed bin Mumtaz Shah v Apollo Enterprises Ltd (t/a Apollo Hotel Singapore) [2001] 1 SLR 159 

[5] ibid, at page 163

[6] ibid, at page 170

[7] Parliamentary debate on 18 November 2008 8 Acting Minister of Manpower, Mr Gan Kim Yong’s speech in Parliament on 18