Acting manpower minister faces questions on Singapore's rising retrenchment numbers
The Singapore government is considering administrative action against employers who do not provide retrenchment benefits despite having financial capacity, as the city-state aims to better support laid-off workers following a recent spike in retrenchments.
Acting Manpower Minister Jasmin Lau told Parliament on Tuesday that the government wants to ensure that employers conduct retrenchments responsibly and treat affected employees fairly.
"One option we are considering is to take administrative action against employers who do not pay retrenchment benefits in egregious cases where an employer has the financial ability to pay but refuses to, despite repeated engagements and warnings," Lau said, as quoted by AsiaOne.
The majority of employers that recently carried out layoffs paid their affected staff retrenchment benefits, according to Lau, citing data from the Mandatory Retrenchment Notification (MRN) in 2025.
Only 12% did not pay retrenchment benefits, including about one in five who cited financial difficulties. The rest of the employers said they did not pay due to the lack of obligation to do so, and because affected employees were given other forms of support, such as keeping them on payroll for an extended period, or an employment assistance payout.
"As shared previously, MOM and our tripartite partners are considering the issue of retrenchment benefits as part of the ongoing Employment Act review, including whether stronger obligations on employers are warranted," Lau said.
Growing retrenchments
The acting manpower minister faced questions on retrenchments after the Ministry of Manpower's latest Labour Market Report showed retrenchments increased to 4,620 in the second quarter of 2026.
The retrenchments were focused in outward-oriented sectors, such as manufacturing (870 retrenchments), information and communications (720), and financial services (710).
Business reorganisation or restructuring emerged as the leading reason for retrenchments, as cited by 72.1% of employers.
The government said it was not clear whether the sudden spike in retrenchments was driven by artificial intelligence (AI), but said previous surveys indicate that only a "small minority of firms adopting AI have reduced headcount."
"More are creating new roles or redesigning jobs," Lau said. "We will continue to refine our surveys and market sensing mechanisms to better understand the impact of AI on jobs."
Meanwhile, the acting manpower minister added that the ministry is working with relevant agencies to provide clear guidance to prevent instances of termination which have been "disguised" as retrenchments.
"Where there are complaints of disguised retrenchments, MOM will investigate for signs such as a spike in contractual terminations within the company and engage the employer concerned," Lau said.
"We agree that clearer guidance would help prevent mislabelling and under-reporting. MOM will work with tripartite partners to provide clearer guidance on what constitutes a retrenchment and the obligations that follow."
