Court rules pay in lieu of notice and a labelled exit are within employer rights
A long-serving worker sued his employer over a termination he called a "disguised retrenchment." The court tossed the case out entirely.
On 11 May 2026, the General Division of the High Court of Singapore struck out a wrongful dismissal claim brought by Seng Hock Chye Daniel against Denso International Asia Pte Ltd. The decision, delivered by Assistant Registrar Ramu Miyapan, offers a useful reminder for HR leaders about how Singapore courts view termination disputes, retrenchment benefits, and the limits of tripartite guidance.
The facts are straightforward. The claimant had been employed by Denso since around May 2005. His employment was terminated on 1 October 2024 after roughly 19 years, 4 months and 7 days of service, and he was paid salary in lieu of notice.
He pushed back hard. The claimant brought a claim for wrongful dismissal, alleging that the termination was carried out in bad faith as a disguised retrenchment to deprive him of retrenchment benefits, and seeking damages including for psychiatric harm, distress, humiliation and loss of reputation. He also alleged that the company's post-termination references to his performance were a cover story invented after the fact, and that he had developed adjustment disorder with depressed mood as a result of losing his job. Those allegations were not tested at a trial because the company applied to strike out the claim before it could get that far.
The court agreed with the employer. On the retrenchment angle, the judge pointed out that the claimant had not actually pleaded any contractual or statutory entitlement to retrenchment benefits. As the court put it, "the mere fact that other employees may have received redundancy packages (even if proven) does not create a legal entitlement for the claimant absent a contractual or statutory foundation." Seeing colleagues walk away with a payout does not, by itself, create a right to one.
On the bad faith argument, the claimant leaned on a recent decision, Prashant Mudgal v SAP Asia Pte Ltd, which recognised an implied duty in employment contracts not to behave in an intolerable or wholly unacceptable way. The court drew a clear line. That case was about deceptive pre-termination conduct, specifically an employer running a sham performance improvement plan while having already decided to fire the employee. Here, there was no such allegation. The judge noted that the claimant's real complaint was about how the exit was labelled, not about deceptive conduct in the lead-up to it.
Interestingly, the claimant himself acknowledged that he had not pleaded a breach of this implied duty in his statement of claim and asked the court for leave to amend, since Prashant Mudgal was decided after his claim was filed. The judge declined, taking the view that even with the proposed amendment the claim would remain legally unsustainable under the very precedent the claimant sought to rely upon.
The judge was also unimpressed with the argument that the termination breached the Tripartite Guidelines on Wrongful Dismissal. As the court put it, "the Tripartite Guidelines are administrative guidance documents, not binding law capable of creating civil causes of action." The Guidelines are something the Employment Claims Tribunal must take into account when adjudicating wrongful dismissal cases, but they do not, on their own, create a right to sue in the civil courts.
The claims for psychiatric harm, distress, humiliation and reputational damage fared no better. The court found the claimant had not pleaded a recognised cause of action in negligence or under the rule in Wilkinson v Downton, and that damages for hurt feelings and reputational injury are generally not recoverable in wrongful dismissal cases under the long-standing Addis principle. The court also flagged that the claimant had not disclosed the alleged medical report said to support his adjustment disorder claim, despite a procedural requirement to do so.
A few practical points stand out. Termination decisions made within the four corners of the employment contract, with proper notice or pay in lieu, remain firmly within an employer's rights. Retrenchment benefits need a clear contractual or statutory hook, not just precedent from past exits. Performance improvement plans must be genuine, not paperwork to justify a decision already made. And tripartite guidelines, while important to follow, do not by themselves open the door to civil claims.
Costs in the matter will be dealt with separately.
