Man made to retire without notice or payment wins S$26,350 in claims against employer

Man made to retire without notice or payment wins S,350 in claims against employer

SINGAPORE: A man was dismissed about three months after he turned 63, Singapore’s statutory retirement age at the time, with his company claiming that it was retiring him on a lawful basis.

The former area manager took the company to the Employment Claims Tribunals, seeking S$26,350 (US$20,363) comprising S$11,600 in damages for wrongful dismissal and an employment assistance payment of S$14,750.

The company disputed both claims, saying that its termination was lawful since it was retiring the man, and that no notice or salary in lieu of notice was required in these circumstances.

It also claimed that it was not required to provide an employment assistance payment, since it had offered re-employment to the man but he rejected it.

In a judgment released on Monday (Jul 13), Tribunal Magistrate Joel Tan ruled in the retiree’s favour, awarding him the full sum of S$26,350 he had sought in his claim.

Mr Tan said that a company wishing to terminate an employment contract after an employee attains retirement age must provide notice or salary in lieu as stated in the contract and the Employment Act.

The re-employment exercise conducted by the company for the claimant was lacking, since the company did not reasonably engage or consult the claimant on his re-employment, Mr Tan found.

The re-employment offer made was also a six-month contract, but the Retirement and Re-employment Act generally requires a one-year re-employment term unless both parties agree otherwise.

The claimant and the company were not named, as Employment Claim Tribunal cases are heard in private.

THE CASE

In March 2025, the claimant turned 63. Before then, the company did not make any offer of re-employment.

On Jun 8, 2025, the claimant sent an email about re-employment, and the company responded two days later with a re-employment offer.

It offered to re-employ him as a training executive, a readjustment of his role as an area manager.

The company said it was undergoing restructuring aimed at streamlining management of its clusters, which would reduce the number of area managers and render the man’s existing role redundant.

The company identified an “opportunity” for him to be redeployed as a training executive to provide training coordination and administrative support, given his prior involvement in training-related work.

The offer was for a six-month fixed-term contract with a lower monthly salary of S$4,000. His existing gross monthly wages were S$6,428 at the time.

The man asked why the offer was for six months instead of a year, which he understood to be the minimum required under the law.

The company responded, saying that employers may offer a shorter initial term on reasonable grounds such as pending structural changes or operational reviews.

It said that the six-month term was to allow both sides to review the suitability of the redeployed role, with a possible extension.

The company added that the claimant had to decide whether he would accept or reject the offer by Jun 17, 2025.

The man asked for more time to consider while he was on medical leave, but the company said the deadline was non-negotiable.

The man then replied that this refusal was “somewhat unempathetic” and wrote to reject the offer formally. He said it was drastically different in scope from his existing rule, offered little employment stability and involved a substantial reduction in salary.

He said he would be eligible for an employment assistance payment.

The company issued a notice of termination the next day, on Jun 18, 2025, terminating the man’s employment with immediate effect and saying that no such payment was payable because he had rejected the re-employment offer.

The letter indicated that it could terminate the employment without giving two months’ notice or salary in lieu, given that the retirement marks the natural end of the employment.

TRIBUNAL’S FINDINGS

In this case, the company operated under the mistaken assumption that it could terminate the employment contract immediately after the employee attained retirement age.

“No such power exists – whether under contract, statute or the general law,” the magistrate said.

Mr Tan added that the six-month offer did not satisfy the company’s re-employment obligations. Under the law, the period of employment stipulated in the contract must be for at least a year, unless both parties agree otherwise.

The change in job role and cut in salary, while about 38 per cent, did not on their own render the re-employment offer unreasonable.

However, the magistrate took issue with the process of the re-employment exercise.

Read Full Article At Source