According to The Straits Times, the ministerial statement comes as layoffs in Singapore reached a post-pandemic high in the second quarter of 2026, with 4,620 workers retrenched. Lau told lawmakers that while retrenchment benefits are not currently mandated by statutory law, the government is looking at stricter measures for defiant employers who ignore tripartite advisories after repeated engagements.
Regulatory Framework and Compliance Gaps
Under Singapore’s distinct labor framework, retrenchments are governed by the Tripartite Advisory on Managing Excess Manpower and Responsible Retrenchment (TAMEM), which sets the prevailing norm at two weeks to one month of salary per year of service for employees with at least two years of tenure, as outlined by Conventus Law. While the Employment Act sets minimum notice periods and mandatory retrenchment notifications (MRN) for firms with 10 or more employees, severance payouts remain guided by tripartite standards rather than universal statutory mandates.
Data presented to Parliament showed that about 88% of employers filing mandatory notifications in 2025 paid retrenchment benefits. Among the roughly 12% that did not, about a fifth pointed to financial distress. However, others cited a lack of legal obligation or claimed they offered alternative support, such as extended payroll retention. Close to 80% of non-paying firms were smaller enterprises with fewer than 200 employees.
Rising Layoffs and Re-Employment Challenges
The debate over enforcement coincides with a broader deterioration in labor market indicators. Q2 2026 layoffs rose from 3,830 in the first quarter, driven primarily by business reorganization and restructuring. Professionals, managers, executives, and technicians (PMETs), particularly resident workers in their 40s and 50s, accounted for about three-quarters of these redundancies.
At the same time, re-employment rates within six months dropped from 60.7% in Q1 to 54.9% in Q2. Workers who successfully secured new employment frequently faced financial downgrades; about 40% took pay cuts, experiencing a median wage reduction of 25%.
Ongoing Tripartite Reviews
In response to mounting concerns from over 10 Members of Parliament, the tripartite partners—comprising MOM, the National Trades Union Congress (NTUC), and the Singapore National Employers Federation (SNEF)—are reviewing the Employment Act and considering adjustments. Proposals include bringing forward the mandatory retrenchment notification window to give employment agencies like the Employment and Employability Institute (e2i) earlier access to affected staff, facilitating faster career transition support.