Q I HAD worked for a multinational firm for nearly eight years, but my services were terminated due to a restructuring. I refused to sign the termination letter as no satisfactory reasons were provided. Finally, I was persuaded into submitting a letter of resignation instead.

Could this be considered as retrenchment, and should I be paid about eight months of pay based on the number of years of service? The incident happened in 2003, so is it too late to pursue it?

A RETRENCHMENT benefits are also subject to the expressed or implied terms of the contract. In other words, when the contract was entered into, the issue of these benefits should have been addressed and set out.

The Employment Act, which applies to anyone earning under $1,600 and those who qualify as employees under the Act, also states that anyone who has been employed for less than three years is not entitled to any retrenchment benefits.

Even then, the Act is silent about the amount of retrenchment benefit that should be paid or the conditions upon which it is to be paid. Again, these have to be resolved through the parties' contractual rights and obligations.

Under the Employment Act, the employer is not required to give any reason for the retrenchment or paid time-off for the employee to look for another job or even a minimum period of notice about a retrenchment.

The courts have used an employer's current or prevailing policies and practices when ordering that retrenchment benefits be paid.

So, there must be evidence to show that the employer had a consistent practice for many years, right up to the time of retrenchment, of paying retrenchment benefits. This may be a month's pay for every year of service, for example.

The courts have alternatively treated such a consistent practice as an implied term of the contract, even if there is no expressed stipulation.

Finally, any action for breach of agreement must be brought within six years of the breach and the obligation to pay, that is, from 2003.

Amolat Singh
Lawyer
Amolat & Partners

Advice provided in this column is not meant as a substitute for comprehensive professional advice. E-mail questions to a1admin@sph.com.sg.

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