MOM/NTUC: Employers cannot disguise retrenchments as ‘new opportunities’ by asking Singapore workers to reapply for jobs overseas - Singapore News

06 Jun 2026, 06:00 · The Independent

SINGAPORE: Companies cannot avoid calling a retrenchment a retrenchment simply by asking workers to apply for jobs overseas, the Ministry of Manpower (MOM) and National Trades Union Congress (NTUC) stated, following concerns that some employers are presenting job cuts as fresh career opportunities during restructuring exercises.

According to Channel NewsAsia (CNA), both organisations said that if a role in Singapore becomes redundant, the situation is still considered a retrenchment, regardless of whether the employee is invited to apply for a position elsewhere in the company.

The issue came into focus after Swedish fashion retailer H&M announced plans to move its Southeast Asia headquarters from Singapore to Malaysia. Employees across East Asia were reportedly asked to apply for 178 positions across the region, many of which had shifted out of Singapore. Workers who fail to secure a role could leave under what the company described as mutual separation arrangements.

When retrenchment becomes a “new job opportunity”

NTUC said it is concerned about cases where workers are asked to reapply for local or overseas positions while their existing Singapore roles are being eliminated.

The union stated that if a Singapore-based position is eliminated due to redundancy, the worker’s employment relationship with the local entity ends. In such cases, the exercise should be recognised as a retrenchment rather than a new employment opportunity.

MOM said a retrenchment occurs when a role no longer exists in Singapore, including situations where it has been relocated overseas, even if the employee applies for another role within the organisation.

The clarification is important because retrenchment carries expectations around notification, compensation and support that may not be as obvious under alternative labels.

Some companies avoid the word “retrenchment” to reduce negative perceptions

Human resources professionals who were interviewed said some companies may prefer terms such as restructuring, calibration or mutual separation because they sound less severe.

Ms Archana Srinivasan, founder and director of Alchemy People Partners, said some restructuring exercises are genuine responses to regional expansion, automation or cost pressures. Others, however, may package workforce reductions in softer language to reduce negative perceptions.

Mr Ian Liew, an HR practitioner with more than a decade of experience, however, said that changing the label does little to alter the reality for affected workers. He said the real test lies in whether employees receive fair redeployment opportunities, adequate support and proper compensation.

The differing opinions show companies across industries are under pressure to cut costs and reorganise operations, particularly as technology and regionalisation reshape business structures.

The grey area around “mutual separation”

One of the more contentious issues involves mutual separation agreements. These agreements are typically presented as voluntary exits. However, lawyers and HR experts stated that they can create uncertainty when workers are leaving because their jobs have effectively disappeared.

Mr Terence Seah, partner at Virtus Law, said employers cannot escape their contractual obligations simply by avoiding the word “retrenchment”. The key question remains what the employment contract requires and what actually happened to the role.

Ms Srinivasan noted that some employers may argue that no retrenchment occurred if workers voluntarily sign separation agreements. This creates a legal and practical grey area, even when the underlying reason for departure is job redundancy.

She advised employees to seek professional advice before signing such agreements and stressed that workers cannot be forced into them.

Workers may lose out financially

The distinctions used can have real financial consequences for retrenched employees. Under tripartite guidelines, retrenchment benefits are commonly recommended at between two weeks and one month’s salary for every year of service, although these guidelines are not legally binding.

Mr Liew pointed out another difference. Retrenchment payments made to compensate for job loss are generally not taxable, while ex gratia payments under mutual separation agreements are typically treated as taxable income by the Inland Revenue Authority of Singapore (IRAS). Meaning, workers could receive less after tax, even if the headline payout appears similar.

Other retrenchment labels: Restructuring, calibration, redeployment or mutual separation

Beyond legal obligations, experts who were interviewed repeatedly returned to one theme: transparency.

Singapore Human Resources Institute Chief Executive Officer Alvin Aloysius Goh said employees feel uncertain when alternative roles are significantly different or not practical for their circumstances. He said employers should handle redeployment and separation discussions fairly and openly.

HR consultant Christine Chan added that workers can feel stranded when companies offer relocated jobs without providing enough information about relocation packages or employment terms. The lack of certainty creates more stress than the restructuring itself.

For employees, the lesson is to look beyond the label. Whether a company calls it restructuring, calibration, redeployment or mutual separation, the key issue is whether the original Singapore role still exists.

MOM, NTUC, and labour experts advise employers that workers are more likely to accept difficult decisions when companies explain them properly, provide meaningful support, and call things as they are.

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