How Does Termination of EOR Work in Singapore?
Introduction
Ending a job through an employer of record (EOR) in Singapore can start before the termination letter goes out. For a foreign employee, the employer must withhold all money due from the day it learns they are leaving. The EOR handles this as the legal employer, but only once your company has made the decision and shared the details.
Who Does What During EOR Termination in Singapore?
In an EOR arrangement, your company decides and gathers the facts, and the EOR handles the legal employer’s side. Your service agreement sets the exact split, so use this table as a starting point.
Step | Your company | The EOR |
Decision | Decides to end the job and records why | Checks the contract and confirms the notice period |
Termination letter | Gives the reason, last day, and handover plan | Issues the written notice |
Final pay | Confirms the leave balance and anything owed | Calculates and pays final salary and any salary in lieu of notice |
CPF and tax | Shares whether the employee is a citizen, permanent resident (PR) or foreign national | Pays Central Provident Fund (CPF) contributions and files tax clearance where it applies |
Retrenchment | Provides headcount and details of affected employees | Submits the MOM notification where it applies |
The EOR’s name is on the letter, but your records are what back it up. Keep notes on the reasons and the dates as you go.
What Notice Period Applies to EOR Termination in Singapore?
Contract Terms and Default Notice Periods
Notice starts with the contract. It has to be in writing, and an email counts. You don’t need to give a reason in the notice letter.
If the contract doesn’t mention a notice period, the Employment Act sets one based on how long the person has worked there:
Length of service | Notice period |
Under 26 weeks | 1 day |
26 weeks to under 2 years | 1 week |
2 years to under 5 years | 2 weeks |
5 years or more | 4 weeks |
Can Either Side Skip the Notice Period?
Yes, in two ways:
- Pay salary in lieu of notice, which is money equal to what the employee would have earned during the notice period.
- Agree in writing to waive notice, with both sides signing off.
When Can an EOR End an Employment Without Notice in Singapore?
When an employee is dismissed for misconduct, the employer can end the job without notice and without paying salary in lieu. The employee also loses unused annual leave.
In these cases, the employer has to show the dismissal wasn’t wrongful. Pass incident notes, messages, and any written warnings to the EOR before the letter goes out.
How Does Retrenchment Work Through an EOR in Singapore?
What Counts as Retrenchment?
Unlike a misconduct dismissal, a retrenchment is about the role, not the person. It means dismissal because of redundancy or reorganisation. It covers permanent employees and contract workers on terms of at least 6 months. Ending a contract with no plan to refill the role soon also counts as a retrenchment.
MOM Retrenchment Notification
Employers with a Singapore-registered business and at least 10 employees must submit a retrenchment notification to MOM. The deadline is 5 working days after the affected employees are told. Smaller employers don’t have to, though they are strongly encouraged to.
Both you and the EOR are involved in a retrenchment, so agree early on who submits the notification.
Retrenchment Benefit
Employees with at least 2 years of service are eligible for retrenchment benefit. Those with less could get an ex-gratia payment, which is a goodwill payment with no legal obligation behind it. As a guide, it is 2 weeks to 1 month of salary per year of service. The company’s finances and the industry play a part.
If a salary cut came shortly before, the calculation uses the pre-cut salary. CPF isn’t payable on the benefit. Your service agreement decides who covers the cost, so settle it before a retrenchment comes up.
What Happens to Final Pay, CPF and Tax After EOR Termination?
Final Salary and Unused Leave
Final salary is due on the last day of work. If that isn’t possible, the employer has 3 working days from the termination date. The employer also pays out unused annual leave, unless the exit is for misconduct. In a retrenchment, everything is paid on the last day, including leave and notice pay.
Foreign employees are the exception. The employer must hold back their money for up to 30 days while tax clearance is done.
CPF During the Notice Period
CPF is still payable on salary earned during the notice period. The employee stays on the payroll until the last day.
Does Tax Clearance Apply to Non-Citizen Employees?
Tax clearance lets the Inland Revenue Authority of Singapore (IRAS) confirm that a departing non-citizen employee has settled their income tax. The employer files Form IR21 at least a month before the last day. The hold-back on the employee’s money starts when the employer learns of the departure, so tell the EOR as soon as you decide, not when the notice goes out.
What Happens If the Employee Disputes the Termination?
What Counts as Wrongful Dismissal?
A dismissal is wrongful when it happens without just or sufficient cause. These are examples of wrongful dismissal:
- The dismissal was based on grounds such as age, race, gender, religion, marital status and family responsibilities, or disability.
- It was meant to take away the employee’s benefits.
- It was meant to punish the employee for exercising an employment right.
Misconduct, poor performance, and redundancy are valid reasons for dismissal.
Who has to prove a dismissal was wrongful depends on notice. The employee must show proof if notice or salary in lieu was given. The employer must prove it was not wrongful if no notice was given.
Where Wrongful Dismissal Claims Go
A claim moves through three stops:
- The employee files with the Tripartite Alliance for Dispute Management (TADM) within one month of the last day.
- If mediation doesn’t settle it, the claim goes to the Employment Claims Tribunals (ECT).
- The ECT can order the employer to give the job back with pay for lost income, or to pay compensation. Claims are capped at S20,000,orS30,000 through tripartite or union-assisted mediation.
Managers and executives dismissed with notice or salary in lieu can only file after at least 6 months of service.
Frequently Asked Questions
1. Who tells the employee when EOR termination in Singapore is happening?
Your company should have the conversation, since you manage the person day to day. The EOR then issues the formal written notice. Agree this order in your service agreement so the conversation and the notice line up.
2. What should a company send the EOR before EOR termination in Singapore starts?
Send the EOR these details:
- The employee’s name, contract, and intended last day
- Whether the exit is with notice, salary in lieu, or for misconduct
- The reason, with supporting records such as warnings or incident notes
- The current leave balance and any amounts owed
- Whether the employee is a citizen, PR, or foreign national
3. What comes before retrenching an employee through an EOR in Singapore?
Take a long-term view of your manpower needs and consult the union if the company is unionised. Selection should be free of discrimination and based on ability to contribute to future business needs. Treat affected employees with dignity and respect, and consider a longer notice period.
4. Can employees get job-search help during an EOR retrenchment in Singapore?
Yes. Employers can submit an optional early alert to MOM. It connects affected local employees to job-search and training help. That help comes from the Skills and Workforce Development Agency (SWDA) or the Employment and Employability Institute (e2i).
5. Will the Workplace Fairness Act change how EOR termination works in Singapore?
Not yet. The Workplace Fairness Act is planned for 2027, so that year is a target, not a confirmed date. Once it applies, an employee who believes a decision was discriminatory should first raise it through the company’s grievance process. Mediation comes next, and the Employment Claims Tribunals can hear claims up to S$250,000.
EOR termination in Singapore comes down to a clear handoff. Your company makes the call and keeps the records. The EOR, as the legal employer, sends the written notice, pays final salary, and files what applies to the employee. Whether the exit is for misconduct, redundancy, or a standard exit with notice changes the notice, the filings, and the final pay. Before the next exit, check that your service agreement names who does each step. Talk to the Galaxy APAC team about your Singapore EOR setup.
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Frequently Asked Questions
1. Is EOR Japan legal?
Yes. EOR arrangements operate under the Labour Contract Act, where the EOR becomes the statutory employer. No special government licence is required. This differs from worker dispatch (haken), which requires a licence and is subject to a three-year placement cap. An EOR isn’t a staffing intermediary. It’s the actual employer of record.
2. Can an EOR in Japan sponsor work visas for foreign national employees?
Yes, if visa sponsorship is included in the provider’s service scope. The EOR, as the registered employer, can file the Certificate of Eligibility with the Immigration Bureau and manage renewals. Confirm this is explicitly included in your agreement and check which visa categories they support. Not all providers handle this as a standard service.
3. Does using an EOR remove the complexity of Japan's dismissal protections?
No. The EOR handles the administrative execution of a dismissal: notice, documentation, and statutory process. But the foreign company’s performance management decisions are what determine whether a termination is defensible. Japan’s abuse of dismissal doctrine applies regardless of the employment structure. The EOR can execute compliantly; it can’t retroactively justify cause that wasn’t built through proper management.
4. What happens when a fixed-term employee reaches five years of service?
Under the Labour Contract Act’s five-year rule, once cumulative fixed-term service exceeds five years without a gap longer than six months, the employee can request conversion to an indefinite contract. The EOR can’t refuse. Employment terms stay the same; the contract simply becomes open-ended. International employers should factor this into workforce planning for roles initially scoped as project-based.
5. How long does onboarding through an EOR in Japan typically take?
Most providers complete onboarding in two to four weeks from signed agreement to first day of work. The main variables are whether the hire requires visa sponsorship, the complexity of the employment contract, and social insurance registration timelines. Providers with established Japan operations and pre-built compliant contract templates move faster.
