Employment lawyer shares insights on compliance, best practice and alumni networks
Handling employee separations properly is a common and crucial aspect of any HR professional’s job.
But getting it wrong can be damaging – and costly — both legally and reputation-wise.
To that end, Christine Ong, partner at Virtus Law LLP (Stephenson Harwood (Singapore) Alliance), offers insights on how Singaporean companies can manage employee exits with care while ensuring legal compliance.
Legal compliance during employee exits
Compliance with legal requirements during the exit process is crucial, and Ong underscores the need for meticulous attention to employment contracts.
“In the legal aspect, one of the key things is documentation. Everything needs to be maintained, and everything needs to be checked,” she explains.
She points out that companies may assume that all employees have the same notice period without double-checking the contract.
“You’d be surprised at how many people think they know what’s in the template contract, but for a particular employee, the notice period could be different. So it’s very important to check the employment agreement.”
Additionally, Ong advises employers to ensure they are compliant with Singapore’s Employment Act.
“You’ve got to make sure that you’ve paid out all the salary that you owe because, under Singapore law, there’s a cutoff date by which you must pay after an employee leaves; if there’s any unused annual leave, you have to encash it,” she explains.
“Failure to do this could breach the Employment Act and lead to potential claims.”
Ong also highlights the importance of addressing post-termination obligations.
“If there are confidentiality obligations or non-competes, non-solicits, remind the employee of these obligations before they leave. It’s crucial to ensure there’s no ambiguity over their legal duties even after employment.”
Employee terminations after misconduct
One of the most common legal mistakes that employers make is failing to document the employee’s performance or misconduct.
“If you’re terminating for conduct reasons, under Singapore law, there’s a requirement for due inquiry,” Ong explains. “You have to present the allegations to the employee and allow them to respond. If you don’t do this, it could lead to claims of wrongful termination—even if the employee’s misconduct is clear.”
This due inquiry process is often overlooked, but Ong warns that skipping it could have serious legal consequences.
“You could have clear misconduct, but if you missed out on the due inquiry stage, then it’s wrongful termination. This is where documentation comes in—it’s important to document everything from the beginning, so [that] you can avoid disputes.”
Ong also points out that many companies wait until it’s too late to gather the necessary documentation.
“Most companies don’t do that early enough, and by the time they come to us, we’re already trying to resolve the situation. Adequate documentation from the start can minimize these disputes.”
Personal data protection in exit interviews
Exit interviews and surveys are essential tools for gathering feedback, but they must comply with data protection laws.
“The most important thing is obtaining consent from the employee,” Ong says. “You need to be very specific about why you’re collecting data and what it will be used for. Under Singapore’s Personal Data Protection Act (PDPA), if you want to retain or use employee data after they’ve left, you have to get their clear consent.”
Ong suggests anonymizing data to reduce privacy concerns.
“If you anonymize or aggregate the data, it helps prevent the identification of individual employees while still allowing you to gather insights for the company. But it’s also important to make sure the employee understands who will have access to the data, how you’re collecting it, and why. [Companies] should make [that] clear from the start.”
Handling exit interviews in a respectful and human-centric way is equally important.
“It’s not just about compliance,” Ong notes. “If you want ‘honest feedback,’ employees need to feel comfortable that what they’re saying won’t lead to any retaliation or negative reaction.”
Preserving ‘dignity’ in employee separations
As employee separations become more structured, the key is to handle them thoughtfully and with respect, says Ong: “The bottom line is to try to do the exits with dignity.”
Even in difficult circumstances, the goal is to ensure that the process does not humiliate or embarrass the employee.
“If it’s an acrimonious situation, try to do it at a time when it’s less conspicuous, when there are fewer people around, so that you kind of preserve the image of the employee,” she says.
Ong further notes that companies are increasingly aware of the risks associated with poorly handled exits, particularly in the digital age.
“Social media has everyone so concerned about a bad review on the internet. People just talk, and one poorly handled exit can affect a company’s reputation.”
More organizations are also turning to structured offboarding processes, she says.
“There’s now more formal documentation, exit interviews, and surveys so that it’s a clean break. It’s important to have policies in place to prevent issues later.”
Building a corporate alumni network
Positive exits don’t just mark the end of an employee’s journey with a company—they can pave the way for future engagement through corporate alumni networks. Ong sees this as a valuable tool for businesses but warns that it must be handled with care.
“There’s always a risk of confidentiality breaches,” she explains. “You talk to an ex-colleague about what’s going on in the firm, and you could let slip things that may be confidential.”
To mitigate these risks, Ong recommends setting clear policies on what current employees can and cannot discuss with alumni.
“There needs to be very strict, very set policies that outline what is ‘acceptable’ behavior, in terms of the communication, and what you [can] say to these people as well.”
Ong also highlights the potential for favoritism when rehiring former employees.
“If you have an active alumni network, there’s a chance that someone who has kept in contact is more likely to be rehired over someone who hasn’t been involved.”
Despite these challenges, corporate alumni networks are increasingly seen as a way to retain long-term connections with talent, she says.
“That’s fine as long as the process is fair, but you need to ensure that hiring decisions are based on objective criteria to avoid claims of favoritism.”
Managing employee exits with utmost care and attention to legal requirements is key to safeguarding both a company's reputation and its future relationships. As Ong points out, a respectful, compliant process can prevent legal complications while leaving the door open for positive connections down the road.
