How can HR determine what is ‘fair grounds’ or a justifiable reason for termination?
It’s common for employment contracts in Singapore to clearly state terms around termination, like notice periods, without an expressed requirement to provide reasons for the firing, said Thomas Choo, partner at Clyde & Co.
Therefore if HR decides to terminate an employee's contract by relying on the termination notice provisions, there is no legal requirement for HR to provide a reason.
Unless, of course, the contract states that a reason must be given.
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However, the Ministry of Manpower (MOM) encourages employers to explain their reasons for termination so that the employee can better understand the situation and achieve closure, said Choo.
“In relation to poor/non-performance, it is an implied term in Singapore that the employee must be competent – you must ultimately be good at what you are meant to be employed for,” he said.
“If the employee misrepresents that they have a specific skillset which the employer is specifically looking for, there is a good chance that the employer can legally terminate them for incompetency and poor performance.
“However, in most cases these would usually fall under the termination with notice provisions under the underlying employment contract.”
Whatever the case, employers must be clear about the purpose behind the termination. Especially amidst the COVID-19 crisis, employers must avoid disguising layoffs just to escape from paying retrenchment benefits.
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Earlier this year, manpower minister Josephine Teo warned employers that they will be punished for doing so. For instance, if found guilty, they stand to lose financial support as well as work pass privileges.
“Even during the COVID-19 period, whatever the termination of employment is called, an employee is presumed to have been retrenched if the employer cannot show a plan to fill the vacancy any time soon,” Teo said.
