Significant changes to Singaporean laws will impact global restructures

These changes include the introduction of a three-tiered workplace dispute process from 2027, the removal of a limit on the number of years a work permit holder can be employed in Singapore and updates to employee retirement and re-employment age.

For businesses which have entered into a collective bargaining agreement or memorandum of understanding with a Singapore trade union, there are usually additional consultation and payment obligations.

Restructuring often leads to layoffs or redeployment of employees across different locations. Under Singapore law, there is a presumption that an employee’s role has been made redundant if the employer has no intention to replace the role. When considering the redundancy process and severance payments, there is a need for employers to consider not just the statutory and contractual requirements, but also guidelines which are issued by various bodies such as the Tripartite Alliance for Fair Employment Practices. Enforcement action may be taken against the relevant employer if these are not complied with.

For foreign employees, a transfer of employment may require either the transfer of their work passes, or a need to cancel and reissue new work passes. Depending on the type of work passes held, there may also be notification requirements.

In the event of a termination of employment, this is likely to also trigger visa cancellation or notification requirements. Businesses should work closely with their immigration advisers to ensure that foreign employees remain legally authorised to work for them in such circumstances.

When foreign employees cease employment, there is generally a requirement to withhold their salaries until tax clearance is obtained by the tax authorities. This will have a corresponding impact on payment timelines and quantum which should also be noted. Lastly, employers need to check if there is a need to repatriate their foreign employees under the rules governing the relevant work passes held by the employees, and their contractual documents.

Similarly to many other developed jurisdictions, a global restructure can often mean that roles may potentially be moved overseas. Employers should take into consideration jurisdictional complexities before finalising or proceeding with any such plans. For example, there will be a need to consider what will be the applicable employment laws governing the remote workers’ employment under such arrangements.

Employers will also need to consider factors such as immigration, tax obligations, payroll, social security, insurance and other employment law considerations.

It is often necessary to consider these issues in partnership with legal counsel, immigration specialists and tax specialists in more than one jurisdiction to determine how to implement such arrangements.

Read more about global restructuring in the APAC region:

• Navigating Thai labour laws during a global restructure
• Global restructuring presents both challenges and opportunities for Australian employers