This paper provides a general review of employees' entitlement to retrenchment
benefits in Singapore. It examines why regulatory legislation has failed to
guarantee retrenchment benefits to some employees of liquidated companies.
In so doing, it highlights the loopholes in the legislation and then examines
how the 1993 amendment to the Companies Act (Cap. 50) deals with these
loopholes.
The article argues that while the amendment to the Companies Act enables
employees in liquidated companies to claim retrenchment benefits, problems
that remain in the retrenchment benefits legislation could prevent involun
tarily terminated employees in a reorganized company from claiming
retrenchment benefits. These problems arise because of the lack of precise def
inition of the term 'retrenchment' in the Employment Act, and of the term
'reorganization' in botb the Employment Act and the Companies Act. In view
of these problems, it is suggested that a clear definition of 'retrenchment' in
terms of dismissal or involuntary termination beyond the control of the
employee would be useful.
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