Johnathan Lee Kui Bao

What happened

The employee worked for the employer as a manager. He reached the statutory retirement age, then 63, in March 2025 [17], [25]. The employer made no offer of re-employment before that date. Nothing changed. He carried on working as before, and no re-employment contract was put in place [25], [35].

About three months later, the employee himself emailed to ask about re-employment. Two days later the employer replied with an offer [25]. The employer was restructuring its management and said the employee’s existing role was becoming redundant. It offered him a newly created, non-managerial post in training [26], [50]. His gross monthly wages of about $6,400 would fall to $4,000, a cut of roughly 38 per cent [27], [45]. The contract would be a fixed term of six months [28]. He was given one week to accept or reject [30].

The employee asked why the term was only six months, since he understood that re-employment contracts under the Retirement and Re-employment Act should be for at least one year [28]. The employer said a shorter initial term could be offered where there were reasonable grounds, and that six months would let both sides review the suitability of the new role during the restructuring [29]. The employee, who was on a few days of medical leave, asked for one more week to decide. The employer refused, and said that silence would be treated as a rejection [31]. Before he had given any answer, the employer had already announced internally that he would be stepping away from his management duties [74].

On the deadline day the employee rejected the offer. He said the role was drastically different in scope, offered little stability and involved a substantial pay cut, and that he should instead receive an employment assistance payment (EAP), the lump sum an employer must pay when it cannot re-employ an eligible employee [32]. The next day the employer issued a Notice of Termination recording his retirement with immediate effect. It gave no notice and no salary in lieu, on the footing that retirement was the natural end of the employment, and it refused any EAP because he had turned down the offer [6], [7], [33].

The employee brought two claims in the Employment Claims Tribunals: $11,600 for wrongful dismissal, being about two months of his basic salary, and an EAP of $14,750 [2]. The tribunal allowed both claims in full [5].

What the tribunal decided

Retirement age is not a licence to terminate at once. The tribunal held that if the employer wanted to end the contract after the employee reached the retirement age, it could have done so lawfully by giving two months’ notice or salary in lieu, as the contract and sections 10 and 11 of the Employment Act provided. It did not [9]. There is no power, under contract, statute or the general law, to bring the contract to an immediate end once the employee reaches that age. By issuing the Notice of Termination on that mistaken assumption, the employer, in the tribunal’s words, “renounced the performance of its obligations” under the contract and was in repudiatory breach [10].

The measure of damages is salary in lieu of notice. Section 16 of the Employment Act implies an agreed damages provision into employment contracts: the party in repudiatory breach must pay the sum it would have paid as salary in lieu of notice [11]. That is also the ordinary measure of damages for wrongful dismissal at common law [12]. The employee’s gross monthly wages were about $6,400, but he claimed only $11,600, or $5,800 a month, which was less than the gross pay that would have accrued over the notice period. The claim was allowed in full [13].

How the EAP fits into the re-employment scheme. An EAP is one of two alternatives by which an employer that cannot re-employ an eligible employee discharges its obligations [16]. Section 7A(1) of the Act imposes two obligations: to offer re-employment before the employee reaches the retirement age, which was 63 at the time and has been 64 since 1 July 2026, and to re-employ the employee until the re-employment age, which was 68 at the time and has been 69 since 1 July 2026 [17]. If the employer offers re-employment in accordance with section 7A and the employee refuses, the obligation is discharged and, under section 7C(3), no EAP is payable [22]. The employer accepted that it would have to pay an EAP if its offer did not comply with section 7A [24]. Everything therefore turned on whether the offer complied.

Late offer: a breach, but not one that triggers an EAP by itself. Section 7A(1) requires the offer to be made before the employee reaches the retirement age, and paragraph 8 of the Tripartite Guidelines on the Re-Employment of Older Employees recommends that consultation begin at least six months before retirement. Neither was observed [36]. But the tribunal held that delay alone does not entitle the employee to an EAP. Section 7A(2) treats the existing contract as continuing, and section 7A(3)(b) deems the employer to have complied in the meantime [37], [38].

A six-month offer the employee did not accept was no offer at all. Section 7A(6) provides that, unless the parties agree otherwise, the period of re-employment must not be less than one year at any one time [39]. The parties may agree a shorter term, and if the employee consents the statutory minimum yields to that agreement [40]. The tribunal continued: “But absent such agreement, the statute fixes one year as the minimum duration which an employer must be prepared to offer. An offer for a shorter period, standing alone and without the employee’s assent, does not meet that requirement” [41]. The one-year minimum exists to give older employees a measure of certainty [42]. The tribunal did not need to decide whether the employer’s reason for the shorter term was reasonable, because neither the Act nor the Guidelines allow an employer to offer a shorter initial term on the basis that it is reasonable to do so. The offer did not comply, so the re-employment obligation was not discharged [43]. This is the decisive ground for the EAP award.

Reasonableness of the terms and the process (obiter). Because the six-month point decided the matter, the tribunal said it was strictly unnecessary to consider whether the change of role, the pay cut or the consultation were reasonable, but it addressed the point briefly because the parties had raised it [51]. These observations are obiter, meaning they were not necessary for the decision. The tribunal’s view was that, although section 7A does not use the word reasonableness, the scheme as a whole, in particular sections 7A(4), 7A(5) and 7C(1) read with the Guidelines, requires the employer to discharge its obligations reasonably, in both substance and process [52], [53], [54]. On substance, re-employment does not entitle an employee to keep the same managerial responsibilities, and a wage cut may ordinarily follow a change in job scope [57], [58]. The Guidelines do not, however, give employers a free licence to reduce wages [60]. A change of role and a salary reduction do not, without more, make an offer unreasonable, and nothing here was self-evidently unreasonable [61]. On process, the tribunal was satisfied that the employer did not reasonably engage or consult the employee [68]. The exercise was compressed into about ten days, and a request for a short extension made while the employee was on medical leave was refused [69]. The deadline was fixed for reasons unrelated to any operational necessity [71]. “Where concerns are raised about a proposed re-employment arrangement, they call for proper engagement rather than a “take-it-or-leave-it” response” [72]. A face-to-face meeting would ordinarily have been appropriate; here everything was done by email [72], [73]. The internal announcement made before the employee had decided was premature [74], and no explanation was ever given for why immediate retirement was necessary [77]. Viewed cumulatively, the process fell short of the standard the statutory scheme contemplates [78].

How much EAP. The employer was required to pay an EAP under section 7C(1) and had paid nothing [79]. Under section 8C(3) the tribunal may consider the Guidelines and the steps the employer took, and may order whatever EAP is just and equitable [80]. The obligation accrues while the employee is still employed [81]. “Payment of the EAP, where applicable, is therefore more properly characterised as a sum owed by the employer which ought to have been discharged before termination, rather than as damages for breach” [82]. Post-termination events, such as whether the employee found other work, may therefore not be directly applicable [82]. The tribunal should instead place itself in the employer’s position before termination and ask what sum would reasonably have tided the employee over while he looked for another job [83]. There is no fixed formula; the employer must take the Guidelines into account, and paragraph 36 suggests that the EAP could be 3.5 months of salary, subject to a cap of $14,750 [84]. Where an employer has been careless, or worse, and has not addressed its mind to quantum, there may be greater justification for using that yardstick as a reference point [86]. The tribunal expressed no concluded view, because the employer did not dispute the amount. The $14,750 claimed was about 2.3 months of gross wages and equal to the Guidelines’ ceiling. It was reasonable and was awarded in full [87].

Claim	Basis	Award
Wrongful dismissal	Two months’ salary in lieu of notice under section 16 of the Employment Act [11], [13]	$11,600
Employment assistance payment	Section 7C(1) of the Retirement and Re-employment Act; the six-month offer did not comply with section 7A(6) [43], [79], [87]	$14,750
Costs and disbursements	Ordered against the employer [88]	$250 and $70

The total award was $26,350 [88]. This is a first-instance tribunal decision. The published grounds do not record whether the decision has been appealed.

What this means for employers

• Retirement age does not end the contract. If you want to end the employment of someone who has reached the retirement age, you must still give the contractual and statutory notice or pay salary in lieu. In this case the tribunal held that terminating on the spot was a repudiatory breach, and section 16 of the Employment Act makes the employer liable for salary in lieu of notice [9], [10], [11], [77].
• Offer at least one year. A re-employment offer of less than a year that the employee does not accept does not discharge your obligation, and you cannot rely on the refusal to avoid an EAP. The one-year minimum gives way only where the employee agrees to a shorter term [40], [41], [43]. If you want a review point for a new role, the tribunal suggested offering a term of at least a year with an agreed review of the job scope after six months [76].
• Start early. The Act requires the offer to be made before the employee reaches the retirement age, and the Guidelines recommend consultation at least six months before and an offer at least three months before [36], [63], [64]. Delay alone will not trigger an EAP [37], [38], but it counts against you when the process is assessed [62], [69].
• Do not run the process by email with a rigid deadline. The tribunal expected a face-to-face meeting to explain the rationale and hear concerns, criticised the refusal of a short extension sought during medical leave, and treated an internal announcement made before the employee had decided as premature [69], [72], [73], [74]. A different, less senior role at a lower salary is not in itself unreasonable [57], [61], but the figure must bear a reasonable relationship to the revised job scope and should be explained rather than imposed [60], [66].
• Address your mind to the EAP figure. If you take the position that no EAP is payable at all and lose, there will be little before the tribunal on quantum, and it indicated that it may then be more justified in using the 3.5 months’ salary yardstick, capped at $14,750, as its reference point [84], [86]. Discuss quantum with the employee in advance and be ready to justify the figure [85].

What this means for employees

• Immediate retirement without notice is a wrongful dismissal. If your employer retires you with immediate effect after you reach the retirement age and pays no notice or salary in lieu, you can claim your salary for the contractual or statutory notice period [9], [10], [11], [12], [13].
• Claim the right figure. The employee here claimed on his basic salary rather than his gross monthly wages and recovered less than he was entitled to. The tribunal noted the claim was below the gross rate of pay that would have accrued over the notice period [13].
• You may decline an offer of less than a year. Unless you agree otherwise, a re-employment contract must run for at least one year at a time. Turning down a shorter offer does not cost you the EAP [39], [40], [41], [43]. By contrast, a late offer is not by itself a ground for an EAP; your contract simply continues in the meantime [37], [38]. And a different role at a lower salary is not automatically unreasonable, particularly if you held a senior post, so you will need more than the change itself to challenge an offer on that ground [57], [58], [61].
• The EAP is a debt, not damages. It was owed before your last day. Whether you found another job afterwards, and how hard you looked, may not be directly relevant to the amount [81], [82], [83]. A dispute over entitlement to an EAP is expressly within the tribunal’s jurisdiction under paragraph 45 of the Second Schedule to the Employment Claims Act [19].
• Mind the gateway. A claim must first go through mediation at TADM and the Employment Claims Tribunals, and a wrongful dismissal claim must be lodged at TADM within one month of your last day of employment. The tribunal’s cap is $20,000, or $30,000 where the mediation was union-assisted or under the Tripartite Mediation Framework; in this case the $30,000 limit applied [2]. Parties are not represented by lawyers at the hearing, so any advice needs to be taken before you file.

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Frequently asked questions

Is a six-month re-employment contract legal under the Retirement and Re-employment Act?

Only if the employee agrees to it. Section 7A(6) of the Act says that, unless the parties agree otherwise, each re-employment contract must be for at least one year. In [2026] SGECT 5 the tribunal held that a six-month offer which the employee did not accept did not discharge the employer’s re-employment obligation, and that neither the Act nor the Tripartite Guidelines permit a shorter initial term simply because the employer thinks it reasonable [39], [41], [43]. An employer that wants a review point can offer a year and agree to review the job scope after six months [76].

If I reject my employer’s re-employment offer, can I still claim an EAP?

It depends on whether the offer complied with section 7A of the Act. If it did, your refusal discharges the employer’s obligation and section 7C(3) means no EAP is payable [22]. If it did not, for example because the term was less than a year and you had not agreed to that, the employer cannot rely on your refusal and must pay an EAP instead [41], [43], [79]. The employer in this case accepted at the hearing that it would be required to pay an EAP if its offer was not in accordance with section 7A [24]. Keep the correspondence.

What happens if my employer did not offer re-employment before I turned 63?

The retirement age is now 64 [17], but the answer is the same. The employer is in breach of section 7A(1), which requires the offer to be made before you reach that age [36]. On its own, however, the delay does not entitle you to an EAP. Section 7A(2) treats your existing contract as continuing, and section 7A(3)(b) deems the employer to have complied for the interim period [37], [38]. Your job carries on under the old terms until the employer either re-employs you or lawfully ends the contract. If the offer eventually made is non-compliant, or the employer terminates without notice, the position changes, as this case shows.

How much EAP should an employer pay, and how is the $14,750 cap calculated?

The Act sets no formula. Section 7C(5) requires the employer to take the Tripartite Guidelines into account, and paragraph 36 of the Guidelines suggests the EAP could be 3.5 months of salary, subject to a cap of $14,750 [84]. The tribunal can order whatever sum is just and equitable [80]. It said that where an employer has not addressed its mind to quantum at all, there may be greater justification for using the 3.5 months yardstick as a reference point [86], but it stopped short of deciding that this is the standard; the $14,750 here was awarded because the employer did not dispute it [87]. The judgment does not explain how the cap itself was derived.

This decision is one of several 2026 Employment Claims Tribunals decisions discussed in Wrongful Dismissal in Singapore: What the Employment Claims Tribunals Decided in 2026.

This article is for general information only and is not legal advice. It discusses a decision of the Employment Claims Tribunals as reported at the citation given; the parties are anonymised in the published grounds and are referred to here only as the employee and the employer. The law stated is as at September 2026.