Terminating a Foreign Employee on Medical Grounds: What MOM Expects From the Employer

A Work Permit holder collapses on a construction site and, six weeks later, a company doctor certifies him permanently unfit for manual labour. An S Pass holder in a logistics firm exhausts her paid hospitalisation leave after a road accident and still cannot return to full duties. Both employers now face the same question: can you terminate a foreign employee on medical grounds, and what exactly does the Ministry of Manpower (MOM) expect the employer to do next? As at 7 September 2026, the answer sits at the intersection of the Employment Act 1968, MOM’s Tripartite Guidelines on Wrongful Dismissal, and the Employment of Foreign Manpower Act (EFMA), and getting the sequence wrong exposes the employer to a wrongful dismissal claim, a fine for late pass cancellation, or both.

This is not the same question as a mid-project pass revocation or a resignation during renewal. It is a deliberate, employer-initiated decision to end employment because the person can no longer do the job for medical reasons, and MOM’s own guidance treats it as one of the more sensitive categories of dismissal precisely because it sits close to the line of depriving an employee of a benefit they are entitled to. This article sets out what the law actually permits, what MOM expects an employer to document, and the pass-cancellation and repatriation steps that follow once the decision is made.

When Can an Employer Terminate a Foreign Employee on Medical Grounds?

The starting point is the Employment Act 1968, which applies to foreign employees on an Employment Pass, S Pass or Work Permit in the same way it applies to Singaporeans, save for specific exclusions such as domestic workers and seafarers. Employees covered by the Act who have served at least three months are entitled to paid outpatient sick leave (up to 14 days a year) and paid hospitalisation leave (up to 60 days a year, inclusive of the 14 outpatient days), provided the absence is certified by a registered medical practitioner. Our explainer on MC rights and paid sick leave entitlements sets out the qualifying rules in more detail.

MOM’s own published guidance is unambiguous on the core point: termination of employment “should only be done after very careful consideration by employers, and must be based on relevant and objective performance criteria,” and employers “should treat sick employees with compassion and should not terminate employment just for taking sick leave.” At the same time, MOM acknowledges that there are situations where an employer genuinely assesses an employee to be too ill for the job, and where excessive or repeated absence adversely affects the company’s operations. In those situations, the employer can lawfully terminate the employment, provided due notice or payment in lieu of notice is given (Ministry of Manpower, “Can your employment be terminated for taking sick leave?”, last updated 16 December 2025).

The Line Between “Too Ill for the Job” and Wrongful Dismissal

The distinction MOM draws is between a genuine, objective assessment that the employee cannot perform the role, and a dismissal timed to avoid paying out sick leave or other entitlements. A related but distinct scenario, where an employee’s medical return request itself becomes the flashpoint, is covered in our piece on medical return requests and constructive dismissal risk. Employers should not treat the two scenarios as interchangeable; the facts and the paper trail required differ.

The Wrongful Dismissal Risk When You Terminate on Medical Grounds

MOM, together with the National Trades Union Congress and the Singapore National Employers Federation, issued the Tripartite Guidelines on Wrongful Dismissal in April 2019 as the reference document used by the Tripartite Alliance for Dispute Management (TADM) and the Employment Claims Tribunals when assessing dismissal claims. A dismissal is treated as wrongful where it is carried out to deprive an employee of a benefit or entitlement due to them, for a discriminatory reason, or on a false or unsubstantiated ground. A poorly documented medical-grounds termination, timed immediately after an employee exhausts hospitalisation leave, is exactly the fact pattern the guidelines were written to catch.

An employee covered by the Employment Act who believes the termination was wrongful, or without just cause and excuse, can file a claim with TADM within one month of the last day of employment. If mediation fails, the matter proceeds to the Employment Claims Tribunals. This is a materially tighter timeline than a general civil claim, and it means the employer’s documentation needs to already exist by the time notice is given, not be assembled afterwards.

Building an Objective, Documented Case

In practice, MOM expects an employer relying on medical incapacity to be able to show, at minimum: the medical certificates and any fit-for-work or unfit-for-work assessments relied on, correspondence with the employee about the impact on the role and any attempts at alternative duties, the sick leave entitlement actually used against the statutory cap, and a dated record of when the “too ill for the job” assessment was made relative to the notice given. Employers who have also had to manage a dispute over the notice period itself should read our guide on what happens when a foreign employee disputes their notice period, since the same documentation habits reduce exposure in both scenarios.

Notice, the Termination Letter and Final Pay

Where the employment contract is silent on notice, the Employment Act sets a default notice period tied to length of service, ranging upward with tenure; where the contract specifies a notice period, that figure governs instead, and it must be reciprocal between employer and employee. MOM requires that notice of termination, whether given by the employer or the employee, be in writing (Ministry of Manpower, termination with notice). A termination letter that cites “medical grounds” should state the objective basis relied on rather than simply referencing the employee’s sick leave record, precisely because the latter reads as a deprivation-of-benefit dismissal on its face.

Final salary, any outstanding leave encashment, and CPF contributions (where applicable to the pass type) should be settled promptly and in line with the employment contract. Keep the medical-grounds basis for termination and any separate salary or property dispute as distinct, clearly documented threads rather than allowing them to blur into a single contested narrative.

Cancelling the Work Pass and Arranging Repatriation

Once employment ends, the EFMA obligations run on a separate and unforgiving clock from the Employment Act notice period. For an Employment Pass, MOM’s own guidance requires cancellation within one week after the last day of notice, and where the pass holder has left Singapore permanently, cancellation must be submitted within one week of the departure date (Ministry of Manpower, Cancel an Employment Pass). Employers should also consult our detailed walkthrough on work pass cancellation and repatriation obligations, which covers the equivalent timelines for S Pass and Work Permit holders.

Before cancelling the pass, MOM expects the employer to have given the pass holder reasonable notice of the upcoming repatriation, sought tax clearance from the Inland Revenue Authority of Singapore at least one month before the last day of employment, settled all outstanding employment issues including salary, and purchased a return air ticket with check-in luggage to the pass holder’s home country, unless the pass holder has agreed in writing to bear that cost themselves. A pass holder still in Singapore after cancellation cannot work, even while waiting to leave, and the employer should request a Short-Term Visit Pass to keep their stay lawful in the interim.

The IR21 Tax Clearance Trap

The one-month IR21 lead time is where many employers come unstuck in a medical-grounds termination, because the decision to end employment is often made abruptly once a doctor’s assessment comes in, leaving little runway before the intended last day. Raffles Corporate Services has published a detailed guide to Form IR21 and tax clearance for employers who need the mechanics of the filing, including how the employer must withhold monies due to the employee until IRAS issues its tax clearance directive. Employers managing corporate tax and payroll through a related group structure should also see our guide to the myMOM Portal for where the pass cancellation and IR21 workflows now sit administratively.

A Worked Scenario: The S Pass Holder Who Cannot Return to Duty

Consider an S Pass holder employed as a warehouse supervisor for two years and two months. She is hospitalised following a road traffic accident and, after 60 days of paid hospitalisation leave, the company’s panel doctor certifies she is unfit to return to a role requiring standing and lifting, with no clear recovery date. The employer has no suitable desk-based role to redeploy her into.

A compliant sequence looks like this. First, the employer obtains and retains the doctor’s written assessment of permanent or indefinite unfitness for the specific role, not merely a further MC. Second, the employer discusses redeployment options with the employee and documents that none exist, or why any offered alternative was declined. Third, notice is given in writing, applying the two-week notice period that applies at her length of service under the default Employment Act schedule (assuming the contract does not specify a different period), with the termination letter citing the medical assessment and absence of a suitable alternative role, not the sick leave taken. Fourth, IR21 is filed with IRAS at least one month before the intended last day, final salary and any leave encashment are settled, and a return air ticket is arranged. Fifth, the S Pass is cancelled within one week of the last day of notice, or within one week of her departure date if she leaves Singapore permanently beforehand. At every step, the paper trail is dated and kept, because if she files a TADM claim within a month of her last day, that is the record MOM’s adjudicators will examine.

A Compliance Checklist Before You Terminate on Medical Grounds

• Confirm the employee’s actual sick leave entitlement and usage against the statutory 14-day outpatient and 60-day hospitalisation caps.
• Obtain a dated, written medical assessment of unfitness for the specific role, not a general MC.
• Document any redeployment options considered and why they were not viable.
• Ensure the termination letter is in writing and cites the objective medical and operational basis, not the fact of sick leave itself.
• Apply the correct notice period under the contract or the Employment Act default schedule.
• File IR21 with IRAS at least one month before the intended last day of employment.
• Settle final salary, leave encashment and any other outstanding entitlements before or on the last day.
• Cancel the work pass within the applicable EFMA timeline and arrange the return air ticket and repatriation.
• Keep every document dated, in case a wrongful dismissal claim is filed with TADM within one month of the last day.

Employers who are still working through the Tripartite Alliance for Dispute Management process for an unrelated dispute may also find our 2026 guide to working with the Tripartite Alliance useful background on how these bodies expect employers to engage.

Getting the Sequence Right

Terminating a foreign employee on medical grounds is lawful in Singapore, but only where the employer can show an objective, documented basis and follows the notice, pay and EFMA repatriation steps in the right order. Treat the medical assessment, the notice, the IR21 filing and the pass cancellation as one continuous, dated file rather than four separate tasks, and the same file that protects the business from a wrongful dismissal claim will also be what MOM expects to see if the pass cancellation is ever queried.

If you are managing a medical-grounds termination and want the pass cancellation, notice and documentation sequence checked before you act, Singapore Employment Agency can advise on the specific pass type and timeline involved. Where the termination also triggers a wider restructuring of your Singapore entity’s headcount or payroll setup, Raffles Corporate Services can support the corporate and tax clearance side of the transition.

The Editorial Team, Little Big Employment Agency