Why “Quiet Firing” is a Legal Landmine for Singapore Employers

Introduction

“Why \”Quiet Firing\” is a Legal Landmine for Singapore Employers” addresses a growing workplace concern: managers who deliberately marginalise or push staff out without formal disciplinary or termination processes. Quiet firing may seem like a low-cost way to manage underperformance, but it exposes employers to significant legal, financial and reputational risk under Singapore law.

This article explains why quiet firing can be unlawful in Singapore, outlines the relevant statutory frameworks (including the Employment Act, CPF Act and MOM guidance), and provides practical steps employers should follow to manage performance fairly and compliantly.

Who this applies to

This guidance applies to a broad range of Singapore employers and HR professionals, including:

• Private companies and SMEs with local and foreign employees;
• Organisations employing Work Permit holders, S Pass, Employment Pass and locals covered by the Employment Act;
• Employment agencies, line managers and HR teams responsible for performance management, disciplinary procedures, and terminations;
• Organisations subject to ACRA, IRAS and MOM reporting or inspection requirements.

Key rules and requirements in Singapore

Quiet firing can breach multiple Singapore statutes and obligations. Employers should be familiar with the following legal frameworks:

• Employment Act: Sets out minimum employment terms, termination notice, salary payment and protection for employees within its scope. Unlawful constructive dismissal or wrongful termination claims can arise where employees are forced to resign through conduct that undermines employment.
• CPF Act: Employers must continue CPF contributions for eligible employees. Failure to contribute properly, even during efforts to marginalise an employee, can trigger penalties from CPF Board.
• Employment of Foreign Manpower Act (EFMA): For foreign workers on Work Permits, S Pass or Employment Pass, employers must comply with MOM conditions, fair employment practices and repatriation obligations. Quiet firing tactics that lead to permit cancellation issues or failure to report changes can attract enforcement action.
• Manpower Act / MOM guidelines: MOM expects employers to manage performance through transparent processes. For foreign workers, termination and engagement processes must meet permit conditions.
• Work Injury Compensation Act and Workplace Safety and Health Act: Reductions in duties or hours that conceal or avoid statutory protections (for example, avoiding reporting an injury) are non-compliant.
• Personal Data Protection Act (PDPA) and POHA obligations: Maintaining proper records and treating employees with dignity are part of broader statutory and reputational obligations.

Beyond statute, unfair treatment can also lead to claims for constructive dismissal, wrongful dismissal, unfair dismissal (for unionised or regulated sectors), discrimination complaints and reputational damage affecting hiring and ACRA/IRAS interactions.

Step-by-step process

Managing an underperforming employee should be structured, documented and consistent. Follow these steps to reduce legal exposure:

• Document performance concerns early: Keep objective records, examples, dates and impact on business outcomes.
• Conduct a fair performance review: Meet the employee, present evidence, allow the employee to respond and agree clear performance expectations and timelines.
• Offer support: Provide training, mentoring, or changes in duties where appropriate. Note any staff benefits or rehabilitation options.
• Issue formal warnings when necessary: Use progressive discipline, verbal, written warnings, and final written warnings, following internal policies consistent with the Employment Act and any contract terms.
• Follow contractual and policy notice requirements: Check employment contracts, company handbook and collective agreements for notice periods and disciplinary procedures.
• Consider alternatives to dismissal: Redeployment, re-skilling, or alternative roles can be lawful and commercially sensible.
• If termination is necessary, process it formally: Provide the required notice or payment in lieu, calculate CPF and statutory payouts correctly, and issue termination paperwork. For foreign employees, follow MOM notification and repatriation rules and update ACRA/IRAS records where applicable.

Common mistakes to avoid

Quiet firing often stems from a desire to avoid difficult conversations. Common mistakes that create legal exposure include:

• Withholding work, excluding employees from emails or meetings, or altering duties without documentation, this can look like constructive dismissal.
• Failing to follow progressive discipline or company procedures required by contract or policy.
• Not handling CPF contributions, salary payments or statutory entitlements correctly during the marginalisation period.
• Terminating a foreign employee without complying with MOM notification rules or permit conditions.
• Using informal or undocumented performance management that discriminates against protected classes or breaches PDPA confidentiality.

Practical examples

Example 1: A manager reduces an employee’s responsibilities, stops assigning projects and excludes them from client meetings. The employee resigns due to unbearable conditions and claims constructive dismissal. If the employer cannot show a documented performance management process, the claim may succeed, exposing the employer to compensation.

Example 2: An employer sidelines an S Pass holder, then later attempts to cancel the pass without notifying MOM correctly. MOM investigates and finds breaches of EFMA conditions and repatriation obligations, leading to fines and potential hiring restrictions.

Example 3: A company reduces hours informally to avoid paying overtime or statutory benefits. IRAS, CPF Board or MOM audits could result in retrospective payments, penalties and reputational damage.

How an experienced consultant can help

Experienced consultants and employment specialists can provide practical, compliant frameworks to manage performance and disputes. Typical support includes:

• Reviewing employment contracts, staff handbooks and progressive disciplinary policies to ensure they meet the Employment Act, CPF Act and MOM requirements.
• Drafting clear performance improvement plans, warning letters and termination notices that reduce legal risk.
• Advising on CPF calculations, statutory payments, and MOM notifications for foreign employees, and assisting with ACRA and IRAS administrative updates.
• Providing training for managers on lawful performance management, PDPA-compliant record-keeping and non-discriminatory practices.

Little Big Employment Agency can assist with application, compliance and advisory support in these areas, helping to protect your business and staff.

Frequently Asked Questions

Q: Is quiet firing illegal in Singapore?

A: Quiet firing is not a specific statutory offence, but many quiet-firing tactics can amount to constructive dismissal, discrimination or breaches of statutory obligations under the Employment Act, CPF Act and EFMA. Such conduct may expose employers to claims and enforcement action.

Q: What rights does an employee have if they are being quiet fired?

A: An employee may raise a claim for constructive dismissal, unfair dismissal (where applicable), or file a complaint with MOM or the Industrial Arbitration Court depending on their status. Employees may also pursue remedies for unpaid CPF, salary or benefits through the CPF Board or Ministry channels.

Q: How should employers approach poor performance to avoid legal risk?

A: Use documented performance management: provide clear expectations, offer training and support, issue progressive warnings, and keep objective records. Follow contractual and statutory notice and payment obligations if termination becomes necessary.

Q: Are foreign employees more vulnerable to quiet firing risks?

A: Yes. Employers must follow MOM notification and repatriation rules, and improper handling can lead to EFMA breaches, fines and hiring restrictions. Always manage foreign employees’ permits and employment status transparently.

Key takeaways

• Quiet firing may seem administratively simple but can create significant legal and financial exposure in Singapore.
• Follow documented, fair performance management, progressive discipline and contractual notice rules to reduce risk.
• Ensure CPF, IRAS and MOM obligations are met throughout an employee’s lifecycle, failure to do so leads to penalties.
• For foreign employees, comply with MOM and EFMA rules on permits, notifications and repatriation.
• Seek professional advice from employment specialists like Little Big Employment Agency for compliant processes and documentation.

Requirements may change, so always check the latest guidance from MOM, or consult a professional adviser.

If you would like to find out more about how Little Big Employment Agency can assist with your employment and immigration requirements, please get in touch with the team at [email protected].

Yours sincerely,
The editorial team at Little Big Employment Agency

Disclaimer: This does not constitute legal advice. If you require legal advice, please contact a lawyer.