Termination with notice

You can either encash or clear your annual leave if your employment was terminated.

If the unused leave is encashed, it should be calculated at the gross rate of pay based on your last drawn salary.

However, if an employee is terminated for misconduct, any unused leave will be forfeited.

With your employer’s agreement, you can use your annual leave to offset the notice period in exchange for bringing forward your last day of employment. In this case:

• You would only be paid up to your last day of work.
• The annual leave which has been used to offset the remaining notice period will not be paid for by the employer.
• After your last day, you can start work immediately with your new company.

There is a difference between offsetting notice period with annual leave and going on approved annual leave during notice period. You can use your annual leave during the notice period, and the days taken will count towards fulfilling the notice period.

If you apply for annual leave during your notice period, and your employer approves it:

• You will be paid for the full notice period.
• There is no bringing forward of the last day of work and you are considered an employee until the last day of the notice period.
• You can join a new company only after the last day of your notice period.

If you apply for unpaid leave while serving notice, your employer can extend the notice period, but only with your agreement.

Whether unpaid leave is granted is at your employer’s discretion.

If you are covered by the Employment Act, and you take sick leave (paid or unpaid) during the notice period, it is treated as part of the notice period. Your employer cannot extend your notice period or claim for any short notice from you.

Reservist training is not considered as part of the notice period. For example, if you go for 1 week of reservist training while serving notice, your notice period will be extended by 1 week.

If you are serving notice, you are still considered an employee of your current employer.

You should check with your existing employer whether you can start work with your new employer during your notice period.

All employees, including those on a fixed-term contract, can resign at any time, as long as they serve the required notice stated in their contract, or make payment in lieu of notice.

If a notice period is not specified in the contract, then it should be aligned to the length of service.

As the workforce of a company directly affects its business, responsible employees should work with their employers to ensure a smooth handover. Employers should also make sure that all salary and allowances are paid to employees before they leave.