HRSINGAPORE Community Discussions
Salary Payment and Annual Leave
Hi Fellow HR Practitioners,
We have a staff who was served with 2 months of notice. Last day to be 30 Nov.
If the handover responsibilities is successful, the company plans to release her earlier e.g. 15 Nov. My question is regarding salary payment and annual leave.
Do I pay her up to 30 Nov or 15 Nov. As for annual leave, do I pro-rate to 30 Nov or 15 Nov.
Greatly appreciate your advice.
If there is mutual consent, payment pro-rated up to 15 Nov. Leave pro-ration depends on company policy, usually up to official last day, 15 Nov.
MOM has provided clear guideline. If your company decides to release her early, that is, she's not using her annual leave to offset notice period. In this case, your company will need to pay her till 30 Nov and 30 days annual leave.
Only if she offers to offset notice period using her annual leave and the company agrees, then you can deduct her leave, pay her till 15 Nov and 19 days leave balance (assuming your company is 5 working days).
We do have such practice before. We released the staff earlier than her official last day.
Pay and annual leave was calculated till 30th Nov as this was her official last working day.
But 15th till 30th Nov was considered as Garden Leave; which mean the staff will not be able to start work in any new company.
Final salary and annual leave encashment should be calculated till 30 Nov even if the company decide to early release him
You still have to pay her until the last day of 2 months notice. Discharging her early is not her choice but of the company. You can have her work till her last notice period or you may discharge her early and still pay her accordingly (2 months notice).
The Employment Termination clause in employee's Letter of Offer - what does it say? It should be either party giving to the other the same notice. For your case 2 months.
As such if it is company's decision to let the employee go 2 weeks earlier, with no misconduct taken place, the company should honour her intention to serve the full notice and pay her the 2 months salary.
However, if it is mutually agreed - she is agreeable to get the pro-rated pay for the early release,
get the agreement in black and white. You must get employee's consent.
Otherwise both parties need to adhere to what is stated in the termination clause.
You may have to check with the dept manager on the agreement for the early release. It is not uncommon that the company continues to pay till 30 Nov 2017 on the ground to good handling over of duties and there isn't much for her to do.
What it means is that based on mutual agreement, your company is prepared to let the staff leave earlier. As such, you should calculate her salary and annual leave entitlement based on her agreed last day of work.
Also, do take note that under the Employment Act, annual leave pro-ration is based on completed months. Thus it makes no difference if she leave on 30th Nov or 15th Nov (assuming she worked more than 1 year in the company) as her completed month is only 10 months.