Singapore Employment Law Updates Q2 2026

The first half of 2026 has produced two significant employment law decisions in Singapore that employers should take note of. In Prashant Mudgal v SAP Asia Pte Ltd [2026] SGHC 15, the General Division of the High Court affirmed, for the first time in clear and unequivocal terms, that the implied term of mutual trust and confidence forms part of Singapore employment contracts. In JGP v JGQ [2026] SGECT 1, the Employment Claims Tribunal published its first written grounds of decision and, in doing so, set out a comprehensive analytical framework for wrongful dismissal claims under Section 14(2) of the Employment Act 1968 – finding that an employer who overstated the basis for an employee’s dismissal (alleging dishonesty when only negligence was established) had dismissed the employee “without just cause or excuse”.

Both decisions illustrate that the Singapore courts and tribunals are looking more closely at how employers exercise their disciplinary and performance management powers, and are prepared to scrutinise whether internal processes are conducted with genuine intent and procedural integrity. These decisions show that employers cannot simply rely on contractual termination rights or treat performance and disciplinary processes as mere administrative formalities. We have summarised these decisions below and have provided practical checklists for employers to navigate their way forward in light of these developments.

 

I. Performance Improvement Plans - Boon or Bane (Prashant Mudgal v SAP Asia Pte Ltd [2026] SGHC 15)

Summary

In a landmark judgment, the General Division of the High Court of Singapore (the High Court) has affirmed that the implied term of mutual trust and confidence exists in employment contracts (the Implied Term). The High Court in Prashant Mudgal v SAP Asia Pte Ltd [2026] SGHC 15 (Prashant Mudgal) has confirmed that employers are prohibited from acting, without reasonable and proper cause, in a manner that is likely to destroy or seriously damage the relationship of trust and confidence between an employer and employee.

The High Court in particular found that implementing a Performance Improvement Plan (PIP) after already deciding to terminate an employee would be a breach of the employer’s duty not to behave in an intolerable or wholly unacceptable way. Internal email correspondence evincing the management’s determination to remove the employee before placing him on a PIP and the shoddy documentation which accompanied the PIP served as decisive evidence in helping the High Court reach that conclusion.

Despite the breach, the High Court saw fit to only award nominal damages of SGD1,000 against the employee’s total claim amount of almost SGD5 million.

The decision does not limit an employer’s contractual right to terminate with notice in Singapore. It remains well within the employer’s rights to terminate an employee’s employment at any time in accordance with the terms of the employment contract. The issue in Prashant Mudgal was not the fact of termination in itself, but the integrity (or the lack thereof) of the process leading up to it.

Crucially, Prashant Mudgal signals that the Singapore courts will now look behind the label of a PIP and scrutinise whether the outcome of the PIP was pre-ordained. Employers should no longer assume checking all the boxes in a structured document automatically shields them from liability – the process must genuinely be intended to support the employee’s improvement and not merely rubber stamp an outcome that has been pre-judged.

Prashant Mudgal is also indicative of the growing sentiment in Singapore that PIPs are becoming a legal risk touchpoint. When misused or shoddily documented, a PIP can often be riskier and result in more exposure than a straightforward termination. Running a PIP may now be riskier than not running one at all.

Facts of the case

The claimant (the Claimant) was a senior employee at SAP Asia Pte Ltd (the Employer) whose working relationships deteriorated over time due to escalating conflicts and an alleged pattern of abrasive communication styles with colleagues. In response, the Employer chose to place the Claimant on a 45‑day PIP which was presented as a structured opportunity for the Claimant to address identified behavioural and leadership concerns.

There was internal correspondence amongst management well before any formal performance process was initiated showing that decision‑makers were already fully aligned on removing the Claimant from the business. There were repeated internal remarks reflecting a desire to remove him “as soon as possible” and that there was a need to “expedite” his exit.

During the PIP period, witnesses testified that the Claimant attempted to comply with the stated requirements, and there were indications that some colleagues viewed his conduct as having improved. However, based on internal correspondence, it appeared that the Claimant’s supervisor remained convinced that the Claimant’s improved conduct was not genuine or sincere and that the Claimant was merely “simulating his behaviour” for the PIP. The Claimant’s supervisor showed no willingness to reconsider their earlier decision to exit him from the business despite the Claimant’s marked improvement.

The documentation supporting the PIP process was also severely lacking. There were no consistent records of weekly check‑ins, written assessments of the Claimant’s progress or any clear documentation during the PIP period or relating to the PIP’s final conclusion. There was no record or documentation on whether the PIP’s objectives had been met by the Claimant and the objectives which he had not met. Following the expiry of the PIP, the Employer proceeded to terminate the Claimant’s employment by serving a notice of termination in accordance with his employment contract. In fact, the Employer provided the Claimant more than his required one month’s notice.

Decision of the High Court

The High Court found that the Employer breached the Implied Term because the PIP was not intended to provide the Claimant a genuine opportunity to improve. Key to the High Court’s finding was the combination of the Employer’s determination in exiting the Claimant prior to the PIP and the poor documentation and lack of procedural integrity underlying the Claimant’s PIP.

For one, internal communications showed that management was already in “full alignment on removing” the Claimant and that they intended to “expedite” his exit even before the PIP had begun. This demonstrated that the end result of termination was pre‑ordained. The internal correspondence revealed that the Employer effectively placed the Claimant on a PIP with the end-game of terminating his employment. Although the PIP was presented as a structured and supportive process, it operated merely as a façade for a dismissal that was pre-decided by the Employer.

The High Court also placed significant weight on the “abject shoddiness” of the PIP and the absence of any clear documentation and records during the entire process. Key elements of the PIP, including weekly check‑ins, progress assessments and a formal outcome, were all missing, inconsistent or never communicated to the Claimant. The lack of contemporaneous records further reinforced the view that the PIP was not administered as a bona fide performance management tool.

Importantly, the High Court made it clear that there was nothing inherently wrong in the Employer’s decision to terminate the Claimant’s employment and that it was well within their rights to do so in accordance with the terms of the employment contract. It was in fact within the Employer’s prerogative to do so at any time. Rather, the pain point lay in the Employer’s conduct before the termination which was problematic – even if it were true that various persons in the Employer’s organisation faced difficulties working with the Claimant, this was quite apart from the fact that the Employer was not justified in placing the Claimant on the PIP without intending for it to be a genuine opportunity to improve. The Employer’s issuance of the PIP with the end-game of termination in mind was therefore found to be a breach of the Implied Term.

In the High Court’s own words:

“It is true that the [Employer] could have chosen not to place the [C]laimant on the PIP. However, having chosen to place the [C]laimant on the PIP, it was not open to the [Employer] to lead him on like a lamb to slaughter on the false pretext that he was being given a genuine opportunity to improve. Such dishonest conduct had no reasonable and proper cause and would, on any objective view, be calculated and likely to destroy or seriously damage the relationship of confidence and trust between employer and employee.”

Surveying the local jurisprudence, the High Court found that there was ample doctrinal support for the Implied Term in Singapore employment contracts. Moreover, it was held that the Implied Term was justified in principle and that policy considerations militated towards its implication in the Singapore context, for instance, because employment contracts are not commercial contracts but are in fact a “continuing relationship of trust and confidence between the employer and employee” and because employment relationships can be uniquely characterised by the power imbalance between the parties (both at the stage in which the contract is entered into and when it is being performed).

Despite the clear impetus of the Implied Term, the High Court noted that the term may invariably engender some degree of uncertainty in employment relationships. However, the High Court noted that: (1) the threshold for breach of the Implied Term remained a high one; and (2) the Implied Term must not contradict an express term of the contract and that parties are still “free to modify or exclude its operation in their contract by words to that effect”. Ultimately, whether or not the Implied Term has been breached should be determined on a case-by-case basis in a principled manner, having regard to the existing legislation and circumstances in Singapore.

Despite finding that the Employer had breached the Implied Term, the High Court only awarded the Claimant nominal damages of SGD1,000. This was because the Claimant could not ultimately prove the losses alleged to have flowed from such breach. Whether or what other forms of damages may be claimed as a consequence of a breach of the Implied Term is an issue that will have to be thoroughly considered in another decision.

Why this case matters for you

For years, the question of whether the Implied Term truly formed part of Singapore law was a topic of much debate and controversy, especially after the reluctance to adopt it in Dong Wei v Shell Eastern Trading (Pte) Ltd [2022] 1 SLR 1318. Prashant Mudgal now answers that question in no uncertain terms: the Implied Term exists in Singapore employment contracts, although its precise ambit and content remains confined by the express terms of the contract.

Prashant Mudgal also serves as a clear signal to employers and employees alike that the Singapore courts are prepared to look past the labels of PIPs and will examine whether the process was administered as a genuine opportunity for the employee to improve. It is clear now that PIPs that are merely cosmetic, performative, and run to “paper over” a decision already pre-judged, are scenarios that invite liability and are ripe for dispute. In fact, a PIP ran just “for show” may be far more dangerous for employers than not running a PIP at all. Employers should expect closer judicial attention on documentation hygiene, internal communications, and whether employees are given a real, not theoretical, opportunity to improve.

A practical checklist for employers

Consider the appropriateness of a PIP: Before initiating any PIP, employers should properly consider the intended purpose of the process. If the business has already concluded that termination is the appropriate outcome, the business may consider exercising their contractual right to terminate with notice, rather than commencing a PIP that is not genuinely intended to provide an opportunity to improve. Implementing a PIP when the outcome has been effectively pre-determined exposes the organisation to a breach of the Implied Term.

If a PIP is used, ensure it is genuine, structured and thoroughly documented: Where a PIP is appropriate, it must be implemented as a genuine process aimed at improving the employee’s performance. The PIP must be supported by a proper evidentiary trail and employers should set clear, measurable expectations, provide meaningful support and document all checkpoints. While the categories of documentation required are not closed, businesses should make some demonstrable effort in order to dismiss any impression that the PIP was done perfunctorily. This would include, for example, scheduling check‑in meetings, recording any modifications to expectations and issuing a documented final assessment to the employee concerned – in this case, the more, the better.

Calibrate tone and emails: Assume internal emails will be read in court. Avoid language suggesting inevitability of termination before and during an ongoing PIP. Taking a page out of Prashant Mudgal, this may include remarks that you are keen to remove the employee “as soon as possible”, that the PIP is a necessary hurdle before termination, that you are determined to terminate the employee’s employment, or deliberately ignoring genuine improvements in an employee’s performance.

Train decision-makers: Cross‑functional alignment (eg Legal‑HR‑manager) can help to reduce inconsistent messaging and documentation gaps.

Employment contract updates: Generally, implied terms can be modified or excluded from operation in contracts by express words to that effect. Consider reaching out to external counsel to review your existing employment contract templates to modify the scope of or to exclude the Implied Term to reduce risk and liability.

Concluding Remarks

While Singapore remains relatively employer‑friendly, the introduction of the Implied Term forms part of the broader trend and move towards increased expectations for transparency and procedural honesty in the workplace. While there remain open questions on how the Implied Term will be applied in practice, the Implied Term now sits alongside other like-minded developments such as the upcoming Workplace Fairness Act (expected to take effect by end-2027).

In the words of the High Court, the outcome in Prashant Mudgal may well be considered a “pyrrhic victory” for the Claimant. Some may find this unsurprising given the High Court’s comments that the Claimant’s self-righteous behaviour had contributed to the hostility in an already volatile office environment, and that the Claimant was, to a large extent, the author of his own misfortunes in the workplace. That said, the case serves as an important illustration of why the Implied Term is both necessary and, in fact, foundational to employment relationships. Against this backdrop, businesses should be mindful not only of their legal rights (such as termination on notice) but how their disciplinary and performance processes are experienced and felt by employees in practice. For employers, the key takeaway is clear: your processes must be genuine, decisions must be made in good faith, and employees must be treated in a manner that preserves the trust and confidence that undergirds employment relationships.

 

II. Firing for cause – how much cause is enough? (JGP v JGQ [2026] SGECT 1)

Summary

On 15 May 2026, the Employment Claims Tribunal in Singapore (the ECT) published its first written decision in JGP v JGQ [2026] SGECT 1 (JGP v JGQ). Acknowledging the “high volume” of wrongful dismissal cases, the ECT took the opportunity to set out a framework when considering claims of wrongful dismissal under the Employment Act 1968 (the EA).

In the case itself, the ECT considered several wrongful dismissal claims arising from an employer’s large-scale internal review into its employees’ medical reimbursement claims. The ECT’s key holdings are as follows.

A claim under Section 14(2) of the EA (ie that an employee has been dismissed without “just cause or excuse”) is distinct from the common law action of “wrongful dismissal”.

Where an employer relies on misconduct as the basis for dismissal, the requirement of “due inquiry” under Section 14(1) of the EA is engaged, even if the employer terminates the employee with notice or salary in lieu of notice (rather than summary dismissal). An employer’s internal disciplinary frameworks do not raise the standard required to meet the due inquiry requirements.

Whether an employer’s stated reasons for the termination amount to “just cause or excuse” is assessed in two steps: (a) truth (including any mental element the employer invoked – such as dishonesty or wilfulness); and (b) sufficiency (whether the proved facts, in context, amount to “just cause or excuse”– rather than warranting a lesser penalty).

If the employer’s stated reason is not proved at the level argued but the evidence establishes a lesser wrong within the same gravamen, it must have been fairly put to the employee before dismissal, cohere with the notice’s core account of why the relationship had to end, and be something the employee had a fair chance to meet.

Parity of treatment between employees may have a bearing on the proportionality of the decision to dismiss the employee (for instance, where the employer’s own practice shows that comparable conduct has attracted warnings or reduced bonuses rather than dismissal).

Facts

The employer in this case (the Employer) commenced an internal group-wide review into its staffs’ medical benefit claims after concerns of possible misuse of outpatient medical entitlements arose. A substantial number of employees were investigated. Around 40 employees were ultimately dismissed following the investigation exercise, each having been assessed by disciplinary committees to have intentionally, wilfully, and/or dishonestly committed breaches of the Employer's medical claims policy. Several employees commenced claims before the ECT contending that they had been “wrongfully dismissed” by the Employer.

The decision in JGP v JGQ itself covered the claims made by one of those claimants, Ms. C (the Claimant), who submitted 62 reimbursement claims for healthcare related items totalling approximately SGD 9,989 over a seven-month period. The disciplinary committee overseeing the Claimant’s disciplinary inquiry concluded that she committed serious breaches of the Employer's medical claim policy intentionally and dishonestly. Following further concerns raised by the Employer's global head of HR, the disciplinary committee’s recommendation was for the Claimant’s employment to be terminated. The Claimant was subsequently terminated with contractual notice, part of which was later commuted to salary in lieu.

The letter of termination issued to the Claimant stated that the decision to end her employment was founded on her having committed intentional misconduct involving dishonesty and a severe breach of the Employer's medical claims policy. The Claimant then commenced wrongful dismissal proceedings against the Employer in the ECT under Section 14(2) of the EA and also claimed in respect of her 2023 performance bonus.

Decision of the ECT

The ECT found that the Claimant had been dismissed “without just cause or excuse” under Section 14(2) of the EA, but dismissed her claim in relation to her 2023 performance bonus.

The ECT distinguished common law wrongful dismissal (which asks whether the employer brought the employment to an end in accordance with the employment contract) and a claim under Section 14(2) of the EA (which asks whether the dismissal was “without just cause or excuse”).

The ECT held that where misconduct is relied upon as the basis for dismissal, the requirement of “due inquiry” under Section 14(1) of the EA would arise even where an employer terminates with notice or salary in lieu. The ECT reasoned that employers should not be able to cite misconduct as a reason for dismissal while avoiding the procedural safeguards associated with such allegations merely by electing to terminate with notice. In addition, an employer’s internal disciplinary frameworks do not raise the legal threshold of a due inquiry, because this only would penalise employers that put in place sound disciplinary processes.

As the Employer's letter of termination to the Claimant expressly cited the Claimant’s alleged misconduct, a due inquiry was therefore required. The ECT was satisfied that all requirements under a “due inquiry” were met in the Claimant’s case. This was because the Claimant had received clear notice of the allegations, was given a meaningful opportunity to respond to those allegations, and that the disciplinary committee carefully considered the Claimant’s explanations alongside all inquiry records before reaching its decision to terminate.

Although the ECT was satisfied that a due inquiry was done, it found that the Employer failed to show that the Claimant’s dismissal was supported by “Just cause or excuse” (Section 14(2) of the EA). Where reasons on grounds of misconduct or poor performance are recorded in the notice of dismissal issued to an employee (eg dishonesty), the issue of “just cause or excuse” is to be decided in two steps: (1) truth; and (2) sufficiency.

The first step considers whether the employer’s stated grounds for termination can be established on a balance of probabilities. The second step assesses whether, even where some wrongdoing is proven, those findings – when viewed in their context and together with the employer’s own practices – amount to “just cause or excuse” for termination, as opposed to warranting a lesser sanction. The parity of treatment between employees is a factor in assessing whether dismissal was warranted or a proportionate response.

On the facts, the ECT accepted that the Claimant had submitted impermissible claims under the Employer's medical claims policy. However, the ECT ultimately concluded that “dishonesty” (the mental element that the Employer chose to allege) had not been established. The ECT considered, among other things:

• the broader workplace practices surrounding the claims process;
• the Claimant’s reliance on colleagues and clinic staff; and
• the Claimant’s willingness to repay the sums once told the claims were not in order.

The ECT therefore concluded that although the Claimant had exercised poor judgment and breached policy requirements amounting to some level of negligence, this did not provide justification for her dismissal. In addition, the evidence showed that other employees with broadly comparable spending patterns were not dismissed. The ECT subsequently awarded compensation for the Claimant’s claim under Section 14(2) of the EA.

The ECT dismissed the Claimant’s separate claim relating to her performance bonus on the basis that the bonus was stated to be discretionary. The fact that the ECT found that she was dismissed without just cause or excuse under Section 14(2) of the EA did not create a right or entitle the Claimant to her claimed performance bonus.

Why this case matters for you

JGP v JGQ is a landmark decision as it is the ECT’s first published set of written grounds. The ECT has made clear that the statutory claim under Section 14(2) of the EA (which asks whether an employee was dismissed “without just cause or excuse”) is analytically distinct from common law wrongful dismissal (which is concerned with whether the employer terminated employment in accordance with the contract). This means that a termination which is contractually compliant – for example, one effected with proper notice or salary in lieu – can still be found to be “without just cause or excuse” if the employer’s stated reasons for dismissal do not hold up to scrutiny. Employers should not assume that compliance with notice provisions insulates them from a successful claim under Section 14(2) of the EA.

The decision also signals that where employers cite misconduct as the basis for dismissal, they must be prepared to prove the specific characterisation they have chosen. Applying the two-step test, the Employer had characterised the Claimant’s misconduct as dishonest, but the ECT found that this specific mental element was not established. Although a lesser wrong (negligent submission of impermissible claims) was proven, the ECT found that this lesser wrong did not justify dismissal, when viewed in context of the Employer's own practice of imposing lesser sanctions on employees with comparable conduct profiles. Employers should be careful not to overstate the basis for dismissal in their termination letters to employees.

The ECT has confirmed that parity of treatment between employees is a relevant factor in the sufficiency analysis (ie the second step of the test under Section 14(2) of the EA). Where an employer’s own practice shows that comparable conduct has attracted warnings or reduced bonuses rather than dismissal, it will be difficult to justify dismissing a particular employee on similar facts – especially where the aggravated mental element (such as dishonesty) that the employer relied on as a distinguishing factor is not proven.

Finally, the ECT also held that where misconduct is cited as the basis for dismissal, the requirement of “due inquiry” under Section 14(1) of the EA is triggered even if the employer terminates with notice. Employers should not assume that terminating an employment relationship according to the contract’s notice provisions does not engage a due inquiry – a due inquiry is still required where the termination notice cites misconduct as the reason behind the employee’s dismissal.

A practical checklist for employers

Frame the basis for dismissal accurately and proportionately: Where misconduct is relied upon, the termination letter should accurately characterise the nature of the misconduct based on the evidence available. Overstating the grounds – for example, alleging dishonesty when the evidence supports only carelessness or poor judgment – can call the dismissal into question before the ECT. The ECT will hold the employer to the specific characterisation chosen and, if that characterisation is not proven, the employer may be found to have dismissed the employee without just cause or excuse even if some form of wrongdoing is established.

Conduct a proper due inquiry before citing misconduct: Where the employer intends to cite misconduct as the basis for dismissal, the requirement of “due inquiry” under Section 14(1) of the EA is triggered regardless of whether the termination is effected by way of summary dismissal or with notice. At a minimum, the employee must receive clear notice of the allegations, a genuine opportunity to respond, and the decision-maker must consider the employee’s explanations with an open mind before reaching a conclusion. Employers should not assume that giving contractual notice allows them to bypass these procedural safeguards.

Ensure consistency of disciplinary outcomes across the organisation: Parity of treatment is a factor in the ECT’s sufficiency analysis. Where the employer’s own practice shows that comparable conduct has attracted lesser sanctions (such as warnings, bonus reductions or counselling), it will be difficult to justify dismissal for an employee whose conduct falls within that same range. Before proceeding with dismissal, employers should review how similar cases have been handled internally and document the basis for any departure from precedent.

Consider whether termination is proportionate, or whether a lesser sanction will suffice: The ECT will conduct a de novo assessment of whether the proved misconduct amounts to “just cause or excuse” for dismissal, rather than merely reviewing the employer’s internal decision for reasonableness. If the evidence does not support the aggravated mental element alleged (for example, dishonesty or wilfulness) and only a lesser wrong is established, the ECT will consider whether dismissal was a proportionate response – or whether a lesser penalty, such as a warning or a reduction in bonus, would have been more appropriate in the circumstances.

Concluding Remarks

JGP v JGQ sends a clear signal: Singapore’s employment law landscape is evolving towards greater scrutiny of how employers exercise their powers and manage their people. By establishing a comprehensive analytical framework for wrongful dismissal claims under Section 14(2) of the EA, the ECT has made clear that employers who cite misconduct must prove what they allege, at the level they allege it, and must demonstrate that dismissal was a proportionate response. Contractual compliance with notice provisions will not, by itself, shield an employer from a finding that a dismissal was “without just cause or excuse”.

The practical lesson from JGP v JGQ is that process, documentation, and consistency all matter in carrying out employee dismissals. Employers should approach disciplinary processes with rigour and good faith – not as administrative formalities to be ticked off, but as processes that must be able to withstand independent judicial scrutiny.

This decision, together with the upcoming Workplace Fairness Act (expected to take effect by end-2027), reflects the broader trend in Singapore towards a more structured and accountability-driven employment framework. While Singapore remains a jurisdiction that respects the employer’s right to terminate employment in accordance with the contract, JGP v JGQ makes clear that the manner in which that right is exercised, and the integrity of the processes surrounding it, will be subject to closer attention than ever before.

If you would like to discuss how these decisions may impact your organisation’s current practices, or require assistance in reviewing your employment documentation and processes, please reach out to any member of our employment team.

*DLA Piper is restricted for regulatory reasons from practising local law in Singapore. This article is not intended to constitute the general dispensation of advice on Singapore law.