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Compliance
Published:
January 19, 2026
Last updated:
January 19, 2026
Employee termination represents one of the most sensitive and legally complex HR responsibilities, particularly for organizations managing multi-country operations across Asia Pacific. For mid-sized companies (100-300 employees spanning 3-7 APAC markets), termination challenges multiply exponentially—what constitutes lawful dismissal in Singapore may trigger wrongful termination liability in the Philippines, Japan, or South Korea.
The stakes are significant: improper terminations create legal exposure (reinstatement orders, back wages spanning years, substantial compensation awards), damage employer brand, disrupt operations, and strain client relationships.
Recent data underscores these challenges. Mercer's research indicates Southeast Asian employers observed elevated turnover rates post-pandemic, while Gartner found one in five employees actively job-seeking. This heightened employee mobility, combined with increasingly protective employment regulations across APAC markets, makes understanding termination compliance more critical than ever.
APAC employment frameworks span an enormous spectrum from highly protective employee-centric markets (Philippines, Japan, South Korea) requiring demonstration of "just cause" with robust procedural safeguards, to more employer-flexible jurisdictions (Singapore, Hong Kong) permitting termination with reasonable notice, to markets with unique characteristics (Thailand's 119-day probation strategy, Taiwan's mandatory severance calculations).
1. Dismissal Standards Vary Dramatically
"Just Cause" Markets (High Protection):
Employer-Flexible Markets:
2. Severance/Separation Pay Obligations Differ Vastly
3. Wrongful Dismissal Consequences Vary in Severity
Reinstatement + Back Wages:
Compensation Without Reinstatement:
So how does a company manage employee termination compliantly while ensuring that the employee’s wellbeing is taken care of at the same time?
We’re glad you asked.
There are essentially two types of employee terminations: voluntary termination of employment and involuntary termination of employment. The differences between these two terminations are described in the table below:
Dismissal grounds:
Mandatory two-notice rule:
Failure consequences: Procedural defect creates nominal damages (PHP 30,000-50,000) even with just cause; absence of just cause creates full illegal dismissal liability.
Practical approach: Document performance issues meticulously, follow two-notice rule religiously, consider negotiated settlements to avoid NLRC litigation.
Dismissal standards: "Objectively reasonable and socially acceptable"—among world's highest bars.
Grounds requiring demonstration:
Notice: Minimum 30 days advance notice or 30 days' wages in lieu.
Practical approach: Most terminations involve negotiated voluntary resignation (合意退職) offering severance packages rather than unilateral dismissal.
Dismissal standards: "Just cause" must be objectively verifiable and socially acceptable.
Notice: Minimum 30 days advance notice or payment in lieu.
Severance: One month average wage per year for 1+ years (regardless of reason except serious misconduct).
Example: 5 years service, KRW 3,000,000/month → KRW 15,000,000 severance.
Collective dismissal: Business necessity, alternatives exhausted, fair selection, 50+ days consultation, MOEL reporting.
Notice: 30 days or payment in lieu for most terminations.
Severance: One month salary per year (capped at 3× municipal average wage, 12 months maximum).
Mass layoffs: 20+ employees or 10%+ workforce require labor bureau notification, union consultation, public announcement.
Social credit system: Wrongful termination creates blacklisting affecting government procurement, business licenses, banking (1-3 years sustained compliance for removal).
Statutory minimum notice:
Summary dismissal: Permitted for serious misconduct after reasonable investigation.
Retrenchment: No statutory severance; Tripartite Guidelines suggest benefits.
Severance (graduated by tenure):
119-day probation strategy: Many employers use 119-day probation (just under 120 days triggering severance) to assess employees before obligations begin—unique to Thailand.
Notice:
Severance: One-half month average salary per year for 12+ months service terminated due to employer reasons (post-2021 service).
Practical approach: Provide proper advance notice, document grounds, calculate severance under new formula.
Choose appropriate setting: Private meeting room ensuring confidentiality, HR representative present, avoid significant dates.
Use respectful language: Be direct but compassionate, provide clear factual reasons, listen to reactions without arguing, express appreciation where appropriate.
Cultural considerations:
Fair severance packages: Meet or exceed statutory minimums, explain calculation clearly.
Outplacement services: Career counseling, resume assistance, interview preparation, job search support, networking connections.
Emotional support: Counseling services, extended health insurance, reference letters, flexibility on final work date.
Transparent communication: Inform team of departure (within confidentiality bounds), address workload concerns, clarify reporting changes.
Prevent negative impacts: Acknowledge unsettled feelings, recognize remaining employees' contributions, maintain positive work environment.
Knowledge transfer: Document responsibilities, facilitate handover, preserve institutional knowledge, maintain client relationships.
Pre-Termination:
Termination Meeting:
Post-Termination:
Probation doesn't exempt employers from termination standards in most APAC markets. Philippines, Japan, South Korea, Malaysia, Taiwan, Vietnam still require valid reasons with proper documentation. Singapore and Hong Kong provide more flexibility but termination without reasonable cause still creates potential liability.
Assuming practices from home market (or one APAC market) apply universally. Terminating a Philippines or Japan employee using Singapore's straightforward notice-based approach creates massive liability. Organizations must understand each market's specific dismissal standards, procedures, and severance obligations.
Liability can reach millions in local currency. Philippines: 10-year employee earning PHP 50,000/month with 3-year litigation = PHP 1,800,000 back wages alone plus severance, damages. Japan/South Korea: similar exposure. These amounts dwarf compliant termination costs.
Often yes. Even markets without statutory severance (Singapore, Hong Kong, Malaysia, Japan), offering severance: facilitates agreement reducing disputes, allows settlement agreements with waivers, maintains positive employer brand, follows market norms. Cost typically far less than litigation exposure and reputational damage.
Most APAC markets prohibit or restrict terminations during protected periods. China: cannot terminate during pregnancy/maternity/breastfeeding, work-related injury, serious illness. Wait until protected period ends, consult local counsel, document grounds existed before protected status began.
Yes, common in face-conscious cultures (Japan, South Korea, China). Offer voluntary resignation with severance package in exchange for claims waiver. Benefits: employee maintains dignity, employer avoids procedural requirements. Approach carefully—if coerced, courts may treat as involuntary termination.
