Removing a Director Who Is Also an Employee in Singapore: Board Seat, Contract and Claims

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In many Singapore private companies, the person running the business sits on the board, draws a salary and often holds shares. When relationships break down, the others may want to “remove” that person, as if one decision ends everything. It does not. A working director holds an office as director under the Companies Act 1967 and the constitution, and a job under a contract of employment. A shareholding is a third position that neither decision touches.

Each has its own rules, decision-maker and forum. Treating them as interchangeable leads to invalid resolutions, notice pay claims, Tribunal cases and sometimes oppression actions.

Two relationships, not one

A director holds an office whose powers and duties come from the constitution and the Companies Act; a director need not be paid at all. An executive or managing director usually also has a contract of service, governed by contract law and, where it applies, the Employment Act 1968.

The two end separately. In Ang Tien Sin v Lai Kin Sin and others [2025] SGHC 42, the company terminated the applicant’s managing director role in October 2024, and the shareholders separately removed him as a director by ordinary resolution in November 2024. The High Court held that his right to inspect records under section 199 of the Companies Act depended on being a director, not on the managing director role, so the valid removal left him without standing.

Can a director be an employee?

Yes. In Lee v Lee’s Air Farming Ltd [1961] AC 12, Mr Lee owned almost all the shares, was governing director and was employed as the company’s pilot. The Privy Council held that, the company being a separate legal person, it could employ him, so his widow could claim workers’ compensation after his fatal crash.

Whether a particular director is an employee is a question of fact. Indicators include a service agreement, salary through payroll with CPF, defined duties and leave; a non-executive director paid an annual fee is unlikely to be one.

Does the Employment Act apply?

Since 1 April 2019, the Employment Act covers employees under a contract of service, including managers and executives, whatever their salary; the old exclusion was deleted by the 2018 amendments. The Ministry of Manpower lists seafarers, domestic workers, and statutory board employees or civil servants as not covered. Directors are not a listed excluded class, so a director who works under a contract of service may be covered in that capacity.

Part 4 (hours, overtime and rest days) is narrower. It applies to workmen earning a basic monthly salary of S$4,500 or less and other employees earning S$2,600 or less, and does not cover all managers or executives. Most executive directors fall outside Part 4, but the dismissal provisions can still apply.

Removing the director from the board

For a public company, section 152(1) allows shareholders to remove a director by ordinary resolution, despite anything in the constitution or any agreement. Special notice is required and the director is entitled to be heard at the meeting (s 152(2)). The board cannot remove a public company director (s 152(8)), and section 152(7) preserves any claim for compensation or damages for termination of the appointment.

For a private company, section 152(9) allows removal by ordinary resolution, subject to any contrary provision in the constitution and despite any agreement with the director. Some constitutions provide differently, so read the constitution first. Our guide to resigning or removing a director in Singapore covers the mechanics.

Clauses that link the two roles

A constitution may end a managing director’s appointment automatically when he or she ceases to be a director, and a service agreement may require resignation from the board when employment ends. Without such clauses, dismissal leaves the person on the board, and removal from the board leaves the employment contract in place.

Ending the employment

The contract is ended on its terms: notice of the agreed length, or salary in lieu where the contract allows. Ending a fixed-term service agreement early without a contractual right may expose the company to a claim for the unexpired term. See our article on termination of employment: procedure, notice and payment.

For misconduct, section 14(1) of the Employment Act allows dismissal without notice only after due inquiry; alternatively the employer may downgrade the employee or suspend without pay for up to one week. The Ministry of Manpower says there is no fixed procedure, but the employee should hear the allegations and be able to respond before someone who does not appear biased. Suspension during the inquiry must be on at least half pay and, without the Commissioner for Labour’s approval, for no more than one week.

Wrongful dismissal and salary claims

Under section 14(2), an employee who considers that he or she was dismissed without just cause or excuse may claim under section 13 of the Employment Claims Act 2016, and the Tribunal may order reinstatement with lost wages, or compensation. Managers and executives dismissed with notice or salary in lieu need at least six months’ service to claim, as the Ministry of Manpower explains.

Claims start with mediation at the Tripartite Alliance for Dispute Management (TADM); only if it fails, and a claim referral certificate is issued, can the claim go to the Employment Claims Tribunals. Key limits:

• Wrongful dismissal: file within one month after the last day of employment.
• Salary-related claims: within one year after the dispute arose if still employed, or within six months of the last day of employment.
• Claim limit: S$20,000 per claim, or S$30,000 where the claim went through union-assisted mediation or the Tripartite Mediation Framework.

Larger contractual claims can be pursued in the civil courts, or the excess abandoned to stay in the Tribunals. See our guide to the Employment Claims Tribunals for employers.

Director’s fees versus salary

Director’s fees are paid for holding office. Section 169 of the Companies Act prevents a company from providing or improving emoluments for a director “in respect of his or her office as such” unless approved by a resolution not related to other matters, and most constitutions require shareholder approval. Salary is paid under the employment contract.

The CPF Board states that contributions are not payable on directors’ fees voted at general meetings, but are payable on wages where a director is also engaged under a contract of service. On exit, final salary goes through payroll with CPF; approved fees are paid separately. See our comparison of director’s fees, salary and dividends.

When the director is also a shareholder

Removal does not take away the shares. Where the company was formed on mutual trust, with an understanding that the founders would all manage it, the removed person may apply under section 216 of the Companies Act, alleging oppression or unfair prejudice. Commercial unfairness is the common thread (Over & Over Ltd v Bonvests Holdings Ltd [2010] 2 SLR 776), and the court may order a share buy-out or winding up (s 216(2)).

Exclusion is not automatically oppressive. In Wei Fengpin v Low Tuck Loong Raymond and others [2021] SGHC 90, the High Court found a quasi-partnership and held that conduct over dividends, bonuses, withheld information and related dealings was commercially unfair. But the plaintiff’s expectation of remaining a director was “not an absolute or a perpetual one”, and his removal was justified because a company he controlled was a direct competitor.

Another route is winding up on the just and equitable ground under section 125(1)(i) of the Insolvency, Restructuring and Dissolution Act 2018, where the court may instead order a buy-out (s 125(3)). See our article on the oppression remedy under section 216.

Duties that continue after leaving

Section 157(2) of the Companies Act prohibits an officer from making improper use of the position, or of information acquired through it, to gain an advantage or cause detriment to the company, and “officer” includes a former officer (s 157(5)). The contract may add confidentiality, non-solicitation and non-compete clauses, which are enforceable only if they protect a legitimate interest and are reasonable.

Bank mandates, Corppass roles and email access can outlast the removal, so cut them off quickly. Whether the company is bound by what the person signs afterwards is covered in our article on contracts signed without authority.

What the company should do

• Read the constitution and service agreement together: who can remove the director, the majority needed, any automatic vacation clause and the contractual notice.
• Keep the decisions separate. Use one resolution for the board seat and a separate decision and letter for the employment, so a defect in one does not affect the other.
• Minute the board’s decision to end employment, who signs the letter and any due inquiry, with interested directors declaring their interest.
• Hold the shareholder meeting properly: correct notice (special notice for a public company), the director’s right to be heard where it applies, and a minuted ordinary resolution.
• File with ACRA. Section 173A(1) requires notice to the Registrar within 14 days after a change in directors; see ACRA’s guide to filing a notice of cessation.
• Keep a resident director. Section 145(1) requires at least one director ordinarily resident in Singapore; replace the departing person promptly if he or she was the only one.
• Update the register of directors and any other affected registers.
• Close out the money: final salary, notice pay and leave with CPF; approved fees separately; and any provision for disputed claims reflected in the accounts.

Frequently asked questions

Does removing someone from the board end his or her employment?

Not automatically. The contract continues unless it or the constitution provides that it ends with the directorship, so the company usually has to terminate it separately.

Does dismissing an executive director remove him or her from the board?

Generally not. The person stays a director until he or she resigns, is removed by the shareholders or vacates office under the constitution.

Can the board remove a director?

For a public company, no: section 152(8) prevents it. For a private company, removal is normally by shareholders under section 152(9), unless the constitution provides otherwise.

Is a working director covered by the Employment Act?

If he or she works under a contract of service, the director may be covered as an employee, since managers and executives have been covered since 1 April 2019. Part 4 on hours and overtime will not usually apply because of the salary thresholds.

How long does the company have to tell ACRA?

The change must be lodged within 14 days after the person ceases to be a director. The company must also keep at least one locally resident director in office.

Need a lawyer?

This article is general information about Singapore law for companies, directors and shareholders. It is not legal advice, and it does not take account of your circumstances. Raffles Corporate Services Pte Ltd is a corporate service provider, not a law practice, and does not give legal advice.

If your company is removing or dismissing a director who is also an employee, or you have been removed from the board or dismissed, we can introduce you to an experienced Singapore law firm that handles employment disputes, director removals and shareholder disputes. Tell us briefly what has happened and we will connect you.

Email: [email protected]
WhatsApp: +65 8501 7133 or +65 9018 0072

We can also take care of the corporate side for you: board and shareholder resolutions, register updates and ACRA filings.

Conclusion

A working director’s exit runs on two tracks: the board seat, controlled by shareholders under section 152 and the constitution, and the job, ended under the contract and, where it applies, the Employment Act. Reading the documents first, keeping the decisions separate and filing with ACRA within 14 days reduces the room for challenge. For help with resolutions, registers and filings, contact Raffles Corporate Services.

The Editorial Team, Raffles Corporate Services