The notification letter indicates which Company you will be employed to and when you can start commencing your new role.
This letter is also proof that the employing Company has issued the work pass and is liable to start paying the candidate monthly salary indicated in the In-Principal Approval (IPA) letter.
Yes, the Employment Pass notification letter does have an impact towards EP renewal. As mentioned, all employment pass related will be given an In-Principal Approval (IPA) letter once the application is approved, regardless it being a new or renewal application.
However, for a person to start working or continue working in Singapore, they will need to proceed and issue their employment pass.
Once issued, the Ministry of Manpower (MOM) will then issue a Notification Letter (NL) as proof that they can now start working or continue working in their position.
If no action was taken to issue the pass, then the In-Principal Approval (IPA) letter will be revoked, and the pass holder will need to be sent home or is unable to continue working in Singapore.