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Company closing and employees rights

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asked on Dec 6, 2016 at 19:35
by   TerriC
Appreciate advise.
My company has just announced that it's ceasing its operations end of this month. 

And no, we were not given any notice of its closure up till now and that was addressed to all via email.
There's been no resolution to whether the employees will be compensated according to their letters of appointment but was informed that we will get paid up to the day of close.

There has been no guarantee made to confirmed staff or any other staff on whether compensation will be paid out for their notice periods (3 months here), or for leave that's not been utilized.

Furthermore we've just been informed that we will only receive our pay after the company closes which is due 20th December. 

1. After the 20th December the company will be officially closed to business, ceased. Do we still have the right to seek compensation from the directors after that date? or will the company simply, like our severence, vanish?

2. Unconfirmed staff aren't usually allowed to take annual leaves, but are bounded to serve a 1 month notice if resigned. Should 1 month be part of the compensation to unconfirmed staff?

3. We are headed to the labour office to lodge a report and file our claim, do we need a lawyer to represent us as a group? and if so, any recommendations and what are the costs?

Thanks in advance.
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4 Answers

answered on Dec 6, 2016 at 19:58
by   jeff005
edited Dec 6, 2016 at 20:14
by   jeff005
You do not need the services of a lawyer.

Just go straight to the nearest Labour Dept.

If none of your group is versed in latest labour law with regards to compensation due to employees for cessaton of a business entity due to economic reasons or business takeover then....

Try reading this FB page
https://www.facebook.com/arunkumarandassociates/?hc_ref=PAGES_TIMELINE&fref=nf >

Ask for advise and quotation.

Note that I do not know this lawyer firm. 
I had bad face offs with lawyers.
But this guy have posted some good articles and advises on 
Lawyerment forum without revealing his identity and name of his legal firm.
I give him due respects.
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answered on Dec 6, 2016 at 19:59
by   vkpc
There has been no guarantee made to confirmed staff or any other staff on whether compensation will be paid out for their notice periods (3 months here), or for leave that's not been utilized.

The letters of appointment is already a guarantee for pay in lieu of the notice period.
Why need a "double guarantee"?

After the 20th December the company will be officially closed to business, ceased. Do we still have the right to seek compensation from the directors after that date?
Directors and shareholders are separate entities from the company. ( for Sdn Bhd or Bhd companies )
So you cannot seek anything from them.
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answered on Dec 7, 2016 at 00:27
by   arun kumar
First of all, if the employees are within the scope of Employment Act 1955 (earning less than RM 2,000), then there would have to be paid termination notice as per the Employment Act unless the contractual notice in their letters of employment is much favourable. Under the Employment Act (EA), the length of notice is as follows:

a. For those working less than 2 years - 4 weeks notice
b. For those working from 2 to 5 years - 6 weeks notice
c. For those working more than 5 years - 8 weeks notice.

Now, you state that the letters of appointment provide for 3 months notice, which is much favourable than stipulated under the EA and as such the Company has to pay 3 months notice. Further for those under the EA, the Company must also pay termination benefits as per the Termination and Lay off Regulations. 

a. For those working less than 2 years - 10 days wages per year of service
b. For those working between 2 to 5 years - 15 days wages per year of service
c. For those more than 5 years - 20 days wages per year of service. 

For those covered under EA, they would also be entitled to be paid for their unutilised annual leaves. 

Unfortunately the above only applies to those within the scope of EA. For those not covered under the EA, they would be only entitled to the termination notice as per their contract and for unutilised leaves. 
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answered on Dec 7, 2016 at 02:17
by   jeff005
@ TerriC

Now that you have gotten feedback, you have to act on it fast.

First and foremost is to inform the Labour Dept
Second, go over to EPF & Socso to see if everybody contributions is up to date
Thirdly, employees still have the time to thwart off temporary any takeover of the company until all employees are duly compensated.

Your posting under this thread is not clear.

https://www.lawyerment.com/answers/questions/11815/company-ceasing-business-and-absorption-of-staff

We have recently received some interest from another company who is looking to expand and buyout my team, as well as to obviously absorb the existing businesses we have as well.

My Personal View Only 
1. Cessation
2. Buyout
3. Takeover

All are different in nature.
It appears to me it is more of a buyout (without taking over employees).

You should know the operations of the company since UR lead.
There can be assets, accounts receivables, contracts not completed, stocks, forward orders....
Just cannot "close" like that under company laws.

You can apply an "Interim Injunction" in court to delay the buyout until all employees is duly compensated since the company have not stated in their "Notice of Termination" on "compensation"
But you need everybody's Termination letter and their Appointment letter.
You are not only dealing with Labour Laws but also Company Laws and Acts.
This is a possible way to fix these issues.
Time is short
Work fast
(personal opinion =dun quote me)
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