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Retrenchment

1350 Views  ⚫  Asked 4 Years Ago
asked on Jun 20, 2014 at 22:30
by   100plus
I have been employed by my current company for 5 years 9 months
My department is recently retrench me as i am not able to meet expectation of good report writing 3 days ago.

Our notice period to each other is 2 months. They told me my last day is today on Tuesday and they are going to compensate me  4 months salary. I feel this is fair, am i right?

Are they compensated me according to local requirement by virtue to Employement Law?
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5 Answers

answered on Jun 22, 2014 at 03:03
by   arun1011
Hi there

They cannot retrench you for performance issues. Retrenchment is only if there is no more work for you in the Company or your work can be done by others for cost reasons. As for whether the compensation is fair, it depends. If your earning more than RM 2K, you can file a complaint at the Industrial Relations Department for your matter to be referred to Industrial Court and if you win, you could be entitled to 24 months backwages plus 1 month for each year of service which in your case would mean a maximum of 29 months.
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answered on Jun 26, 2014 at 20:20
by   100plus
Thanks again to your advice furnished at another email.

Do u mind to quote me the name of the Act and relevant section and sub- section for the information you furnish above the the act?
Do you have the online link ?

By reference to Malaysia Employment (Termination and Lay-Off Benefits) Regulations 1980, I am not sure am i accurate to say that the company should compensate me 11x days for our employment record of 5.5 years ++, thus 4 months compensation (including 2 months notice period ) is actually not lawful.

I am hestitating how should i  negotiate with the company for the sake of win-win consideration.
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answered on Jun 26, 2014 at 21:00
by   arun1011
Hi there

Termination benefits as quoted by you only applies if you fall under the scope of Employment Act 1955 if your salary is less than RM 2,000. I had expressly mentioned this to you in my previous replies. I am not sure as to whether your salary is less or more than RM 2,000.

If your salary is more than RM 2,000, the Company can actually terminate you on the grounds of retrenchment by paying you nothing except the notice period. However the practice by most companies is to pay 1 month for each year of service and if you bring your case to Industrial Court, and the Industrial Court finds there was no genuine redundancy, then they would also similarly award 1 month for each year of service but the Industrial Court could also award backwages up to 24 months (this is the period from the time you were terminated until the Court Award subject to a maximum of 24 months)
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answered on Jun 26, 2014 at 21:42
by   100plus
Thanks for your prompt clarification.......ehh..I think my quote Malaysian Employment Termination Benefit has caused misunderstanding.

Can i clarify all per  my case  ---- my monthly salary is more than RM2000 :
Can the company dismiss me on the ground of my  report writing skill which has not attained their requirement?

You meant they can just dismiss me by paying me 2 months notice period without further compensation ?


Below are compensation benefit  copied from Malaysian Employment Termination Benefit. you meant these are applicable to those paid below/less than RM2K/month?

Not less than -

1. 10 days wages for every year of employment under a continuous contract of service with the employer if he has been employed by that employer for a period of less than 2 years; or

2. 15 days wages for every year of employment under a continuous contract of service with the employer if he has been employed by that employer for a period of 2 years or more but less than 5 years; or

3. 20 days wages for every year of employment under a continuous contract of service with the employer if he has been employed by that employer for 5 years or more; and

4. pro-rata as respect of an incomplete year, calculated to the nearest month.

Thank you for your time.
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answered on Jun 27, 2014 at 00:13
by   arun1011
In respect of (a) - Company can terminate you but you can challenge the dismissal and you will have a strong case as dismissal based on poor performance must first be started with written warnings and opportunity for improvement.

For (b), yes if they dismiss you, they can just pay you the notice period. But if you bring it to Industrial Court and the court finds the dismissal to be unjust, then you are entitled to backwages up to 24 months and 1 month for each year of service.

For (c) - only applies to those earning less than RM 2,000.
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