GENUINE REDUNDANCY AND RETRENCHMENT COMPENSATION: AN ANALYSIS OF MALAYSIAN LAW
Abstract
Retrenchment is a process to discharge the surplus labour arising due to various factors which renders the services of the redundant worker no longer needed by the employer. This might happen firstly, when the business itself ceases to operate or the business no longer exists, secondly, when the place where the employee was contracted to work disappears, thirdly, the job itself disappears and fourthly, when less employees are needed to do the same job while the job still exists. All these are brought about because of change in business as times are not always booming in the business world. In a genuine redundancy situation, it is pertinent for the employer to pay retrenchment benefits or compensation to the affected workers in order that they are able to cope with immediate aftermath of retrenchment. The retrenchment payment is a minimum sum paid to the employee based on the length of service for loss of the job.
Having said the above, this paper will seek to discuss genuine redundancy and the retrenchment compensation with reference to the law and practice in Malaysia. Here, unlike some developed countries such as the United Kingdom, not all workers will be eligible for the compensation in the event their services are no longer required by the organisation due to genuine redundancy in the organisation. Hence, this paper will, apart from discussing what it means by ‘genuine redundancy’ and ‘retrenchment compensation’ from the Malaysian perspective, will also propose reform of the existing law to accord retrenchment compensation to all workers affected by the retrenchment.Keywords
References
- Ashgar Ali and Farheen Baig (2012). Retrenchment: The Law and Practice in Malaysia, Sweet & Maxwell Asia, 48. Maimunah, Aminuddin (2006). Malaysian Employment Law Practices, LexisNexis, Kelana Jaya, 302.Ashgar Ali and Farheen Baig (2015). Retrenchment: Last In First Out (LIFO) Rule, Malaysian Current Law Journal, lxxx. Ashgar Ali (2015). The Viability of A National Retrenchment Scheme (NRS) in Malaysia. Industrial Law Reports (3), xvii.
Details
Primary Language
English
Subjects
-
Journal Section
Research Article
Authors
Ashgar Ali Ali Mohamed
*
Malaysia
Mohammad Naqib Ishan Jan
Malaysia
Muhamad Hassan Ahmad
Malaysia
Arun Kasi
Malaysia
Publication Date
January 10, 2019
Submission Date
October 30, 2018
Acceptance Date
December 31, 2018
Published in Issue
Year 2018 Volume: 4 Number: 12