Employers who are considering retrenchment must first take necessary measures to ensure that the retrenchement exercise follows the guidelines provided by The Code of Conduct for Industrial Harmony 1975.
In executing the retrenchment exercise, employers are required to report to the nearest Jabatan Tenaga Kerja Semenanjung Malaysia (JTKSM) at least 30 days before any action described below is implemented using Termination Form (Form PK), according to type of termination to be implemented by the employer: -
- Voluntary Separation
- Temporary Layoff; or
Any employer who fails to comply is guilty of an offence under section 63 of the Employment Act 1955, and if found guilty could be fined not more than RM10,000 for each offence.
Rights of Employees During Retrenchment
Employees who are being released due to the retrenchment exercise have following rights. Employees have:-
- The right to know the reasons of such exercise to be carried out
- The right to be notified within a reasonable time before the date of retrenchment
- The right to be compensated in accordance to the Employment Act 1955 (PART XIIA)
- The right to challenge the retrenchment if there is any element of unfair labour practice