Latest Retrenchment Updates in Malaysia

Retrenchment Updates In Malaysia So Far In 2020

We are now halfway through 2020. Unfortunately, we are still uncertain of the future. Some find out that working from home is possible, others are still trying to adjust to it. But not everyone can work from home. Many of them are working in the manufacturing, farming and hospitality sectors.

Many employers had to take drastic actions to keep their companies afloat. One of these actions is retrenchment. Some companies have begun offering Voluntary Separation Scheme (VSS) and/or Mutual Separation Scheme (MSS) to their employees.

Companies That Offered VSS & MSS

On May 12, Hotel Equatorial Kuala Lumpur announced a VSS to employees who were keen to apply. The property's general manager Robert Lagerwey said the scheme allowed for compensation over and above the minimum guidelines mandated. 

On May 15, Parkroyal Kuala Lumpur offered a VSS to all its employees as the luxury hotel will be closed for 15 months for renovation. The hotel decided to start the renovation in mid-June, instead of its initial plan to do it late this year, because of the Covid-19 pandemic.

The company said it has fixed June 8 as the last day of employment for all staff, where the final payment of the VSS will be credited into the employees’ bank accounts.

Major companies are struggling to keep their staff during the Coronavirus pandemic.

On May 20, Genting Malaysia Bhd announced that it will undertake mutual and voluntary separation schemes for its employees to further mitigate the adverse financial impact from the ongoing Covid-19 pandemic.

Genting Malaysia Bhd senior vice-president of human resources Quan Cher Siong said the company had to assess and recalibrate its cost structure, including staffing needs, based on both current and anticipated future operating capacity.

Quan said the company had to make the very difficult decision to restructure its Malaysian operations and rightsize the workforce by retrenching surplus labour and offering VSS and MSS.

How bad is it?

Back on May 19, The Malaysian Employers Federation (MEF) warned that a wave of lay-offs will likely happen just after Eid. This is because companies are struggling to stay afloat after the detrimental economical effects of the Covid-19 pandemic. 

MEF executive director Datuk Shamsuddin Bardan said that the country’s largest federation of employers expects more than two million people to lose their jobs. This number includes fresh graduates and 610,000 people who were already unemployed before March 2020.

The Malay Economic Action Council (MTEM) senior fellow Azlan Awang predicted that 60 per cent of Malaysian workers would find it tough to survive beyond a week, and do not have the means to raise even RM1,000 for household expenses if they were to lose their jobs abruptly due to the Covid-19 pandemic.

He based this grim prediction based on a Bank Negara-NEAC study in 2017 that showed up to 60 per cent of Malaysian households were surviving below the living wage, meaning they did not earn enough to have a normal standard of living.

Retrenchment Resources for HR

If you are looking for resources and guides in retrenchment, we have prepared some articles just for you.

1. Best Practices HR Must Know for Retrenchment and Downsizing Exercise
2. Is Covid-19 a Justifiable Reason for Retrenchment?
3. HR Guide: Retrenchment Procedures in Malaysia 
4. More Layoffs in Malaysian Companies: Understanding VSS and MSS    

We must prepare for a tough journey ahead and some of us will have to make tough decisions. We hope that the articles we provide will help you in these troubling times.

Are You Short on Staff? Reach millions of job seekers on Maukerja, Ricebowl, LinkedIn and more when you post a job on AJobThing.com Register today!