The whole world is currently panicking due to the Covid-19 pandemic. As this virus has spread all over the world and forced many countries to go into lockdown, national economies have been suffering and may suffer for months to come. As a result, many employers have had to let some of their staff go in order to keep their company afloat. This has also affected Malaysians, and we’ve seen some of our readers sharing their plight in our article comments as well.
Now, we know that people can get fired for various reasons, but we’re going to specifically talk about being retrenched due to your company’s financial losses during Covid-19. So, if you’ve been asked to leave because the company isn’t doing too well at this point, here’s what you need to know.
It’s not illegal to retrench staff
Losing a job is a painful and scary experience, even more so during a time such as this. If this has happened to you, the first thing you may want to do is to get some sort of remedy under the law. But before you decide to take any action against your employer, you should know that companies ARE allowed to let go off their staff in difficult times such as this.
Just before the Movement Control Order started, the Human Resource Ministry released a set of guidelines for employers to follow during Covid-19. These guidelines are frequently updated and you will be able to find the latest version on the Ministry’s Facebook page.
In all versions of these guidelines, it was mentioned that employers who are retrenching their staff need to follow a few steps if they are doing so due to financial difficulties:
- Employers will need to ensure that all the criteria for retrenchment (which can be found here) are followed
- Employers will need to fill up a Borang Pemberhentian and file this with the nearest Jabatan Tenaga Kerja or Human Resource Ministry branch (This requirement is also needed for issuing paycuts)
- This report will need to be filed 30 days before you are retrenched. In other words, you’ll need to have sufficient notice that you’re being terminated
So, laying off staff when it can’t be helped isn’t wrong it itself, but it has to be done with the right procedure. Failing to do so, or even firing you without a good reason can make them RM10,000 poorer for EACH staff that is fired. This is in accordance with Section 99A of the Employment Act 1955.
Your company can’t fire you if they’re receiving government aid
On 27th March 2020, the Prime Minister announced an economic stimulus package known as PRIHATIN, to help Malaysians cope financially during Covid-19. The package provides financial aid for various groups of Malaysians, but one of it is the subsidization of a portion of employees’ salaries. In other words, the government is ‘paying’ for each employee to be retained in the company. This way, the company would not need to cut salaries or even retrench anyone for as long as the payments were made. The government said that it would pay RM600 monthly per employee for 3 months, but this would only apply to:
- employees earning less than RM4,000 or
- companies that have made a loss of 50% or more since 1st January 2020
Then on 6th April 2020, the Prime Minister announced an additional stimulus package (PRIHATIN PLUS), and it was a bit more detailed than the previous one:
- Companies with more than 200 employees would be paid RM600 monthly per employee. However, the company could only claim this benefit for a maximum of 200 employees
- Companies with 75-200 employees would receive RM800 monthly per employee
- Companies with less than 75 employees would receive RM1,200 monthly per employee
But there’s one rule that all employers must must abide by if they receive this aid: They CANNOT retrench their staff for 6 months (the 3 months where the wage subsidy is paid, and the next 3 months after that).
So, if your boss has opted for this aid but has decided to let you go citing financial difficulties, you may have a good case against them in court for dismissing you without a valid reason.
You have more time to file a case in court now
After reading this far, if you still strongly feel that you’ve been unfairly dismissed, then, you might want to take your case to the Industrial Court. Those wanting to file a claim for unfair dismissal are given 60 days from the time they are dismissed to do so, and this can be found in Section 20 of the Industrial Relations Act 1967:
This law has also been strictly followed in cases such as Fung Keong Rubber Manufacturing (M) Sdn Bhd v Lee Eng Kiat & Ors  and Sim Kooi Soon v Malaysia Airline System , where the judges said that there was “no escape clause” for it.
But as we all know, with the MCO going on, courts cannot open as usual at this point. And at the time of writing, we don’t know exactly when the MCO will end and when court hearings will be allowed again.
So, here’s the good news: The government has clarified in a set of FAQs that the 60 day limitation will only start from the time the MCO is lifted, and not from the day you were dismissed.