Documente Academic
Documente Profesional
Documente Cultură
Termination
Redundancy
Redundancy refers to a surplus of labor and is normally the result of a
reorganization and restructuring of the business of an employer. It is
usually direct to the implementation of retrenchment.
In Radio & General Trading Sdn. Bhd. Vs Pui Cheng Teck & Others
(Award 243 of 1990) the court stated that the company must
considers whether he made a reasonable decision concerning the
necessity of redundancy at that particular time or in view of the
particular commercial conditions. The company has to proof that the
workmen are surplus and therefore need to retrench. The court also
said that if there was a redundancy situation, was the consequent
retrenchment made in compliance with accepted standards of
procedure; for example last in first out.
In National Union of Cinema & Places of Amusement Workers Vs Shaw
Computer & Management Services Sdn. Bhd. (Award 22 of 1975),
when the workmen were discharged due to redundancy, the
employer has to proof the redundancy and show how, by whom and
on what basis that selection of retrenchment was made.
Layoff
Layoff become one the alternative to overcome redundancy.
In Goodyear Berhad Vs National Union of Employees in Companies
manufacturing Rubber Products (Award 176 of 1982) the court stated
that the company has the right to shut down its plant at any time. It
also has the right to lay off its employees for proper cause. In Dunlop
Malaysian Industries Berhad Vs Dunlop Industries Employees Union
(Award 76 of 1982) the court has mentioned the reason why layoff has
been implemented. The court said that the employer merely wants work
to stop for a short period and at the same time to keep his workmen.
In Regulation 5(1) The Employment (Termination and Layoff Benefits)
Regulation 1980, it was stated that if a workman who is hired under a
contract of service has been laid off if his employer did not give any
work more than twelve normal working days within any period of four
consecutive weeks.
If the days of layoff less than 12 days it is called as temporary layoff.
Regulation 5(1)(b) The Employment (Termination and Layoff Benefits)
Regulation 1980 noted that a workman has not entitled to receive any
wages under his contract for the period or periods where he did not
assigned any work.
Layoff benefits
Dunlop Malaysian Industries Bhd Vs Dunlop Industries Employees Union
(Award 76 of 1982) stated that if the employer wants his workmen to be
available on call, it is only fair that the workmen be compensated whilst
they are waiting. There must be some inducement for them to stay and
not looking for other jobs. At the same time it will not fair to the employer
for the workmen to demand full wages when they are not doing any work.
Therefore, Regulation 6 The Employment (Termination and Layoff
Benefits) Regulations 1980 indicates the amount of benefits for
termination and layoff. The regulation noted that benefit for a layoff
cannot less than (a) ten days wages for workmen who are worked less
than 2 years (b) fifteen days wages for workmen who are worked for two
years but not more than five years or (c) twenty days wages for workmen
who are worked more than five years. Wages are calculated in pro-rate
daily basis according to the nearest month.
The layoff benefits must be paid not later than seven days after such
date (Regulation 11). Where the parties themselves are unable to agree
on the compensation to be paid to employees during temporary layoffs,
the Industrial Court will resolve the issue for them.
Retrenchment
In Cycle & Carriage Bintang Bhd Vs Cheah Hian Lim (Award 342
of 1992) the court has noted an important general principles on retrenchment.
1.It is for management to decide on the strength of the staff which it considers
necessary for efficiency in its undertaking. When the management decides that
workmen are surplus and that there is therefore a need for retrenchment, an
arbitration tribunal will not intervene unless it is shown that the decision was
malafide or unfair labor practice.
2.It is the right of every employer to reorganized his business in any manner for
the purpose of economic or convenience provided he acts bonafide.
3.An employer has the right to determine the volume of his staff consistent with
his business and if, by the implementation of a reorganization scheme adopted
for reasons of economy and better management, the services of some
employees become excess of requirement, the employer is entitled to discharge
such excess.
4.In the absence of any express agreement on the point, an employer is not
obligated to find suitable employment for redundant workers.
5.In effecting retrenchment, the employer should comply with the industrial law
principle of LIFO unless there are sound and vital reasons for departure. Thus,
an employer is not entirely denied the freedom to depart from this principle.
6.The retrenchment of an employee can be justified if carried out for profitability.
The services of an employee may well become surplus if there is reduction or
cessation of work the employee was performing.
Retrenchment Benefits
Many awards from Industrial Court have gave responsibility to
employer and employees/trade union to negotiate regarding benefits
for retrenchment. If the collective is silent regarding retrenchment
benefits, the employer shall follow Regulation 6 Employment Act
(Termination and layoff) Regulations 1980 (Atlas Electronic Sdn. Bhd Vs
Electrical Industry Workers Union [Award 168 of 1986), Public Corp Bhd
Vs Penang & Prai Textile Vs Garment Industry Employees Union [Award
101 of 1985] and Central Elastic Corp Sdn. Bhd Vs National Union of
Employees in Companies Manufacturing Products [Award 205 of 1984]).
In Malayan Commercial Banks Association Vs Association of Bank
Officers (Award 88 of 1988) the court remarked that an officer should
be paid retrenchment benefits base on one months basic salary for
each completed year of service.
In Electrical Power Engineering Sdn. Bhd Vs Electrical Industry Workers
Union (Award 193 of 1986) the court said that a study should be made
to see which formula provides the higher benefits. A much higher
benefit should be given to the employee so that the ill-effects of
unemployment might be better cushioned.
Termination
Termination by Notice
A contract of service may be terminated by one party (either
management or employee) giving notice to the other party of his
intention to terminate the contract. The length of notice must be
the
same for both the employer and the employee.
According to Section 12(2) Employment Act 1955, in the absence
of
such provision in writing, the length of notice shall not less than
(a)four weeks notice if the employee has been employed for less
than two years on the date on which the notice is given
(b)six weeks notice if he has been employed for two years or
more but less than five years on such date
(c)eight weeks notice if he has been employed for five years or
more on such date.