Retrenchment /Redundancy

During a retrenchment exercise, employers must submit a notification to the nearest Department of Labour, using the standard “Borang PK” form, at least 30 days before the termination of employment.

Retrenchments can be justified for various reasons, such as redundancy or financial constraints. However, if challenged, employers must prove that the retrenchment was carried out for genuine reasons. Employers must also adhere to the "Last In, First Out" (LIFO) principle or an alternative fair and objective selection criterion.

While employers are encouraged (but not required) to abide by the Code of Conduct for Industrial Harmony during a retrenchment exercise, it's essential to note that adherence to this code is voluntary.

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