Retrenchment among top 5 reasons behind employee dismissals in Malaysia, says HR Ministry


RETRENCHMENT has been one of the most common reasons behind worker dismissals in Malaysia under Section 20 of the Industrial Relations Act 1967 over the past decade, according to the Ministry of Human Resources (MoHR).

The ministry said a study by the Institute of Labour Market Information and Analysis (ILMIA) revealed that about 30% or 13,882 cases out of 46,915 cases received by the Industrial Relations Department between 2009 and 2018 were for appeal dismissals under Section 20 of the Act.

The second most common reason is misconduct involving 11,948 cases or 26%, followed by termination by contract notice on no grounds (6,605 cases or 14%), difficult working environment (2,725 cases or 6%) and forced resignation (1,851 cases or 4%).

“Other reasons (involving 9,904 cases) include probationer, fixed-term contract, voluntary resignation, frustration of contract, retirement, minimum wages, implementation of retirement and dissatisfaction of performance,” MoHR said in a statement yesterday.

The study also showed that a total of 142,336 workers were dismissed between 2014 and 2017, and 15% out of the figure were registered under the Industrial Relations Act 1967.

Section 20 of the Act, which came into force on Feb 10, 1989, is introduced to provide protection to workers who have been dismissed without reasonable causes. It allows employees who face unfair dismissal to file for a work reinstatement within 60 days from their termination date.

MoHR added that employers should seek advice from the ministry before conducting a dismissal to avoid any unjustifiable treatment on retrenched workers.

“The employers are prohibited to dismiss their workers due to misconduct issues prior to conducting a domestic inquiry (in order) to be fair to the workers.

“Employers should comply with all requirements under the law, especially in preparing the documentation during the investigation process,” it said.

The ministry also hoped that trade unions will play their roles to assist workers facing dismissal cases.

“Employers’ associations must also play its role, so that members of the association will understand the procedures that they need to adhere to in the event of company closure, a surplus of employees in the company, as well as misbehavior issues,” it said.