Malaysian Employers Are Not Allowed To Simply Terminate Workers In Times Of Crisis

The law also states that local workers get priority over foreign workers.

Cover image via Bloomberg

Employers who arbitrarily terminate the employment of a worker when times are bad could be held liable to pay a fine of RM10,000

In fact, if an employer must retrench its staff in times of crisis, they would first have to let go of foreign workers before local workers, according to Deputy Human Resources (HR) Minister Datuk Seri Ismail Abdul Muttalib.

The Deputy HR Minister, who was addressing the Dewan Rakyat today, 23 November, said, "Section 60 of the Employment Act 1955 (Act 265) states that no employer can arbitrarily terminate the employment of local workers to employ foreign workers.

"In other words, the failure of employers to comply with the rules, they have committed an offence and can be convicted of a fine of not more than RM10,000."

Deputy Human Resources (HR) Minister Datuk Seri Ismail Abdul Muttalib.

Image via theSundaily

The practice of dismissing local workers to hire foreign workers violates the Employment Act 1955 (Act 265), which also provides employees terminated by employers with certain protections

According to Ismail, retrenched workers could claim financial benefits by making their claims at any Labour Office branch.

"Employees who are suddenly laid-off are entitled to a number of basic protections. Among others, employers shall give sufficient notice period or remuneration in accordance with the work contract, but not less than stipulated under Section 12 (2) of the Employment Act.

"Employers are also obliged to pay retrenchment benefits in accordance with the work service contracts, which must not be less than the rate prescribed in the Employment (Termination and Lay-Off Benefits) Regulations 1980," Ismail said.

Foreign workers in Malaysia are allowed to work in selected sectors

These include manufacturing, plantation, agriculture, construction, mining and quarrying, and the services sector under certain sub-sectors such as spas, foot massage, resorts, hotels, garden assistants; workers in animal parks, restaurants, cooking, washing and cleaning, and cargo, ports and airports.

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