{"id":2946,"date":"2021-04-19T08:32:00","date_gmt":"2021-04-19T00:32:00","guid":{"rendered":"https:\/\/yhalaw.com.my\/?p=2946"},"modified":"2024-09-09T09:11:40","modified_gmt":"2024-09-09T01:11:40","slug":"employment-retrenchment-lifo","status":"publish","type":"post","link":"https:\/\/yhalaw.com.my\/zh\/employment-retrenchment-lifo\/","title":{"rendered":"EMPLOYMENT LAW \u2013 RETRENCHMENT EXERCISE \u2013 EMPLOYMENT DISMISSAL \u2013 LAST-IN FIRST-OUT (LIFO)"},"content":{"rendered":"<p><strong><em>What is retrenchment?<\/em><\/strong><\/p>\n<ul>\n<li>Retrenchment is an action taken to terminate the employment in the event of redundancy in the workforce of a company.<\/li>\n<li>Redundancy is a situation where the employee or position is no longer required. In short, it is when an employer has more employees than it needs.<\/li>\n<\/ul>\n<p><strong><em>Criteria for selecting employees to be retrenched<\/em><\/strong><\/p>\n<p>Code of Conduct for Industrial Harmony (\u201c<strong>the Code<\/strong>\u201d) provides guidelines on retrenchment exercises.<\/p>\n<p>This includes:<\/p>\n<ul>\n<li>Ability<\/li>\n<li>Experience<\/li>\n<li>Skill and occupational qualifications<\/li>\n<li>Length of service<\/li>\n<li>Status (non-citizen, casual, temporary, permanent)<\/li>\n<li>Age<\/li>\n<li>Family situation<\/li>\n<\/ul>\n<p>A commonly applied principle \u2013 \u201cLast-In, First-Out\u201d (\u201c<strong>LIFO<\/strong>\u201d).<\/p>\n<p>The most junior employee (in terms of length of service) would be retrenched first, compared to those who have served for a longer duration.<\/p>\n<p><strong><u>Section 60N of the Employment Act 1955<\/u><\/strong> &#8211; Employers should terminate the services of foreign workers first before considering local employees.<\/p>\n<p>Although the Code does not have force of law, employers are encouraged to comply with LIFO.<\/p>\n<p>To justify not using LIFO, an employer must provide clear evidence to prove that an employee does not have the skills required for the job.<\/p>\n<p><strong><em>In what situation can a company retrench an employee?<\/em><\/strong><\/p>\n<ul>\n<li>There must be redundancy.<\/li>\n<li>The dismissed employee must have been correctly selected for retrenchment (objective criteria).<\/li>\n<li>Retrenchment must be done in good faith and not with motives of any unfair labour practices. In short, the employer must have a fair procedure in place before carrying out retrenchment.<\/li>\n<li>The burden of proving that the retrenchment is bona fide lies with the employer. It is not for the employee to show that the retrenchment is unfair.<\/li>\n<\/ul>\n<ul>\n<li>The burden is on the employer to prove actual redundancy. The employer has a duty to prove that the circumstances were such that the employees\u2019 functions has to be reduced because they are considered redundant.<\/li>\n<\/ul>\n<p>Case in point: <em>Ng Chang Seng v Technip Geoproduction (M) Sdn Bhd &amp; Anor [2021] 1 MLJ 447. Court of Appeal (Putrajaya) \u2013 Civil Appeal no: W-02(A)-692-04 of 2019<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Retrenchment of employees and reduction of workforce in Malaysia.<\/p>","protected":false},"author":9,"featured_media":2951,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1573,1572],"tags":[1818,1600,1817],"class_list":["post-2946","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-employment","category-labor-law","tag-dismissal","tag-salary-mco","tag-retrench"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>EMPLOYMENT LAW \u2013 RETRENCHMENT EXERCISE \u2013 EMPLOYMENT DISMISSAL \u2013 LAST-IN FIRST-OUT (LIFO) | Yew Huoi, How &amp; Associates | Leading Malaysia Law Firm<\/title>\n<meta name=\"description\" content=\"YHA &amp; Associates is a leading law firm in Malaysia.Specialises in handling Civil,Maritime,Shipping Matters,Company Law,Family Law,Real Estate and many ...\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/yhalaw.com.my\/zh\/employment-retrenchment-lifo\/\" \/>\n<meta property=\"og:locale\" content=\"zh_TW\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"EMPLOYMENT LAW \u2013 RETRENCHMENT EXERCISE \u2013 EMPLOYMENT DISMISSAL \u2013 LAST-IN FIRST-OUT (LIFO) | Yew Huoi, How &amp; 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