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Termination Benefits/Compensation

alsa
Member
Thu, 18 Nov 2010 04:15:01 PM  (Last updated: Fri, 19 Nov 2010 01:07:33 PM)

Dear Admin,

Would like to have your opinion on the above subject matters.

Employment Act covers only the following category or personnel:-

(1) Salary range RM1500 and below.

(2) Manual labor workers or personnel supervising workers performing manual labour.

Employment (termination and lay off benefits) regulations states:-

6. (1) Subject to the provisions of these Regulations, the amount of termination or lay-off benefits payment to which an employee is entitled in any case shall not be less than -

(a) ten days’ wages for every year of employment under a continuous contract of service with the employer if he has been employed by that employer for a period of less than two years; or
(b) fifteen days’ wages for every year of employment under a continuous contract of serviced with the employer if he has been employed by that employer for two years or more but less than five years; or
(c) twenty days’ wages for every year of employment under a continuous contract of service with the employer if he has been employed by that employer for five year or more,
and pro-rata as respect an incomplete year, calculated to the nearest month.

If a company decides to terminate an employee with notice given as per stated in employment contract due to his/her poor work performance, is he/she entitled to termination benefits? He/She doesn't fall under the category of "employees" as define under Employment Act?

Appreciate your advice.

Just some comments for all to ponder/provide comments and views:

With regards to the termination benefits, I personally think that it doesn't make any sense in general. When employee have not been performing to company expectations, isn't it just right for the company to terminate him/her. Why the need for compensations?

You may have cases where a long-serving employee are using this law against his/her employee. His/her working performance could have been acceptable thorughout his stay with the company. However, suddenly his working attitude changes and has become a liability to the company. He's not performing and are unwilling to resign. He/she is just waiting for the employer to terminate him/her to reap the big payout of termination benefits.

Just my own opinion.

KL Siew
Administrator
Thu, 18 Nov 2010 04:30:02 PM

Regulations 4(b) below may be relevant. Note the words "..on grounds of misconduct inconsistent...". If you can prove poor performance to be a misconduct, why not? You may think it is but when the case goes to the Industrial Court, it is not necessary that the court will agree with you.

4. (1) Subject to paragraphs (2), (3) and (4), an employee shall be entitled to termination benefits payment where his contract of service is terminated for any reason whatsoever otherwise than -

(a) by the employer, upon the employee attaining the age of retirement if the contract of service contains a stipulation in that behalf; or

(b) by the employer, on the grounds of misconduct inconsistent with the fulfilment of the express or implied condition of his service, after due inquiry, or

alsa
Member
Thu, 18 Nov 2010 04:40:05 PM

Dear KL Siew,

Thanks for the reply.

Exactly what I meant, to the company we can consider it as a misconduct but the court may judge otherwise. So it is very subjective and I would say most of the time it would be in favor of the complainant.

Anyway, for the employement (termination and lay off benefits) regulation is it applicable to all employees? Or just those that are under the category of "employees" as defined under employment act?

Thanks in advance.

KL Siew
Administrator
Fri, 19 Nov 2010 01:07:32 PM

Applicable to the category of "employees" as defined under EA.

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