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Downsizing and Cutting Wages

OneLegKick
Member
Wed, 12 Feb 2014 11:55:50 AM  (Last updated: Thu, 27 Feb 2014 12:29:31 PM)

I am for Finance & Admin Manager for this company AABB S/B, a manufacuring company. For pass 1 year our business has been decreasing almost 50% and face bad collection problems that already hit RM1mil mark. Now every month we are late in paying staffs salary and epf as well as socso. The bosses already not taking salary for many months and even use their own monies to pump into the company for daily cash flow. Now we are facing legal issues from suppliers for delinquent payments as well as we are suing our customers at the same time.

For the meantime to get days by ( estimating the situation will not improve in near future ), the bosses asking me to seek the possibilities to either :

a) Lower the wages of workers,( if this is permitted under Employment Act) , and if not, can we

b) Lower the wages of workers in exchange of not having them to work daily or with a schedule that stipulate certain working days and off day every week. OR

c) Those that do not agree to the new working arrangement will be asked to resign and being terminated - Can we do this?

Of course we want to implement this in accordance to the Employment Act. Hope to get some pointers. Thanks a lot

KL Siew
Administrator
Wed, 12 Feb 2014 03:10:02 PM

You should discuss the problems with all the staff first, get the feedback and decide what to do next. If you have to retrench some of them you should read up the Employment (Termination and Layoff Benefits) Regulations pertaining to payment of such benefits/compensation.

OneLegKick
Member
Thu, 27 Feb 2014 12:29:31 PM
Originally posted by KL Siew on Wed, 12 Feb 2014 03:10:02 PM

You should discuss the problems with all the staff first, get the feedback and decide what to do next. If you have to retrench some of them you should read up the Employment (Termination and Layoff Benefits) Regulations pertaining to payment of such benefits/compensation.

Hi,

The management is thinking to retrench some workers. I have 2 issues here :

a) Those that above 60 years old do not enjoy the compensation even their wages is lower than RM 2000.00, am I right?

b) Some of our workers are machine operators ( printing machine ), are they covered under EA even their salary is higher than RM2000.00? So if these workers are retrenched, we must pay them compensation?

c) For those workers not under EA and salary above RM2000.00, if the employment letter does not include any lay-off compensation, in the event the management retrench these workers, no compensation is supposed to be given? Can the staff make claims to the company by going to Industrial Relations Dept?

Thanks

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